As we reported previously, there has been an increase in the number of cases being filed at Tribunal. However, the official statistics tend not to give an indication as to the reason for that increase. While there are a number of different factors that have led to the increase, including specific campaigns on holiday pay
, equal pay and retirement age
, the economic recession has certainly played a significant part.
In times of high employment Tribunal claims will be reduced. This is based on the simple principle that they are designed to compensate for loss. Where someone can go from one job to another they have no real loss so there is no advantage to them to put in a claim. Similarly, if they are in alternative employment they will not want to have the extra demands on their time that a Tribunal claim will bring.
However, in times of high unemployment Tribunal claims become more likely. If an individual wants to claim benefits from the Department of Work & Pensions then they have to show that they haven’t become voluntarily unemployed, either by resigning or being dismissed for their conduct as this can result in a loss of benefits for up to 6 months. To avoid this sanction an individual will often state that their dismissal was unfair, however, once they state that they were unfairly dismissed they are expected to put in a Tribunal claim to support their position.
A similar principle applies if someone wants to activate payment protection insurance in respect of mortgage, loan, overdraft or credit card payments. Most insurance schemes include legal services cover designed to help an individual pursue a Tribunal claim. These make good economic sense for the insurance company because it can reduce the amount that they have to pay out on the policy. Where an individual wants to activate the policy then they are expected to submit a claim if they are stating that there are monies owed or that their treatment was unfair.
When unemployment is high individuals can expect to be out of work for longer. They need the money coming in so it becomes more sensible to pursue a claim because they have the time and the likely payout is higher. When this is combined with the fact that they can get assistance through the public purse or through no win no fee solicitors then it becomes significantly more attractive to pursue a claim. There is the expectation of an economic settlement to avoid the costs of a hearing and there is no real risk that they can see to pursuing a claim. When added to the fact that most individuals have an overly optimistic idea of what their claim is worth the result is, invariably, an increase in Tribunal claims. There is nothing to indicate that these claims are any more valid but the economic climate does make them more likely and, if successful, more costly.