How to decide whether you should settle or fight an employment tribunal claim.

  • Employment Tribunal
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Peninsula Group, HR and Health & Safety Experts

(Last updated )

What to do when faced with a tribunal claim is a difficult situation for employers and there are a number of factors to take into account. In order to make sure that you make the right decision in each situation it is important to understand what different influences are on you that will affect your consideration.

If you are being accused personally of acting unfairly or being discriminatory the natural impulse is to want to clear your name. This will colour your judgement and make it harder for you to assess the situation objectively. People find it hard to accept that they were wrong so it is harder to look at the case dispassionately when you have been personally involved.

The question for a tribunal is whether you appear to have acted reasonably based on the evidence before them. This is not quite the same as acting reasonably and it is that distinction which can cause most of the confusion. This is where it can be an advantage to have the matter looked at by someone wholly unconnected. As an individual you will often not be aware of the minor assumptions you have made that can sway your perceptions so that a decision is not as objective as you believed.

As a company, when deciding whether to settle or fight a tribunal claim you have to weigh up the costs and consequences of each option. There are no guarantees at tribunal so there is always the chance that you will lose. They are also public hearings so there is the potential for adverse publicity. There are costs involved in a hearing irrespective of the outcome. Not only are there the costs of any representation but there is the basic cost of time and stress for you and any of your witnesses involved in the proceedings. It may cost you more to successfully defend the case then it would cost you to settle it.

There are, however, counter considerations. If you settle cases on a costs saving basis, even when the claims are weak, your employees may believe it is economical for them to find a no win, no fee solicitor who will assist them purely with the intention of getting an economic settlement so settling could encourage future claims.

Ultimately, it is a balancing act between the value to the business of resolving the case quickly and the benefits of defending the case. You should never have a blanket policy that you will either always settle or fight claims but you should instead be pragmatic. Look at each case on its merits. How important is it to you as a business that you fight this claim and what are your chances of success? Try to keep commercial settlements to low amounts to discourage speculative litigation.

Tribunals require an investment of time, settlements require money. You have to decide in each situation what represents the best value for the company.

For more information on the issues raised in this editorial, please call our 24 Hour Advice Service on 0844 892 2772.

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