Times have changed since the days of informal employment tribunals - and the costs rules must adapt as a result, argues Alex Lock


There has been much talk in employment law circles over the past few months about two related issues: access to justice and reform of the tribunal.



According to research by the Advisory, Conciliation and Arbitration Service, employment discrimination claimants face a 'postcode lottery' in finding and funding legal representation (see [2007] Gazette, 19 April, 5). Meanwhile, Michael Gibbons was asked by the Department for Trade & Industry to examine the employment tribunal system, and statutory dismissal and grievance procedures, in light of continuing criticism from all sides over the cost and complexity of pursuing or defending claims.



It is time for a grown-up debate on the expectations that employers, employees and the tribunal judiciary have of lawyers, and the ability of the system to resolve disputes in a just way.



In the early days of employment tribunals, the system was set up in such a way to discourage lawyers and costs. Legal aid was not available and employment law was relatively straightforward. Hearings were intended to be informal, quick and unencumbered by the ritual of the law and precedent.



How things change. Employment law is now recognised as a fast-changing and complex area of law, requiring specialised practitioners who must keep up to date with a bewildering number of decisions from the Employment Appeals Tribunal all the way up to the European Court of Justice.



Lawyers dealing with tribunal claims are expected to be up to date on the law, deal with complex issues of disclosure and fact, and arrive fully armed with written statements, agreed bundles, chronologies, lists of issues and agreed facts and skeleton arguments. Hearings are often several days or weeks long and are usually preceded by case-management discussions or pre-hearing reviews. All of this results in considerable cost: simple one-day cases may generate costs of £10,000, and complex cases considerably more.



It is clear that, with more than 115,000 tribunal claims every year, a forum to resolve disputes is needed. It is equally clear that the cost of properly managing these claims and bringing them to a just conclusion in line with the expectations of the parties and the tribunals can be considerable. The point must be how those costs are met.



At present, both parties, in general, bear their own costs. The employee who has been unfairly dismissed and rightly seeks redress in the form of compensation for his losses must meet the costs of doing so himself. Similarly, the employer wrongly accused of unlawfully discriminating against an employee will find himself put to considerable cost in proving he has done nothing wrong.



The end result can see poorly treated employees denied access to justice and employers forced into settling with individuals who know the employer wishes to avoid large legal bills in defending the claim. Awarding costs to the winning party is as much about access to justice for the wronged as protecting the wrongly accused.



A grown-up debate means recognising that law and dispute resolution requires investment. Parties should, of course, be encouraged to settle their disputes without the need for a court or tribunal hearing. In this age of reform, I propose that the tribunal introduce a part 36-type arrangement where costs are awarded if the offer made (by either party) is not beaten at a hearing. This would provide a positive encouragement to explore settlement and would fairly apportion costs if the case required a hearing.



Alex Lock is an employment partner at national firm Beachcroft and editor of the Employment Lawyers Association Briefing journal