Claims by former employees of a shut-down firm have now exceeded £500,000, as staff try to claw back lost redundancy pay and other monies due to them.
A total of 23 people have now made successful claims through the employment tribunal following the closure last year of Kent firm the Foster Partnership. They are likely to receive some of the money through government-backed schemes, but will join a list of other creditors if they want to claim back the rest of their awards.
The firm was shut last October following an intervention by the Council for Licensed Conveyancers, in order to protect client interests. It has since emerged that the only remaining director, Edward Foster, is still in business through an unregulated firm named eLawyer Services Limited. The company was incorporated a year before the Foster Partnership closed and started trading in April 2019, undertaking non-reserved legal activity work. The new business has no legal responsibility for the Foster Partnership redundancies.
The Gazette reported last month that a handful of claims had been successfully resolved in the employment tribunal under Rule 21, which allows for a determination of a claim where no response has been presented by the former employer. It was understood at the time that a number of other claims were yet to be published.
The full extent of the claims has now been confirmed, with 23 former staff claiming a total of £523,000 for unfair dismissal in breach of contract, failure to comply with redundancy procedures and unauthorised deductions from wages. The highest individual claim is worth £53,000.
Tribunal records show one of the successful claimants was Foster himself, who received £13,000. Three other former directors of the Foster Partnership, who all resigned in the second half of 2019, are also among the claimants.
The Gazette has been told by former employees that they have been told their redundancy pay will be covered by the Insolvency Service. If the company goes into liquidation or administration they will also be able to claim their notice pay. Payment of the remainder of the judgments would depend on how much is left for creditors following a liquidation.
Foster said the firm had been forced to close with immediate effect from the date of intervention and all staff were laid off immediately. It had no assets to settle debts, including any future employment claims.
He said ‘While we were able to assist many former staff members with finding new employment very quickly, it was obviously a distressing period for all involved. I am pleased to see that all our former staff members have now received compensation through the National Insurance Scheme.’
A spokesperson for Council for Licensed Conveyancer pointed out that as only reserved services need to be regulated there is a gap that allows some legal services to be delivered without regulation.
She added: 'We do not like the risk this creates for consumers but we, the SRA , and the other frontline legal regulators, have no powers to intervene into these businesses. Our powers are limited by the Legal Services Act 2007 and we can only intervene into entities and individuals who we regulate. That is one of the key reasons we invest in Legal Choices and other public legal education: to seek to ensure consumers are aware of the protections they gain from using a regulated legal provider.'