The Supreme Court’s landmark ruling about tribunal fees could lead to a rise in insurance premiums and excess charges, a regional broker has warned.
The number of insurance claims emanating from employment disputes had dropped in recent years, along with the premiums and excesses. However, following the Supreme Court’s ruling to ban tribunal fees, premiums are likely to increase along with the excesses, says Bryan Banbury, MD at Nottingham-based indpenedent insurance broker Russel Scanlan.
For clients without cover, he said, the advice is that now, more than ever, is the time to take it out. Tribunal fees were introduced in July 2013 by a fees order made by Chris Grayling, who was Lord Chancellor at the time. They started at around £160, and increased up to £950 for further hearings. For certain claims, claimants had to pay up to £1,200.
“Following the landmark ruling over employees’ access to justice, in which these fees were ruled unlawful, we expect there will be a sharp influx in the number of tribunals in the short term – which means businesses’ HR departments, particularly within larger organisations, need to be prepared,” said Bryan.
“We expect employer clients could face greater difficulty in reaching an early conciliation settlement, given employees will now have less of a deterrent to commence employment tribunal proceedings. Having the right insurance policy in place is therefore vital, especially now that the number of cases being brought to a tribunal could spike in a short space of time.”
The expected influx of tribunal cases is likely to clog up the courts, Bryan warned, meaning cases could take up to 12 months to reach a hearing – with the process becoming far more drawn out than in previous years.