Could ADR help in your Tribunal Claim?

On 7 July 2023, Judge Barry Clarke (President of the England and Wales Employment Tribunals) released guidance on the use of Alternative Dispute Resolution (“ADR”) in Employment Tribunal claims. The guidance was written for Tribunals; however, it may be of interest to parties who are seeking early resolution to claims and wish to avoid going to a final hearing.

Tribunal claims always carry a cost, whether this be an early settlement offer, legal or just the cost of diverting staff from their day job to prepare and attend the Hearing. Costs orders are only rarely made in Tribunal claims so there is no guarantee of recouping your legal costs, even when defending against weak claims.

Alongside the financial and emotional costs, no Tribunal is without risk, which multiplies when dealing with complex matters such as discrimination and whistleblowing claims.

Employment Judge Clarke‘s guidance on the use of ADR has been produced as a way to resolve claims earlier and thereby reduce costs to all involved is a welcome contribution to this arena.

So what ADR options are available to parties?

The Four ADR options

We are all now familiar with the first two, ACAS Conciliation and Judicial Mediation. The final two options; Judicial Assessment and/or Dispute Resolution Appointment are less understood, and we feel are underutilised by parties and the Tribunal.

ACAS

Early conciliation has now been a statutory requirement for nearly 10 years (May 2014) before a claim can be lodged at the Tribunal. In addition, the use of ACAS does not end with the issuing of a claim and their assistance can be instrumental in settling a claim at any point during a case.

Pros: ACAS are independent to all parties and the Tribunal, and they can assist with claimants who are not represented. An ACAS officer can provide appropriate information to a litigant in person to assist them in understanding the benefit of settlement.

ACAS have a simple legally binding agreements (COT3), which brings claims to a quick end.

Cons: ACAS must remain impartial so cannot easily advise either party on strengths or weaknesses of their claims. Further, the same conciliators are not always available due to their work loads, and this can lead to delays in progressing matters quickly.

Judicial Mediation

Mediation is consensual, confidential, and facilitative which means.

• Consensual: both parties have to agree to the process.
• Confidential: parties can speak freely “without prejudice” and any comments or concessions made will not be used at a final hearing.
• Facilitative: the Judge conducting the hearing will not generally give indication on merits or prospects of success.

Many respondents will be aware of Judicial Mediation as this has been used in Tribunals for a number of years. Judicial Mediation is becoming more and more common with Tribunals normally considering it in cases where the final hearing is likely to be three days or more. Normally it is considered in cases involving discrimination or whistleblowing. It should be noted that settlement can only be reached via a COT3, and ACAS needs to be aware that mediation is taking place.

Pros:

• Judicial Mediation is aimed to be held before parties incur significant costs and therefore assists in maximising savings to parties.
• It can help bring both sides to the table. It gives Claimant’s an opportunity to explain their case to a Judge and consider the response to those claims.
• It is possible to offer non-financial options to settle, which would not be open to a Tribunal, which have included in our experience, as an agreed reference, an apology and an agreed consideration of an ill health retirement process
• Judicial Mediations can also be held remotely or in person depending on the necessity of the parties.
• Even if it is unsuccessful both parties often get a better understanding of the other partis position so are better able to prepare for the Hearing. Or future settlement discussions

Cons:

• Many Tribunals will only consider listing for a judicial mediation if a claim is likely to be over 5 days. Where Judicial Mediation can be useful for more straightforward cases as well.
• If the parties are not able to achieve a settlement outside of a judicial mediation, the prospects of achieving one during that mediation are lessened, especially if either party has unrealistic expectations of the value of the claim.

Further, due to the ‘without prejudice’ nature of the discussions, if mediation fails any information learnt must be ignored.

Judicial Assessment

Judicial Assessment is another Judge led but rarely used process.  This differs from Mediation in that the judge will review the case and outline considerations on the strength and weaknesses of each parties case. It can be used on any type of case. The process is consensual, confidential, and evaluative.

• Evaluative: the judge will use their experience and skills to review the pleadings and any other documents to give an impartial indication on the merits or weaknesses of parties positions.

Pros:

• Judicial Assessment can take place at any time; be it a preliminary hearing, case management hearing, or during a specific listed hearing. It is useful in bringing unreasonable parties to the negotiating table if their cases are shown to be weak and can be used to limit weak claims. Where parties agree, it could also assist having an indication as to the weakness of the other party’s position to concentrate on.

Cons:

• Judicial Assessment works both ways in that it can highlight weaknesses in your own claims, which in turn may make negotiating more difficult for you when trying to reach a settlement with a party in a stronger position.

Dispute Resolution Appointment

This a new scheme, currently being piloted in the West Midlands Tribunals where it has shown to have a positive outcome.

It is intended to be used in the most complex of cases; mainly discrimination and whistleblowing claims.

In this appointment, an Employment Judge will use their skills and experience to give parties an evaluation of their prospects of success and possible outcomes in terms of remedy, while remaining impartial. They will do this using the information available at the time to them.  To ensure that the evaluation is as helpful to the parties as possible, the Dispute Resolution Appointment will be held after witness statements have been exchanged. These statements will be available for the Employment Judge to read (along with key documents of relevance).

The need for this sort of assessment has been due to the high backlog of cases the Tribunals are currently facing, with parties not being interested in the other mediation routes. Such reluctance to use other mediation routes is mainly due to, either one party not being professionally represented or an unrealistic expectation, on either party of the merits and therefore value of the claim.

Pros:

• It can bring an unrepresented party to a realisation about their case and the merits and weaknesses of it. It can also help resolve cases faster before they become prolonged and increasingly combative.

Cons:

• Time and expense involved in bringing/defending the claim will have already been spent. This is because it is usually only considered after witness statements have been produced and when the parties are preparing for final hearings. In many cases, where the parties and entrenched in their positions, it will make more sense financially to just proceed with the Hearing.

Our Opinion

ADR has its place within the Employment Tribunal system and the experience in the West Midlands has shown that it is resolving cases and freeing up judicial resources.  We hope that it is offered across all regions not only as an alternative but is actively considered and used by the Tribunals. We however believe that judicial assessment should be automatically considered in every Preliminary Hearing. In our experience, once the ET1 and the ET3 are considered, an Employment Judge will be able to assess the legal claims and defence and highlight strengths and weaknesses. This will not be as comprehensive as an assessment when all the preparation has been completed but would be a better tool to reduce financial costs of defending claims. We would also like to see this process go hand in hand with a clear warning that if the case has clear and significant weaknesses, the Claimant may face a legitimate application for costs if they proceed.  This would not impede a future judge from reaching their own decision on the basis of all the evidence but would potentially weed out hopeless cases/ defences.

If you wish to discuss any of these options on any of your current cases or just wish to speak about these processes in greater detail, please do get in contact with a member of our team, who will be happy to assist you.