The huge costs that universities can incur fighting employment tribunal claims, even when the institution is vindicated by the result, have been highlighted by a case in Scotland.
The University of St Andrews spent more than £200,000 on legal fees successfully defending itself against a claim brought by a former lecturer – around 10 times the amount that it might have expected to pay in compensation had it lost the case.
Too often an adversarial stand-off develops which can lead to escalation and delay and rising costs in administrative time and legal fees. Good systems and procedures can help prevent disputes. If they do begin, there may be simple and cheap ways to resolve many disputes. Using lawyers should be a last resort; seeking legal advice can inflame and entrench the original problem.
Fear of litigation may affect the handling of disputes internally in institutions.
– Litigation fear lets cheats off the hook. Times Higher Education, 13 Oct 2006.
If a student or member of staff goes to court or employment tribunal there are costs for an institution even if the case is dropped or settled.
Staff disputes which go to litigation are typically dealt with through Employment Tribunals and sometimes the Employment Appeal Tribunal.
Costs to institutions of defending or settling ET applications have recently been quantified in response to a series of Freedom of Information requests and they are considerable.
The dynamics of this process have recently changed. Employees must now pay a fee to initiate a claim and may face paying the costs of the other side. This is likely to discourage speculative litigation but it will place employees in a position where it is more difficult for them to trigger a recognised ‘dispute’ and negotiate a proportionate settlement. Have recent changes to employment law affected the costs of cases to your institution?
- Over the last 3 years how many current or former university staff have submitted claims to the employment tribunal service?
- How many of these were settled prior to a full hearing date?
- How many of these settlements involved the insertion of a non-disclosure (commonly known as gagging) clause in the terms of the settlement?
- What is the total figure that has been paid out in these settlements?
- What has the total expenditure on legal expenses been in relation to the above disputes?
- Over the last 3 years how many current or former staff have signed non disclosure agreements purely in relation to the confidentiality of research activities?
- Over the last 3 years how many current or former staff have signed non disclosure agreements for reasons not covered above?
The Law Reports show that the student cases which occasionally reached the courts are now in the main not being brought against universities, but are being dealt with by the Office of the Independent Adjudicator (OIA). On the other hand, the OIA has faced a series of judicial review applications.
The courts have discouraged students from failing to use the OIA
rather than the courts.
Nevertheless, Judicial review applications are still occasionally made
by students, as in this case:
Carnell, R (on the application of) v Regents Park College & Another,
Court of Appeal – Administrative Court, April 07, 2008,  EWHC
Keep a close eye on costs – how often are the mounting costs of a case checked in your institution?
- Do you have a requirement to report to the Governors each time legal costs cross a stated threshold?
- Do you have a procedure for calculation of costs in administrative time (‘management costs’).
- Do you have a requirement to report to the Governors each time management costs cross a stated threshold? Could you cut costs at the outset? Take a fresh look at your practice and procedure.
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