Lending to the complexities and lengths of each case, presently, there is no fixed cost for an employment tribunal. Legislative reform in 2017 enabled anyone to raise workplace disputes for free. However, there are requirements that add to overall costs. For example, defence costs can be a significant cost for employers. This includes paying a solicitor and barrister to prepare and defend the claim. A straightforward case could cost between £6,000 and £8,000, whilst more challenging cases with complex legal issues may reach figures of over £20,000. As per the British Chamber of Commerce, the average cost is estimated to be £8,500 for employers. Management time also contributes to costs, as staff and management will need to manage the case, collect evidence, and be present at hearings. If the tribunal results in the claimant’s favour, the employer may have to pay heavy compensation fees. Employers could mitigate costs with early conciliation (they must contact the Advisory, Conciliation and Arbitration Service (Acas) before filing, or with existing insurance policies.
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How much does an employment tribunal cost?
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The circumstances of the case impact the cost. Cases with simple facts tend to be the least expensive, whilst cases with intricate legal issues and multiple witnesses might be more expensive.
Each hearing adds to the cost—especially if a legal team must present. Attempting to settle outside of the tribunal could lead to significantly reduced costs.
A simple case will cost between £4,500 - £8,000, a medium complexity case ranges from £8,000 - £17,000, with high complexity cases costing around £17,000 - £30,000+.
Every employer will face work issues from time to time. Sometimes, these can only be resolved at an employment tribunal. Employees, workers, even job applicants can choose to raise a claim against you.
In this guide, we'll explain what an ET3 form is, how to respond to it, and what happens if you fail to submit it properly.
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In some situations, workplace disputes can only be resolved through employment tribunals.
Independent adjudicators cover all legal grounds, reach final verdicts, and award compensation.
The costs for tribunal hearings can quickly add up; so, it’s important to plan if you’ve been summoned to one. By doing so, you can minimise costs on your finances, production, and reputation.
In this guide, find out how much employment tribunal costs, and how to reduce hearing claims in the workplace.
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How much does an employment tribunal cost for employers?
Currently, there are no set amount of costs for .
After legislative changes in 2017, anyone can raise a workplace dispute to tribunals, free of charge. But there are financial requirements that can add to overall costs.
According to the British Chamber of Commerce, the average cost of an employment tribunal claim is around £8,500.
Normally, each party will pay for its own employment tribunal fees. But ultimately, the legal adjudicators will ultimately decide. If a party acted unlawfully, they could be asked to pay for their opponent’s legal fees.
For claims, the maximum compensatory award increased from £115,115 to £118,223. The upper limit remains the lower of a year's salary or the maximum statutory limit.
For discrimination claims, there is no maximum amount. The claimant can even be compensated for injuries to their emotional wellbeing–which can range from £35,200 to £58,700.
The Government plan to allow the Secretary of State to bring tribunal proceedings on behalf of workers; or provide legal assistance/representation for workers to bring claims themselves. They also have the power to issue and enforce a notice of underpayment where the individual has been underpaid statutory payments or entitlements.
Different types of employment tribunals costs
There are different types of tribunal costs to consider. It can vary depending on the size, complexity, and value of the claim
Legal representation
It’s so beneficial to have legal representation during an employment tribunal. Through the help of a solicitor or an entire legal team, you gain a better understanding of what the best outcome is for your case.
Without prior legal knowledge, some disputes can be hard to defend alone. So, having appropriate representation increases your chances of defending your side.
Compensation
Adjudicators will always have the final say on disputes. They could ask a guilty party to pay various penalties, including compensation.
They might be asked to pay compensation for any loss or harm caused before and during the hearing.
The compensation amount depends on individual cases, but they can run into thousands of pounds.
Loss of time
Most hearings can last days, but more complicated ones can be weeks long.
So, you need to consider the amount of time and effort it takes to prepare for a hearing. A loss in time can significantly affect things like productivity and profits, for your business.
Reputation
The aftermath of going through legal hearings can be damaging to your reputation.
Public people and media representatives are usually allowed to attend hearings. Allegations and findings can easily be leaked, damaging your business name.
Even if these turned out to be false, the harm that they cause can be difficult to recover from.
What happens after an employment tribunal?
In the end, the final amount to employment tribunal costs will depend on the verdict.
A basic award is a set amount of money that is based on a person’s age, service length, and salary.
A compensatory award is the amount of money or entitlements which the claimant lost. For example, after missed wages or paid leave.
Some penalties can involve paying basic and compensatory awards together.
How to reduce tribunal claims in the workplace
Employees have a legal right to appeal against a workplace decision. They might feel they’ve been treated unfairly, and it’s affecting their legal rights and means to work.
So, as an employer, you must do your best to provide a fair and healthy workspace. That way, you can reduce the chances of disputes being raised to tribunal hearings.
Here are steps to reduce tribunal claims in the workplace:
Have clear policies and procedures
Your policies and procedures must clearly demonstrate acceptable workplace behaviour and conduct.
Make these documents available to all staff members. These include information on employment laws and regulations which everyone must follow.
In some cases, you can try to resolve issues before they reach a hearing. If it’s suitable, you can reach an agreement through informal methods, like mediation.
Here, both parties can express their concerns outside of formal court settings. You both can avoid expensive legal fees and the stress which comes with legal disputes.
Collect data for compliance
Whether you work for a large organisation or not, you should always oversee your staff’s entitlements.
You can collect this through BrightHR software which tracks absences, payment, and other management aspects.
This type of data can be crucial during hearings, as it can demonstrate your compliance as an employer.
FAQs covering the cost of an employment tribunal
Depending on the circumstances of the case, an employment tribunal can be a complex process. It can be a stressful and taxing experience for all parties concerned. Therefore, it's natural to have questions. Here are some our experts are regularly faced with:
What are the main costs?
Legal fees attribute to most of the expense. This includes the time spent by your legal team, solicitors and barristers, researching and preparing for the case, drafting documentation, and representation at hearings.
Disbursements are also costly. These are expenses paid to third parties—commonly, barristers’ fees for representing at a hearing. Another cost could be expert witness fees for medical reports.
What if I lose the case?
Generally, each party covers its own costs, and the tribunal doesn’t order one side to pay the other’s legal fees. However, if the tribunal deems a party has acted unreasonably or maliciously, it can order them to cover the respective fees.
Get expert advice on employment tribunal costs with Peninsula
If you face a workplace dispute, you should do your best to resolve it internally. Explain your reasons and demonstrate how you both can benefit from avoiding legal courts.
But if you have to attend a hearing, be sure to go prepared. Without legal representation, the consequences can be difficult to recover from.
Peninsula offers expert advice on employment tribunal costs and hearings. We provide employment tribunal support from start to end–helping you protect your business.
We also have a 24/7 HR advice service which is available 365 days a year; with multi-lingual support and fully trained counsellors ready to help.
Want to find out more? Contact us on 0800 028 2420 and book a free consultation with an HR consultant today.
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