Employment Tribunal backlog now at a 10-year high
2020 has been a year of unprecedented change, so much so that the even saying so has become something of a cliché. As a nation, we have all adjusted to the necessary changes and challenges that have resulted from lockdown, social distancing restrictions, investment in PPE and loss of demand or Covid affected trading. Many industries have been seriously impacted as a result of these changes and with a sustained period of economic uncertainty ahead of us and a likely prolonged recession it is likely we will see continued insolvencies and regrettably job losses as businesses are forced to cut their cloth accordingly and manage costs that will inevitably result in redundancies.
So far in 2020 we have experienced a surge in unemployment in the wake of the coronavirus that has resulted in the highest level of single employment tribunal claims since 2012/13. Quarterly Ministry of Justice (MoJ) figures covering April to June 2020 show that single claim receipts increased by 18% to 10,000, putting into context the challenge facing the tribunal. The outstanding caseload of 37,000 by the end of June had passed peak levels last seen in 2009/10 following the global financial crisis. The number of disposals has fallen by 31% this year from the same period in 2019 and that caseload is known to have risen since the end of June. The MoJ has warned that the trend is likely to continue as the Government’s job retention scheme comes to an end this month.
So with economic pressure, increasing job losses anticipated and an increase in claim farming activity and awareness propagated by social media and targeted online advertising, it is reasonable to expect more allegations of Employment Practices Liability claims to impact businesses of every size and industry. This will impact organisations not only in terms of costs and potential awards but also the inevitable time, hassle and potential for lasting reputational harm and disruption.
It is also likely that individual Directors & Officers may also be named in actions as second defendants in actions and as such they are jointly and severally liable and so it is the own personal wealth of these individuals that may be at risk.
As such, it has perhaps never been more important for organisations to avail themselves of the protection available from a Management Liability Insurance programme that will provide indemnity for costs and awards and access to tier 1 legal support to and to wherever possible prepare a defence and repudiate liability for both the company and the individual. Management liability insurance remains widely available, affordable and is an essential protection for any limited liability business.
For more information please contact as member of the Specialist Risk Insurance Solutions team to discuss:
020 7977 4800
srisenquiries@specialistrisk.com
Sources:
https://www.gov.uk/government/collections/tribunals-statistics
