Compulsory Alternative Dispute Resolutions to be rolled out across Employment Tribunals
Tuesday 3rd October 2023
Employment judges can now order a new form of non-consensual alternative dispute resolution between the parties in a bid to cut down the backlog of claims.
Judicial backlog and new form of dispute resolution
In Q4 2023, the combined open caseload for the Employment Tribunals stood at around 477,000, with a 39% increase in new cases received compared to the same period a year ago. In view of this, the Tribunal has issued new Presidential Guidance on a new form of alternative dispute resolution (“ADR”), and the power for judges to compel parties to take part in ADR.
Going forward, there will be four main types of ADR available to parties in an employment tribunal claim:
- ACAS’s early conciliation service;
- Judicial mediation;
- Judicial assessment; and
- Dispute resolution appointments.
Dispute Resolution Appointment
Dispute resolution appointments (“DRA”) are described as a non-consensual, confidential and evaluative process, meaning that they can be scheduled even without the consent of the parties. A party failing to attend their appointment without good reason may be found to have behaved unreasonably, and the Tribunal may make a cost order against them.
Although the parties may be compelled to conduct a DRA and to generally co-operate with the tribunal and with each other, they are not obliged to reach a successful outcome, or to follow the Judge’s recommendation after the conclusion of the appointment. The primary goal of a DRA is to assist the parties in understanding the case, and to narrow the issues requiring the Tribunal’s ruling. According to the Presidential Guidance, most DRAs will be utilised in cases where parties have historically been reluctant in adopting other forms of ADR, claims involving discrimination and whistleblowing, and generally complex cases that require a hearing period of 6 days or more.
Where a DRA has been ordered, an Employment Judge will give the parties an evaluation of their respective prospects of success and possible outcomes in terms of remedy, while maintaining an impartial role. If the DRA is unable to bring the parties to settle, a different judge will be assigned to decide on the claim at a final hearing.
Employers often look to settle employment claims for a range of reasons irrespective of fault, settlement can often be a good commercial decision. Most commonly this is due to the time, costs and risks associated with having a full hearing and the possible damage to reputation should the Claimant be successful. However, Claimants can sometimes have unrealistic expectations about the merits of their claim and the size of any potential award. As a result, they may put forward unrealistic offers or refuse to engage in settlement negotiations entirely.
It is possible that judicial oversight will encourage Claimants to engage with the ADR process. Failure to attend the DRA may result in a costs award against the Claimant which may encourage attendance, and assessment of merits by a Judge will give Claimants a realistic evaluation of their odds of success. These factors may lead to unrealistic Claimants being more willing to consider offers of settlements put forward by Respondents.
The full impact of DRAs remains to be seen and it will be interesting to see whether it has any effect on the backlog of cases many Tribunals are experiencing. Watch this space! If you require any further information on the above developments, please do not hesitate to get in contact with a member of the Employment Team.