| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Lord Wedderburn of Charlton: The Minister is making some bad points.
Lord McCarthy: The Minister is telling us of a case where the existing law seems to have dealt with the matter extremely well, yet there was a case for a further measure.
Lord McIntosh of Haringey: Exactly. I am describing the circumstances in which costs are legitimate. I think we have agreement that it is legitimate to award costs under certain circumstances. I want now to describe the circumstances in which payments—they are not the same as costs—will also be legitimate. In terms of how it will be controlled it is right, as has been said, that we will address the issue
through the provision of guidance for tribunal users on how the costs regime applies. If we make clear to tribunal users exactly how it applies, we will dispel some of the inaccurate messages which employers or their representatives are putting out to intimidate applicants.Under current rules, parties may only recover costs which they have actually incurred and costs awards primarily cover legal expenses. There is no power to compensate a party in respect of time they have spent preparing for a tribunal. Legal representation is not the normal procedure in tribunals. Most users and in particular applicants do not engage lawyers. Less than a third of respondents are legally represented and less than a quarter of applicants. So the present system is not even-handed towards applicants, who are less likely to engage a lawyer. The introduction of preparation time will help to address and correct this situation, rather than making it worse.
Preparing for a tribunal can be time consuming and costly, particularly when a party is pursuing its case without a representative and must undertake all the work in his or her own time. There has been research to suggest that the average amount of time spent by applicants preparing their case is 42 hours and a half of all applicants spend longer than 20 hours of their own time preparing for a case. The new provision will help us to give tribunals the option of recognising this and compensating the parties accordingly.
Tribunal allowances already cover loss of earnings for attendance at the tribunal, so why should there not be the possibility of compensation for preparing for it? Similarly, an employer or one of his staff may have to set aside part of his working day to prepare the defence and for the hearing. Preparation time will cover the time a party has spent gathering information and documents for the case, speaking to witnesses and preparing for the hearing. It may also recognise that a party has had to devote time to a case unnecessarily, which could have been more productively spent elsewhere.
Compensation for case preparation will not be limited to actual expenditure. That is why we are talking about payments rather than costs. We doubt that it is possible or sensible to assess preparation time by a precise calculation of loss in every case. We cannot keep records and it may not involve any actual expenditure.
In an unfair dismissal case where the applicant is unemployed, it would not be appropriate to award preparation time compensation for the actual expenditure because there might not be any. It might, however, be appropriate to order some form of compensation to the applicant in recognition of the time spent in preparing for the case as a result of the respondent's unreasonable actions.
We intend to set out in the regulations guidelines for assessing case preparation compensation. We will consider a range of tools to ensure that case preparation compensation is reasonable. For example, fixed amounts, ranges of amounts by reference to different jurisdictions, linking assessments to the
applicant's rate of pay or former rate of pay, and the remuneration of the employee of the respondent who dealt with the matter. We will also consider capping awards in respect of preparation time.We also provide in the regulations that, where a tribunal intends to set the amount of a costs award and also intends to make an award of preparation time, the total amount will not exceed the current limit on costs awards. We will take great care in framing the regulations and we will of course consult.
I have said some new things here. I have said—which may not have been said before—that the total amount of payments that can be made for preparation time, added to the costs award, cannot exceed the current limit for costs awards. I have made clear that costs awards are very rare and the amounts of money are very small. Therefore, it is clear that this extension of provision for compensation from actual costs, in other words, legal costs, to payments for time, which cannot be assessed so accurately, is perhaps a significant change, but a significant change in a very small field indeed. If between now and Report stage, I think about ways in which assurances can be given on that point, I will be happy to give that consideration.
Lord McCarthy: Can I ask the noble Lord, Lord McIntosh of Haringey, before he sits down, there was a sentence in which he said "a very small field indeed"? There was another sentence a little earlier when he said "quite frequently", so it would be "quite frequently in a very small field". I am not quite certain what that very small field is.
Lord McIntosh of Haringey: Let us engage in textual analysis when we see Hansard. I do not remember saying "quite frequently".
Lord Gladwin of Clee: Forgive me, but the Minister went rather quickly over the issue that I am concerned about. There is already evidence that an employer's representative will use the threat of costs in an intimidatory way. I am not making this up. My noble friend Lord McIntosh of Haringey said something about that, and I am hoping it was an assurance. I wonder whether he would repeat what he said because I believe we shall be saved from that situation by the wisdom of the employment tribunals. However, what we will not be saved from is the employer who—and it happens—uses threats against an employee who has gone to a tribunal, in an intimidatory way, to frighten them off pursuing their claim. That is a real issue and I need some guarantees about that.
Lord McIntosh of Haringey: I understand that point. I am afraid it concerns not what is in this Bill, but the increase in the maximum amount of costs which occurred in July of last year. That is a serious issue which needs to be addressed.
What I said was—and I think this is the relevant part—compensation for case preparation will only apply for the exceptional and abusive cases which we all agree do not properly belong in the employment tribunals. In order that that should be made clear to both applicants and employers, because that is what is
necessary to stop intimidatory messages, I have said that it will be put in guidance for applicants and for respondents.
Lord Wedderburn of Charlton: This is perhaps one of the most serious debates that your Lordships have had in this Committee.
The Minister, in sticking to the stone brief which Ministers have stuck to throughout the Grand Committee so far, with one very tiny exception for which we are immensely grateful, has advanced an understanding of the clause which is quite extraordinary.
The Minister spoke almost entirely of a recovery of preparation time payments by applicants. He ignored totally what the Law Society says, and I quote it again,
- "Although this provision is couched in language that applies equally to both parties, it is likely to impact disproportionately on applicants".
The second point is that we also "provide in regulations". The Minister will forgive me if I quote him wrongly but I understood that he said we also provide in regulations. If the Government know what is in the regulations, let us see them now—they are not going to appear in the Bill. If they will not let us see them, why will they not publish their draft of the regulations tomorrow? They know what is coming, so why not let us see them? They should be in the Bill. Our modest amendment is that the provision should be restricted to cases in which costs might be payable because proceedings on one side or the other were conducted vexatiously, unreasonably or in a misconceived manner. That is so obvious that the Minister must accept it, but he will not include it in the Bill. Instead, he said that the proposal would be limited to the new limit that the Government imposed.
Sometimes there runs through my head in these proceedings a song which that excellent radio station Capital Gold confirmed the other day was sung by Lesley Gore in the 1960s. it is called, "It's my party and I'll cry if I want to". I wonder why the Minister did not refer to the Law Society. Does he suggest that it is wrong and that the provision goes way beyond normal juridical principles?
Baroness Gardner of Parkes: I find disconcerting the discussion about what the Law Society want. The Law Society contains the very people who are totally covered by the word "costs". The Minister made the point that these payments would relate, as I said earlier, to charities that have to spend a great deal of time defending cases and have lost out badly. However, he also quoted applicants who might have no money of their own. It is a significant point against the Law Society that although it is busy not wanting anyone to have payments, it claims for any case for
which it could claim only under the same circumstances in which that claim could be made, and for every legal fee. I do not need John Grisham to tell me about billing 24 hours a day.
| Next Section | Back to Table of Contents | Lords Hansard Home Page |