EPL claims: Early Conciliation - a change in the law to be aware of - DAC Beachcroft

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EPL claims: Early Conciliation - a change in the law to be aware of

Published On: 2 April 2014

As of 6 April 2014, a scheme will be introduced whereby claimants will only be able to bring an Employment Tribunal claim against their employer if they have referred the issue to ACAS (the Advisory, Conciliation and Arbitration Service) for Early Conciliation first. This will be the case for most Employment Tribunal claims. The Early Conciliation process will be voluntary from 6 April 2014 and will be mandatory for claims lodged on, or after, 6 May 2014. As well as the introduction of fees for issuing claims in July last year, this reform is intended to reduce the number of cases going to Employment Tribunals.

Employment Practices Liability ("EPL") providers need to be alive to this change in the event that Insureds are contacted by ACAS and asked to consider settlement in advance of a claim. Appropriate procedures and training will help to reduce the risk of Insureds inadvertently prejudicing their own and/or Insurers position, by ensuring that disputes are settled, where appropriate, protecting against both current and future identifiable risk. Claims notification wording in Policies may therefore need revisiting or clarifying.

What's the change in practice?

ACAS Early Conciliation will require the claimant to submit a form to ACAS in advance of submitting an Employment Tribunal claim. ACAS will then, with the claimant's consent, contact the employer with a view to considering whether the parties can reach an agreement to settle the matter without submitting a claim.

While the parties are considering whether to negotiate, the normal 3 month time limit for bringing a claim is paused. The parties will have up to a maximum of 6 weeks to try to resolve the matter. If the parties cannot reach an agreement in that time frame, ACAS will issue the claimant with a certificate. This certificate must be presented to the Employment Tribunal when submitting a claim or it will be rejected.

What this means is that Insureds will potentially know much earlier than normal that a claim may be brought. There is no obligation for an Insured to make any offers of settlement, but there may be the opportunity to avoid a claim at an early stage without incurring significant legal costs or management time. Equally, if the Insured does not engage in the process, or handles the process poorly, or agrees to settle a dispute without fully protecting against future risk, this may inadvertently prejudice their own, and/or their Insurer's, position.

How can we help?

Within our Employment and Pensions Group, we have a bespoke EPL team, comprising of solicitors and claims handlers across the UK who handle a large volume of EPL claims every year and have a wealth of knowledge in working with Insurers, Insureds and Brokers on such claims.

To help manage this change, we have a bespoke training course to help EPL providers understand the benefits and pitfalls of the process, including the Policy implications. We can also offer a systemised, capped fee approach for managing Early Conciliation, including quick early assessments of risk/liability as well as carrying out negotiations with ACAS.

If you would like more information on Early Concilation and its likely impact, or to talk about training or management of the process, please contact Louise Bloomfield, Associate, who heads our EPL team.