Wrongful Dismissal and Unfair Dismissal
There are usually 2 types of claim that can arise out of Employment Law disputes; Wrongful Dismissal and Unfair Dismissal.
Wrongful Dismissal arises when your employer breaks the terms of your contract when terminating your employment therefore there has been an alleged Breach of Contract.
Unfair Dismissal relates to your statutory rights where your employment is terminated for reasons that UK Law deems unjust.
Dismissal can be both unfair and wrongful.
Wrongful Dismissal claims can be brought before an Employment Tribunal or before a County Court. They can be brought in conjunction with an Unfair Dismissal case and in these circumstances the Employment Tribunal would be the correct venue.
Claims for Wrongful Dismissal in the County Court where the value of compensation is anticipated to be worth more than £10,000 should attract payment of legal costs to the successful party. Where such claims are anticipated to have a compensation value of less than £10,000 the recoverability of legal costs from the losing party are limited by the Court. In such circumstances legal costs could exceed the compensation level awarded.
If you wish to bring a claim for Wrongful Dismissal, contact our employment law team on 0808 274 0822 for a specific estimate on costs.
The following cost and service information provided is a guide to the funding options for an employment case and the likely legal costs where a case is taken to an Employment Tribunal;
In the vast majority of cases where an employee brings a claim for Unfair/Wrongful Dismissal, even if successful, an Employment Tribunal will unfortunately not make an award for payment of their legal costs. For a Wrongful Dismissal claim brought before a County Court the value of the compensation would need to exceed £10,000 to recover legal costs from the paying party. Consequently when considering a claim, if you are an employee you will have four options to fund the case:-
(i) Trade Union Membership
If you are a member of a Union, and were at the time that you were dismissed, you may have recourse to Union representation or Legal Expenses Insurance provided by your Union to fund legal fees.
(ii) Independent Legal Expenses Insurance
Often on Building, Home and Contents Insurance there is cover provided for Legal Expenses or more commonly “Family Legal Expenses”. You should check such policies and any insurance provided with your bank and/or credit card companies who may also provide insurance to cover employment related claims.
Please note that often the costs that your Insurer will pay will not cover all the cost of our involvement and you may be required to supplement this arrangement with a unique agreement with ourselves as to the balance of costs which our employment team would provide further advice on (also see other methods of funding set out below).
(iii) Damages Based Agreement (DBA)
This arrangement is recommended where we assess that there is a 61% chance of succeeding with the claim based upon the information we are provided with.
A Damages Based Agreement (DBA) will normally be recommended where the level of compensation anticipated is sufficient to cover the cost of our involvement through to Final Hearing (see Phase 4 below).
DBA’s allow a Solicitor to take up to 35% of any compensation received inclusive of VAT to fund legal fees.
In order to assess the viability and likely value of a case before we can agree to accept it and provide a DBA we may require payment of an investigation and assessment fee before such an Agreement can be offered or entered into and this would cost on average between £360 to £840 inclusive of VAT.
(iv) Paying Privately
In cases where we are not able to offer a Damages Based Agreement and in the absence of any trade union or legal expenses insurance funding as set out above, then you may wish to fund legal fees yourself. In those circumstances the likely fees would depend upon the complexity of the case and we would recommend that you pay in phases for different elements of the case as set out below.
Estimated costs depending upon the level of complexity:
Phase 1 – Preparation of the ET1 (Claim Form to the Tribunal)
£500 to £1,000 excluding VAT in simple cases
£1,000 to £1,500 excluding VAT in medium complexity cases, and
£1,500 to £2,000 excluding VAT in complex cases.
Phase 2 – Dealing with the Employer’s ET3 (Response to the claim)
£200 to £375 excluding VAT in simple cases.
£400 to £600 excluding VAT in medium complexity cases, and
£700 to £1,000 excluding VAT in complex cases.
Phase 3 – Preliminary Hearing
This is required in cases involving eligibility to bring a claim, Whistle Blowing matters and/or Discrimination. These are often conducted as Telephone Hearings in order to limit costs.
These costs can range from between £250 to £500 excluding VAT if done by way of a Telephone Hearing (for all levels of complexity).
If Preliminary Hearings are listed for legal representation and attendance then the costs can range from;
£900 to £1,000 excluding VAT in simple cases.
£1,000 to £1,200 excluding VAT in medium complexity cases, and
£1,200 to £,1500 excluding VAT in complex cases.
Phase 4 – Complying with Tribunal Directions in preparation for Final Hearing
This will usually require one or more of the following:-
- The production of a Schedule of Loss setting out the level of compensation claimed.
- Providing further details of the claim with supporting law and cases.
- The production of statements.
- The production of documents relevant to the case.
- The preparation of Trial Bundles.
The costs in relation to simple cases range from £600 to £1,000 excluding VAT.
The costs in relation to medium complexity cases range from £1,000 to £2,500 excluding VAT.
The costs in relation to high complexity cases range from £1,500 to £4,000 excluding VAT.
Phase 5 – Tribunal Hearing
Again, this is determined by the level of complexity, but we would estimate costs as follows:-
(a) Simple case (1 day): £1,500 excluding VAT
(b) Medium complexity (2 days): £2,500 excluding VAT
(c) High complexity case (3 days or more): £1,500 for the first day excluding VAT
£1,000 for each day thereafter excluding VAT
Classes Of Cases:
Claims brought by one employee Claimant. Cases involving claims for Automatic Unfair Dismissal or where there are straightforward issues constituting the claim and the Defences to it.
Medium Complexity Cases
These occur where there may be issues relating to qualifying period of employment, discrimination, whistle-blowing and more than one Claimant.
High Complexity Cases
These may involve 2 or more employee Claimants, complex issues relating to disability and other claims involving discrimination and/or whistle-blowing cases and claims for injury to feelings.
When considering funding a case on a privately paying basis, in the absence of allegations relating to Discrimination and/or Whistle-Blowing, compensation is limited to 12 months’ loss of earnings. Loss of earnings are calculated with reference to benefits received during the period of unemployment, Tax and National Insurance that would ordinarily be paid and any income received during that period.
Consequently if you have secured employment or are confident of securing alternative employment within 6 months of dismissal, we would not recommend funding such cases on a privately paying basis, except in exceptional cases where there is Discrimination, Whistle-Blowing or other complicating features that will allow for uncapped compensation.
Many employers will have Insurance in place to cover the cost of claims against them and should contact their Insurance Brokers or Insurance providers without delay.
You can insist that the Insurer agrees to you instructing ourselves as your chosen Solicitor.
The costs that the Insurer will pay may not always cover all the cost of our involvement and you may be required to supplement any such arrangement with a private paying business retainer as set out above.
If no Insurance is available then anticipated legal costs for an employer may be more than those set out above on a private paying basis as there is often an onus upon employers to produce more information in relation to claims. Consequently for each stage described above we would anticipate that costs would increase by approximately 15% to the amounts quoted.
Timeframes to Resolution
The time it takes from our first meeting with you to the final resolution of your case depends largely on the stage at which your case is resolved. If your case proceeds to a final Tribunal/County Court hearing then the process is likely to take on average between 27 weeks to 1 year. If your case is resolved earlier then a resolution could be reached within a few months.
IN ALL CASES
The information on costs set out above is based upon averages. If after instructing us information comes to light that either increases or decreases the complexity then you would receive a specific revised estimate of likely costs.