Jackson and Employment Law: what impact?
As most practitioners should now be aware, recent months have seen some of the most significant and wide-reaching reforms to procedure in the civil courts since the Woolf reforms. These changes have been brought about by a report into civil litigation costs by Jackson LJ, published in 2010, and implemented largely by legislation brought into force on 1st April 2013, when all of the changes set out below took effect. Whilst the reforms will in the main only impact upon civil practitioners, some may have a direct bearing on proceedings in the employment tribunal, and will of course need to be considered carefully by employment lawyers handling matters in the County Court or High Court concerning employment law issues, including claims to restrain breaches of an employee’s restrictive covenants, or wrongful dismissal claims brought in those jurisdictions. This article does not seek to set out the substance of the Jackson reforms in full, but will address some of the key provisions which may touch directly upon employment law issues.
Increase in the level of general damages
Any civil claim where judgment is given (or a settlement reached) after 1st April 2013 is now subject to a 10% increase in the proper level of damages for non-pecuniary losses (primarily awards for pain, suffering and loss of amenity), i.e. that such damages should now be assessed at 10% higher than previously. This reform was introduced by case law, rather than statute, in the judgment of Lord Judge LCJ in Simmons v Castle [2012] EWCA Civ 1288; [2013] 1 WLR 1239 (at para.20). The Court of Appeal held that the increase should apply to “all civil cases”, but the issue of whether that includes awards for injury to feelings in claims involving discrimination brought before an employment tribunal was not addressed. Does it therefore apply to such cases?
The rationale behind the measure was to compensate claimants for another Jackson reform which did not benefit them, namely the end to the recovery of success fees from a defendant in conditional fee cases. Due to the nature of the costs regime in the employment tribunal, such fee arrangements are rare in tribunal claims – should the uplift therefore not apply in the circumstances?
On the other hand, discrimination is a ‘statutory tort’, provided for by ss.119 and 124 of the Equality Act 2010. It could clearly therefore be classified as a ‘civil claim’. Furthermore, awards for injury to feelings have always been based upon a comparison with damages awards in the civil jurisdictions for pain, suffering and loss of amenity, providing the basis for the three bands of awards in discrimination claims set out in the case of Vento v Chief Constable of West Yorkshire Police [2003] IRLR 102. Why, considering these factors, should the 10% increase not apply?
There has not yet been a reported case dealing with this issue, but it seems that in all likelihood, the uplift should apply to discrimination awards in the employment tribunal, given that the arguments for its application appear to properly outweigh the objections. Practitioners should therefore be alive to this, and be ready to bring Simmons to the attention of the employment tribunal when dealing with a relevant claim. The effect of the increase will be to amend the upper limits of the low, medium and high Vento bands to £6,600, £19,800 and £33,000 respectively.
Other changes
It is worth repeating that employment practitioners who are dealing with a claim in the County Court or High Court will need to be fully familiar with the Civil Procedure Rules post-Jackson. The full extent of the changes is beyond the scope of this article, but the following is a non-exhaustive list of some of the provisions applying to civil court claims, but which may directly impact upon employment law work:
- ATE insurance premiums are no longer recoverable from the losing side. Whilst these payments largely only apply to conditional fee cases, this change will mean that trade unions will no longer be able to recover self-insurance costs, i.e. where the trade union itself provides the cover to its member. As a result, it is feared that union membership fees may be increased to compensate for the cost to unions of this reform.
- Part 36: An additional sanction now faces a defendant who fails at trial to beat a claimant’s part 36 offer to settle a claim. The court can order such a defendant to pay to the claimant an additional sum (up to a maximum of £75,000), equivalent to 10% of any damages awarded (or 10% of the costs awarded in a non-monetary claim) – CPR 36.14(3)(d). This is bound to encourage claimants to make such offers and defendants to accept them, so as to avoid the risk of incurring the additional sanction – in employment matters, where settlement is as prevalent as in any area of law, those advising clients will need to bear this new provision in mind.
- Costs budgeting – the Jackson reforms introduced an entirely new concept in civil litigation costs: for all multi track cases (with limited exceptions) begun on or after 1st April 2013, all parties are obliged to file a costs budget, or estimate, at around the time of allocation of the matter to a track. Failure to do so will result in that party being unable to later claim any costs save for the applicable court fees. Further, upon the parties filing their budgets, the court will now manage those costs, and can make one of a number of orders restricting their recoverability. In short, parties’ representatives in multi track cases will now have to carefully assess and predict the costs that a party is likely to incur, if they are to have any real hope of recovering them if successful. Practitioners should fully familiarise themselves with these new provisions, contained in CPR 3 Part II (3.12 to 3.18), and will need to act with accurate foresight of the anticipated costs of a claim, or run the risk of not recovering them.
- Relief from sanctions – the reforms have done away with the previous ‘checklist’ test applied to an application brought by a party seeking relief from a sanction imposed by its failure to comply with a rule, practice direction or court order. Now, a court must “consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders” (CPR 3.9). There is a clear change of emphasis here towards a stricter approach to such applications, and a focus on proportionality of costs. Civil courts are likely to develop a more rigorous and unforgiving attitude towards case management issues, and it remains to be seen whether this hardening of resolve will be mirrored in the employment tribunal.
In conclusion, the Jackson reforms are important, and are very likely to be here to stay. At a time when litigation across all disciplines is facing difficult funding issues, fees are being introduced into the employment tribunal regime, and cutbacks are the order of the day, practitioners would be well-advised to keep abreast of these latest developments in what is a rapidly-changing legal landscape.
