Monthly Archives: January 2014

Legal Insurance and Freedom of Choice

Ashby Cohen explain how contents insurance can cover your legal billsWhen you have just lost your job and face an uncertain future, the last thing you need is to have to find money to pay any legal bills incurred in connection with a potential Employment Tribunal claim.

If you are unable to meet the ongoing cost of paying for legal representation, you are then faced with the prospect of either risking a substantial sum of your own money by initiating tribunal proceedings, or taking a smaller settlement that you would otherwise be entitled to, or worse still be forced to abandon your claim altogether.

What many people don’t appreciate is that often you do not need to make such unpalatable choices because you may have the benefit of a legal expense policy.  Such policies are usually purchased in conjunction with domestic contents insurance policies, for a nominal additional sum.

The policy, subject to its conditions, will normally provide cover for up to £50,000 to £100,000 of legal expenses.  These legal expenses would normally include all solicitors’ fees, VAT and disbursements such as tribunal and barristers’ fees.

Provided that your claim is accepted by your insurer as having reasonable prospects of success, then the fundamental point for you to remember is that under The Insurance Companies (Legal Expense Insurance) Regulations 1990 you are entitled at the point of the start of proceedings or when proceedings have actually started to choose your own solicitor.  You are not obliged to use the insurer’s panel firm of solicitors.

However, most insurers insist upon their panel solicitors conducting the initial merits assessment of your claim, which tends to be quite a slow process.  For this reason, it is advisable to notify your insurer and get a claim form as soon as you become aware of issues at work.

You should be aware that even if your legal expense insurance policy provides a 24 hour legal helpline, it is very rare for an insurer to agree to fund preliminary work on your matter.  You will usually have to wait until proceedings become necessary and in the interim, any legal fees that you incur would be your own responsibility.  Insurers tend not to backdate payments.

There are still debates going on as to whether it should be the panel solicitors who takes the initial step of issuing the proceedings, or whether you have the right to insist that it is your own solicitors that does so.  On balance the latter scenario seems to have prevailed.

Furthermore, you may not be able to insist that the insurer meets the full hourly cost charged by your preferred choice of solicitor. Recent guidance states that the insurer can only be compelled to pay the “going rate” in your area. However, even with this small limitation, it still gives you the opportunity to choose your own solicitor and pay a modest “top-up” amount. This may be preferable in terms of the service and accessibility provided by your own choice of solicitor.

Overall therefore, having the benefit of such a policy can enhance your bargaining position in any negotiation as well as giving you the opportunity to pursue your rightful claims.  For those reasons alone, it is well worth the small additional cost of the policy.

The Legal Tests for Sexual Harassment

iStock_000002756763SmallComments which have a sexual undercurrent and which are made in the workplace are regarded by some as mere “office banter” which they are happy to engage in.  For others, the same comments make them feel uncomfortable or are a source of embarrassment and upset.  If various surveys are to be believed, sexual harassment in the workplace is common in the UK.

Section 26(1) of the Equality Act 2010 provides a definition of harassment which operates across a range of characteristics which an individual might have and which are protected by the 2010 Act, such as an individual’s age, race or sex.  Section 26(2) specifically provides a definition of sexual harassment.  In a claim by an employee for sexual harassment, the definition requires that the Employment Tribunal should consider (in relation to each allegation)

(a)    Did the alleged harasser engage in conduct of a sexual nature?

(b)   If so, was it unwanted?

(c)    If so, did it have the purpose or effect of violating the claimant’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for the claimant?

In respect of “conduct of a sexual nature” the Employment Statutory Code of Practice (issued by the Equality and Human Rights Commission to provide a detailed explanation of the Equality Act) provides as follows:

“Conduct ‘of a sexual nature’ can cover verbal, non-verbal or physical conduct including unwelcome sexual advances, touching, forms of sexual assault, sexual jokes, displaying pornographic photographs or drawings or sending emails with material of a sexual nature.”

From this it can be seen that sexual harassment can comprise simply comments, without the need for there to have been any inappropriate physical contact or the sending of inappropriate text or email messages.

It will be noted that question (c) breaks down into two different tests.  The first is related to purpose – was the purpose of the conduct to violate the claimant’s dignity or create (in shorthand) an adverse environment for the claimant? The second is related to effect – was the effect of the conduct to violate the claimant’s dignity or create an adverse environment for the claimant? In most cases, the primary focus will be on the effect of the unwanted conduct rather than on the purpose. This leads to Section 26(4) of the Act which states that in deciding what effect the conduct has had, each of the following must be taken into account

(a)    The perception of [the claimant]

(b)   The other circumstances of the case

(c)    Whether it is reasonable for the conduct to have that effect.

In one case* which came before the Employment Tribunal, the employee was of Indian ethnic origin who was employed by a pharmaceutical company.  She gave notice of her resignation and her relationship with her manager (which had previously been good) became strained.  In a meeting with her manager, the manager said “We will probably bump into each other in future, unless you are married-off in India”.  The employee claimed that this remark constituted racial harassment.  Although the claim was under the old Race Relations Act, the test for harassment was similar to that set out in the Equality Act 2010.  The Employment Tribunal found that the quoted words had been said but awarded her only £1,000 in compensation.  The pharmaceutical company appealed against the finding of liability to the Employment Appeal Tribunal (“EAT”).  An appeal to the EAT is only on a point of law and the EAT felt that it could not overturn the findings of the Employment Tribunal as being wrong in law  Nevertheless, a reading of the EAT judgment indicates that the EAT was surprised that there had been a finding on liability, the EAT stating that the facts had been close to the borderline and that the Tribunal having considered the case most conscientiously, had been entitled to hold that the comment had fallen on the wrong side of the line.

In the course of its judgment, the EAT stated

“the victim must have felt or perceived, her dignity had been violated or that an adverse environment to have been created.  That can, if you like, be described as introducing a ‘subjective’ element; but overall the criterion is objective because what the Tribunal is required to consider is whether, if the claimant has experienced those feelings or perceptions, it was reasonable for her to do so.  Thus if, for example, the Tribunal believed that the claimant was unreasonably prone to take offence, then, even if she did genuinely feel that her dignity had been violated there will have been no harassment.”

and went on to comment:

“Dignity is not necessarily violated by things said or done which are trivial or transitory, particularly if it should have been clear that any offence was unintended … it is also important not to encourage a culture of hypersensitivity or the imposition of legal liability in respect of every unfortunate phrase.”

Whether it is reasonable for a claimant to have felt her dignity to have been violated or an adverse environment to have been created is essentially a matter for the factual assessment of the Employment Tribunal, having regard to all of the circumstances and using the tests described above.


*Richmond Pharmaceuticals v. Dhaliwal [2009] ICR 724