THOUSANDS OF BUSINESSES ARE PAYING FOR WORTHLESS LEGAL FEES INSURANCE TO COVER EMPLOYMENT TRIBUNALS
Thousands of mostly small businesses throughout the UK are paying premiums for legal fees insurance that is largely worthless.
Many small firms take out insurance against the costs of fighting claims at employment tribunals, some as standalone policies and some as “add ons” to employer’s liability or other policies. Insurance companies always write these policies on the basis that they will only cover claims that have more than a 51 per cent prospect of being successfully defended – cases where they assess the employer has acted incorrectly will not be covered.
Premiums for this type of insurance before August 2013 were set to reflect the large number of ill-conceived or totally spurious employment tribunal claims filed by disgruntled employees.
However, the rules for bringing claims to employment tribunals changed in 2013. It is now a requirement not only for ex-employees to go through Acas Early Conciliation before they can lodge a claim; they must also pay a fee of up to £250 when they file the claim and a further £950 before there is a hearing. The effect that this has had on the number of claims being lodged has been dramatic – the overall number of claims has fallen by 79 per cent.
Peter Abraham of human resource compliance advisers HR4UK (www.hr4uk.com) said:
“The reduction in the number of claims means the risk of an employer who has attempted to comply with the law being taken to an employment tribunal for a misconceived claim is now much lower than it was just over a year ago.
“What’s more, because there are now costs to the employee of bringing a claim, only cases where the claimant is likely to succeed are being pursued. These are the very cases where insurance companies believe the employer has less than a 51 per cent chance of success and are therefore much more likely to refuse to cover.
“These two factors together mean that businesses are paying for insurance which is of dubious benefit. Insurers have generally not significantly, if at all, reduced their premiums. They are creaming in profits on this area of business – especially as many small businesses simply renew a policy without reviewing its costs and benefits.”
Until recently, as part of its services, HR4UK offered a complimentary insurance to clients to cover the costs of fighting employment tribunal claims. Due to the changes that have taken place HR4UK is no longer doing so because it sees insufficient benefit to its clients. Instead it is providing free representation in Acas Early Conciliation negotiations and employment tribunals using its expert team of employment lawyers and barristers, allocating up to £20,000 of its own money to cover such costs in any one case. What is far more beneficial to its clients is that it will represent them regardless of the chances of success at the employment tribunal and this offer is no longer tied to the rigid rules of insurers.
Peter Abraham said: “We tried to renegotiate the insurance policy but, despite the huge reduction in risk faced by the insurer, we were being asked for a premium that was little different to what we have paid in the past.
“We are so confident in our advice and systems that we no longer see a need for legal expense insurance to fight employment tribunal claims when the misguided and ridiculous claims that flooded the system in the past are simply no longer there. So we are putting our own money where our mouth is and offering to provide free representation in Acas Early Conciliation negotiations and employment tribunals up to £20,000 per claim to our clients – provided they follow our system. They do not even have to ring us for advice.
“We have been delighted that our clients have seen the sense in what we have done, many saying they feel this is better than the insurance-backed service as they do not have to worry about the chances of success to know whether their legal fees will be covered.”
OAKHAM WOMAN AWARDED £1,000 AS ‘THANK YOU’ FOR LARKFLEET REFERRAL
Bridgette Tan, a resident at the Larkfleet Homes (www.larkfleethomes.co.uk) Leighfield Park development in Oakham, has been awarded £1,000 for referring the development to a friend who has now also purchased a property there.
Mrs Tan moved to Leighfield Park just over two years ago and was so impressed with the development she recommended it to her friend Christina Hall.
Mrs Tan was able to take advantage of Larkfleet’s referral scheme which gives buyers who recommend a friend to Larkfleet a £1,000 ‘thank you’ gift if that recommendation results in a house sale.
When Mrs Hall completed her move to the development last month, Mrs Tan was awarded her cheque for £1,000.
Mrs Tan said: “I love the community spirit at Leighfield Park – it is a very friendly place to live. The location suits me perfectly too as I can walk to and from work and it’s close to my gym.”
Mrs Hall has also been impressed by Leighfield Park – especially the sales team on site. She said: “The sales team were a pleasure to deal with and offered a personalised service from start to finish. They really understood what I was looking for and went that extra mile to ensure that the property met my needs.
“I love living at Leighfield Park. It is just on the edge of beautiful countryside which I can enjoy whilst taking my dog for a walk. It’s also so refreshing to have a new development that has a variety of house styles. The properties all look different in some way and the development has more open space that I have seen on other sites.”
Leighfield Park is part of Oakham Heights, Larkfleet’s major urban expansion of Oakham, located on land between the Oakham bypass and Barleythorpe Road.
The development offers one, two, three, four and five bedroom properties and is aimed at buyers looking for a stylish, traditional home that allows them to enjoy rural life while still benefiting from good transport links to surrounding towns and cities.
Larkfleet CEO Karl Hick said: “It is great to hear that Leighfield Park has such a positive impact on residents and that they are happy to recommend it to friends and family. It is a credit to our sales teams on site that buyers have found buying and living at Leighfield Park such a pleasant experience.”
The government’s Help to Buy scheme, which allows homebuyers to potentially own 100 per cent of their new home with just a 75 per cent mortgage and 5 per cent deposit, is available at Leighfield Park.
All houses have solar PV (photovoltaic) panels fitted as standard so homebuyers can benefit from reduced energy bills and generate an income from selling their excess energy to the grid under the government’s Feed in Tariff scheme. The PV panels will produce electricity from daylight, generating useable power even on cloudy days.
There is also an electric car charging point on site for resident and public use.
For further details on Leighfield Park call 01572 722 262 or email firstname.lastname@example.org.
SMOOTHIE BIKE HELPS HEALTH AT COLOPLAST
As part of an ongoing ‘wellbeing’ programme at Peterborough-based medical devices company Coloplast (www.coloplast.com) employees have been given the opportunity to create their own healthy drinks – using pedal power.
The company set up a ‘smoothie bike’ in the staff restaurant and provided free ingredients for employees to make their own fruit smoothies. The bike was connected to a blender which chopped, mashed and mixed the ingredients – so healthy exercise on the bike resulted in the creation of a healthy drink.
“Staff wellbeing is a really important aspect of working at Coloplast”, explained Kelly Rippon, HR assistant. “As friends and colleagues we want people to be fit and healthy but as a company we benefit, too, if people have less time off due to illness and are able to give 100 per cent when they are at work.”
As well as being good for health and an important part of the diet, fruit can also boost concentration, keeping staff on top of their game and helping to avoid the ‘afternoon lull’ caused by the drop in blood sugar that comes following a typical lunch containing foods such as sandwiches, pasta, cakes and biscuits. Fruit releases its energy slowly, helping to keep blood sugar stable and avoiding the highs – which can make you feel bloated – and the lows, which can make you feel tired and lethargic.
Kelly added: “The smoothie bike helped us to make some serious points about diet and exercise as well as being a talking point and a bit of fun.”
• If you want to join a company that is recognised in the Sunday Times Top 100 Best Companies to Work For, cares for its customers and works to improve the wellbeing of its staff, visit www.jobsatcoloplast.com.