About unfair and wrongful dismissal claims

The terms “unfair dismissal” and “wrongful dismissal” are often used interchangeably. Strictly, unfair dismissal is a statutory claim, whereas wrongful dismissal is a claim for breach of contract, usually related to a claim for unpaid notice. These claims can both be brought in the Employment Tribunal and there is often considerable overlap between them because they usually arise from the same set of circumstances. However, the amount of compensation that an Employment Tribunal can award for wrongful dismissal (breach of contract) is limited, so sometimes it is better to bring wrongful dismissal claims in either the County Court or High Court. Colina Greenway only advises on these claims when brought in the Employment Tribunal.

Indicative costs for advice

Based on our experience the following are typical ranges of fees for advising on the defence of an unfair/wrongful dismissal claim from beginning to end:

Straightforward claims

£12,000 ex VAT, barrister’s fees and expenses

Claims of medium complexity

£15,000–25,000 ex VAT, barrister’s fees and expenses

Very complex claims

£25,000–35,000 ex VAT, barrister’s fees and expenses

 

The current VAT rate applicable to fees is 20%

Barrister’s fees

These consist of a brief fee which covers preparation and the first day of the hearing and a “refresher” fee for each day of the hearing thereafter. The brief fee is payable once papers are sent to the barrister, even if the case settles before the hearing starts. The size of the fee depends on factors including the seniority of the barrister and the amount of evidence they need to master. In a straightforward unfair dismissal claim we would only use a barrister for the final hearing but in more complicated claims we may advise on using a barrister for preliminary hearings as well.

An estimate of what barrister's fees might be for a two day unfair dismissal hearing, exclusive of VAT, is £3,000-£4,000 for the "brief" fee and £1,500-£2,000 for the refresher.  VAT is chargeable on barrister’s fees at the standard rate of 20%.

Expenses

The most common expenses are photocopying and postage charges for the hearing bundle (we do not charge for incidental photocopying) and travel/accommodation costs.  Unless a case requires a lot of travel and/or overnight stays near the hearing venue total expenses are usually less than £1000 excluding VAT.   VAT is charged on all expenses incurred at the standard rate of 20%.

Things that may impact the total cost

• If the unfair dismissal claim is relatively straightforward, for example unfair selection for redundancy, or if it includes a claim of discrimination, for example unfair redundancy selection based on gender or race.
• The number of preliminary hearings—these can be to discuss the steps required to get ready for the final hearing (a Case Management Preliminary Hearing) or to deal with substantive issues, such as whether or not the claim has been brought outside the time limits.
• Whether the preliminary hearings are conducted by telephone or in person—we do not charge for travelling time but we do charge for time spent at tribunal waiting for the hearing to start (usually this time is spent discussing the case).
• Whether any hearing is cancelled or delayed—it does happen that an Employment Tribunal may have a listing issue which means that a hearing does not start on time, or may even be postponed to another day. Sometimes the Tribunal requires the parties to wait for a number of hours before deciding to postpone.
• The number of applications by the parties before the final hearing. For example, it may be necessary to ask a Claimant for further particulars of their claim. If the parties cannot agree then it might be necessary to make a written application to the Employment Tribunal for a specific Order.
• The number of witnesses.
• The numbers of days that the final hearing lasts.
• Whether or not remedies are decided at a separate hearing from issues of liability.
• The seniority of the barrister used to conduct the final hearing.
• “Off the record” discussions to settle the claim—these may take place at any stage in the proceedings, up to and including the final hearing, although there is no guarantee that the parties will settle.

It is important to be aware that in Employment Tribunal claims, with only very limited exceptions, each side will have to cover its own costs of legal advice, whether or not they win the case. This can be an important consideration in whether or not to bring a claim or to settle it and something we would advise on at the outset.