One of the most common questions individuals ask when considering an unfair dismissal claim is: “How much will it cost?” That is an entirely reasonable concern. Employment Tribunal proceedings can be demanding, both legally and practically, and it is important to have a clear understanding of the potential financial commitment before deciding how to proceed.
Factors to consider
Employment Tribunal claims are rarely straightforward. The amount of work required can vary significantly depending on a number of factors, including:
- The length and complexity of the claim
- The nature and detail of the employer’s response
- The volume of documents disclosed
- Whether preliminary hearings are required
- The extent of correspondence and procedural issues arising during the proceedings
Unfair dismissal claim costs: our estimated fees
As a general guide, our estimated fees for running an unfair dismissal claim from start to finish are typically in the region of £12,500 to £26,500 plus VAT.
By way of illustration, this estimate may include the following stages of work:
- Drafting the ET1 and particulars of claim: £2,000 – £4,000 plus VAT
- Reviewing the ET3 and grounds of resistance: £1,000 – £2,000 plus VAT
- Complying with disclosure obligations: £1,500 – £3,500 plus VAT
- Taking instructions for and drafting witness statements: £2,000 – £4,000 plus VAT
- Preparing for a preliminary hearing (if applicable): £2,000 – £3,000 plus VAT
- Preparing for the final hearing: £2,000 – £5,000 plus VAT
- Correspondence and ancillary work throughout the claim: £2,000 – £5,000 plus VAT
These figures are indicative only and will depend on the specific circumstances of the case.
Barristers’ fees
The above estimates do not include barristers’ fees for representation at a preliminary hearing and/or the final hearing. Barristers’ fees will depend on the length and number of hearings, as well as the seniority of counsel instructed.
Assessing the merits at an early stage
Before issuing a claim, we usually recommend an initial merits review. This allows us to assess the strengths of the case, identify any potential risks, and provide advice on prospects of success at an early stage.
Our estimated fee for a merits review is £1,650 – £2,200 plus VAT, depending on the volume of documentation requiring review.
Settlement discussions
If an employer is willing to engage in settlement discussions, we can also assist with negotiating a resolution on your behalf. Our fees for settlement negotiations typically fall between £2,000 – £4,000 plus VAT, depending on the number of negotiation rounds and document revisions required. This work is charged separately from the costs of running a Tribunal claim.
Can legal costs be recovered in the Employment Tribunal?
Unlike the civil courts, costs do not usually “follow the event” in the Employment Tribunal. This means that even if a claimant is successful, they should not expect to recover their legal fees as a matter of course.
Costs orders are only made in limited circumstances, such as where a party (or their representative) has acted vexatiously, abusively, disruptively, or unreasonably, or where a claim or response had no reasonable prospects of success. As a result, costs awards remain relatively rare.
It is therefore important for individuals bringing a claim to proceed on the basis that they are likely to be responsible for their own legal costs, regardless of the outcome.
How much compensation can be awarded for unfair dismissal?
In an unfair dismissal claim, compensation is usually made up of two elements:
- The basic award, which is calculated in a similar way to a statutory redundancy payment, based on age, length of service (capped at 20 years), and weekly pay (subject to the statutory cap).
- The compensatory award, which is intended to compensate for actual financial loss arising from the dismissal, such as loss of earnings and benefits, subject to the statutory maximum or one year’s gross pay (whichever is lower).
The level of compensation will depend on the individual circumstances of the case, including the claimant’s efforts to mitigate their losses and how quickly alternative employment is secured. In some cases, compensation can be reduced or eliminated altogether if the Tribunal finds that the claimant contributed to their dismissal or failed to mitigate their losses.
Get in touch
If you are considering bringing an unfair dismissal claim or would like advice on your options and prospects of success, we would be happy to hear from you. An early discussion can help you understand the strengths of your case, the likely costs involved, and whether Tribunal proceedings or settlement discussions are the most appropriate route. Please contact us to arrange an initial appointment.
How Nelsons can help
Rebecca Arnold is an Associate in our expert Employment Law team, providing advice on performance management and a wide range of contentious and non-contentious matters including discrimination claims in the tribunal.
If you require advice regarding unfair dismissal claim costs or assistance with preparing appropriate policies, please do get in touch with a member of our Employment Law team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
contact usIf this article relates to a specific case/cases, please note that the facts of this case/cases are correct at the time of writing.