News & Opinion

News & Opinion from United Employment Lawyers. Breaking Barriers • Working Together • Delivering Excellence

Collaborative legal approach the way ahead

The following article appeared in today’s Scotsman newspaper:

If you’re a Scottish international rugby fan – who isn’t when you consider their recent performances – you’ll know how much the TMO (television match official)  has become part of the international game. It can be frustrating to wait those ticking minutes while every camera angle is examined by faceless match officials. Yet, somehow we appreciate that these extra pairs of eyes make things fairer. The TMO’s contribution enhances the decision-making, always leaving the referee with the final call on the decision.

It’s the same when you find you have a critical health condition. Your GP doesn’t decide whether you have a major ailment, he or she sends you for tests. The medical profession seldom makes a major judgement on a patient without doctors consulting a senior clinician.

So we can agree it is always better to get a second opinion. It’s preferable to get even more than that. This was what struck me several years ago about employment law and how it needed to move into the modern era. We’ve talked before about the increasingly complex world of work. The landscape is changing so fast and most legal practitioners are struggling to keep pace.  More and more companies – both SMEs and larger businesses – need to be aware that they are entering a danger zone. This is particularly true when we enter the festive season of office Christmas parties! When employment issues cannot be easily resolved there needs to be some kind of TMO.

With the abolition of employment tribunal fees, there is anecdotal and statistical evidence that claims are increasing, in some cases by 100% compared to before the imposition of fees. There is also a rise in a backlog of complaints that are now in play.
It is likely that there will be more lower-value claims, union-backed claims, and those involving discrimination and equal pay. It all takes up management time, and has an impact on productivity. Yet employers should not panic but adopt a logical approach to risk management, much of which starts with an assessment of where specific risks may lie. One increasing component of a comprehensive risk management approach for the employer has to be the consideration of taking out employment practices liability insurance (EPLI). This originated as a form of Directors and Officers Liability insurance in the US and is now available in the UK in different forms, sometimes as part of a fixed price offering that includes help lines.

We hear a lot about the commoditisation of legal services. This kind of collaborative legal approach must be the future path. Of course, it is important for employers to look at the pros and cons of each offering and ask yourself the following questions. Is the adviser independent from the underwriter? If not is there any risk that the advice is not completely independent and given only with your interests in mind?  Is there a link between taking and following advice and cover extended? To what extent are premiums affected by steps you may have taken to reduce risk? What about excess? Is it always payable or can it be reduced or even waived in certain circumstances? If the adviser has some financial interest in the insurance offering does that have the potential to compromise the independence of advice or does it help to provide a well rounded offering? How important is commercial advice as opposed to textbook advice? Because of the increased levels of complexity now present in employment law it is essential that employers are able to access advice of the highest quality and this should not be compromised in any way so any potential conflict of interest should be addressed and where possible eliminated. No matter how well business people manage their employees or compliance procedures, you may by hit by compensation and hefty costs if a judgement goes against you.

Increasingly this cover is linked to advice taken. This is where lawyers can and should play their part and where the beauty of a TMO-style system should kick in. Instead of using a single lawyer, those who are insured can get advice backed up and supported by other seasoned employment law practitioners. This is why I prefer a collaborative approach particularly in current market conditions – it can help reduce risk where lawyers can quickly access collective wisdom and experience for a second opinion. This works for the client and insurer. The client gets independent advice and the insurer can reflect reduced risk in terms offered under the policy. More more wise heads are far better than one. It’s like a rugby ref, who needs to make a snap judgment in the heat of the moment as the ruck hits the try line, taking a moment to seek another angle.

Lawyers  need to be innovative and find new ways to serve their clients. Anything that can be done to make everyone’s life fairer and more stress-free needs to be considered. I’m a believer that understanding employment practices liability insurance is an increasingly important aspect of managing a business and an essential component of a risk management strategy in the ever changing world of employment.

Malcolm Mackay is the chairman of United Employment Lawyers, a national network of independent law firms working in collaboration to find employment law solutions.