Warning for publicans over legal fees insurance

By Naomi Larsson

- Last updated on GMT

Related tags: Employment tribunal

Pubs should check the terms of their legal fees insurance
Pubs should check the terms of their legal fees insurance
Publicans could be paying for “worthless” legal fees insurance if they renew their policies this year, a human resources advisor has warned.

According to HR compliance advisers HR4UK, a change in employment tribunal regulations has seen the overall number of claims fall by around 80%.

The company has questioned whether it is worth licensees taking out insurance to cover the costs of fighting claims at employment tribunals, when policies only cover claims that have more than 51% chance of winning.

Since 2013, ex-employees must go through Acas Early Conciliation​ before they have a claim heard, and must pay an upfront fee of £250 when they file a claim and a further £950 before there is a hearing.

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Peter Abraham from HR4UK said: "No employee is going to put up over £1,000 of their own money for a tribunal hearing unless they believe they have an exceptionally good chance of winning.

“The claims that are being filed are therefore those where the initial investigation shows the employer has made some error and is likely to lose. These are the very cases that are not covered by the insurers under their 51% chance of success clause.”

HR4UK said it used to include insurance to cover costs of fighting employment tribunal claims but no longer does so because it does not see the insurance as beneficial for its clients.

He added: "We no longer see a need for legal expense insurance to fight employment tribunal claims because the misguided and ridiculous claims that flooded the system in the past are simply no longer there.”

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1 comment

Poor Advice!

Posted by Paul,

Not all insurance policies have this 51% clause. How do you propose a business that has a better chance of winning pays for their defence in the absence of insurance. The Employment Awards section wouldn't exist with the Employment Disputes cover. This cover is often included free or at low cost as part of a broader range of Legal Expenses insurance so their is no value in removing cover

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