June 2008

Religion And Belief Discrimination

Can After The Event Legal Expense Insurance Continue In Its Present Form?

Coping With Practice: The Solicitors’ Assistance Scheme - A Lifeline For The Profession

Settlement Gives Legal Aid Providers Certainty And Stability For The Future

April 2008

The Worrying Phenomenon Of Harassment

Things You Never See ‘Kingdom’ Do

Out of Balance Regulation?

February 2008

Recoupment by LSC

And the winner is... (finalists in the most interesting current employment law facts)

Religion And Belief Discrimination (TOP)

A survey out this month conducted by MORI showed that 88% of people have never been put off dealing with a person or a business because of their association with a particular religion. So, it would be easy to assume that the Religion and Belief anti-discrimination Regulations are not anything to worry about.

From a statistical point of view, it might be tempting to underestimate the Regulations. After all, they are in their infancy. Since coming into force in December 2003, just 1,411 claims have been dealt with by tribunals.

However, simply because Religion and Belief discrimination is relatively new and untested, does not mean it can be ignored. Employers whose employees bring a tribunal claim under the Regulations need not necessarily quake in their shoes in fear of a large payout. The actual financial compensation can be relatively small. The median compensation award was £6010 in 2005: by 2006 it had fallen to £1550. What employers need to be concerned about is the ‘trial by media’ that ensues when a claim is brought.

Remember the case of Miss Eweida, the British Airways employee who insisted on visibly wearing a Christian cross? There was a tabloid feeding frenzy when that case hit the headlines. Subsequently, it has gone to tribunal where BA won. The case turned on BA’s uniform policy. This policy states, “An employee can wear any item that is concealed under their uniform, including religious items” also “ An employee who wished to wear a religious item that was by its nature visible could only do so (1) if the item was mandatory (2) if it could not be concealed under the uniform and (3) if it was approved by management.”

The tribunal held that this policy did not put Christians at a particular disadvantage, since the visible display of the cross was not a requirement of the Christian faith. The tribunal further found that BA had a legitimate aim in pursuing its strict uniform policy.

The tribunal did criticise BA, though. BA had changed its uniform policy after Miss Eweida had made a complaint. As a result of that change, Miss Eweida returned to work. This change was the first proper analysis of whether the policy was really necessary. BA was criticised for this. The company should have carried out a review of its uniform policy at an earlier stage. This would have helped balance the desire of those who wish to manifest their faith with the maintenance of the high standards of the uniform policy.

But, how many people realise that BA has won? The overriding memory of this case will be that a devout Christian employee was disgruntled by her treatment at the hands of BA and that BA subsequently changed its uniform policy. The public perception is a factor of which Mr. Warner, the Chief Executive of BA is only too aware, “Unintentionally, we have found ourselves at the centre of one of the hottest social issues in current public debate.”

The damage to BA was done by the publicity. Such damage is set to continue, too. Miss Eweida has been given leave to appeal to the EAT.

So, what can employers do, to prevent this? The Employers Forum on Belief www.efrb.org.uk suggests five points:

• Create a workforce profile. This means that Religion and Belief issues should be visible within the discrimination spectrum that is dealt with by employers.

• Establish boundaries. Do you want to support your employees in adhering to their Religion and Belief? Whereas the law stipulates that you must not discriminate against employees, you might want to go further than this and set up staff networks or celebrate religious festivals.

• Audit policies. This is the BA uniform policy lesson. As an employer, you should review the way in which your employees go about their work, to check that no one is being discriminated against.

• Enforce a culture of respect. Does your workforce need training on awareness of diversity?

• Consider requests for adjustments fairly. Do not assume that making alterations will be beyond your organisation. The Forum gives as an example Muslim employees who want a prayer room at work. There was not enough space to accommodate this, so the employer rearranged the working time of the individuals to enable them to visit a nearby mosque.
My Advice
Employers need to be aware of the Religion and Belief Regulations in three regards. These are aspects of the Regulations that are set to increase in significance:

First, it is unlawful to discriminate against those employees who are not religious. Employers need to be careful that they are not more sympathetic to requests for time off for prayer than requests to time off for caring duties.

Second, Religion and Belief discrimination may well appear with claims for other sorts of discrimination. For example, an LGBT network of employees might want to set up a satellite network in India. This could pose an employer with significant problems because of the different attitude towards homosexuality in India.

Third, the Regulations were changed by the Equality Act 2006 and now a philosophical belief no longer needs to be like a religious belief. In effect, this means that beliefs such as humanism are covered. Whilst the change was not meant to include affiliation to a political party, and no case law has yet found that political beliefs are included, the possibility of political views being covered by the Regulations need to be considered. Therefore, employers need to be scrupulous that they are reasonable in this regard.

Eleanor Williams

Darwin Gray

ewilliams@darwingray.com
 

Can After The Event Legal Expense Insurance Continue In Its Present Form? (TOP)

Over the past few years ATE legal expense insurance has settled down but with the MoJ proposals for the future of personal injury claims the landscape has changed from one of some certainty to one of potential turbulence.

The Past – How did we get here ?
A number of years ago Lord Woolf looked at the procedures for bringing claims through the civil Courts. He went to huge lengths to consult and canvass the views of all stakeholders, including the Judiciary, lawyers, insurers, banks etc, ie all those who use the civil Court system on a regular basis.

Lord Woolf concluded that the judicial system was too slow, too expensive, too complex, too uncertain and too adversarial. In other words it was a mess.

The Civil Procedure Rules that resulted from the Woolf report included (amongst others) four fundamental changes, namely

• the need for ‘proportionality’
• pre-action Protocols
• Part 36 Offers
• case management by the Courts.

While some certainty began to settle on legal procedures in another area of the forest a major conflagration was starting that would have a damaging effect on Lord Woolf’s aim to reduce cost and the adversarial nature of civil law.

‘No win – no fee’ agreements
The fire was lit by the withdrawal of legal aid from personal injury and its replacement with conditional fee (‘No win – no fee’) agreements permitting lawyers to claim success fees of up to 100% from the paying insurer while the loser pays all costs principle generated the need for ATE insurance.

Perhaps the legislators did not realise the consequences and soon afterwards the arrival of claims farmers, such as Claims Direct / TAG demonstrated how poorly thought through changes can generate unforeseen problems.

The initial Law Society backed ATE scheme (flat rate premium of around £100) was not financially sustainable as many lawyers failed to take out cover on straightforward claims because of uncertainty as to whether the premiums would be recoverable. On the other hand lawyers wanted high success fees to cover lost cases and the cost of referral fees.

Case law : ‘Pursuit’ and Rogers v Merthyr BC
Two major cases have helped to settle the ATE market (it is a salutary thought that the market was fighting its own internal battle), namely R&SA /First Assist ‘Pursuit’ cases and (DAS) Rogers v Merthyr Tydfil BC. I will refer to them as ‘Pursuit’ and ‘Rogers’.
 

Pursuit involved 5 claims : 2 personal injury, 1 clinical negligence, 1 stress claim and 1 RSI. The ATE premiums claimed from the defendant insurer were £54,000 (damages : £400,000), £9,000 (damages £1,250), £32,000 (damages £20,000), £17,000 (damages £44,000) and £115,000 (damages £ 250,000).
These are not inconsiderable sums. Arguments included disproportionality, champerty (unlawful) and breach of the Law Society’s indemnity costs.

Senior Costs Judge Hurst described the cases as a’ battle’ between liability insurers and ATE providers : ‘an honest attempt by an honourable insurer to fill a gap’. He decided that the ATE premiums had to be paid but not at the levels claimed.

ATE premiums should be calculated by reference to 3 criteria :
• the prospect of success
• own costs estimate
• adverse costs estimate

The premiums were significantly reduced - both sides claimed victory.

In truth the outcome was an honourable ‘draw’ as the decision established the principle of ATE premium recovery and the methodology for premium calculation.

With Rogers the Court considered a different system, ie staged premiums. The financial model was closely scrutinised and evidence from the ATE insurance market was analysed in some detail.

The claim involved an 11 year old boy who was injured falling in a Council provided play area. He cut his hand on glass shards embedded in wooden boundary posts. Damages were agreed at £3,105.

The Council contested liability because the hospital records gave a different version of events. At trial the hospital staff explained that details were obtained from the boy’s mother who had got the facts wrong. The point was not raised in the Defence or in the witness statements - had it been it is doubtful that the claim would have gone to trial.

The ATE premium was allowed at £5,103. On appeal it was reduced to £900. On review Costs Judge Hurst heard representations from various parties including ATE providers, brokers and the Law Society.

The premiums were set at 3 different stages :
• before proceedings : £450
• part way through : additional £900
• trial : calculated by actual risk and anticipated defence costs of trial

Most cases are resolved at Stages 1 and 2 – a relatively small number progress to Stage 3 (less than 5%). However at Stage 3 the premium calculation becomes difficult as the trial outcome and amount of costs become uncertain.

Lady Justice Smith observed in the Court of Appeal: “The picture that emerges is, to my mind, rather worrying. I do not think it was the intention of Parliament that would-be claimants should be able to litigate cases without any risk whatsoever to themselves.

The figures we have seen suggest that the ATE insurance market is not managing at all well, at least on the cases that go to trial. This lack of vigour is resulting in the system being more expensive (eventually to the premium paying public) than it should be.”

Plainly under the stepped premium model ATE insurers need to identify early which cases should be abandoned before reaching Stage 3.

The ATE market appears to be settling down. Fixed standard premiums of £350 abound so that the many pay for the few.

However, market research has disclosed that many of the ‘easier’ claims are not being ATE insured – only 15% of motor claims are ATE insured. This may be a combination of no insurance and the increasing availability of low cost BTE cover.

What of the future ?
The MoJ has made proposals which could have dramatic consequences for ATE - some suggest they sound the ‘death-knell’.

The proposals are that an ATE premium will not be recoverable from the paying party :

• where £2,500 or less is claimed
• where the paying party/insurer has admitted liability

Many ‘soft’ premium policies will be lost to the market as ATE cover is no longer required resulting in the market ‘hardening’ with higher premiums.

Attempting to put numbers on this is difficult as published statistics do not deal specifically with ATE insurance.

From the evidence in Rogers there was a general acceptance that an acceptable loss ratio is between 50% and 55%. As the overall claims cost of failed cases is unlikely to change, the premium cost will be spread over a smaller base with the risk factor increasing due to the higher chance of a significant claim. Cost will increase and will have to be be borne by the overall market .

In my view there is likely to be a return to the level of premiums sought in the Pursuit claims as the pool of recoverable premium cases reduces while the outlay (ie exposure to costs) remains much the same.

Another battle ground looming ?
I am not convinced that the market will change as much as predicted. For some time ATE insurers have complained that solicitors are taking up straightforward cases without ATE cover. Sometimes at best they are taking cover out when cases are progressing towards trial.

Plainly ATE insurers will have to look more closely at the prospects of success in each case. The quality (of claims) will be the key. They will apply stricter selection criteria and higher premiums to the pool of business that remains available to the market.

Only specialist ATE insurers can assess the one-off cases that will be prevalent under the MoJ proposals. Those insurers who are already in this market will grow their market share.

Pre-action disclosure applications may proliferate, increasing the opportunities to Claimant lawyers to costs ‘churn’ and yet giving ATE insurers better insight of the claim prospects at an early stage.

If ATE claims are higher value and the Claimant/solicitor is exposed to higher adverse costs orders then the ATE market could grow by removing all non insured cases. The ATE market will be more specialised .

The relationship between the ‘client’ solicitor seeking ATE cover and the insurer/underwriter will be closer as service level agreements and key performance indicators become the norm, helping to generate a more open and focussed relationship between the law firm and the underwriter.

This is a niche area. Its complexity, lack of maturity and uncertainty will not encourage new insurers to rush into it.

All legal expense insurers (both ATE and BTE) will have to analyse the performance of lawyers they work with to establish ‘best practice’ in terms of case management , risk assessment and management information

This ‘partnership’ of understanding is crucial for this market to succeed. More effective risk assessment (and by definition fewer claims) equates to lower premiums and therefore less overall cost.

ATE has come a long way in a relatively short period of time. However, it remains fragile. The MoJ proposals will change the shape and dynamics of the market place by forcing ATE insurers into premiums calculated by the actual risk and cost – a more bespoke market beckons...?

Hugh Price
Hugh James
 

Coping With Practice: The Solicitors’ Assistance Scheme - A Lifeline For The Profession (TOP)

Most solicitors regard themselves as good at coping with problems. It’s what solicitors do. They are trained to be the solvers of other people’s problems and champions of the underdog. Masters of the universe.

But what happens when a solicitor has a problem of his or her own to deal with? Are they always quite so good at acting on their own behalf? Sometimes, but not always. It is not unusual for anyone to be less effective at dealing with their own problems than they are at helping others, for example clients and, often instead of seeking assistance they will brush things under the carpet and hope that the problem will go away. Usually it does not.

Thousands of solicitors each year reach a point where they are unable to cope with some aspect of their business, professional or personal lives. Possibly it’s because they are all too busy and give so much to their clients that they leave nothing in reserve for themselves. Possibly they are so used to giving advice that it never occurs to them to think about seeking advice instead. Perhaps it is simply that they don’t know who to turn to and having no one, simply give up.

For many solicitors the problem is that whilst they are very good lawyers, they are not very good businessmen and have the firm conviction that they cannot afford the services of someone who is. For others it might be that they know they have a problem but, because of fears over reputation and confidentiality, don’t want others in their firm or their area of practice to know they have a problem. Some may have personal problems brought about by having had to spend too many late nights in the office; others may simply be unable to cope with the stress of running a practice, getting clients and doing the work.
Whatever the reason for not coping, the outcome is often the same. Their work suffers. They cut corners. They don’t do what they are supposed to do or, in doing their work, breach one or more of the growing number of rules and legal obligations to which they are subject. Next thing they know, the Solicitors Regulation Authority is knocking at their door wanting to carry out an investigation or, worse still, intervene. It’s not that they are crooked. It usually has nothing to do with being fraudulent or even cavalier as to consequences. They are simply over-worked and as a result have taken their eye off the ball long enough for problems to have arisen. Of the 55 interventions which took place in the year to January 2008, only 18 were on the grounds of suspected dishonesty. The figures for the previous year (to January 2007) were similar with only 14 of the 51 interventions being for suspected dishonesty.

But it doesn’t have to be like that. Help is to hand and that help comes in the form off the Solicitors’ Assistance Scheme (SAS).

Established 35 years ago as a result of the work of the Special Committee on the Problems of Professional Practice, under the chairmanship of Sir Robert Payne, the SAS assists more than 750 solicitors each year with a wide range of problems including disciplinary and conduct related matters, interventions, crime, financial, employment, partnership, stress and insurance, to name but a few. The objectives of the SAS have remained the same; it is there to help:

“...solicitors who may find themselves in difficulties of any kind and who would like to have guidance and advice from an experienced, independent and sympathetic solicitor on a confidential basis.”

The SAS operates by providing solicitors and their staff and families with access to a panel of about 80 solicitors in various parts of the country, each of whom has agreed to provide up to an hour’s free advice to any solicitor (or their staff or family member) who contacts them. A central help-line is available for those who wish to be referred to an SAS member, or there is a printed membership list (available through a number of sources) and a web site, both of which contain details of who the members are, where they operate from and their specialisms and phone number. The SAS currently receives a small grant from the Law Society which covers Committee meetings and the costs of the AGM, although on the whole it relies upon the goodwill and generosity of its members who give many hours of their time on a non-charging basis.

If the person seeking assistance requires more than the initial hour’s advice, or their problem requires the SAS member to represent them before the SDT or to deal in detail with a more complex matter, then he or she can enter into a separate arrangement with the SAS member on whatever terms are agreed and the usual solicitor/client relationship will be formed.

Often those who call the SAS are wary of disclosing their identity or discussing openly the matter which affects them. All SAS members are independent of the SRA and the Law Society and whether or not a formal retainer is entered into will keep confidential all information which they receive through the scheme and will not feel compelled to “whistle blow” should they be made aware of a breach of the practice rules.

The majority of calls which the SAS receive relate to disciplinary/conduct related matters and employment problems (32.5% and 29% of all calls, respectively) with partnership and finance being the next most popular. Almost 1,000 calls were made to the SAS central help-line number in the past year with other callers going direct to the member using the details in the printed list and on the web site.

In addition to the more traditional types of work, over the past year or so some SAS members have become involved in a new area of work for the scheme - voluntary closures and practice disposals. Sometimes, a situation will arise where a solicitor needs to close a practice down without there being an obvious successor. This may be through retirement, illness or suspension. Usually, if the SRA is not satisfied that the practice will close in an orderly fashion then an intervention may be considered, causing dire financial consequences to the solicitor who may be faced with bankruptcy from the combined effect of intervention costs and run-off cover. Working with the SRA, the SAS has been able to assist a number of firms to achieve a managed closure of their practices without the huge costs that would have been involved with an intervention.

These are changing times within the legal profession and it is almost certain that there will continue to be changes to the way in which we all carry out the practice of law. It is the intention of the SAS to continue to be here for the profession, to continue to provide timely and expert advice and above all, to continue to be a lifeline for those who find coping not as easy as perhaps it once was.

To contact the Solicitors Assistance Scheme please telephone 0207 117 8811, email help@thesas.org.uk or visit the website at www.thesas.org.uk.
 

Settlement Gives Legal Aid Providers Certainty And Stability For The Future (TOP)

The Law Society and Legal Services Commission (LSC) recently concluded a negotiated settlement of the litigation brought by the Society to challenge the contract signed by legal practices in April last year.

This settlement stems from the significant success achieved by the Law Society in the original litigation before the High Court. Succeeding on almost all points raised, the Law Society appealed the point that was lost. In reply, the LSC appealled all the points that the Law Society had won. The hearing before the Court of Appeal was regarded as so significant that the Lord Chief Justice sat.

The Court found for the Law Society with a costs order in their favour.

It is perhaps significant that the LSC, in defeat, indicated that they had anticipated that result. This caused many practitioners to question why the LSC chose to pursue expensive appeal proceedings if the outcome was “anticipated”.

As a result of inaction on the part of the LSC in response to the Court of Appeal judgment, the Law Society issued Judicial Review proceedings - with costs escalating, a bold but confident decision.

It was therefore welcome that the LSC and the Law Society finally sat around the table together with the Ministry of Justice and brought this expensive litigation to an end.

The negotiations secured the following:
• An increase of 2% on all legal help fixed fees and underlying hourly rates from 1st July 2008.
• Care level 2 fee increases from £347 to £405.
• A 5% increase in controlled legal representation (CLR) fees and rates for mental health.
• A 5% increase in CLR fees and rates for immigration.
• A delay in implementing private law family litigators’ graduated fees.
• A closed list of CLACS and CLANS planned for the period ending April 2010.
• A moratorium by the LSC in not seeking to recover historic unrecouped payments on account (UPOAs) over 6 years old and where the amount outstanding is less than £20,000.
• New provisions for the reconciliation of standard monthly payments (SMP’s), designed to keep changes to a minimum, provide for the right to undertake remainder work on a no fault termination of the contract.
• A commitment that there will be no price competitive tendering for civil or family work before 2013.

In addition the LSC agreed to publish a route map that is effectively a 5 year programme setting out its plans for the development of civil legal aid contracts.

This route map sets out principles for consultation and a timetable for proposed changes to fees, contractual arrangements and best value tendering.

The approach to UPOAs will alleviate the administrative burden and financial anxiety that has been felt by many firms. Many practitioners had despaired at demands by the LSC for repayment of UPOAs from many years before. Files had long since been closed or even destroyed leaving practitioners unable to locate information about the payments. In many instances no repayment was due.

The settlement means that firms can agree to make no further claim on the fund and any UPOAs will be treated as a final payment or the firm may report on a case by case basis when the UPOA will be taken into account. Exceptions to this amnesty will include UPOAs in excess of £20k, where recoupment has already been agreed or where a “debit notice “has been issued.

The postponement of BVT for civil or family work does provide at long last some level of stability that is vital for organisations to be able to plan for the future.

Some sectors of the profession have felt left out of the process.

For criminal practitioners, the only significant matter to arise from the negotiations is the commitment by the LSC to delay BVT in criminal legal aid by 6 months to a date not before July 2009.

This brings into question why BVT in civil or family work is delayed by 5 years when criminal practitioners need to position themselves to be able to tender for work in a fifth of the time, particularly in light of recent changes, including police station fixed fees, the new litigators fee and the graduated fee. Practitioners will also have to come to terms with running the single fee for Crown Court work that is also due to be introduced in July 2009 at the same time as the possible start date for BVT in police stations and Magistrates Court work.

Clearly, there is merit in allowing these changes to bed in and thereby enable practitioners to align there businesses to be in a position to properly tender for work. The LSC should be persuaded that there is little argument to postponing BVT in criminal work to accord with civil.

In his review, Lord Carter anticipated BVT being introduced in a stable environment with the availability of increased work loads to allow for realistic tendering. A walk into almost any Magistrates Court in the country today will see the previously extensive lists decimated with court rooms and corridors ghost like. Lord Carter could not have envisaged the paucity of defendants before the Court and the impact upon case loads brought about by means testing, conditional cautioning and fixed penalties, especially those that seem to have been imposed in inappropriate situations.

The financial benefits are welcomed with some caution.

The civil lawyers who will benefit from the increase of 2% on legal help work may regard that as a paltry increase in view of the historic lack of increase over many years but at least it is an increase! Again criminal practitioners see nothing of this. Indeed they may feel particularly disadvantaged when some of those whom they represent who find themselves serving custodial sentences appear to be in line to receive an increase of 20% in their weekly prison income.

The closed list of CLACS and CLANS anticipated to cite 15 areas in which the LSC will work with the local authority and other providers to introduce a CLAC or a CLAN, may give some comfort to providers in other areas. However, it is acknowledged by the LSC that it is crucial to involve the local authorities and they must be looking with some concern at what has recently happened in Cornwall.

Cornwall County Council, who had been working with the LSC and providers in the area with a view to launching a CLAN, recently announced it’s withdrawal from that position. The introduction of a CLAC or CLAN will see the termination of contracts of other providers in the area. The concern of the Council in Cornwall was that the introduction of a CLAN was likely to eliminate a number of providers, both solicitor and not for profit organisations in their area. The local authority clearly took a responsible view in seeking to secure the sustainability of the provision of legal services in an area that poses significant geographical restraints on clients seeking access to such advice.

The Delivery Transformation proposals are intended to secure a likely saving of £7 million per annum for the LSC in simplifying their processes, expanding electronic communication with practitioners and devolving further responsibilities to practitioners. This raises the concern amongst solicitors that the LSC is divesting itself of administrative tasks and passing them onto providers without reimbursement. There must also be the concern, not only for providers but also for the LSC over the recent disastrous attempt to introduce LSC On-Line. This required the withdrawal of the service by the LSC. A limited pilot will seek to correct the failings in the system before its re-introduction.

Overall the settlement achieved by the Law Society in its negotiations with the LSC is probably the best that could have been obtained for civil practitioners, although some groups representing specialist practitioners have felt aggrieved that they were not more involved in the negotiation process.

Des Hudson, Chief Executive of the Law Society, who led the negotiations, has been at pains to stress that this settlement is not the end but only the beginning of the ongoing work that needs to be done on behalf of legal aid practitioners.

The Court of Appeal judgment will clearly affect the contractual relationships between the LSC and legal aid providers. It means that there can be no unilateral right reserved to the LSC to amend contracts. Conditions will need to be clear and any amendment clauses will need to be narrowly constructed.

Finally, the agreement does provide a period of certainty and stability for civil legal aid practitioners in this extremely difficult time. It can only be hoped that this successful piece of litigation against the LSC will induce a more effective discussion process between the LSC and the various representative organisations.

Roy Morgan
Morgans Solicitors and Chairman LAPG
 

The Worrying Phenomenon of Harassment (TOP)

This month, there have been two cases where an employee has claimed that he has been harassed and, in both cases, a court has found that the conduct complained of did not amount to harassment.

In the case of Sunderland City Council v Conn, Mr. Conn had worked as a paver for Sunderland City Council. His line manager was Mr. Dryden, the site foreman. Mr. Conn brought a claim of harassment under the Protection from Harassment Act 1997 (PHA).

Mr. Conn might have used the PHA because the incidents all related back to 2000 and under the PHA, a claimant has 6 years to bring a claim. This makes the PHA potentially treacherous for employers, since old incidents can be dredged up. An additional burden for employers under the PHA is that they can be vicariously liable for the acts of their employees, whether or not they knew what their employees were doing.

The facts of this case were that Mr. Conn complained that Mr. Dryden had harassed him on five occasions. On one of these, Mr. Dryden asked Mr. Conn and two other employees to name those people who had been leaving the site early. Mr. Conn and the other two employees refused to ‘shop’ their colleagues. Mr. Dryden became angry and threatened to punch out the windows of the cabin and to report Mr. Conn and the other two employees to the personnel department.

When the case had been in front of the County Court, the evidence from the other two employees had been that they were not particularly bothered by the threats. Mr. Conn, though, had been bothered. The five incidents he listed combined direct verbal abuse with physical threats. The County Court found that this type of behaviour was potentially intimidating and was the sort of behaviour that might cause psychiatric damage to any worker. The Court of Appeal took a tougher line, though. One judge was especially irritated by Mr. Conn’s attitude to the window punching threat. He said,

‘What on earth is the world coming to if conduct of the kind that occurred in this incident can be thought to be an act of harassment?’

The Court of Appeal decided that harassment needs to be more than,

‘Irritations, annoyances, even a measure of upset [that] arise at times in everybody’s day-to-day dealings with other people.’

For behaviour to constitute harassment, the Court of Appeal decided:

• It needs to be ‘unacceptable’ behaviour, not just ‘regrettable’. Of course, what is ‘unacceptable’ will depend upon the context. The judgment pointed out that, ‘what might not be harassment on the shop floor or in the barrack room might be harassment in a hospital ward.’

• If the offender might well be liable to receive a punishment in criminal law for his unacceptable behaviour, then it is likely to be harassment.

• The unacceptable behaviour needs to occur at least twice. In this way, the harassment forms a ‘course of conduct’ which is a necessary prerequisite to bringing a claim under the PHA

• The Court was concerned with the ‘mental element’ of harassment. It declared that,‘the alleged offender must know, or ought to know, judging by the standards of what a reasonable person would think, amounts to harassment of another.’

So, harassment is not always easy to prove.

My Advice

An employee need not use the PHA to bring a claim of harassment. Alternatively, if Mr. Conn had been eligible, he might have been able to bring a discrimination law claim. From an employer’s perspective, there are advantages to this second sort of harassment claim since the timing to bring a claim under discrimination legislation is 3 months after the incident. Employers need to beware, though, since there is no need, for a ‘course of conduct’ to have occurred. A one-off incident is enough to establish harassment in discrimination law.

It was a harassment claim that was based on discrimination that took place in the case of English v Thomas Sanderson Blinds Ltd, Mr. English brought a claim for harassment. However, he brought his claim under discrimination legislation, namely, that he had been harassed contrary to the Sexual Orientation Regulations. He claimed that he had been subjected to sexual innuendo by his work colleagues. These work colleagues were teasing him that he was homosexual because he had attended boarding school and lived in Brighton.

Ordinarily, Mr. English might have had no difficulty establishing that harassment had occurred. What he needed to show was that, according to Regulation 5(1) of the Sexual Orientation Regulations, there was

• Unwanted conduct by a person (A)

• On grounds of sexual orientation

• Which has the purpose or effect of violating a person’s (B’s) dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for B.

But, in this case, Mr. English was not homosexual. His colleagues did not think he was homosexual. The Employment Appeal Tribunal decided that he could not bring a claim for harassment under the Sexual Orientation Regulations. The EAT held that he could have brought a case if he was homosexual. He could have brought a case if his colleagues perceived he was homosexual. But, all his colleagues perceived was that he possessed some of the stereotypical qualities associated with homosexual men. This was not enough for Mr. English to be protected under the Regulations.

My Advice

Mr. English was given permission to take his case to the Court of Appeal. At the moment, the law on who may or may not bring a claim is muddled. Employers would be well advised to stamp out persistent, unwanted teasing in the workplace, whatever its nature. Because of the impending appeal, Sanderson Blinds may not yet be off the hook. This is particularly so since The Equality and Human Rights Commission has intervened in the case since this decision.

Eleanor Williams, Darwin Gray

Things You Never See ‘Kingdom’ Do (TOP)

An ITV series “Kingdom” starring Stephen Fry has been derided as typical Sunday evening viewing. It is said to be lightweight, overly full of local rustic characters and with as much cutting edge as a blancmange.  However, it has proved a major ratings success for Independent Television.  Moreover, it is the British viewing public’s only glimpse of the life of a solicitor.  Perhaps like me, against your better judgment, you end up watching it and rather than trying to follow the flimsy plot line you spend all your time criticizing its lack of reality.  Here are a number of things that this supposed doyenne of East Anglian solicitors never seems to do:

• Any remunerative legal work

• Receive or send an e-mail

• See a client in his office - Stephen Fry normally goes to the picturesque home of the client; an ivy-clad country house or unbearably quaint seaside cottage

• Looking through job adverts in the Law Gazette on a Thursday morning

• Dealing with spurious complaints from his eccentric band of clients

• Discussing with his erstwhile clerk and partner (his brother who has returned from the dead) billing targets and chargeable hours for the next financial year

• Rushing down to the local County Court to issue proceedings the day before limitation expires

• Standing anywhere other than in a gloriously scenic coastal location (seems to spend a lot of time on the beach at Holme at low tide)

• Getting a roasting from the local judiciary

• Driving a sensible car – a Volvo estate perhaps

• Not wearing a pinstripe suit

Michael Imperato, Russell Jones & Walker

Out of Balance Regulation? (TOP)

In January 2008, I wrote a letter to the Gazette in response to an article entitled “Open and accountable’ by Peter Williamson, the Chair of the Solicitor Regulation Authority’s main Board. I questioned whether its policy to make regulatory decisions public in the interests of “transparency”, actually accords with the government’s five principles of good regulation that the SRA aspires to.

The government’s five principles are – proportionality, accountability, consistency, transparency and targeting. From a brief read on the Better Regulation Commission’s Website, it can be seen that, in the main, these are inwardly facing principles, there to govern a regulator’s relationship with those it regulates, rather than necessarily the public interest (albeit that this is understandably important from a regulator’s perspective).

Those interested can see a copy of that letter on my website. I thought it might be useful to expand on one of two of these principles, bringing in some examples.

Under ‘proportionality’, regulators should not use a ‘sledgehammer to crack a nut’. Under targeting, ‘enforcers should focus primarily on those whose activities give rise to the most serious risks’.

Consider these principles from the perspective of a solicitor who discovered that she had an old client account containing about £5.70 and Solicitor Accounts Rules returns had not been made since setting up a limited liability firm about three years ago. The solicitor and her accountant apologised to the SRA and immediately dealt with the money appropriately.

The SRA recently published its proposal that small amounts of client money, under £50 will (subject to future Rules) be able to be sent to the Solicitor’s Benevolent Fund, without having to get permissions from the SRA. One might have expected no action or possibly a Letter of Advice, both of which options are available to the SRA. However, this solicitor received a formal Warning and was ordered to pay the cost of the investigation at £300. She had a discretion vested in her practising certificate so that on the next renewal round any appropriate conditions could be imposed. When she came to renew her practising certificate she had to pay an additional £200 over the normal fee before her application for herself and her qualified staff would be considered.

Consider a firm in December who went to the Solicitors Disciplinary Tribunal on the single issue of misdescribing their telegraphic transfer fees as “disbursements”, when not the entire sum was paid to the bank. No dishonesty was formally alleged, but the view of the SRA is that this is making a “secret profit”- with all the connotations of impropriety that such a phrase might suggest. It is not a simple misunderstanding of how to describe an administration fee, which the Solicitor Accounts Rules say is a perfectly legitimate charge to make.

That particular firm was visited back in November 2005, by the Forensic Investigation Unit (FIU) of the SRA. The firm changed their procedures immediately. However, the approach of the FIU was that this was so serious an issue that it had to go forward to the SDT. The firm was not on that occasion visited by the Practice Standards Unit (PSU) of the SRA. The approach of the PSU at that time was to advise and indeed require firm’s to change their description but to take no further action.

From the firm’s perspective (and mine as expert witness in the case) the regulatory response depended, not on the seriousness of the issue, but upon which Unit within the SRA conducted the visit to their firm.

Under the principle of consistency ‘regulation should be predictable in order to give stability and certainty to those being regulated’. Also under transparency, ‘those being regulated should be made aware of their obligations, should be given the time and support to comply’, and ‘the consequences of non-compliance should be made clear’.

These are just two examples of many, but they are useful because they explain both ends of the regulatory spectrum and perhaps demonstrate a hardening in the approach of the SRA.

I was recently asked to assist a firm who had been visited by the PSU in 2007 to find that they faced a recommendation of a referral to the SDT under similar circumstances to the firm mentioned above.

Much of the evidence is, of course, anecdotal. However, in the monthly Summary of Performance on the Law Society’s website, the number of FIU visits which have resulted in “adverse reports” (which would attract some kind of regulatory response) increased from 56% in December 2006 to 71% in December 2007.

It must be remembered that the PSU are able to make both formal referrals through to other regulatory units within the SRA, which solicitors will be aware of, but also “intelligence” referrals which the PSU officer will not disclose to the firm.

Vanessa Shenton, via her business THE COMPLIANCE PARTNER provides regulatory and compliance advice and assistance to firms of solicitors. She can be contacted via her website, www.thecompliancepartner.com.

VANESSA SHENTON, THE COMPLIANCE PARTNER

Recoupment by LSC (TOP)

As you may be unfortunately aware, the LSC are still proceeding with the recoupment of payments on account on old cases. The Law Society have now submitted a formal Complaint of Maladministration, which has to go first initially to the Complaints Handling Department of the LSC. The remedy which The Law Society is seeking is that there should be an amnesty on all payments which were made more than six years ago. If a satisfactory resolution cannot be obtained from the Complaints Handling Department, the Law Society intends then to submit the Complaint to the Parliamentary Commissioner.

In the meantime, the LSC will not agree to stop taking steps for recovery and it appears that the only solution for the moment is to try to delay making any payments. Although The Law Society are asking that, if the amnesty is granted, then any relevant payments which have been made should be repaid, It will be appreciated that it is likely to be an uphill struggle to get any money back! There will be commentary on the The Law Society website about the progress of the complaint. The Law Society would still to like to have more examples of firms who have been affected by the recoupment exercise; please contact Simon Cliff at The Law Society, DX 56Lon Chancery Ln or by e-mail, simon.cliff@lawsociety.org.uk.

Richard Fisher

And the winner is... (TOP)

These are my finalists in the most interesting current employment law facts. Both recent developments and forthcoming changes are eligible for inclusion.

In no particular order, here they are:

• The National Minimum Wage for all workers is now £5.52 an hour for those aged 22 and over

• For dismissals that occur after 1st February 2008, the maximum sum that can be awarded in employment tribunals is £63,000

• 40% of employers find the support offered by GPs in helping people with mental problems return to work “poor or very poor”

• Workplace stress was the reason why the UK lost nearly 14 million working days last year

• A Pensions Bill is currently going through Parliament which “will place a duty on every employer to contribute to good quality workplace pensions for their employees.”

• With effect from 6 April 2007 the right to request flexible working is extended to employees with responsibility for caring for:
(i) spouses/partners
(ii) adult relatives as defined and
(iii) adults living at the same address as the employee
There is an ACAS Advisory booklet on these rights available from www.acas.org These new rights affect the 2.6 million carers in the UK.

• A straight bouncer was harassed by a gay club boss who called her a ‘breeder’. She brought a case under the Employment Equality (Sexual Orientation) Regulations Act. It was the first time that the legislation that was initially put in place to protect lesbian, gay and bisexual employees had been used by a heterosexual employee.

• The number of cases going to employment tribunal for discrimination claims rose by 15% last year

• ‘Keeping in touch’ days have been introduced, meaning that a woman on maternity leave is able to go to work for a few days now and again, without losing her right to maternity leave or a week’s statutory pay

• According to the Financial Times, 504,000 under 35 are in receipt of incapacity benefit. This compares to 443,000 who are in receipt of jobseeker’s allowance. The main reason for the growth in the number of claimants has been the massive increase in the number of non-physical ailments

• Age discrimination has been felt almost equally by women and men according to a report from the Department for Business and Regulatory Reform with 11% of men feeling that they have experienced age discrimination at work and 10% of women

• A Rastafarian falls within the scope of the Religion and Belief Regulations as he has a philosophical belief which is similar to a religious belief

• In a case of age discrimination involving a law firm, it was found that reforming their pension scheme was directly discriminatory against a 54 year old partner. However, the discrimination was found to be justified, since the general aim in seeking to reform the pension scheme was to provide a pension arrangement that was more financially sustainable and to reduce
‘inter-generational’ unfairness.

• The House of Lords held in 2007 that whether a particular act can be said to amount to victimisation must be judged primarily from the point of view of the alleged victim, whether or not they suffered any ‘detriment’, rather than from the point of view of the alleged discriminator

• Around five million employees in the UK are putting in the equivalent of around £5,000 a year each in unpaid overtime, according to research from the TUC.

• Employers will be fined up to £10,000 for every illegal worker they negligently hire or could face up to two years in prison. Any employers found to be breaking the law could lose the right to recruit from outside the European Union.

• Parents are entitled to up to 13 weeks leave to look after young and disabled children and have the right to a reasonable amount of unpaid time off work to deal with any emergency involving a dependant

• From April 2008, all agency workers will have the right to withdraw from services provided by their agency, such as accommodation or transport without suffering any loss in pay or benefits, provided they give a period of notice

• Watch out for Spring 2009 when the statutory dispute resolution procedures are likely to be repealed

• A Council gardener received a record payout for a DDA claim when he was awarded £550,499 for unfair dismissal.

Well, I think they’re interesting, anyway... but then maybe I’m just an anorak! If you have any more noteworthy employment law facts, please do not hesitate to contact me on ewilliams@darwingray.com