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Case law: Ruling clarifies when in-house legal costs can be recovered in Employment Tribunal cases

Businesses with in-house legal staff can claim costs from the other side in Employment Tribunal disputes, usually as if they were independent solicitors, a recent ruling has confirmed.

Legal Alert

This update was published in Legal Alert - December 2014

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

Qualified in-house legal staff representing their employer in legal proceedings in the Employment Tribunal (ET) applied to recover their costs from the other side. The Employment Appeal Tribunal ruled that this was permissible.

In-house time spent, and calculation of hourly rates, will usually be assessed as if the in-house staff were independent solicitors, but this depends on the circumstances. The same rule generally applies in the courts. In addition, businesses may be able to claim compensation (rather than legal costs) for management time spent on legal disputes, provided it has diverted managers away from their usual commercial activities.

It is usually necessary to produce a record of managers’ time spent, otherwise the court may decide to reduce the compensation to reflect that fact.

In a recent case there were no such records, and the business claiming for lost management time had to retrospectively reconstruct from memory the time its managers had spent on the case. The court allowed the claim, finding that a reconstruction from memory could be acceptable evidence.

Operative date

  • Now

Recommendation

  • Employers should ensure they claim some of their qualified in-house staff’s legal costs from the other side in ET disputes. They may also be able to recover compensation for diverted management time provided they have good records of time spent.
Case ref: Ladak v DRC Locums Limited [2014] UKEAT 0488_13_1606


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