Mandatory Settlement Rules Enacted in U.K.

By Alex Denny, Victoria FitzGerald and Emma Vennesson May 2, 2014

Important new rules came into force April 6, 2014, which require the parties to a dispute in the United Kingdom to try to settle through Acas, the national conciliation service, before the prospective claimant can bring a formal Employment Tribunal claim.

The steps which must be followed are prescriptive and detailed, but the key points are as follows:

  • The prospective claimant must initiate settlement discussions by sending certain prescribed information to Acas on an early conciliation form. Interestingly, there is no obligation on the claimant to disclose any information on the form about the potential claims.
  • Acas will then try to contact the prospective claimant and respondent, with a view to establishing a dialogue through which the complaints are discussed, information is exchanged and hopefully, settlement is reached.
  • The parties typically have one month to reach settlement, although this period can be extended by up to two weeks in certain circumstances. If settlement is reached, it should be recorded in the usual way, on an Acas COT3 form or settlement agreement.
  • During the settlement period, the clock is stopped on the time limits for bringing a claim, so the prospective claimant can rest assured that he or she will not miss the deadline for bringing a claim simply by entering into settlement discussions.
  • If settlement is not reached for any reason (including if the prospective claimant or respondent refuse to engage in settlement discussions), Acas will issue an early conciliation certificate. The certificate will contain a unique reference number which the claimant must include on their claim form, otherwise it will be rejected.

These new rules are significant because they affect virtually all potential Tribunal claims. It is possible that the rules will lead to “satellite litigation” (i.e., a situation where claims are fought theoretically before going through the Tribunal system), but in many cases the early disclosure of information will help both parties understand the strength of their cases, and in many cases this will aid early and cost-effective resolution.

Alex Denny is a partner, Victoria FitzGerald an associate and Emma Vennesson an associate in Faegre Baker Daniels’ London office.

Copyright 2014 © Faegre Baker Daniels LLP. All rights reserved.

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