Warwick University, following incurring total legal costs in excess of £100,000, has admitted that there are "lessons to be learned" from a protracted dispute with one of its professors.
James Joyce once wrote, mistakes "are the portals of discovery". In such spirit, we thought that the Warwick University case would be ideal opportunity to examine ways of avoiding disputes and minimising costs where they do arise.
Background of the dispute
A professor at the University was suspended in January 2014 for nearly nine months after being accused of undermining the authority of his former head of department when interviewing candidates for a job at the University. The professor was subsequently cleared of all charges at a University Tribunal.
A Freedom of Information Act request revealed that the University incurred £43,328 in legal fees on the matter, which excludes undisclosed fees for its usual firm of solicitors that it instructs on a fixed annual retainer. Moreover, having been informed by the University that it would be instructing counsel for the hearing, the professor hired a barrister himself which further escalated costs. The University has now agreed to cover the professor's costs of some £66,000 in full, in addition to its own costs.
This serves as a stark reminder of the potential for the cost of disputes to spiral, even without it reaching the courts. But what measures can an academic institution implement to avoid soaring costs as a dispute gains momentum?
Preventing legal disputes
Academic institutions would be well advised to ensure that they adopt and maintain a positive work culture and, when issues do arise, to ensure that staff and service users have accessible and established complaints handling procedures.
In addition, a nominated staff and student representative acting as an intermediary between the individual and the institution may help to resolve any complaints.
These measures can serve as a useful tool in encouraging conciliatory discussions at an early stage and may prevent a costly dispute developing.
Minimising costs of legal dispute where they do arise
'Without prejudice' discussions
In the event that a dispute does arise, perhaps the most informal and cost efficient method of dispute resolution is conducting without prejudice discussions either directly or via lawyers. This has the advantage of being private, as well as potentially preserving working relationships and reputations if the matter can be resolved before matters become too "heated". Moreover, "without prejudice" negotiations have the added benefit of confidentiality and cannot be made known to the court or tribunal.
ACAS Early Conciliation
In May 2014, early conciliation through ACAS became mandatory. This requires that prospective claimants contact ACAS before bringing Employment Tribunal proceedings. Early conciliation has proven successful with ACAS dealing with 1,600 such cases each week and claimants in 93% of settled cases receiving the agreed sum. Though mandatory, this can be a useful means of settling a dispute on flexible terms without the formality and expense of traditional mediation which may not be necessary.
Mediation can also serve as a very effective means of resolving disputes as it is supported by a neutral third party and offers more flexible outcomes than litigation.
Mediation is a voluntary process where this neutral third party identifies the issues in dispute and liaises with the respective parties to facilitate a mutually agreeable resolution. The costs involved are likely to be significantly less than those incurred in litigation and the process remains private.
Crucially, the parties also have the flexibility of deciding whether and when to settle and the terms of any settlement, rather than having judgment laid down. A mediated resolution can also encompass terms other than financial recompense which are not available through the courts, such as agreeing joint statements, agreeing any appropriate future preventative action or a form of reference for a departing employee. These types of remedies may be more important to a party than financial compensation and could mean there is a greater chance of reaching an agreement.
Arbitration lacks the flexibility of mediation in some respects, as an independent arbitrator makes a final and binding award on the parties in a process more akin to the traditional judicial system. However, arbitration is still significantly more time and cost-effective than litigation and has the added advantage of being private and having far more limited rights of appeal.
Clear and transparent fee arrangements
Finally, it also important to ensure that legal budgets are properly managed with clear fee estimates being agreed at the outset of the matter.
At Collyer Bristow LLP, we adopt innovative costs arrangements with clients, including:
1. Hourly rate – blended or discounted 2. Fixed fees 3. Task-based 4. Annual retainer 5. Fixed fee with collar and cap 6. Contingent fees 7. Hourly and contingent blend 8. Value-based
There are numerous methods for approaching disputes, each with different elements which may or may not be appropriate.
In summary, preventative measures and acting promptly at all key stages are the key measures academic institutions should consider to avoid or minimise the costs of potential disputes.