Nearly Legal

This story rumbles on, with several features in today’s Guardian, here, here, and here. The paper sees fit to pitch it as something of a moral dilemma, before finally plumping for one side.

The terms of the ‘dilemma’ go something like this.

Very large numbers of women, working for local authorities and schools, usually at the low paid end of the scale, turn out to have been unlawfully paid less than male comparators for many years. Quite how many is still not known because only 47% of Councils have completed pay reviews, despite a deadline of March 2007. However, the Local Government Employers organisation estimate that the underpaid could be in the area of 40% of all Council staff.

Unions have made deals with some Councils for back pay and forward adjustment and are negotiating with others. The Local Government Employers organisation estimates the costs of this at £2.8 billion. The Councils are saying that this, because it is not being funded by the government, will hit services.

Even worse, thousands of women are making independent claims for pay discrimination, some against Councils that have settled with the unions. Both the Councils and the unions are up in arms about quote ‘no win, no fee’ unquote lawyers taking these cases, because:

• They are threatening the basis of negotiation between Councils and Unions, collective bargaining;
• It is not necessarily in the Claimants’ best interests, that of their colleagues or the community;
• They are clogging up the Tribunal system, delaying claims;
• They are delaying the Councils’ abilities to deliver on equal pay.

The real basis of the objections is, of course, money. The settlements reached so far are usually below, sometimes grossly below the value of claims going on awards already made by the Tribunals. An example in the Guardian is a settlement of £5,000 that was rejected and a claim brought. The Tribunal awarded £32,000. The Councils say that inevitably there will be severe cuts in services and redundancies if they have to fund the ‘increased’ level of back payment.

The ‘no win, no fee’ lawyers figurehead is Stefan Cross, who apparently has about 30,000 claims underway and who is preparing a High Court claim against the GMB for sex discrimination for failing to represent its female members properly.

Let me pause to note a couple of issues that struck me in the Guardian reports. First, the GMB itself has issued 25,000 equal pay claims in the Tribunals, which one imagines might go some way to ‘clogging up’ the system.

Secondly, in the case mentioned above, with the award of £32,000, it is reported that after tax and lawyer’s fees the woman received £18,000, which by my rough and ready reckoning means costs and disbursements in the region of £7000. Tribunals, as far as I recall, do not generally make costs awards. If the client is paying the costs of the case, then this is not a CFA. As contingency fees are illegal, this can only be a form of deferred fee arrangement, a conclusion supported by reported costs of £500 per 6 months charged to claimants who pull out. This is not a no win, no fee set up. I’ll come back to this later.

In response to the charges from the Councils and unions, the independent lawyers point to the slowness of the Councils and unions in dealing with the issue, with the low level of settlements, and the inactivity of many Councils altogether. The women involved were illegally and discriminatorily underpaid. They are entitled to back payment for the last 6 years in full.

So where is the moral dilemma? There has been discrimination on pay which is both illegal and immoral. The only morality lies in full restitution, or at least as full as the law allows. If the women choose, as realistically their best option to get close to this, to sign up for a deferred fee arrangment, it is hard to see a moral objection - particularly on the part of Councils that have effectively enforced the subsidization of their services by these women.

The Councils and unions try to cast this as self-interest in ‘getting as much as they can’ which will damage services and ongoing employment. This is, of course, nonsense, although there may be well be a significant financial blow to the Councils. The women are entitled to the full amount. The Councils are effectively insisting that the women continue to subsidise them.

What it is, of course, is real politik. Rather than actually attempting to sort out the mess - remember over half of Councils still haven’t carried out an equal pay review - or present a coherent face to central government on the situation, both the Councils and the unions prefer to blame self-interest and ‘no win, no fee’ lawyers, raising the spectre of public money disappearing into lawyers’ pockets (as with the miners compensation scheme).

Assuming that I am right about the deferred fee arrangments, this is simply inaccurate. But it is notable that ‘no win, no fee’ is now a synonym for grubby ambulance chasing, opportunistic lawyers and is being used in spin for that effect.

The Guardian editorial, unsurprisingly, plumped for the side of the Councils, (after raising the miners compensation scheme as a precedent to be avoided!)

Crucially, the courts are better at resolving absolute rights and obligations than trading off competing priorities. But balancing objectives is what sound decision-making is all about when significant public expenditure is involved.

says the Guardian, gloriously managing to confuse Councils’ limited decision-making ability under statute with the ability to, well, actually change the law and, just to muddy matters further, suggesting the Courts could make lower awards if they wanted and if they took the Councils’ situation into account. The editorial adds

‘No move to make the settlement more generous [sic] should be made without taking into account the effect on pupils and patients… The imperfect compensation on offer can help atone for the wrongs of the past’.

Unfortunately for the Guardian, it is not a question of ‘generosity’ but of legal entitlement. The imperfect compensation is not only not (yet) on offer to a majority of the underpaid, but also means that the lowest paid women are told to continue to subsidise Councils, (in the example above, it would have been to the tune of £27,000). I wonder what Polly Toynbee would make of that?