Primo plc as a company first came into existence in 1971, although the name was not adopted until 2000. Primo is an amalgam of 9 different businesses, parts of which have been trading for over 50 years. The present management has not changed since 1987.
As ever following the lead of the United States, Britain is becoming increasingly litigation minded. The encouragement to sue and make a few thousand pounds could come from a television advertisement, newspaper or even a legal agent waiting outside the school gates asking if there have been any accidents that day.
Employers are vulnerable to claims that can cost thousands of pounds to administer (and much more to ignore), arising from employment disputes, legal defence, tax investigations, VAT disputes and more. Your legal costs can be insured at reasonable cost but if you think it could not happen to you, take a look at these examples:
Following the unexpected resignation of our policyholder's head housekeeper to take up alternative employment, our policyholder was surprised to be the subject of a claim for alleged Constructive Dismissal on the grounds of sexual harassment. The ex-employee alleged she had been subjected to sexual comments and advances from the hotel manager, which had made her situation intolerable.
Solicitors were appointed who, finding the ex-employee's representative evasive on the details of the alleged incidents, undertook a considerable amount of investigative work to try to establish the dates of the alleged incidents and the names of witnesses. This was a highly complex claim with the ex-employee seeking £12,000 in compensation.
On the day of the Employment Tribunal the case was settled before the hearing started, when the policyholder agreed to pay the ex-employee the sum of £2,000. This was considered to be an extremely satisfactory conclusion, particularly as there was every indication the case could have gone on for 4 to 5 days. Legal expenses insurers paid the costs involved which amounted to £12,810.
Following the failure of their accounts manager to transfer accounting information on to computer, despite assurances that the job was under way and deadlines would be met, there was a disciplinary hearing at which he was invited to resign and work one month's notice or have his employment terminated. When he refused to resign, our policyholder terminated his employment and paid him only what he was due up to the day he left their employment. The ex-employee alleged Unfair Dismissal and applied to the Employment Tribunal. Legal expense insurers appointed solicitors to act on the policyholder's behalf.
After a full day's hearing, the claim for Unfair Dismissal was rejected. However, the Employment Tribunal did find that in fairness, the policyholder ought to have paid the ex-employee up until the end of the month. Therefore an award of £1,328.00 in compensation was made. Fortunately for the policyholder, the insurer paid both the solicitors' costs of £4,206.86 and the £1,328.00 compensation award.
Following receipt of a policyholder's year-end company accounts, the Inland Revenue decided to carry out an in-depth investigation. The reasons given for this were the erratic business performance judged by gross profit and the general level of directors' remuneration. Although the policyholder's own accountant was initially appointed because they had already carried out a lot of work and were familiar with the policyholder's tax affairs, when matters did not seem to be progressing; the policyholder requested a change of accountant. Legal expenses insurers appointed a panel accountant who could see immediately that the Inland Revenue's position had become very entrenched during the 3 years the investigation had been running. They arranged several meetings with the policyholder and Inspector of Taxes and undertook a considerable amount of work analysing and preparing the policyholder's statements.
Following this, the acting accountants were able to refute all the Revenue's arguments, and eventually the case was settled on a minor technical adjustment. The policyholders expressed themselves as delighted with this outcome. Legal expenses insurers paid the costs incurred by both accountants, plus those of the self-employed company director, whose assistance had been instrumental in reducing costs, which totalled £12,721.