What do you do if you lose your job, or think you have been treated unfairly but cannot afford to pay for lawyers to bring a claim? What if, as an employer, you are faced with a spurious tribunal claim but you cannot afford to fight it?

It could be you have legal expenses insurance that would cover your legal fees and you are just unaware you have it.

This is a real dilemma that a lot of people are facing either personally, or with family members losing their jobs in the current recession.

As an employee you used to be able to get green form assistance to help with taking legal advice to guide you about what to do, although legal aid itself has never applied to employment tribunal matters.

As much as it should not be the case, some employers still do not treat their employees fairly, giving rise to potential claims.

If you have just lost your job and every penny is precious, what do you do? Some organisations offer to take cases on a ‘no win no fee’ basis but in employment matters they can ask for up to 50 per cent of whatever you win or settle for as their fee.

So what do you do? Some former employees bring the claim themselves, as the employment tribunals were originally set up to be ‘a people’s court’ where individuals could represent themselves.

But with employment legislation being passed almost monthly, and cases changing the employment landscape sometimes daily, it is no longer a good idea.

There are more than 86 types of employment claims and so knowing what you should claim is very complex.

Also, with costs being more commonly awarded in the tribunals of up to £10,000, if the claim was spurious, or had no prospects, as an employee you do not want to risk pursuing a claim that has no chance of succeeding.

Getting advice at any early stage is key.

The Citizens’ Advice Bureau offers a source of free advice, as do ACAS, and there are other organisations who can assist, as well as some who do pro-bono work, such as the Employment Lawyers’ Association, The Bar's Free Representation Unit, law centres, etc.

Yet many people are covered under their house or car insurance policies for employment disputes and do not realise it.

Under Law Society rules, solicitors must draw this to their client’s attention from the outset but still so many people do not realise they have it. It is generally prospects-driven, so if your case is more likely to lose than win, you will not be covered.

Such insurance policies vary but they can cover up to £50,000 of legal fees, so enabling those who have been treated unfairly, or whose employers have breached employment legislation to bring claims.

Legal expenses insurance is also available to employers to give them costs certainty in difficult times.

But watch out for the small print. Many companies providing policies dictate you must have sought their advice all along or they will decline cover, and the exemptions can be extensive.

Others dictate you must use panel solicitors who are based miles away, rather than your own legal representatives.

Many policies are also often prospect-driven and so if you have slipped up on a procedural step, cover may be refused.

The key therefore for employers is also to take advice at any early stage to ensure any necessary redundancies, dismissals, disciplinary or grievances are dealt with properly from the outset.

Getting it right from the outset can save a huge amount of money, time and possible compensation.

For employers there are not just the financial costs of defending claims.

There is the management time, the effect on their reputation, on staff morale, as well as the risk of a decision going against them in the tribunal, should it go that far.

Tribunals ultimately decide each case on their facts, so decisions are sometimes hard to predict and less than certain.

As an employer, you could find yourself defending a spurious claim being pursued by a disgruntled former employee who has nothing to lose because they have signed up to a “no win no fee” arrangement.

These are not always run by qualified solicitors or employment specialists, so there may not be a genuine case.

Many employers settle such “nuisance” or spurious cases, rather than expending sums on legal fees and the added risk of a tribunal not finding in their favour.

The antidote to this is the legal expenses insurance for employers, which is highly recommended in this difficult economic climate.

n Contact: Brethertons Solicitors, 01295 270999; www.brethertons.co.uk