A few of Britain’s largest retailers are going through the prospect of paying tens of millions in damages as a result of a wave of equal pay lawsuits, lots of that are backed by contentious litigation funding preparations.
Final month noticed the newest improvement in a long-standing authorized case in opposition to Asda, the place tens of 1000’s of staff are suing the grocery store. The declare argues that shopfloor staff, predominantly ladies, are paid lower than warehouse staff, who’re primarily males, in violation of equal pay laws.
The Asda listening to comes on the heels of a authorized victory for staff at Subsequent, the place an employment tribunal discovered that the retailer didn’t justify the pay disparity between its warehouse employees, primarily males, and its shopfloor staff, who’re principally ladies. Subsequent plans to enchantment the ruling, which may see compensation amounting to £30 million for the claimants. The case was represented by regulation agency Leigh Day and funded by Harbour Litigation Funding.
Related authorized challenges have been launched in opposition to different retail giants, together with Morrisons, Tesco, Sainsbury’s, and the Co-op. Leigh Day has confirmed that each one its grocery store equal pay instances are being pursued beneath a damages-based settlement, involving over 100,000 retail staff throughout the UK. Harbour Litigation Funding can be supporting claims in opposition to Sainsbury’s, Morrisons, and Tesco.
David Williams, an employment accomplice on the Metropolis regulation agency Fox Williams, famous that the retail sector is beneath vital stress. “There’s fairly a level of concern [in the retail industry] and I believe it’s coming from quite a lot of sources. The liabilities are probably huge as a result of there are many individuals within the sector and there’s a historical past of companies not taking equal pay critically,” he mentioned. “This can be a wake-up name for a lot of corporations to audit their practices and deal with wage disparities.”
Therium Capital Administration, one other litigation funder, is backing the case in opposition to Tesco. Based in 2008, Therium manages 12 separate litigation funds, collectively supporting claims valued at $36 billion. The corporate has a observe file of backing high-profile instances, together with authorized motion in opposition to the Submit Workplace and supporting Noel Edmonds in his authorized battle with Lloyds Financial institution over points associated to its HBOS subsidiary.
Litigation funders function by elevating capital from sources corresponding to hedge funds and sovereign wealth funds. This cash is pooled to finance varied claims, with income from profitable instances enabling additional investments in authorized actions. Whereas this funding mannequin can facilitate entry to justice, it has sparked controversy. Critics argue that it breaches the frequent regulation rules of champerty and upkeep, which traditionally prevented third events from funding authorized disputes for revenue.
The fast rise of sophistication motion lawsuits and third-party funding has led to issues inside the enterprise group. A current report by the Adam Smith Institute warned that these authorized mechanisms expose many corporations to claims price billions. In the meantime, the US Chamber of Commerce has been lobbying in opposition to the unfold of sophistication motion litigation and related funding fashions within the UK and Europe, arguing that they mirror contentious practices seen in the USA.
In England and Wales, two kinds of no-win, no-fee agreements at the moment are prevalent. The normal mannequin, conditional charges, permits legal professionals to take an uplift of as much as 100% on their normal charges for successful instances. Nevertheless, the newer damages-based agreements are extra controversial. Resembling contingency charges within the US, these offers allow legal professionals and their third-party backers to say as much as 50% of the damages awarded, resulting in unease amongst defendant corporations going through potential litigation.
Jamie Younger
Jamie is a seasoned enterprise journalist and Senior Reporter at Enterprise Issues, bringing over a decade of expertise in UK SME enterprise reporting.
Jamie holds a level in Enterprise Administration and recurrently participates in business conferences and workshops to remain on the forefront of rising developments.
When not reporting on the newest enterprise developments, Jamie is enthusiastic about mentoring up-and-coming journalists and entrepreneurs, sharing their wealth of information to encourage the subsequent era of enterprise leaders.
