A few of Britain’s largest retailers are going through the prospect of paying hundreds of thousands in damages as a consequence of a wave of equal pay lawsuits, lots of that are backed by contentious litigation funding preparations.
Final month noticed the most recent improvement in a long-standing authorized case in opposition to Asda, the place tens of hundreds of workers 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 workers, 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 workers throughout the UK. Harbour Litigation Funding can also be supporting claims in opposition to Sainsbury’s, Morrisons, and Tesco.
David Williams, an employment associate on the Metropolis regulation agency Fox Williams, famous that the retail sector is beneath vital strain. “There’s quite a degree of concern [in the retail industry] and I think it’s coming from a variety of sources. The liabilities are potentially enormous because there are lots of people in the sector and there’s a history of businesses not taking equal pay seriously,” he mentioned. “This is a wake-up call for many companies to audit their practices and address salary 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 monitor file of backing high-profile instances, together with authorized motion in opposition to the Put up 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 similar to hedge funds and sovereign wealth funds. This cash is pooled to finance numerous 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 throughout the enterprise neighborhood. A current report by the Adam Smith Institute warned that these authorized mechanisms expose many firms to claims value 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 standard mannequin, conditional charges, permits legal professionals to take an uplift of as much as 100% on their commonplace 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 firms going through potential litigation.
