Employment tribunals under pressure: why delays matter for employers, insurers and claims outcomes

In this article, Julia Wallis, Senior Claims Adjuster at Zurich, and Anjali Sharma, Partner at DAC Beachcroft LLP, explore the current backlog in the employment tribunal system and how longer delays are affecting employers, insurers and the claims process. They consider why claims are taking longer to progress, what the impact of the Employment Rights Act 2025 may be, and why early evidence preservation and a clear settlement strategy are becoming increasingly important.

Tribunal pressures in numbers

The most recent tribunal statistics are consistent with the trends now being seen in SME/Mid Market claims notifications:

• In Q4 (January to March) 2025/2026, employment tribunals received 15,000 single claims, up by 36% from the same quarter the previous year
• The outstanding caseload in the employment tribunal increased 42% from 45,000 to 64,000 (and by 10% in last 3 months)
• Significantly the proportion of complex claims to employment tribunals (typically discrimination and whistleblowing) has increased from 20-25% from 15-20 years ago, and now represent 61% of new single claims

Employment practices liability claims are a clear pressure point in the insurance market, with Zurich seeing employment practices notifications under the Executive Risk Solutions policy increasing by 96.56% this year and generally running at around double the notification level seen under any other Executive Risk Solutions policy sections.

Why claims are increasing and the impact of the Employment Rights Act 2025 (ERA 25)

The growth in tribunal claims is being driven by a combination of factors, including increasing claim complexity, greater use of AI by claimant representatives and forthcoming legislative change.

AI-assisted drafting can allow claimants to produce longer, more detailed and less focused ET1s and schedules of loss at an early stage, even where the underlying factual or legal basis of the claim is weak. This can make allegations more difficult to untangle, increase the time needed for initial coverage and merits assessment, and generate pressure for respondents to incur defence costs earlier than would otherwise be necessary. AI-driven claimant firms may also encourage a greater volume of claims, including claims with inflated heads of loss or multiple overlapping allegations. In the Zurich Speciality Lines Claims Team we have seen an increase in claims alleging multiple heads of loss. Interim relief applications are appearing more often and take up a disproportionate amount of the tribunals' resources. They can require urgent work and quickly incur legal fees, even where the application has limited merit. The increase in complex claims is also leading to more preliminary hearings, adding further stages before the parties reach a final hearing. This can increase the time needed to assess the claim and respond properly.

This pressure on tribunals will be compounded by the introduction of certain provisions of the ERA. The limitation period for tribunal claims is due to double (from three to six months) in October 2026. This extended limitation period is only going to increase claims' life cycle. Further, from 1 January 2027, unfair dismissal rights will apply after six months’ service.  The cap on the compensatory award for unfair dismissal will also be removed on the same date. The Tribunal service predicts that the ERA measures will lead to a further 20% increase in claims.

The practical impact on claims

As a consequence of the increasing caseload, final hearings are often being listed around two years after a claim is brought (more than three years after the events in dispute). This is particularly acute in parts of London, for example five-day hearings in London South are currently being listed into the first half of 2029.

Early conciliation (EC) is also taking longer with potential claims taking up to three months to be addressed by ACAS.  This delay may lead to claimants becoming entrenched in their positions. ACAS expects a 15-20% increase in EC notifications due to the ERA 2025.

The delay to cases being heard can also affect settlement strategy. In some cases, tribunals have encouraged parties to settle by mandating alternative dispute resolution hearings because of limited judicial resources. These hearings do not always result in settlement and require the parties to bear further costs attending them. Hearings are often postponed at the last minute when the costs of preparation are already incurred.

There is also an increasing risk that witnesses are not available by the time the hearing occurs, therefore reducing the prospects of successfully defending the claim. Employers may still want to defend the claim, particularly where the allegations are sensitive or reputationally significant. Those competing pressures need to be managed early.

Impact on policy and claims process

This affects the claims process in several ways. Defence costs are increasing due to the amount of time matters are active. AI-assisted pleadings are likely to intensify this pressure because longer and more complex pleadings require more time to analyse, more detailed responses from solicitors and earlier strategic decisions on whether to defend, seek further particulars or explore settlement. Excesses may be eroded earlier than expected with interim relief applications, and if lawyers are needed to take early witness evidence (to mitigate the risk of witnesses leaving employment before matters advance significantly) Defence costs will be impacted where allegations are broad, unparticularised or supported by inflated schedules of loss, and insureds may not wish to settle increasingly unmeritorious claims.  The cumulative effect is a longer claims lifecycle, higher defence spend and increasing settlement values, particularly in complex discrimination and whistleblowing claims.

Potential reforms

There are proposals for reform - the Employment Lawyers Association has suggested changes to encourage early resolution, including more workplace mediation, a new Employment Resolution Service, simpler ET1 and ET3 forms, earlier document upload and a three-track tribunal system based on claim value and complexity. The aim is to make the process more proportionate and reduce delays.

While these proposals may help alleviate some of the pressure on the tribunal system, meaningful change is likely to take time. In the meantime, employers, brokers and insurers must continue to navigate the practical challenges presented by an increasingly congested tribunal landscape.

Mitigating the impact of tribunal delays

For now, brokers and Insureds should assume that tribunal claims may last longer and cost more. Early evidence preservation is important and witnesses should be identified as soon as possible. Employers should keep clear records of decisions and review document retention policies.