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Tribunal claims aren’t just “legal”, they’re a business decision and SMEs are being forced to choose

ended 21. December 2025

I keep getting asked this by small business owners right now: Should we settle, or should we fight it?

Because the reality is this. An Employment Tribunal claim might be “free” for the employee to bring, but it is not free for the employer. If you’re a small business, it can quickly turn into a choice between spending months dealing with it, or paying to make it go away.

Tribunal decisions are also publicly searchable, so if it goes all the way to judgment, it can sit there online with your business name on it.  And if you lose and do not pay, awards can be enforced and that can escalate into enforcement action and credit issues if it ends up as a court judgment.

So for SMEs, this is rarely about being “right” or “wrong”. It is about what is the least damaging commercial decision.

The SME decision test

If you fight it, you need time, headspace, evidence, witnesses, and a stomach for a long process. Even if you win, you rarely get your costs back.
If you settle, you can usually cap the cost and control the outcome, often with terms that matter just as much as money, like a reference, confidentiality, return of kit, and drawing a line under it.

Questions for small business owners (comment below)
1. If you had a strong case, would you still settle just to avoid months of stress and distraction?
2. What matters more to you, the principle of fighting or the commercial reality of protecting cash flow?
3. Have you ever settled mainly because the process felt like a punishment?
4. Do you think public tribunal judgments change how safe it feels to hire and manage performance?
5. Would you fight more cases if employers could recover costs when they win, or would that put people off bringing genuine claims?
6. What is your one “red flag” that makes you settle early, for example, discrimination risk, weak paperwork, missing managers, or a key witness leaving?

Sources
Employment tribunal decisions database (HMCTS)
https://www.gov.uk/employment-tribunal-decisions 

Judiciary guide: Employment Tribunal (England and Wales) after the hearing
https://www.judiciary.uk/courts-and-tribunals/tribunals/employment-tribunal/employment-tribunal-england-wales/after-the-hearing/ 

Enforce an Employment Tribunal award (fast track scheme)
https://www.gov.uk/government/publications/form-ex727-i-have-an-employment-or-an-employment-appeal-tribunal-award-but-the-respondent-has-not-paid-how-do-i-enforce-it/how-to-enforce-an-award 

CCJs and your credit rating
https://www.gov.uk/county-court-judgments-ccj-for-debt/ccjs-and-your-credit-rating 
 

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Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
Most people are not out to make money from a tribunal claim. They just want what’s fair. But come on. In any system, the minute someone spots a quick buck, someone will try it. And the safeguards? On paper, sure. Claims can be struck out, deposits can be ordered, costs can be awarded, Acas sits in the middle first. In real life, it is patchy, slow, and costs are rare. So the biggest “safeguard” becomes your own wallet and your own tolerance for stress. Now add the backlog. Small business owners are already juggling payroll, customers, sick leave, cashflow, and trying to be decent humans. The last thing we need is a tribunal claim hanging over our heads for months like a dark cloud, draining time, sleep and sanity. This is why people settle. Not because they have done something wrong, but because they have a business to run and a team relying on them. That is not justice. That is pressure.