Hello and welcome to the Pinsent Masons podcast, where we keep you up to date with the most important developments in business law news from around the world.
I'm Matthew Magee, I'm a journalist here at Pinsent Masons and this week we examine in the phenomenon of a sudden increase in employment tribunal claims in the UK and investigate whether AI is behind it. But first, here's some business law news
Australian smart glasses probe puts retailers and businesses on notice over privacy risks, Germany adopts new cyber product liability rules and Scottish retailers warned as new food promotion and placement regulations come into force.
Australia’s privacy regulator has launched a probe into the company behind a smart glasses companion app, which could have ramifications for businesses offering compatible technologies and retailers selling such products, according to a privacy expert. The Office of the Australian Information Commissioner previously issued preliminary enquiries to manufacturers and distributors of smart glasses, including Meta Platforms, Kmart, Google and Shenzhen King Chen, based in China. That company didn't respond and the privacy commissioner has opened an investigation into its privacy practices, Australian Privacy Commissioner Carly Kind said “I have no assurance that the company is protecting personal data of Australians as required by the Privacy Act.” Privacy expert Veronica Scott said “the most significant message was about accountability and potential liability across the supply chain.” The regulator says businesses should conduct their own due diligence on privacy risks of connected surveillance devices they sell.
A new product liability regime will heighten the need for German businesses to adopt robust cybersecurity approaches throughout the product life cycle, an expert had said. The German Bundestag has adopted EU laws which expand liability exposure for manufacturers and other economic operators in Germany, including an explicit recognition of cybersecurity as a relevant factor when assessing whether a product, including software, AI and software as a service is defective, technology expert Daniel Widmann said, “this issue would be particularly relevant for German manufacturers of connected products, software developers, AI providers, digital service providers and other organisations placing related products on the German and EU markets.” He said: “For many organisations, cybersecurity has traditionally been viewed as a regulatory compliance issue, but the implementation of the new Product Liability Directive demonstrates that cybersecurity is increasingly becoming a product liability issue as well.”
Scottish retailers must ensure their policies and procedures comply with new restrictions on the promotion and placement of less healthy food and drink products now in force, an expert had said. The regulations are designed to encourage healthier consumer choices by limiting where and how certain prepackaged food and drinks high in fat, sugar or salt can be displayed and promoted in shops. They follow rules already in force in England and Wales. Regulatory expert Zoe Betts said “retailers should not assume that compliance with existing restrictions elsewhere in the UK automatically means they have nothing further to do in Scotland.” Businesses need to ensure they understand which products fall within scope and review how those products are promoted and displayed in stores.
Employees in the UK are making more claims against employers than ever and it's probably down to artificial intelligence. The tribunal system which hears most employment claims is creaking. Employers are facing a deluge and workers are waiting longer than ever for outcomes. So what can be done? There are no easy answers, but a start is to understand the problem. The UK's Ministry of Justice says that employment tribunals are lower division of the courts which hears claims first had in March this year a backlog of 64,000 outstanding claims, a whopping 55% increase on the same point in 2025. Claims that used to take weeks or months to process can take years, and employers are struggling under the burden of managing what they say are longer and longer claim documents from workers. Leeds based employment law expert Jon Fisher explained what's been happening.
Jon Fisher: The volume of claims has been rising for a couple of years now, but it's really rising exponentially at the moment. I mean, the increase year on year, according to the official stats is over 50%. And that's in single claims that there have been waves in the past where there's big multiple equal pay claims that have kind of distorted the numbers. But these are just, you know, single claims by single employees and it's pretty unprecedented and it definitely hasn't been foreseen by the government and consequently it's putting a system which was working reasonably well under immense strain. They're just having the tribunal system just can't cope with the increased volume of claims and there's absolutely nothing to suggest that either the increase is going to stop or that the tribunal system is going to get the funds and the reforms it needs in the near future. So unfortunately, this is very much something that's going to get worse before it gets any better.
Matthew Magee: So why are the numbers of claims rising so fast? One factor is Labour government reforms of employment laws giving workers more rights. But the rise was already evident before those came into force given that the rise happened in the aftermath of the release to the public of large language model AI in November 2022, Jon says the answer is pretty clear.
Jon: There are number of reasons for it. AI is the most obvious explanation you know makes it. It's a very democratic tool. It gives people access to legal sources of knowledge they might not have had previously and it will draft very clear pleadings for you and it will direct you and tell you exactly what you need to do to bring your claim based on not much work. AI seems to be quite, sort of a punchy litigant as well. It will take your directory towards court proceedings a lot quicker than I think, you know, an advisory service such as Acas would. And interestingly, this isn't just in the UK. We've just spoken to our lawyers, not just our employment lawyers, but across the globe. This is an increase that they're seeing everywhere. It's the AI bit definitely and makes it easier for people to claim generally awareness of employment rights in the UK. There's been an awful lot of news items and media coverage and employment rights because the Labour government's Employment Rights Bill, now Employment Rights Act that they've introduced, which is fairly sort of groundbreaking once in a generation reform of employment laws and that just needs has been an awful lot of coverage of these issues in the media, which again, I think has then helped people think about their rights and even more willing to take steps to enforce them.
Matthew: This backlog creates issues for everyone, a backed up and clogged up employment tribunal service, companies struggling to process the claims and employees waiting years for the result of those claims, says Jon.
Jon: It's not uncommon that we get a claim form through in the London area where they'll say here's the claim, you need to file a response within 28 days. The next step is a preliminary hearing to decide the timetable for the case. That preliminary hearing itself will be over 12 months into the future and nothing happens on that case until that point. So there's a real access to justice point for the claimants, but for employers that just creates a whole host of issues with trying to defend the claims because obviously it's an increasing problem. For example, the witnesses will have left the company before the hearing comes. About 10 years ago, it was uncommon for a case to take more than 12 months to come to hearing. If it's going to take 3 or 4 years, it's far more likely that you'll be trying to sort of get people back from new employment to come and give evidence about something that happened a long time ago at a previous job. It's making it harder to defend claims and settlements are increasing simply on the basis that we're struggling to get witnesses to attend, which didn't used to be such a problem. It's having an impact on claims to just costlier to fight because they just go on for longer. There's a lot more correspondence to deal with during the case. So some claimants send literally hundreds of emails, long, long emails during the course of a case and we try to be proportionate and how we respond to those. But obviously they all need to be read to make sure there's nothing in there that needs to be dealt with. The other issue with the is, is not just about the final hearing. It means the Tribune just has a lot less time to deal with the cases properly. So I mean, you can write to the tribunal and not hear back for six months. It's not just the claim that's been brought the way claimants are using AI. They're also using it to generate correspondence, which is kind of drowning the case management side of the tribunal system as well. So there's a lot getting the tribunal to deal with anything is much more problematic than it was. That takes a long time, which means which is why these cases are taking a lot longer to actually conclude. Not even when they've gone to a hearing, but even to settle or to get struck out or to get some form of resolution before a full hearing is just taking a lot longer than it did.
Matthew: So what can companies do to cope with the deluge? There isn't an easy answer, an efficient management of claims is part of the picture. But so says Jon is using AI to deal with the problems created by.
Jon: AI trying to stop claims ever coming in the 1st place, you know, looking at the trends, the risks, what proactive steps can we take to manage things so that there are claims are less likely given that they're more costly to deal with than they ever have been. And then when the claims come themselves, all we can really do at that stage, given the confines of the tribunal system, is to try to manage them as efficient as we possibly can, which is where we use our own AI systems that we've created in order to try and run the case end to end as quickly and efficiently as possible. The tactics of the tribunal claim have changed and evolved because things take so long to come to a hearing, because they're all the delays in the system, because case management is slower and the strikeouts are less likely and prominent than they were before, we've had to adapt as we go along to deal with the system as it is rather than as it used to be.
Matthew: Finding ways to deal more efficiently with the claims is getting pricing as more UK law changes are on the way, says Jon.
Jon: I'm an optimist by nature, but unfortunately the future is even bleaker in the, in the short term at least in that the Climate Rights Act, which is one of the Labour Party's main manifesto commitments. The key bits of that that are likely to have the biggest impact on claims have yet to actually come into force. That happens on the 1st of January 2027 and that is the reduction in the qualifying period to bring an unfair dismissal claim from 2 years to six months and the scrapping of the cap on unfair dismissal compensation for dismissals which happened after that date. And neither of those have taken effect yet and they are likely to drive claim numbers still higher. So actually, the employment rights legislation today I would say has had little to no impact on this increase. This increase has happened organically, not in response to legislation. And it's likely to be driven still higher that the government themselves originally estimated that there'll be a 10 to 15% increase in claims on the back of these changes. Certainly, think there will be an increase they may well have underestimated while that increase will be. Another thing which is happening or what just happened on the 1st of October is that they've increased the time limits for bringing in a case. So people, from now on will have six months rather than three months to start the Acas stage, which is the prelude to them bringing a claim, which itself means there are more, more people may claim because they've got longer to think about it. And also it might, it might be 12 months from dismissing somebody, for example, before you even are made aware that a claim has been brought.
Matthew: Jon says that the public sphere has to do its bit and changes to how employment tribunals work would help.
Jon: I mean the simple answer is they need more judges and the other things that could be done were perhaps giving the tribunals a bit more teeth in terms of case management. Currently the bar for striking out a claim is very, very high. In fact it has to be no possibility of a fair hearing. Other things that could be considered but I'm not aware are being considered would be introducing a fee for somebody to bring a tribunal claim. Currently it's free. A few years ago a fee was introduced and that actually ended up being declared void after a judicial review on the basis it was too high because that had reduced claim numbers by 80%. But there will be a halfway house where some form of fee that somebody must pay rather than having a free shot, would reduce the claims to hopefully those that have merit. I think it's incredibly unlikely a Labour government would ever introduce that.
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The Pinsent Masons Podcast was produced and presented by Matthew Magee for international professional services firm Pinsent Masons.
