Around 72% of UK employers have reported an increase in the number of legal cases over the past five years, according to a survey by global risk management firm, Gallagher. Employee disputes have become the most common legal issue for businesses (around 38% of those being faced).

And that has meant a big bill for costs and compensation, hundreds of thousands, if not millions of pounds each year; as well as damage to reputation, operations and a drain on management time. The sectors most affected are said to be energy, scientific operations, IT and finance.

A trend expected to continue

Business leaders point to the cost of living crisis, a general sense of economic instability, and, a much greater willingness to look for legal redress, as the main factors behind the rises. They expect the trend to continue into the coming years.

What they need to consider is why legal action should ever be necessary. It means that internal processes, management and people’s relationships in general, have broken down — as a last resort, an external legal authority has been needed. In other words, there’s been a failure of skills, capability and culture.

Apart from the most extreme and complex of cases, that shouldn’t happen. Without wanting to be limited by stereotypes, it doesn’t feel surprising that the sectors with the greatest challenges are those like IT and technology where softer, people skills are traditionally in more of a short supply, coming second to technical proficiency.

Greater focus on workplace cultures and relationships

Where there are good relationships within an organisation, those essential feelings of trust and belonging, employees are far less likely to feel the need to turn to the law. It mostly happens when people feel they are not being listened to, they don’t trust line managers to deal with conflict or other difficult situations, and believe they have no choice.

Employees don’t want to be in that position. Nor do employers. All that’s needed is attention to workplace cultures and relationships. Straightforward measures like making sure there is access to mediation, or the use of interventions to find out what’s happening in dysfunctional teams like neutral assessment or appreciative enquiry (exploring what’s working and focusing on strengths); equipping managers with the skills they need to deal with conflict in constructive ways; creating a Clear Air Culture where there are honest, open conversations that defuse issues in informal ways, early.

Together, these kinds of activities create an environment of trust and positivity that makes the legal route an expensive anomaly.

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