Personnel Today recently ran a story this month with an arresting headline. Nic Paton reported on 15 September 2026 that employees are increasingly using what one HR consultancy calls “tribunal blackmail”, threatening a weak or speculative claim to extract a settlement, and that the practice is costing UK employers as much as £296 million a year. The figures come from Hamilton Nash. Its employee relations expert, Jim Moore, put the mechanics of it plainly: as he told Personnel Today, “paying £10,000 to make a problem go away is simply cheaper than fighting it.”
It is worth reading past the headline, because the numbers inside the piece tell a more interesting story than the word “blackmail” does.
The word does not fit
Blackmail has a legal meaning. Under section 21 of the Theft Act 1968 it is an unwarranted demand with menaces, made for gain or to cause loss, where the person making it does not believe they have reasonable grounds for it. A claimant with even a modestly arguable case, using the ordinary machinery of ACAS early conciliation to test whether an employer will pay to avoid the cost of defending a claim, is doing something else entirely. It is called litigation risk, a feature of civil claims generally and not something peculiar to employment tribunals. Insurers price it into personal injury claims as a matter of course. Commercial litigators call it nuisance value. Nobody reaches for “blackmail” there. Applying the word to employment claims specifically, while leaving it off every other kind of civil dispute, says more about who is uncomfortable with the dynamic than about what the dynamic actually is.
What the 2% figure is really measuring
The article notes that fewer than 2% of the 48,543 claims filed each year succeed at a full hearing, while around 66% settle before one. Read quickly, that looks like evidence that most claims are weak. Read carefully, it is closer to the opposite.
Claims that settle are, by definition, the ones where both sides can see roughly how a tribunal would rule and would rather not pay to find out. That includes plenty of strong claims an employer’s own solicitors have advised them to settle, not only weak ones a claimant is bluffing on. What reaches a full hearing is the residue: the genuinely contested cases, the ones where liability is close, where credibility is disputed, or where an employer has decided the principle is worth defending regardless of cost. A 2% success rate at that stage says tribunals are demanding on the cases that actually get argued out. It says very little about the 98% that never got there.
The real driver is process, not opportunism
Here is where the article and the day job overlap. Hamilton Nash’s own figures put the cost of defending a claim to a full hearing at around £15,000 in legal fees, against an average settlement of £10,000. That gap is what makes the arithmetic work for a claimant with a marginal case, and it opens widest precisely where the underlying process was thin.
A dismissal or disciplinary sanction that followed the ACAS Code of Practice on disciplinary and grievance procedures, in force since 11 March 2015, gives an employer something concrete to defend: a documented investigation, a fair hearing, a considered decision, a right of appeal properly offered. A process that skipped steps gives a claimant’s adviser room to argue procedural unfairness even where the underlying conduct was genuine, and that room is exactly what a settlement demand exploits. The Code’s own foreword records that a tribunal can adjust an award by up to 25% either way for an unreasonable failure to follow it. Get the process right at the point of the hearing, and the exposure that follows, from strong claims and speculative ones alike, narrows considerably.
That is not a claim to make lightly, so it will not be overstated here. A sound process does not make every claim disappear, and nothing in this piece should be read as a prediction about how any individual case will turn out. What it does is remove the ambiguity a cost-based settlement demand depends on.
What changes from January
The article is right to flag January 2027 as the point where the pressure increases. The qualifying period for unfair dismissal drops from two years to six months, and the £123,543 cap on unfair dismissal compensation is removed. That is not, as it is sometimes shorthanded, a day-one right. The six-month qualifying period still has to be served. But it does mean a much larger pool of employees gain protection at the same time as the ceiling on what a successful claim is worth disappears. Hamilton Nash’s own estimate of a mid-career claim running past £250,000 is not far-fetched once several years of lost earnings are in play.
Put the two changes together and the case for a clean process stops being a nicety. An employer facing a wider pool of eligible claimants and an uncapped award has every reason to want the disciplinary stage handled properly the first time, rather than repaired at the tribunal stage after the fact.
Where this leaves an employee reading it
If you are the person on the other side of one of these settlement conversations, the “blackmail” framing is worth setting aside entirely. Whether your claim is strong or genuinely marginal has nothing to do with which label an HR consultancy attaches to the dynamic. What it turns on, every time, is whether the process that led to your dismissal or sanction actually followed the Code, whether the evidence was tested properly, and whether you had a fair opportunity to answer the case against you before any decision was made. Those are the questions worth answering early, before a settlement figure is ever floated.
By Shakil Dixon, Founder and Principal Representative, Zhan Associates
Source: Nic Paton, “‘Tribunal blackmail’ costing employers £296m a year”, Personnel Today, 15 September 2026.
Zhan Associates is a specialist workplace defence consultancy. It is not a law firm and does not carry out reserved legal activities. We do not provide legal advice.