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Arbitration clauses in Partnership Deeds and employment tribunal claims

In the recent case of Clyde & Co LLP v Van Winkelhof, the High Court considered the question of whether a partner could bring a claim in an employment tribunal for discrimination and whistleblowing.

It has long been clear that partners are entitled to protection under the discrimination and whistleblowing legislation and partners can, like employees, bring such claims in an employment tribunal. What has been less clear is how such claims should be litigated when a partnership deed includes a clause stating that all disputes will be resolved by arbitration. Such clauses are very common.

The problem for the claimant is that:

  • arbitrations expose both sides to the risk of paying the other side’s costs. This risk is much smaller in an employment tribunal.
  • an arbitration is a private forum, whilst an employment tribunal is open to the public so reputations can be easily damaged

In this case Ms Van Winkelhof was a senior equity partner and was expelled by her partners. Instead of following the arbitration procedures specified in the partnership deed she launched an action for sex discrimination and whistle-blowing in the Employment Tribunal.  Her partners sought an injunction to prevent her doing this, but failed as the court found that to do so would breach both the Employment Rights Act and the Equality Act.

It is very common in GP partnership disputes for claims to be made of discrimination, bullying & harassment and whistleblowing. These need to be considered alongside other elements of the dispute and make the decision about how to litigate or defend such disputes very complex. Expert advice should always be sought.

 

Posted on September 1st 2011 in News and Publications, News Commentary


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