- … up from £14,000 in 2022/23
- Leading employment lawyers say the uptick likely due to a number of much higher-value cases
- Demographics may make age discrimination claims more common
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The average compensation awarded in successful age discrimination cases has jumped 624% to £103,000 in the past year*, up from £14,000 in the previous year, says employment and partnership law specialists Fox & Partners.
This marks the highest average award for age discrimination claims since at least 2007/08, when just over £3,000 was paid out on average (please see graph below).
The significant increase in these payouts is being partly driven by a number of high-value cases involving senior professionals.
In recent years, high-profile cases have highlighted the risk employers face from age-related discrimination cases. In 2020 a former Citibank employee was awarded £2.7 million in compensation after being called “old” prior to the termination of his employment.
In another case, a senior executive at FTSE 250 firm Vesuvius was awarded £3.2 million – he had been referred to as an “old fossil” who “did not know how to deal with millennials” following the firm’s decision to not hire anyone above the age of 45.
The surge in large awards highlights a growing challenge for employers as the UK’s population ages. The UK’s demographics means age discrimination claims may become increasingly common.
The actual number of claims that make their way through an employment tribunal without being settled early remains relatively low, with only 12 cases reaching the point of being awarded compensation in the tribunals in the past year, down from 16 in 2022/23. Many cases are settled outside the employment tribunals.
Fox & Partners says employers should be quick to investigate and address evidence of ageist stereotyping or age-related ‘banter’.
Ivor Adair, Partner at Fox & Partners, says: “The average value of age discrimination awards has notably climbed in the past year – this should serve as a stark warning to employers. Increasing numbers of older workers believe their age puts them at a disadvantage in securing a new role and losses for senior executives who claim their lucrative careers have been cut short, can be significant.
“With an ageing population and a growing awareness of high-profile disputes, high value age discrimination claims could well become more frequent in the coming years.”
“Succession planning and strategies dealing with the orderly replacement of board members, is often not well handled and can be a source of allegations of age discrimination.”
“Many partnerships still retain a mandatory retirement age, which is a real risk when not decided upon through consultation, or based on evidence or reasoned projections that can justify that retirement age. Those firms that develop a proper succession plan that addresses immediate, medium, and longer-term change but also contingencies, for sudden and unforeseen departures are far better placed to deal with the challenges of an aging workforce.”
“Employers should review their workplace policies to ensure robust anti-discrimination measures are in place. This will contribute to an improved work environment – and reduce the risk of costly litigation for businesses.”
Average payout for age discrimination claims has soared sevenfold in the past year
*Source: Ministry of Justice. Year-end: March 31 2024.
About Fox & Partners
Fox & Partners is a leading specialist employment and partnership law firm based in the City of London, described by Chambers & Partners directory as “a small but perfectly formed boutique with an amazing range of knowledge.” Lawyers at Fox & Partners collectively have decades of experience resolving high profile and sensitive issues involving partners, employers and employees.
Offering risk-based contentious and non-contentious advice, our legal expertise includes partnership, employment, litigation and dispute resolution, regulation, discrimination, redundancy and whistleblowing. We act for a wide range of clients including companies, partnerships, LLPs and high net worth individuals who work within a range of sectors, including professional and financial services.
Fox & Partners is recognised as a leader in its field by both Chambers & Partners and Legal 500. The firm is described in Legal 500 as a “highly focused boutique” with “a very commercial and practical partnership team.”
