compensated over and above what is an actual reflection of their loss. The Polkey deduction is so named due to a court case: Polkey v AE Dayton Services Ltd, and was clarified more recently at the 2013 appeal case for Contract Bottling v Cave. Risk factors Mainly though, the compensatory award depends on what the employee earned before it all went wrong, and how long they will take to get back similarly paid work. Factoring in the smaller basic award, the nightmare scenario in a tribunal for the employer is therefore ruining a 41-year-old high flier's career after they have been with them for 20 years. "Big money" cases tend to be restricted to discrimination, where the tribunal's unfair dismissal cap is lifted, or breach of contract or psychiatric injury, where there is no limit to what can be claimed in court. So a worst-case scenario overall for the employer is not just ruining a high flier's career, but a man doing so by bullying a woman and giving her a nervous breakdown. Compensation tends to roughly double in disability or race discrimination cases, so it can be even worse. Tribunal statistics The reality of tribunals is that the average award of £4,000 does not cover the time and money spent by the employee on the claim, and consequently the employer - who also spends about £5,000 on legal fees - usually merely avoids paying less than it loses on lawyers, publicity, management time and staff penning witness statements and testifying. It is generally in both parties' interests to settle. The risks of being sucked into a tribunal are real - 40,000 unfair dismissal cases are heard every year. 69% of claims are settled; of the other 31%, 19% are thrown out and 12% win. So claimants may be aware they have an 81% chance of extracting some cash. 31% of cases that proceed to a full hearing result in compensation. The median award is £4,000 and mean is £8,058. Costs are awarded to employers in fewer than 0.2% of cases and to employees in fewer than 0.1% of cases, and average a median of £1,000 and mean of £2,095. Three quarters of claimants are represented. Factors for & against settling However, the employer may worry that compromising undermines the decision to dismiss and thus the authority of management, or that it would create a precedent for everyone who leaves