Companies spend an average of £277,000 on resolving an employment dispute, but could cut costs dramatically if cases were mediated early.
Research carried out by the Centre for Effective Dispute Resolution, Lewis Silkin and Barclays has shown that the early stages of an employment dispute costs a business just £9,000.
However, costs rack up swiftly if a case heads towards a tribunal hearing. Obtaining witness statements and carrying out disclosure is the most expensive part of the process, costing around £130,000.
Even the verdict costs more than the initial complaint, with a total cost to the business of £15,000.
The survey of 570 business managers from across the UK also showed that internal disputes are more common than disputes with customers, although the latter has a more harmful impact on a company.