Cost orders: Employment Tribunal refuses costs application against a claimant because employer did not issue costs warning

Dr Minh Alexander retired consultant psychiatrist 19 August 2022

The Employment Tribunal was meant to provide accessible justice but in reality claimants who are unrepresented are much disadvantaged, as reported by this Cardiff University paper which looked at family courts and other civil cases::

“8. Unrepresented litigants participated at a lower intensity but made more mistakes. Problems faced by unrepresented litigants demonstrated struggles with substantive law and procedure. There was other evidence of prejudice to their interests.

9. There was at best only modest evidence that cases involving unrepresented litigants took longer, though cases with unrepresented parties were less likely to be settled.”

Employment Tribunal (ET) claimants, unfamiliar with the legal bear traps, tend to be over-optimistic  about their chances of success:

“Claimants’ expectations about the outcome of the case at the point of initiating their claim were generally positive (Table 7.1). Nearly all claimants (92 per cent) thought that they had at least an even chance, and this included 53 per cent who thought that they were very likely to be successful. These positive views were widespread, even where the outcome turned out to be unsuccessful. For example, only 2 per cent of those whose claim turned out to be unsuccessful at tribunal, expected this to be the outcome at the start of the claim”

Generally, outcomes are unsurprisingly poorer for claimants who are unrepresented in litigation.

In the ET, only those who can match employer’s firepower with equal quality of legal representation have much chance of success and even then, many are only partly successful.

A guide written by a lawyer for lawyers facing unrepresented claimants or “litigants in person” in personal injury cases, , gives an example of how the other side might think:

Litigating with litigants in person: Useful pointers on balancing duties

In the ET, discrimination and whistleblowing cases have particularly poor outcomes for claimants, because the legal tests favour employers.

Many whistleblowers who go to Court are unrepresented.

A 2020 Greenwich University study found that half of whistleblowers are unrepresented in the Employment Tribunal:

A thorny issue is the price of justice.

Lay people may not understand how much justice costs.                                 

The Courts have to manage this cost with fairness and the public purse in mind, and also the list of waiting cases. The Court backlog has grown as a result of the pandemic. Case management hearings are an opportunity for Tribunals to ensure the most efficient handling of cases.

But claimants who represent themselves, are at special risk of driving up the cost of cases and exposing themselves to a cost claim by the other side (the “Respondent”).

If Claimants are deemed to have caused unreasonable and unacceptable costs, possibly because of insufficient objectivity or perhaps because they do not fully understand the cost implications of the way in which they conduct their claim, they may have to pay the other side’s costs.

But many claimants are not even aware that there may be a risk of having to pay the other side’s costs:

“Employers were more likely than claimants to be aware that costs could be awarded against a party if they unreasonably pursued and employment tribunal case. While 67 per cent of employers said they were aware of this, this applied to only 54 per cent of claimants”

The Court seldom awards costs, reserving them for the more extreme cases, and it also has the ability to limit cost orders according to the ability to pay.

Employment Tribunal Rules of Procedure:     “When a costs order or a preparation time order may or shall be made 76.—(1) A Tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that— (a)a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or (b)any claim or response had no reasonable prospect of success. (2) A Tribunal may also make such an order where a party has been in breach of any order or practice direction or where a hearing has been postponed or adjourned on the application of a party. (3) Where in proceedings for unfair dismissal a final hearing is postponed or adjourned, the Tribunal shall order the respondent to pay the costs incurred as a result of the postponement or adjournment if— (a)the claimant has expressed a wish to be reinstated or re-engaged which has been communicated to the respondent not less than 7 days before the hearing; and (b)the postponement or adjournment of that hearing has been caused by the respondent’s failure, without a special reason, to adduce reasonable evidence as to the availability of the job from which the claimant was dismissed or of comparable or suitable employment. (4) A Tribunal may make a costs order of the kind described in rule 75(1)(b) where a party has paid a Tribunal fee in respect of a claim, employer’s contract claim or application and that claim, counterclaim or application is decided in whole, or in part, in favour of that party. (5) A Tribunal may make a costs order of the kind described in rule 75(1)(c) on the application of a party or the witness in question, or on its own initiative, where a witness has attended or has been ordered to attend to give oral evidence at a hearing.”   “Ability to pay 84.  In deciding whether to make a costs, preparation time, or wasted costs order, and if so in what amount, the Tribunal may have regard to the paying party’s (or, where a wasted costs order is made, the representative’s) ability to pay.”

It is held that it is harder for employers to win costs against unrepresented claimants,

“Whilst cost orders are generally much harder to obtain against unrepresented individuals”

But most private individuals can ill afford costs of any sort.

Particularly sacked whistleblowers who face the prospect of blacklisting and loss of livelihood.

An interesting ET judgment has been published in which the Court ruled that a claimant conducted her case unreasonably, racking up costs with little understanding that she was doing so. BUT it has decided not to make her pay costs because her former employer, Kings, failed to give her a cost warning:

“Although the claim had no prospects of success and notwithstanding the Claimant was told this, she continued with it up to the hearing, she seemed genuinely perplexed by the legal complexities involved. The Tribunal considers that she would have had no understanding of the costs implications of what she was doing. The Tribunal considers that the Claimant ought to have received a costs warning to make her appreciate the implications of what she was doing. It was not enough to state the legal position to her on three occasions. In these circumstances, the application is refused.”

So it seems ignorance can be a defence sometimes.

Going to the other extreme, some employers make aggressive cost applications as a means of intimidating claimants, and if they are represented, running up the claimant’s legal bill.

It is acknowledged that this can backfire:

“Costs Warnings

A costs warning letter can in certain circumstances be a useful tool in persuading claimants to settle or drop a matter before a final hearing. The content of a good costs warning letter should include a detailed overview of why the claimant’s claim is legally flawed and, in no uncertain terms, set out the consequences of a claimant going on to pursue his or her claim to a final hearing.  Careful thought does however need to be put into the content, timing and tone of a costs warning letter.  Not every case is right for a costs warning letter, and Tribunals often take unkindly to overly aggressive costs letters against unrepresented claimants.” [my emphasis]

Regardless of any possible leniency and considerations by the Court for unrepresented claimants, do be very circumspect if as a whistleblower you are forced into the Courts. No matter how provoked you are, do your utmost to be reasonable and try to ensure that your conduct cannot be criticised. Otherwise it could be expensive.

Better still, try and avoid an employment dispute altogether, as few whistleblowers walk away from such disputes without emotional, professional and financial loss. There is also huge impact on families, especially where there are dependants.

In these days of great unreliability and corruption in government and captured regulators, it is worth considering whistleblowing directly to the press either anonymously or with agreed protection of your identity. Take careful advice before doing so.

Obviously there will be circumstances when some whistleblowers feel that such whistleblowing will not be sufficient to resolve their concerns, and they must go on the record.

In which case, prepare as much as you can for all eventualities, and again, take careful advice.

Related items:

Replacing the Public Interest Disclosure Act (PIDA)

UK Whistleblowing Law is an Ass: Helen Rochester v Ingham House Ltd and the Complicit CQC