Costs awards by the Employment Tribunal, 1 April 2007 to 31 March 2020

By Dr Minh Alexander retired consultant psychiatrist 13 December 2022

A frequent anxiety for claimants in Employment Tribunals, particularly the unrepresented, is the prospect of an unfavourable costs award.

It is hard for ordinary people to navigate the ET, when faced with the wiles and legal traps laid by employing public bodies, or other powerful employers, who can afford representation by counsel.

Ignorance of the law can make it hard to judge what is considered reasonable under the law.

Straying beyond the bounds of “legal” reasonableness can end in a costs award.

The media coverage of Employment Tribunal costs issues can be sensationalist, and cause alarm.

But it is worth remembering that costs awards are:

• Rare

• Made according to means.

“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.”

I recall seeing a symbolic award for £1 against a claimant who had no means.

In some cases, the Tribunal may order a claimant without present means to pay costs, if there is a prospect that they will have the means in the future. For example, an unemployed claimant who may return to employment.

Many of the judgments which award costs cite quite extreme behaviour, sometimes to the point of what the Employment Tribunal deems “scandalous”.

The ET rules of procedure say:

“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; [or

(c) a hearing has been postponed or adjourned on the application of a party made less than 7 days before the date on which the relevant hearing begins].(a)

(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.”

Occasionally, employers will make a costs application as an intimidatory tactic.

If you conduct your case reasonably, the statistics suggest that it is unlikely that you will be made to pay part of the other side’s costs, but the law is always a gamble.

Equally, employers may be held responsible if they do not issue a costs warning, and claimants who behave unreasonably may escape an unfavourable costs award if they are not warned by the respondent (employer) of this possibility.

Helpfully, the Ministry of Justice publishes statistics on cost awards by Employment Tribunals.

I have summarised this data as follows:

Between 1 April 2007 and 31 March 2020,

1.  A total of 7563 costs awards were made from
2. A total of 1,845,769 ET claims,

representing only 0.4% of cases.

Respondents were more often awarded costs than claimants: 67.6% v 32.3%.

The average (mean) value of costs award between 1 April 2007 and 31 March 2020 increased from £2,095 to £5,664:

YEAR	MEDIAN COSTS AWARD	AVERAGE COSTS AWARD	MAXIMUM COSTS AWARD
2007/8	£1,000	£2,095	£17,775
2008/9	£1,152	£2,665	£28,394
2009/10	£1,000	£2,288	£13,942
2010/11	£1,273	£2,830	£83,000
2011/12	£5	£1,292	£36,466
2012/13	£1,842	£3,141	£54,740
2013/14	£1,000	£2,856	£58,022
2014/15	£1,000	£3,228	£235,776
2015/16	£1,000	£3,386	£102,967
2016/17	£925	£3,747	£146,404
2017/18	£2,409	£4,707	£20,000
2018/19	£2,400	£6,729	£329,386
2019/20	£2,500	£5,664	£103,486

The highest costs award in the period was an eye watering £329,386, made in 2018/19.

The MoJ data does not clarify whether this award was made to a claimant or a respondent.

In the box below, I outline an unusual and very high costs award against a claimant which was made in 2020.

Tan v Copthorne Hotels Limited and a record costs award   In September 2020, the ET made what was believed to be the highest costs award ever in favour of an employer, of £432,001.85.   The claimant, Mr Tan submitted an enormous amount of evidence on what he claimed was an unfair redundancy. The bundle ran to over 3,000 pages.   The Tribunal noted that the claimant took a “scatter gun” approach and it described aspects of his claim as a “fishing expedition” and “speculative”.   It did not agree that the redundancy was unfair.   Mr Tan admitted that he had made covert recordings of his colleagues.   The Tribunal considered the recordings to be a breach of trust and would have resulted in his dismissal in any case:   “We find that this showed duplicitous and underhand conduct on the part of the claimant who was collecting evidence for the purposes of proceedings.” “Had we not found the dismissal to be fair, we would have found this conduct to have completed eroded any trust and confidence between the parties and this would have led to his dismissal in any event, had the respondent known about it.” This is the substantive ET judgment of 9 November 2018.   This is the 2020 costs judgment.      A link to a critique of the case by DAC Beachcroft can be found here.

Between 1 April 2007 and 31 March 2020, only 460 of 7563 (6%) costs awards had a value of £10,000 or more:

This emphasises how displeased the Employment Tribunal was in Reuser v University Hospitals Birmingham, when the Tribunal ordered UHB to pay £20,000 costs to Mr Reuser, after the trust persistently withheld documents material to his case.

But it is best to avoid going to law at all. With our current, weak UK whistleblowing law, the Employment Tribunal is a bed of nails for whistleblowers. Even if you “win”, after a very stressful process, compensation rarely reflects true losses. Employers also sling mud at whistleblowers to argue contributory fault and reduce compensation, so the ET process re-traumatises whistleblowers. If you can find a better path than litigation, take it.

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RELATED ITEM

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

Mr Tristan Reuser’s whistleblowing case: Scandalous employer and regulatory behaviour on FPPR