There is a common misconception that just because a party is successful at the Employment Tribunal, the losing party will always cover any legal costs. This is not true and in the Employment Tribunal, costs are very much the exception, rather than the rule. Read on for more information about when a costs order may be made.
What Are Costs In the Employment Tribunal?
The Employment Tribunals Rules of Procedure 2013 helpfully sets out what costs are.
Rule 74 (1) stipulates that “costs means fees, charges, disbursements, or expenses incurred by or on behalf of the receiving party (including expenses that witnesses incur for the purpose of or in connection with attendance)”.
Despite the wide definition provided by the Rules, the most common costs a party to proceedings is likely to incur will be legal fees. This could include fees for a solicitor or barrister. Other fees could be incurred by obtaining specialist reports from either financial or medical experts.
What Is A Costs Order?
Rule 75 (1) of the above Rules sets out the definition of a costs order.
“A costs order is an order that a party (“the paying party”) make a payment to—
(a) another party (“the receiving party”) in respect of the costs that the receiving party has incurred while legally represented or while represented by a lay representative;
(b) the receiving party in respect of a Tribunal fee paid by the receiving party; or
(c) another party or a witness in respect of expenses incurred, or to be incurred, for the purpose of, or in connection with, an individual’s attendance as a witness at the Tribunal”.
In plain terms, an order for costs is that one party (for example the Respondent) makes a payment to the other party (for example the Claimant) in relation to their costs whilst legally represented. There are some conditions to this, but most notably that the costs were actually incurred and so evidence will be required. If a party is not legally represented, see Rule 75 (2) which deals solely with preparation time orders.
When May A Costs Order Be Made?
Rule 76 of the Rules deals with when a Costs Order may or shall be made. For the purposes of this post, we look only at the specific reference to when a cost order may be made. In this respect, Rule 76 (1) states that the Employment Tribunal may make a costs order and shall consider whether to do so, where it considers that: –
- 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.
- any claim or response had no reasonable prospect of success.
- 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.
The types of case where the Employment Tribunal may make a costs order include: –
- Serial or nuisance litigants who lodge numerous claims without merit.
- Disruptive conduct in failing to attend or seeking continual adjournments of hearings.
- Dishonestly where litigants lie within their evidence.
- Claims where the Tribunal have no jurisdiction to hear them, such as an employee with just 2 weeks of service lodging a claim for a statutory redundancy payment.
- Claims or defence with no reasonable prospect of success (for example unpaid holiday pay claim being defended when the evidence confirms the payment is owed)
- Failing to comply with an Order of the Employment Tribunal.
Lincs Law Employment Solicitors Can Help You
Legal and other costs in the Employment Tribunal can soon add up. If you are concerned about your position, or have been threatened by a costs application we can help. Call us for a free, no obligation discussion on 01522 440412. We would be happy to speak to you. For more information about the Employment Tribunal process and what to expect if you are representing yourself, please visit our website at https://lincslaw.co.uk/blog/the-employment-tribunal-process/
Director, Specialist Employment Law Solicitor
Lincs Law Employment Solicitors