The Threat Of Costs In Employment Tribunal Claims

The Employment Tribunal has often been referred to as the ‘little man’s court’, whereby individuals have a reasonable chance of representing themselves against employers, without incurring huge legal fees. There is no fee for commencing a claim in the Employment Tribunal, and it is often done by litigants in person.

In recent years, the Tribunal has sought to make the process more accessible to individuals through things such as the online claim system; meaning litigants in person can now submit their claim online, negating the need to complete paper forms. More so, Employment Judges are encouraged to make allowances for litigants in person, including showing “patience and an even‐handed approach” and by being “aware of the feelings and difficulties experienced by litigants in person.”

Due to it being relatively straightforward and free for employees to bring claims against their employers, there is the potential for malicious claims with no reasonable prospects of success to be issued, with the express aim of wasting the employer's time and money. To protect against this, Rule 76(1)(a) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 provides that a Tribunal may make a costs order against a party if they are “vexatious, abusive, disruptive or otherwise unreasonable” in the bringing the claim or in the conduct of the claim. This would potentially mean that if a Claimant acted in such bad faith that they may be ordered to pay the employer’s costs in defending the claim.

This cost consequence is aimed primarily at bad faith claims with no reasonable prospect of success, however, an unwarranted threat of costs by a Respondent employer or their legal representative would likely be seen as unreasonable conduct in itself due to the likelihood of it encouraging ‘genuine’ Claimants to withdraw their claims.

Mistakes, misrepresentations, misunderstandings, delays or any other behaviours which may arise out of a Claimant’s anxiety, lack of experience or legal knowledge are usually not enough for a costs order to be awarded against them. The threshold of a costs order goes well beyond simply having a weak claim. An example of a successful claim for costs against a claimant includes Vaughan v Lewisham London Borough Council and others (2013) where the Claimant brought a claim for victimisation, discrimination and harassment against her current employer, previous employer and also a number of individuals who all had common representation. The Claimant issued 9 separate claims, which were each found to be “fundamentally unreasonable”. The Claimant was ordered to pay the costs of £87,000. Despite this, given the high burden of proof, it is unusual for employers to be awarded costs against their employees.

From 2019-2020, only 130 Claimants had costs awarded against them – less than 0.05% of all claims. This, however, has not stopped solicitors from making these threats, which in some circumstances can do more harm than good. Using costs as a threat when there is no realistic possibility of them being awarded could be found by the Tribunal to be unreasonable conduct by the employer, which in turn may result in a cost order against them. More so, in cases of discrimination, this can be seen as retaliatory discrimination.

It is not vexatious or unreasonable for a Claimant to pursue a weak claim which has low prospects of being successful. It is however vexatious or unreasonable for a party to make an unwarranted costs threat.

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