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Costs in Employment Tribunal Proceedings

Posted on July 13, 2012

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The Cost of Employment Tribunal Proceedings:

Many employers worry that even if they win in the Employment Tribunal, they cannot normally recover legal costs from the Claimant, putting them in a lose-lose situation.


Costs can only be claimed if proceedings are brought or conducted in a vexatious, abusive, disruptive or unreasonable manner, or where they are ‘misconceived’ – ie where there was no reasonable prospect of success. In those circumstances Employment Tribunals can award costs of up to £20,000. Any further costs must be assessed by the County Court.


In Topic v Hollyland Pitta Bakery this month, the EAT upheld a decision to award costs against the Claimant because her claim was ‘misconceived’. This was even though the Claimant genuinely believed that she had suffered discrimination.


The Claimant had failed to lodge a grievance before issuing Tribunal proceedings, and the Tribunal took that into account when considering the award of costs.


Genuine belief was not relevant to whether the claim was misconceived, but only whether to award costs at all. Dishonesty is also relevant to costs, but costs may be awarded if an honest claim is misconceived or conducted unreasonably.


This decision which encourage many employers. However such awards of costs are still relatively unusual and it may still be difficult to actually recover the costs awarded from an unemployed claimant who does not own property.


Meanwhile plans are afoot to make Claimants pay a fee to bring Tribunal claims, likely in most cases to be a £250 issue fee and a £950 fee for the actual hearing. However there will be a remission system for Claimants who are unable to pay, which is likely to include most unemployed claimants. We will let you know more once those proposals are finalised.


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