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26 April 2016 | Comment | Article by Louise Price

Case study: costs orders in an employment tribunal

When employment tribunals (then industrial tribunals) were set up in the 1970s, the expectation was that lawyers would not be appearing in them. Instead, they were intended to be forums where employers and employees would appear in person without representation. Employment law is incredibly complex and constantly changing, so it is hardly surprising that things changed. Moreover, in those days the maximum compensation was £12,000. It is now possible for wronged employees to be awarded much more – in some cases several millions.

The initial expectation that lawyers would not be needed is the reason that there is now a different costs regime in employment tribunal litigation. Unlike in civil cases, where the loser is frequently required to pay the winner’s legal costs, in the employment tribunal the basic rule is that both parties bear their own costs. This often means that employers who don’t have employment tribunal insurance are reluctantly pushed into settling cases which they would win as they wish to avoid incurring legal costs.

Employment tribunals can, under the tribunal rules, make costs orders though. Although they are extremely rare, cases do not need to be exceptional for a costs order to be made. All that it is necessary is that the relevant legal test is satisfied. The test involves a high hurdle, but it is not one that is unsurmountable and I am delighted for our most recent client that we have successfully persuaded Cardiff Employment Tribunal to make a costs order against a claimant of £20,000. This is the maximum amount that a tribunal has the jurisdiction to award.

Unfortunately we are not able to report on the details of the case because is it subject to restricted reporting and anonymity orders. We can tell you, however, that the order was made on the basis that the claimant had acted unreasonably in the bringing of proceedings and in the way the proceedings were conducted. This was a case in which multiple allegations of discrimination had been made that were just not sustainable on the evidence. The claimant more or less alleged that every single interaction with the Respondent over a period of time in some way constituted discriminatory treatment. This extended, for example, to communications simply asking if the claimant’s complaints had been resolved or if she wished to escalate them. There were also factual findings that the claimant had embellished notes of meetings and reached bizarre interpretations of written communications.

The tribunal applied the broad brush principle from the Court of Appeal case of Barnsley Met Borough Council v Yerrakalva which allowed it to look at the whole picture of what happened in the case. Having done so, it decided to exercise its discretion to make a costs order in this case and make our client’s robust defence of its position worthwhile.

Disclaimer: The information set out above is for general information only. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.

Author bio

Louise Price


A highly specialised lawyer, Louise is a Partner and Head of Employment and HR services. Her expertise includes corporate support work, TUPE, pensions and employee benefits advice. She regularly advises private, public and third sector clients regarding large scale TUPE transfers of staff including drafting indemnities and warranties, advising on potential employment and pension liabilities, information and consultation obligations, and providing best value guidance.

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