Employers and Employees Beware!

If you take your employer or your employee takes you to an Employment Tribunal there is a risk of having costs awarded against you.

Since July 1991, the Tribunal has had power to award costs of up to £10,000. Initially this was a rare occurrence, but in 2002 such costs orders tripled from the previous year.

Costs in excess of £10,000 can also be awarded. The Tribunal can only do this if both sides agree, otherwise they are assessed by a County Court taxing judge. In one case last year, an order for costs was made against an employee for over £60,000!

When are costs awarded?

• if proceedings are brought for a spiteful or improper motive, for example to harass the employer
• if either party is acting disruptively, for example requesting adjournments or postponements
• if either party refuses to answer requests for documents or information
• if there is no merit in the case
• if a party makes a late withdrawal from the Tribunal proceedings
• if a party unreasonably refuses to accept an offer of settlement

This is a discretionary power so it will largely be a question of the Tribunal's judgement. The Tribunal consists of a panel of 3, and majority decisions can be taken. The ability to pay is not a factor that the Tribunal takes into account.

Carol Shaw, Partner
June 2003