Employment Tribunal costs, who pays?

Costs in the Employment Tribunal

The general rule in employment tribunals is that each party bears their own legal expensess or ‘costs’. This is contrary to the ordinary rules of civil litigation. In other words, costs do not automatically flow from the outcome.

You must ask for your costs

There are certain instances where an employment tribunal may order one party to pay the other party’s costs. These exceptions are designed to address instances of unreasonable behaviour and ensure fairness in the process. Key scenarios where costs may be awarded include:

1. Misconduct /Unreasonable Behaviour: If a party has acted vexatiously, abusively, disruptively, or otherwise unreasonably in the conduct of proceedings, the tribunal may order them to pay the other party’s costs.

2. Unfounded Claims or Defences: Costs can be awarded against a party if they have brought a claim or defence that had no reasonable prospect of success.

3. Non-compliance with Tribunal Orders: Failure to comply with tribunal orders, such as missing deadlines for document submission, can result in a costs order.

Types of Costs

Costs in the employment tribunal can be sorted into two main types:

1. Preparation Time Orders: These orders compensate a party for the time they have spent preparing their case if they have represented themselves (having no legal representation). This is calculated based on a fixed hourly rate.

2. Legal Costs: If a party has incurred legal costs through legal representation, the tribunal may order the other party to cover these costs.

How Costs are Assessed

When awarding costs, the employment tribunal has the discretion to determine the amount, which can be assessed in different ways:

1. Summary Assessment: This is a quick assessment where the tribunal decides the amount of costs based on the information available at the hearing.

2. Detailed Assessment: In more complex cases, costs may be subject to detailed assessment, which involves a more thorough examination of the costs incurred. This process is conducted by a specialised costs judge or costs officer.

Managing your costs in the employment tribunal

It is so easy for legal expenses to spiral out of control. Therefore, managing your costs carefully in stages is essential:

1. Seek Early Legal Advice in relation to the process can help you understand the merits of your case and avoid pursuing unfounded claims or defences.

2. Always Consider Alternative Dispute Resolution (ADR) options, such as mediation or ACAS conciliation which can often lead to a quicker and more cost-effective resolution than proceeding to a full tribunal hearing.

3. When in proceedings, always ensure that all documentation is complete and submitted on time to prevent unnecessary delays and additional costs.

4. Know the circumstances in which costs can be awarded against you so that you can appropriately conduct yourself and avoid unreasonable behaviour.

Need help?

If you have any concerns about any aspect of the employment tribunal process or require assistance with an employment dispute, please do not hesitate to contact the dispute resolution team at Fisher Jones Greenwood LLP – contact us, telephone number 01245 584520.