Employment Tribunal claims can require a lot of time for preparation, and where there are lawyers advising, the legal fees can amount to a lot.

Sometimes one side in an Employment Tribunal claim will threaten the other side with pursuing them for legal costs if they bring or continue with a claim.

Claimants and Respondents cannot normally claim their legal costs, or for time spent in preparation, as part of compensation, or on the outcome of the case, in the Employment Tribunal.

Costs are only awarded at the Employment Tribunal very rarely, and following particular types of serious conduct.

However, this does mean that costs can sometimes be awarded against you as a Claimant. The way in which you conduct your case, and the decisions you make about continuing with aspects of your case, can sometimes lead to you receiving an Order from the Tribunal to pay the costs of the Respondent. It is important to think very carefully about and any costs warning you receive from the Tribunal, and to be aware of the scope of the Tribunal’s power to award costs. 

The rules about costs in the Employment Tribunal are mainly contained in the Employment Tribunal Rules from Rule 73 onwards.

In summary, the following rules apply:

If in the opinion of the Tribunal –

• a party has acted vexatiously, abusively, disruptively or otherwise unreasonably, either in the bringing of the case, or in the way the case was conducted;
• if the claim or part of it (or the employer’s response) had no reasonable prospect of success;
• Where a party has been in breach of any Order or Practice Direction from the Tribunal; OR
• Where a hearing has been postponed or adjourned on the application of a party,
  
  – then costs may be awarded. 

Special rules also apply to costs in Unfair Dismissal cases around reinstatement and re-engagement.

The Tribunal will look at the test summarised above in deciding whether or not to award costs, and will apply its discretion to the issue.  Generally speaking, the Tribunal will look at “all relevant factors” in deciding whether or not to award costs, including:

• the general position that costs in the Employment Tribunal are the exception rather than the rule;
• the extent to which a party acts under legal advice;
• the nature of the claim and the evidence; and
• the conduct of the parties.

Sometimes there will be quite expensive legal fees in a case because a party is represented, and there may be several lawyers (possibly solicitors and barristers) brought in to advise on a matter. In such a case, the legal costs to that party may be in the thousands of pounds, and that party will want to try to recover some of those very high costs.

On the other hand, in some cases, neither side is represented by lawyers. However, this doesn’t mean that there can’t be any costs awarded.

So there are two different situations:

• Costs where there was representation: A Tribunal can make a “Costs Order” in respect of legal fees and expenses (for example fees for an expert witness) paid by the winning party if they are legally represented or represented by a lay representative (someone who is not a legal representative but who charges for representing at tribunal).
• Costs where there was no representation:  If the winning party was not represented, the Tribunal can award a “Preparation Time Order” for the costs of the time taken to prepare the case.

An Employment Tribunal can also order a party to make a payment to a witness who is required to attend the Tribunal in respect of their expenses incurred in attending. (Evidence of such expenses would be required).

Generally speaking, a party may apply at any time up to 28 days after the date of the judgment on the relevant issue was sent to the parties.

The Tribunal should not make a Costs Order or Preparation Time Order unless the party being asked for costs has had ”a reasonable opportunity to make representations” in response to the application.

If a Costs Order or Preparation Time Order application is made against you, you should receive notice of this in writing, and it will be important to respond quickly setting out why you think this would not be appropriate, with reference to the Tribunal rules, pointing out if you are a litigant in person (unrepresented), making clear that you believe your conduct in the case to have been reasonable in the circumstances, or any other factors which may apply to your conduct in relation to the issue raised. In such a situation, it may be relevant to refer to Rule 2 of the Employment Tribunal rules (the “Overriding Objective”).

No. The Employment Tribunal rules state that the maximum amount a Tribunal can order is £20,000, unless there is a detailed assessment of the costs.

If a detailed assessment of the costs is undertaken, in accordance with the Civil Procedure Rules 1998, there is no limit on the amount of a costs award.

Working Families has a separate page on Deposit Orders, Unless Orders and Strike Out in the Employment Tribunal.