Tribunals do have the power to award costs and generally this will be done on the basis of how a party conducts itself through the case, or on the grounds that they pursued a claim or defence which had no reasonable prospects of success. However, case law has shown that awards for costs are to be the “exception and not the rule” in Employment Tribunals.
The recent tribunal case of Mr C H Tan v Copthorne Hotels Ltd has highlighted the fact that tribunals can and will award costs against claimants in some matters. This particular case is of interest because of the high amount awarded; the claimant had a costs order made against him for a total of £432,000 – which is believed to be the highest award of costs made by any Employment Tribunal.
The case involved a high-level employee of a hotel business who was made redundant. The claimant brought several claims in the Employment Tribunal, many of which were struck out before the full hearing. The claimant had made many covert recordings of his conversations with people involved in the business and introduced thousands of pages of evidence at the tribunal.
Despite being made to pay a deposit order, the claimant pushed ahead with many of his claims – despite having no reasonable prospects of success – and eventually lost on all counts. Whilst we do not have detailed reasoning of why the tribunal ordered such a high amount of costs, it is likely that this was due to the claimant’s behaviour in pursuing weak claims and in his subsequent actions during the proceedings.
What this case shows is that tribunals will make an award for costs where it is appropriate, and this is something that both parties should bear in mind during proceedings. It is important for employees and employers to understand the reasons tribunals can make awards for costs include:
Whilst an award of costs is still rare – and the amounts awarded are often much lower than in Mr Tan’s case – employers should be aware of the reasons tribunals may make a costs order. Where spurious and vexatious claims are issued against the business, employers should bring this to the claimant’s attention by way of a costs warning letter, and consider making a costs application to the tribunal when successful.
Care should be taken when issuing a costs warning letter to ensure a respondent doesn’t act in a manner which could attract criticism from the tribunal, and advice should always be sought.
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