Costs orders 





In general, in the employment tribunal each party pays its own legal costs, but in limited circumstances, one party can be ordered to pay some or all of the other party’s costs, known as a “costs order”. 





Although still quite rare, the number of costs orders has been rising. There is also an increase in the number of orders for costs “to be assessed” by the County Court, a process that results in larger costs orders.
Tribunals can award costs where a party or their representative acts “vexatiously, abusively, disruptively or otherwise unreasonably” or where proceedings were “misconceived” (that is, had no reasonable prospect of success).
Here are some examples of conduct that can lead to a costs order:


• making extensive and unfocused requests for unnecessary documents;




• not complying with case management orders;





• insisting on including large quantities of documentation in the papers to go before the tribunal and then not using them at the hearing;





• insisting on pursuing arguments that the tribunal has already warned have no chance of success; 




• failing to provide details of allegations after repeated requests by the other side and the tribunal;




• withdrawing a claim or response without justification shortly before the hearing;





• refusing to consider a reasonable settlement offer and insisting on an unreasonable sum;





• abandoning claims at the last moment without justification;





• asking for last minute amendments without justification;





• refusing to follow tribunal guidance about joint expert medical evidence;





• insisting on including “without prejudice” or privileged material in the tribunal bundles;





• abusing tribunal members, representatives or the other side;





• concealing relevant evidence;



• intimidation;





• lying; and 





• making unjustified secret recordings.





Unreasonably failing to issue a grievance where one is required by the Acas Code can also lead to an order for costs because it represents a “lost opportunity” to settle the claim (Topic v Hollyland Pitta Bakery [2012] UKEAT 0523/11/1903). 



A tribunal should warn an unrepresented claimant that they risk facing a costs order if they do not change their behaviour and only make the order if the warning is ignored. 





A tribunal can consider someone’s ability to pay before making a costs order. Normally, tribunals look at income and expenditure but they can also look at capital (even equity in a home). A tribunal that decides to disregard someone’s ability to pay must explain why (Doyle v North West London Hospitals NHS Trust [2012] UKEAT 0271/11/0404). This might be, for example, because a party has lied about their means (Shields Automotive Limited v Grieg [2011] UKEAT 0024/10/1507) or has not produced good enough evidence of means (Jilley v Birmingham and Solihull Mental Health NHS Trust [2006] UKEAT/0584/06). Genuine “future earning capacity” can be taken into account when making a costs order, but only if it is realistic (Herry v Metropolitan Borough Council [2016] UKEAT 0101/16/1612).




The fact that one party “doesn’t need the money” for example, because they are wealthy or have legal expenses insurance, is never a good reason not to award them their costs (Mardner v Gardner [2014] UKEAT/0483/13/DA). 





A tribunal judge can award costs up to a maximum of £20,000 but they can also order that costs be assessed through a separate process, either by an employment judge or the county court. Where this happens, there is no cap and the amount can be very large. 



A wasted costs order can be made against a legal or any other representative who has caused another party, including their own client, to incur costs through “improper, unreasonable or negligent act or omission”. 





Finally, preparation time orders can be awarded to a party who has not incurred any legal costs. This means that unrepresented parties or those represented by voluntary or not-for-profit sector representatives can recover costs for time spent preparing. These are made in the same circumstances as other costs orders.