Cost claims in employment tribunals
Unlike the civil courts, costs (including legal fees) are not usually paid by the losing party in employment tribunal cases.
When can costs be awarded in tribunals?
Costs can be awarded by a tribunal if one of the parties has behaved vexatiously, disruptively, abusively or otherwise unreasonably in bringing proceedings or the way they have conducted themselves during those proceedings.
A costs order might also be made if a claim is pursued (or defended) despite the claim/defence having no reasonable prospect of success. They are rare, so are big news when they happen, especially when the sums involved are large.
Large costs award in employment tribunal
An employment tribunal has awarded what is believed to be the largest costs award against an employee who used to work for Millennium and Copthorne Hotels as Senior Vice President of Global Procurement.
Chee Hwee Tan was made redundant and brought a whole raft of claims against his employer including unfair dismissal, discrimination based on race, age and sexual orientation, whistleblowing detriment and unlawful deduction from wages. Hedging his bets did not pay off for this employee.
The employment tribunal dismissed all the employee’s claims. They found that the employee had been ‘duplicitous’ and acted in a way which undermined trust and confidence when he secretly recorded conversations with colleagues.
Former employee made to pay employer’s costs
The tribunal made an order for costs because his claims had been vexatious. The employee now must pay £432,000 to the employer to cover the costs of defending those spurious claims.
Costs awards are rare, and usually average only a few thousand pounds, so the pressure on the employer to settle these spurious claims must have been huge. They held their nerve and it paid off. This case doesn’t create any new law, but it does show that tribunals are willing to make costs orders in the right cases, even if those costs are very high.
Chris Dobbs says "While it is rare for costs to be awarded in employment tribunal cases, this one does demonstrate that both claimants and respondents do have to be careful to avoid such awards. Any claims or responses that are doomed to failure, with no prospects of success, or that involve lies and deceit, can end up being very expensive. Also, parties in employment tribunal proceedings must ensure they meet all the deadlines set down by the employment tribunal or at least, if they cannot be met, ask for an extension with good reason."
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