Defending Costs Actions

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You have lost your employment tribunal case (or sometimes have won it) and now you are faced with a costs action by the respondent.

Costs awards are still relatively rare (1% of cases that actually go to a hearing) but as the situations whereby costs may be awarded have been very considerably widened since 2004, cost threats even before you have properly begun your case need to be taken seriously and once a costs action against you has begun you need to take it very seriously, especially if the costs award comes after having lost your tribunal case.

Whereas before 2004 you would have needed to have behaved in some way unacceptably, you can nowadays become liable for costs even if you inadvertently slipped up or your case was not as promising of success as you had thought.

An employment tribunal may award costs of up to £10,000 (the tribunal may refer the case to a county court for a decsion as to the exact costs to be awarded) for having acted

1. abusively
2. vexatiously
3. disruptively
4. unreasonably

• You can also be liable for costs if the bringing or conducting of proceedings was 'misconceived', i.e. had little chance of success.

Employers can also base a costs action on a claimant having refused so-called 'Calderbank' offers (although the legal justification for this at employment tribunl is tentative and used more to support a claim of 'unreasonableness' on the part of the claimant.

A costs defence needs careful preparation

A judge is despite his best intentions liable to sympathise more with the well constructed arguments and impeccable English of a fellow lawyer than yourself so it will normally help you to have good advice and if possible representation at the costs hearing.

Settling costs with the respondent

Taking costs threats seriously does not however mean that you need to cave in to them. Employers' representatives are often devious and may try to follow up the threats by cajoling you to settle with them in advance of a hearing at a 'discount'.

Two rules are therefore to be kept in mind:

• Don't ever throw yourself on the 'mercy' of a lawyer(or other employer's representative such as a legal consultant).He doesn't have any. If he did he'd be out of a job along with many other decent people seen at tribunal.
• Don't ever settle costs with employers' representatives outside the tribunal and before the costs hearing unless you have received compelling legal advice beforehand (We can not remember a situation where this happened).

The case of Simms V McKee saw an employer penalised for making costs threats against a worker:     Costs Threats - EAT Ruling May 2006

The following case is possibly the most extreme case of costs being awarded at an Employment Tribunal. Swingeing costs were awarded against the claimant. This case should not however put you off if you think you have a valid case to argue. It is only included here as an aid as to what not to do and what is not acceptable when conducting an employment tribunal case.      The High Costs Of Justice

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