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. 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.

There are ways of going about resisting costs awards but if the employer applies for a costs award against you and you do not defend yourself properly the results can be potentially catastrophic.

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.

You can be pursued for an employment tribunal award of costs of up to Ł10,000 (if referred by the tribunal to a county court, costs awards against you are unlimited) for having acted

abusively
vexatiously
disruptively
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

Employers' representatives can be very persuasive and employment tribunal judges can be more amenable to their arguments than might be wished for.
You don't want your employer to be awarded costs by default as a result of your not having properly defended yourself........ or on the other hand for having defended yourself too well in that you over egged the pudding, reminding the judge of all those little irritating mannerisms that got under his skin during the hearing, and of course the ignorance of the legal niceties that you showed during the hearing.

This is not a criticism of you but 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.

You need good advice, a well constructed legal defence, and if you have legal representation at the costs hearing then all the better.

Settling costs with the respondent

Taking costs threats seriously does not however mean that you need to buckle in the face of these. Employers' representatives are often devious and may try to follow up the threats by cajoling you to settle costs 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 be fooled. 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).

WorkRep has a proven (and as of September 2009 an unbroken) record in successfully defending workers against employers' costs actions. Workers we have represented at hearing are guaranteed representation at costs hearings in the ET and EAT whether or not they have won their case(as long as the worker has behaved reasonably throughout his case). If you have not been represented by us before, we will still consider defending you against a costs action.

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

Disclaimer : articles and information published by WorkRep are intended for general information purposes only. No representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability of such information are made. Š Workrep 2009

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