Costs orders in the ET - case law

Cost orders are rare (Gee v Shell UK Ltd [2003] IRLR 82 CA per Sedley LJ at para 35) in the employment tribunal but applications for costs are becoming more common.

The authority guiding the principle on cost is to be found from a judgment by the EAT in the case of Haydar v Pennine Acute NHS Trust UKEAT/0141/17 and Smiler J determined that the decision in a costs application is essential a three stage test....

'The words of the Rules are clear and require no gloss as the Court of Appeal has emplhasised. They make clear (as is common ground) that there is, in effect, a three stage test to awarding costs. The first stage - stage one - is to ask whether the trigger for making a costs order has been established either because a party or his/her representative has behaved unreasonably, abusively, disruptively or vexatiously in bringinf or conducting the proceedings or part of them, or because the claim had no reasonable prospects of success. The trigger, if it is satisfied, is a necessary but not sufficient condition for an award of costs. Simply because the costsjurisdiction is engaged, does not mean that costs will automatically follow. This is because at the second stage - stage two - the Tribunal must consider whether to exercise its discretion to make an award of costs. The discretion is broad and unfettered. The third stage - stage three - only arises if the Tribunal decides to exercise its discretion to make an award of costs, and involves assessing the amount of costs to be ordered in accordance with Rule 78'

Costs in the employment tribunal follow the conduct of a case by the parties and not the common law rule that costs follow the case. So even if you win your case you will probably not recover your costs.

We will be writing a defence document soon for claimants who face a costs application in the tribunal - look out for this in our letters and applications section of the website.