Costs in the Employment Tribunal

Among the powers of the Employment Tribunal are those to award costs against a party that has acted “vexatiously, abusively, deceptively or otherwise unreasonably” or that has brought proceedings deemed to be misconceived. Since 6 April 2012 the tribunal has been able to summarily assess costs up to £20,000 (£10,000 where claims were issued before 6 April 2012) but such Costs Orders remain the exception rather than the rule. 

The tribunal can take the parties’ ability to pay into account when it considers whether to make a Costs Order and how much that party will have to pay.  In a recent case (Oni v NHS Leicester City) the tribunal, in its Judgment on liability, stated “in our view not only was the bringing of the various claims (by Mrs Oni) unreasonable but the manner in which they have been conducted was also unreasonable”.

At a costs hearing, the same tribunal made an Order that Mrs Oni must pay all the costs that had been incurred by the NHS in defending her claim.  When Mrs Oni appealed against this decision, the Employment Appeals Tribunal (EAT) stated that that tribunal should not have heard the costs application given the opinions which had been expressed about Mrs Oni during its liability Judgment.  The EAT also held that the tribunal had been wrong to find that Mrs Oni had the means to pay these costs as it had not properly considered her ability to pay.

The EAT said that the tribunal should not have expressed itself in such a way that demonstrated that it had already made up its mind on the issue of costs. It overturned the costs award.

Mrs Oni had made claims of constructive unfair dismissal, race discrimination and victimisation; all of which were dismissed in their entirety.  The hearing lasted for 13 days and Mrs Oni was represented by her husband.  Although it is recognised that the employment judge or the tribunal panel that dealt with the liability hearing is best placed to determine whether a party has acted in a way that justifies a costs award being made, the EAT said that the tribunal should not have expressed itself in such a way as to prejudice the outcome of a costs’ application.

It seems that the tribunal in this case had made up its mind that this was a hopeless case.  Tribunals often give indications to the parties if they feel that the case is hopeless and/or without merit. It can be assumed that throughout the case the tribunal tacitly warned Mrs Oni that if she progressed and lost her case there was a real risk that costs would be awarded against her and it expressed that in the Judgement.

This is a disappointing decision for employers who find themselves in a position where they have to defend weak claims.