Don’t take costs for granted at tribunals, says law firm
Article date: 28/10/2013
Leading law firm Higgs & Sons says Lord Sugar's legal wrangle with Apprentice TV show winner Stella English is a stark reminder that companies should not expect to be awarded costs by employment tribunals as a matter of course.
The Amstrad entrepreneur lodged a counter claim for costs after Miss English's constructive dismissal claim against him was dismissed, with the tribunal ruling the case should never have reached it.
But Lord Sugar's claim to recover his £50,000 legal fees itself failed, with the costs hearing deciding that Miss English truly believed she had a case against him.
Experts at Black Country law firm Higgs & Sons says the ruling shows that tribunals will not award costs lightly.
Simon Bond, from Higgs' employment team, said the 'loser' of any tribunal did not automatically pay the 'winner's' costs and that both parties would normally have to pay their own fees when defending or making a claim.
Simon said: "Costs orders are the exception rather than the rule, because costs do not follow the case when it comes to Employment Tribunals.
"Lord Sugar's case is a stark reminder that even if an employee's claim has no basis, a tribunal will not necessarily issue a costs order and will not issue them lightly."
Simon said there were only very limited circumstances in which costs must be awarded but that tribunals had some discretion in other cases.
He said that the tribunal may make a costs order, and must consider whether to do so, where it finds that:
- A party or their representative has acted vexatiously, abusively, disruptively, or otherwise unreasonably in the bringing or conducting of the proceedings, or part of them; and
- Any claim made in the proceedings by a party had no reasonable prospect of success.
And he said a tribunal may also make a costs order where one party had been in breach of an order or practice direction or a hearing had been postponed or adjourned on the application of a party.
Simon said a recent Higgs survey had shown widespread backing for the introduction of fees for people bringing cases to Employment Tribunals.
Client feedback showed that over 83 per cent of people believe the introduction of fees for claimants was a positive step, and 87.5 per cent of people believed that they would reduce the amount of cases coming before a tribunal.
Higgs & Sons works from two offices in the Black Country - Waterfront Business Park in Brierley Hill and Kingswinford. The firm employs more than 200 people, which includes over 100 specialist lawyers.
For specialist advice for your business relating to employment issues, contact Simon on 0845 111 5050 or email firstname.lastname@example.org