Generally speaking, and regardless of which party comes out on top in an Employment Tribunal case, cost awards (whereby the Employment Tribunal orders one party to pay some or all of the costs of the other) remain somewhat rare. Unlike in civil court actions, where costs generally follow success, Employment Tribunal rules mean that costs (known as expenses in Scotland) are only awarded in certain, limited circumstances such as when a case has no reasonable prospects of success or the bringing, or conduct, of a claim is vexatious.
Even in cases where cost awards are deemed just and necessary, the awards are often, comparatively, relatively small figures (with the average cost award being around £2400 for 2018/2019).
Speculative claim is penalised
In the recent case of Tan v Copthorne Hotels however, this status quo was significantly departed from when the Employment Tribunal made a six-figure cost award, ordering the claimant to pay around a staggering £430,000 in costs to the respondent (representing one of the largest cost awards ever handed out by an Employment Tribunal).
The case involved a senior vice president (the claimant), who had been made redundant by the respondent hotel group. A host of allegations and claims were made against the respondent including claims relating to harassment, victimisation, direct discrimination, whistleblowing detriment and unlawful deductions from wages.
In the course of the hearing, which lasted seven days, the claimant admitted to obtaining hundreds of hours' worth of covert recordings of private meetings and conversations, conduct described as "deceitful" and "duplicitous" by the Employment Tribunal. None of the claimant's multiple heads of claim were upheld and some were raised significantly out of time. As a result of all these factors, a costs award in respect of the Respondent's legal fees was made, totalling over £432,000. While the case was decided in 2018, the costs award was not determined until last month. Given the size of the award, it would not be a surprise if this was appealed.
While the circumstances of Tan v Copthorne Hotels are exceptional and very case specific, the case should act as a gentle reminder that the risk of cost awards for speculative claims or defences are very real, and the awards themselves can be very substantial.
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