As anyone who has ever been to an Employment Tribunal will know, awards of costs are rare. Costs are normally only awarded where a party has behaved unreasonably in either bringing a claim or in the way they have pursued it. In addition, even if you are able to persuade an Employment Judge to award you costs, under the Tribunal Rules they are required to take into account the ability to pay of the party against whom costs are being awarded. Clearly, this usually has the greatest impact on employers, as it is usually the employee who has less ability to pay.
In the recent case of Chadburn v Doncaster and Bassetlaw Hospital NHS Foundation Trust (2015), the Employment Appeal Tribunal upheld an Employment Tribunal’s decision to award £10,000 costs against the claimant to partly offset the £35,000 costs which the Trust had spent in defending the claim. The Tribunal held that the claimant had invented race discrimination allegations. They found that she did this as a means of giving the Tribunal jurisdiction to hear her complaints, as she did not have the required 2 years’ service to bring a claim of unfair dismissal.
The Tribunal heard evidence that the claimant was £600 in debt and accepted that she would not be able to pay any of the costs awarded at the present time. However, she was aged 39 and the Tribunal felt that she had many years of earning capacity in front of her, and there was therefore no reason why she could not pay the costs over a period of time.
The Employment Appeal Tribunal refused to overturn the decision. They rejected the claimant’s argument that the decision was perverse. They held that re there was no reason why the question of affordability had to be decided once and for all by reference to the party’s means at the moment the order is made.
This decision will give some comfort to employers who often feel that, even if they are able to obtain an award of costs against a claimant, the amount awarded is often tiny in relation to the costs they have incurred. However, unfortunately we do not believe that the principles demonstrated in this decision are likely to be followed widely – in this case the Tribunal found that the whole basis of the claimant’s case was fabricated, which is rarely the case. It is also worth remembering that an award of costs is only the first stage – there is still the question of actually getting the money!
If you are involved in Tribunal proceedings, we have wide experience in helping employers achieve positive results and, in some cases, getting substantial costs awards for them. If you need help with a Tribunal claim which you are defending, please get in touch. Please call us on 01243 836840 for a no obligation chat or email us at [email protected].