In the recent case of Makanjuola v Waltham Forest Council , an Employment Tribunal has made a record award of costs against a Claimant – in the sum of £117,000.
In the Employment Tribunal it has always been the case that costs do not follow the event and generally each party bears their own costs. It has always been the exception rather than the rule that the losing party in an Employment Tribunal would have to pay their opponent’s costs. However, the changes to the Employment Tribunal rules of procedure have made it easier for a winning party to obtain an award of costs, and the old cap of £20,000 (without the need to go to the County Court to get the amount of costs assessed) has gone.
In order to obtain costs, it is still necessary for the winning party to show that the losing party conducted the proceedings in a way which was unreasonable, vexatious or disruptive, and that is a difficult hurdle to show. Even if you can show that type of conduct, the Employment Tribunal still has to consider whether it is just and equitable for it to make an award of costs. In assessing this, one of the factors an Employment Tribunal has to consider is the ability of the subject of the award of costs to pay the award, so getting substantial awards of costs against Claimants, who may well be out of work, is highly unusual.
In the Makanjuola case, David Makanjuola, had worked as an environmental health enforcement officer for Waltham Forest Council for almost 20 years until his dismissal for gross misconduct. He then made 69 separate allegations against the authority. He claimed unfair dismissal, discrimination and harassment because of race and disability. All his claims were rejected by the Employment Tribunal and the Council applied for all of its costs.
Employment Judge Ferris explained the reason why he made such a large award:
“When a large organisation (like the respondent) faces elaborately organised claims, presented by an extremely intelligent and unscrupulous litigant like the claimant, it is very much more difficult to defend than it is when a claimant is merely inefficient and clumsy. We accept that the cost to the respondent must, for these reasons, have been unusual and excessive.”
David Makanjuola is appealing both the fact of and the amount of the award of costs to the Employment Appeal Tribunal.
Whilst this case is very exceptional, it will provide some comfort to employers who often feel that the Tribunal system is weighted heavily in the Claimant’s favour.
If you have a dispute with an employee then we can help. Where appropriate, we can give expert guidance on what any potential claims may be worth, and on how best to approach a potential Settlement Agreement, including preparing the agreement itself. Please call us on 01243 836840 for a no obligation chat or email us at [email protected].