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Costs threats

Respondents’ lawyers often say that they will apply for costs in the employment tribunal if the claim is not withdrawn or settled. Sometimes they say that they will apply for ‘up to £10,000,’ and sometimes they threaten even larger sums. If you are not a lawyer and don’t have access to specialist advice, it can be hard to know how seriously to take these threats.

The first thing to note is that the usual rule in the employment tribunals is that each side pays its own costs, win or lose. You don’t have to pay the other side’s costs just because you have lost the case. In general, the employment tribunal only awards costs if the conduct of one side has been “vexatious, abusive, disruptive or otherwise unreasonable” or if the claim was “misconceived.”

The “vexatious, abusive, disruptive or otherwise unreasonable” part of this is relatively straightforward. It basically means that you have to fight the case in a reasonably civilised and co-operative manner. If you try to ambush the respondent with new factual allegations or documents they haven’t seen before at the last minute, or send them pages and pages of detailed questions on irrelevant matters, or repeatedly fail to comply with the procedural timetable set by the tribunal, or fail to turn up to the hearing without a good excuse, or telephone their witnesses and shout at them (and so on), then you may well face a costs application on this basis.

“Misconceived” is much trickier. Your claim is misconceived if it has ‘no reasonable prospect of success.’ Some claims are so weak that anyone ought to be able to tell at a hundred paces that they are hopeless. If you are an airline pilot who arrived for work drunk, and you were dismissed after a disciplinary hearing and an appeal, at both of which you were represented by your trade union, then your unfair dismissal claim is hopeless, and you shouldn’t need a lawyer to tell you so.

But often when the respondent’s lawyers tell you that your claim is misconceived, they will be relying on some legal technicality: you are a ‘worker’ but not an ’employee,’ so you don’t have a right not to be unfairly dismissed; you were a student, and not a ‘worker,’ so your discrimination claim must be brought if at all in the county court not the employment tribunal; your claim was presented too late, or too early, or had not been preceded by a valid grievance. Or they will simply be saying that the claim looks weak on the basis of the way it has been put in your ET1 and/or witness statements.

These things are much harder to judge if you are not a lawyer. If your claim is listed for several days or even some weeks, and the respondent’s lawyers are telling you that it is misconceived and threatening to apply for £10,000 or £50,000 or even £100,000 in costs, you are likely to feel thoroughly intimidated. If you can’t afford your own legal advice, the chances are you simply do not have this kind of money. A costs order on this scale might mean losing your home, or bankruptcy.

One tactic you can try in these circumstances is to treat the tribunal itself as a source of legal advice. Write a letter explaining that the respondent is threatening you with costs, and ask for a pre-hearing review to consider the question whether your claim has any reasonable prospect of success.

Here is a sample letter showing how you might put an application like this.

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