Statistics are a dangerous way of looking at legal issues. While they tell us a lot about claims in general, they don’t tell us anything about an individual case. Since we are almost always concerned with a particular case this means they are often misleading.
For example, say that two claimants, Adrian and Ben, look at the 07/08 statistics on unfair dismissal awards. They both see that the average award is £4,000 (in this case the median is more useful than the mode). Adrian is being offered £2,000; Ben is being offered £7,000. On the basis of the statistics, Adrian decides his offer is much too low; while Ben decides to accept his. What the statistics can’t tell them is that Adrian’s case is weak and worth almost nothing, while Ben’s is strong and worth a lot. Adrian should jump at his offer, while Ben should hold out for more. The statistics obscure this.
Bearing this warning in mind, the statistics can be revealing.
One area that they are interesting is in relation to costs, in particular costs threats. A costs threat is a letter, usually from a respondent, that says something like “Your case is rubbish. If you don’t withdraw it, we will apply for costs”. These letters try to do two things. Firstly, they set up an application for costs later, since the Respondent can say “We told him his case was no good and we were going to apply for costs.” Secondly, they put pressure on the Claimant to withdraw or settle for less than they want. Normally, the latter is the main point of the letter.
There is nothing wrong with this in principle. It is perfectly normal to put pressure on a party to settle and, if a claim is weak, a costs threat is a good way of doing this. But such threats are often abused. Some respondents (and their solicitors) will send out a costs threat regardless of the strength of their case. These letters try to suggest that costs awards are both common and large.
The statistics tell us that neither of these things is true.
Costs awards against claimants are not common; they are rare. 327 were made between 1st April 2007 and 31st March 2008. During the same period 189,303 claims were brought to the tribunal. The two statistics do not quite match up. Some of the costs awards will have been made in cases that started before 1st April 2007; and some of the claims started during the relevant period will have costs orders made after 31st March 2008. Nonetheless, the statistics suggest that costs are awarded against a claimant in about 0.2% of cases brought.
During the same time period, 35,210 claims were dealt with in a hearing (i.e. they were not withdrawn, settled, struck out without a hearing or subject to a default judgment). This suggests that just under 1% of cases that go to hearing lead to costs against the claimant. Just how unusual this is can be seen in the graphic below:
This does not mean that there is a 1% chance of costs being awarded in any particular case. If you have a reasonable case and run it properly, the chances of costs is infinitesimal. If your case is misconceived and you run it unreasonably, the chances are much higher than 1%. But the common implication from respondents that cost awards are routine is simply not true.
If costs are awarded, how much will you have to pay? Costs threats normally imply that will be £10,000 or only slightly less. In fact, the majority of costs awards against claimants are £1,000 or under. And if you look at costs awards between £1 and £1,000, many are at the low end of that range.
Again, these statistics will not help you if you run up vast costs for the other side by acting unreasonably, particularly if you are in a position to pay them. But they do show that, in most cases, any costs order will be much less than the respondent would like you to think.