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Costs recovery in the Employment Tribunal – a change in attitude?

Costs recovery in the Employment Tribunal – a change in attitude?

Following a failed Tribunal claim, Northumbria Police are attempting to recover nearly £600,000 in costs from a former employee. This is unusual both because costs recovery in the Employment Tribunal is widely regarded as the exception, not the rule, and because of the high level of costs claimed. We take a look at rules on costs recovery and consider whether this case indicates a change in attitude to costs recovery.

Ms Aubrey was a former head of legal with the Northumbria Police. She was dismissed in 2014 and brought a claim for unfair dismissal. A number of damaging allegations were made by her during the course of her claim, many involving senior members of the police force. Following the failure of her claim, the respondent employer has taken the unusual step of seeking nearly £600,000 in costs.

Under the Employment Tribunal Rules, a party can only recover its costs in limited circumstances. Traditionally, costs recovery in the tribunal is viewed as the exception rather than the rule because of the high hurdle that must be overcome to recover. The only circumstances where costs can be recovered are where:

  • A party has acted vexatiously, abusively, disruptively or otherwise unreasonably either in bringing the claim or through their conduct during proceedings; or
  • The claim is considered to have no reasonable prospect of success.

The Tribunal will also usually take into account the means of the party against whom costs are being claimed.

The Tribunal can then order either:

  • that the party pay a specified amount which does not exceed £20,000; or
  • that the party pay the whole or a specified part of the costs as determined by a detailed assessment by a costs draftsman.

The outcome of Northumbria Police’s costs application is outstanding so we cannot be certain if this application is a sign of an increased appetite for costs recovery in the Tribunal. However, the circumstances where costs can be recovered remain a very high bar to overcome and, unless the Rules change, it is likely that costs awards will remain rare in the Tribunal.

In considering whether to bring a costs application following a failed Tribunal claim, it is crucial to properly consider the risks of recovering nothing or very little, all while wasting costs in pursuing the application. It may be preferable to negotiate settlement with the claimant for a contribution to costs - this route ensures that a portion of costs are recovered and provides a clean end to the matter.