Rare costs and preparation time award

Costs are rarely awarded by the tribunal, only where:

• the claim or defence has no prospect of success; or
•  a party, or their representative, has acted ‘vexatiously, abusively, disruptively, or otherwise unreasonably’ in bringing or conducting proceedings.

The Claim

We represented a group of claimants who were dismissed by the respondent company and subsequently brought various claims including outstanding wages, holiday and notice pay. The claims were straightforward and should have been heard within a few months of issue. The cumulative value of the claims was around £8,000. It was therefore expected the claimants legal fees would be minimal.

It was clear from the outset that the claimants were entitled to the majority of these payments. However, the respondent chose to vigorously defend these although it had no legal grounds to do so for most of them. The respondent also adopted the tactic of attempting to frustrate proceedings by continuously failing to comply with case management orders and applying for numerous applications to postpone proceedings, leading to considerable delays of over 17 months.  This delay resulted in the claimants incurring substantial legal fees of over £20,000.

At the final hearing the claimants were, unsurprisingly, successful. At the conclusion of proceedings an application was made for the claimants’ legal costs and a costs hearing was listed.

The Judge concluded at the costs hearing that the respondent should have realised on filing its defence that ‘there was no rational basis… to conclude the defence had any prospect of success at any time’. In relation to the respondent’s behaviour the Judge found that it ‘sought … to muddy the waters by a raft of unmeritorious allegations that were untrue. This continued throughout the proceedings until the liability hearing, even when the respondent was represented by legal advisors’. The claimants were awarded costs of over £19,000, double the amount of the actual award.

What does this mean?

It is not unusual for a party to pursue a claim or defence without merit. However, this case shows that if they do so, or are found to have deliberately tried to frustrate or undermine the tribunal process resulting in increased costs for the other party, the tribunal will award costs against them. A copy of the judgment can be found here.