The usual rules in an employment tribunal (ET) are that each party, win or lose, bears their own costs. However the Tribunal Rules of Procedure does set out certain circumstances when the losing party may be ordered to pay the winning party's costs.
The recent case of Doyle v North West London Hospitals NHS Trust has demonstrated the difficulties facing respondents who apply for an order that the other party pay their costs. In this case, the tribunal found that the claimant’s claim of race discrimination had been both misconceived and unreasonable and thus ordered her to pay all of the respondent’s costs (thought to be in the region on £95,000).
The claimant appealed arguing that the ET had been wrong to make such an order without:
- having regard to any relevant conduct and its effects; and
- considering her ability to pay.
The Employment Appeal Tribunal (EAT) held in relation to ground one, that in exercising its discretion to order costs, the ET did not have to find a precise causal link between any relevant conduct of the claimant and the specific costs claimed by the respondent. The ET had not erred in finding that the whole of the claimant’s case had not been brought in good faith and therefore she should be ordered to pay all of the respondent’s costs.
In relation to ground two, while acknowledging the regulations were clear that an ET is not obliged to take ability to pay into account in deciding the amount of any costs order, the EAT found in this case as the sum involved was so large and there was nothing to indicate that the claimant was going to be able to pay, the question of means should have been raised by the ET before it made its decision. The costs order was accordingly set aside and the matter remitted to the same ET with directions that it make reasonable enquiries into the claimant’s means and then consider whether to have regard to her ability to pay and, if so, what the appropriate costs order would be.
Even after obtaining a cost order, the winning party may have to consider methods of enforcing it, if the paying party is either unable or unwilling to pay.