A recent EAT decision has backed a robust approach to employment tribunals’ costs jurisdiction, in cases where there is clear evidence that the paying party has conducted the proceedings unreasonably.

In this case the EAT upheld an ET decision ordering the claimant to pay a third of the respondent’s legal bill after a 20 day hearing in which she was wholly unsuccessful. These costs are estimated at £260,000. Even after some reduction following detailed assessment in the county court, her final bill is likely to be at least £60,000. Despite the fact that she was unemployed at the time of the award, the EAT said that the tribunal was entitled to take the view that there were reasonable prospects of her returning to well-paid employment in the future. Although it realised that this would leave the claimant with a very significant liability which she might never be able to meet, the EAT rejected the claimant’s argument that setting the costs award at such a high level was a misuse of the ET’s discretion.

This appeal and other recent cases of a similar nature appear to reflect a growth in the number of significant costs awards. In the year to March 2012 the official tribunal statistics show that there were 48 costs awards of £10,000 or over, compared to 4 in the previous year. The number of higher awards may be further boosted from next month when changes in the employment tribunal rules remove the £20,000 limit on the costs that can be awarded without sending the bill to the county court for detailed assessment.

However there will be no change to the substance of what the rules say about when costs may be awarded in the employment tribunal. That means that they will still not be awarded in the vast majority of cases, and of course it is not just respondents who get the benefit of these orders on the relatively rare occasions when they are made. Among those 48 costs orders there were 10 where claimants were awarded £10,000 or more.