The Employment Appeal Tribunal (EAT) has granted an application for the respondent to repay the appellant's fees of £1,600 in the case of Horizon Security Services Ltd v Ndeze and another UKEAT/0071/14, following a successful appeal. The judge stated that the general expectation would now be that a successful appellant could recover any tribunal fees paid by him from the other party and set out the factors that the tribunal will take into account when considering such applications.
The introduction of tribunal fees in July 2013 led to revised versions of the procedural rules for the employment tribunal and EAT, which gave tribunals the power to make a costs order requiring unsuccessful parties to repay any tribunal fees paid by the other side. Rule 34A(2A) of the EAT Rules 1993 now provides that:
"If the Appeal Tribunal allows an appeal, in full or in part, it may make a costs order against the respondent specifying the respondent pay to the appellant an amount no greater than any fee paid by the appellant under a notice issued by the Lord Chancellor."
Following the introduction of the new rules, there has been little guidance or court or tribunal authority as to when cost awards would be made to recover tribunal fees and what factors judges should take into account when assessing whether to make such orders. Horizon Security Services Ltd v Ndeze and another gives us some guidance.
In this case, the employment tribunal found for the claimant. The respondent, Horizon Security Services Ltd (Horizon), successfully appealed to the EAT and the ET's decision was overturned.
In appealing to the EAT, Horizon had paid appeal fees totalling £1,600 (a £400 fee when lodging its appeal and a £1,200 hearing fee). Following the EAT's judgment in its favour, Horizon applied for an award of costs against the claimant for the tribunal fees it had paid.
Judge Eady QC considered the costs application and made the decision to make a costs award in favour of Horizon for the full amount of the tribunal fees it had paid.
In making her decision, the judge commented that the introduction of fees had been a significant change in the legal landscape and that the general principle was now that a successful applicant should be able to recover the tribunal fees they had paid from the other party.
The judge stated that there were some factors that may temper this general principle, such as the situation where an applicant had only been partly successful or where the other party could show that they lacked the means to pay. Finding that neither of these factors applied in this case, the judge made a costs award for £1,600 against the claimant.
This case confirms the position that the Government has been stating for some time in relation to tribunal fees: that where a claimant or applicant brings a successful claim or appeal, they will usually receive their money back from the respondent to cover the tribunal or EAT fees they have paid.
Given that remission of tribunal fees is very difficult to obtain when issuing a claim or appeal, it follows that successful claimants and appellants will usually be able to recover these costs from the respondent at the end of the claim, unless the claimant or appellant has only been partially successful or the respondent is able to persuade the tribunal that they are unable to pay the fees.
While recovery of tribunal fees is likely to follow the outcome of the matter, it will still only be possible to recover other costs (such as legal costs) where it can be shown that the other party has not followed tribunal procedure or has acted unreasonably in bringing the claim or in their conduct during the tribunal process.
Employers should be prepared to have to pay the employee's tribunal fees if they lose in the tribunal; tribunal fees should also now be factored in when calculating a claimant's potential losses, for the purposes of settlement negotiations.