Vexatious Claims in the Employment Tribunal – Reassurance for Employers

The number of Employment Tribunal (ET) claims often spike in the festive season – so what are the key issues for employers regarding ET claims and costs?

Employers facing ET claims will be acutely aware of one potentially problematic aspect of the employment tribunal rules – that the successful party will generally not have their legal costs met by the other side.  As such, even where an employer has a strong defence to the claim, it faces the knowledge that defending the claim is likely to lead to significant cost.  However, in exceptional cases, an award of costs (or expenses) can be made by the ET against an unsuccessful party.

Where can an award of expenses be made by the ET?:

• A party (or their representative) acted vexatiously, abusively, disruptively or otherwise unreasonably in bringing the claim, or in the way it was conducted;
• A claim (or defence to a claim) had no reasonable prospect of success; or
• A party is in breach of ET orders, or a hearing has had to be postponed.

In considering an application for expenses the ET must consider the party’s ability to pay.

What exactly is a vexatious employment tribunal claim?

A vexatious employment tribunal claim refers to a legal complaint or case brought by an employee, or former employee, against their employer that is considered frivolous, groundless, or intended to cause harassment or annoyance, rather than to seek a legitimate resolution to a workplace dispute. Such claims can be disruptive, time-consuming, and costly for the employer.

Employees have the right to bring legitimate claims against their employers, such as claims related to unfair dismissal, discrimination, or breach of contract. However, when a claim is deemed vexatious, it may lack a reasonable basis, and the employee may be pursuing it for improper motives. This is a worrying prospect for employers as it can result in a costly outcome. However, in a recent ET decision, an English law firm, Duncan Lewis Solicitors, was awarded £20,000 in costs after an employment tribunal found the Claimant was vexatious and conducted the ET  proceedings unreasonably.

All allegations made by a former employee against Duncan Lewis Solicitors Ltd were dismissed by the employment tribunal. The Claimant claimed to have been discriminated against during her three months with the firm and deliberately not allocated work. Her claims were found to have had no reasonable prospect of success.

In its finding that a costs award in favour of the  Respondent was appropriate, the tribunal found that the Claimant had proceeded with the case ‘against the merits, which either were or ought reasonably to have been apparent to her’.  The Employment Judge  also added ‘She has been rude and disruptive. At times she has sought to do that which is most likely to frustrate and inconvenience the respondent. She has acted both unreasonably and vexatiously. She was given proper opportunities to withdraw from this and failed to do so.’

As such, the Tribunal awarded the Respondent £20,000 in costs, the most a tribunal can order without requiring the costs to be audited by the court. The tribunal also commented that the Respondent capped its application at £20,000 in total and was, on any analysis, seeking less than half of the actual costs incurred. The Tribunal commented that in a case such as this, where the Claimant knew, or ought reasonably to have known, that the claim was without merit, it would be appropriate to award the entirety of the costs reasonably incurred.

Key takeaway

The key takeaway from an employer’s perspective is that where a vexatious or otherwise unreasonable claim is dismissed by a Tribunal, in certain circumstances costs can be awarded to the Respondent for their expense in defending a meritless claim.

It is essential for employers to consult with legal professionals to understand the specific rules and procedures related to costs in employment tribunal cases. Legal advice will help ensure that the application for costs is properly and timeously prepared and presented, increasing the likelihood of a successful outcome and award of costs. If you would like more information on these issues, please contact a member of BTO’s Employment Team.

This update contains general information only and does not constitute legal or other professional advice.