Winckworth Sherwood

UK 200 2014 position: 81


Considering the level of cost awards that should be made against claimants with limited means

Cost orders against either party have long been considered the exception rather than the rule in Employment Tribunals and, despite an increase in costs orders following regulation changes in 2001, orders for costs remain unusual.

In Vaughan v London Borough of Lewisham and others, the Employment Appeals Tribunal (EAT) held that an employment tribunal could make a costs award that the paying party, in this case the Claimant, could not afford. The Claimant, having had all three sets of proceedings rejected following a 20 day hearing, was ordered to pay a third of the Respondents’ costs (that third being a sum of around £86,000) on the basis that her claims were ‘misconceived’ and had little prospects of success.

The Claimant appealed the Tribunal decision to award costs on a number of grounds, including that no deposit order was sought, no costs warning had been given, and that the decision on costs, in light of her limited means, was ‘perverse’. The EAT dismissed the appeal, stating that a lack of deposit orders and costs warnings does not prevent the Tribunal from awarding costs…

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