Costs in the Employment Tribunals are the exception not the rule.

However Tribunals can award costs where a party has conducted itself unreasonably. Case law to date has held, for example, that lying in evidence at the Tribunal amounts to unreasonable conduct (Daleside, Dunedin) . This firm successful obtained a costs order for £5k against a Claimant last year where he was found to have lied on oath.

Traditionally Employment Tribunals have granted very few costs applications – only about 350 per year based on the last set of Tribunal statistics. Generally Employment Tribunals have not ordered costs in cases where a party has made a realistic offer of settlement and the other party has ignored it as Employment Tribunals work differently to other forms of civil litigation where Part 36 and Calderbank offers are used to threaten cost consequences if a settlement offer is ignored or rejected.

This case at the EAT held that ignoring a realistic settlement offer of £30k and not making a counter offer amounted to unreasonable conduct and thus warranted a costs award. This is a case that lawyers, particularly Respondent lawyers, are likely to try to exploit for tactical reasons to “encourage” Claimants to settle. In principle Claimant’s could also use the same strategy to encourage Respondents to enter into negotiations. What this case does not mean is that costs follow the event in situations where an offer is rejected and not beaten at hearing. Conduct will only be unreasonable enough to justify a costs award where the settlement offer is reasonable and the other side ignore it or make a completely unrealistic counter offer.