The Employment Appeal Tribunal (EAT) has confirmed that costs awarded to successful claimants may include costs incurred before the employer responded to the tribunal claim.
Once a claimant has lodged their claim form (ET1) at the employment tribunal an employer has 28 days to lodge their response to the claim (ET3).
Facts of the case
At an earlier employment tribunal (ET), Mrs Martin’s employer had conceded that her dismissal on the grounds of redundancy was just a pretence. The outcome of the redundancy exercise had been decided in advance and there was never any question of anyone else being chosen for dismissal.
Based on this, Mrs Martin was awarded costs of around £17,000, including £4,695 for work done during the period before receiving the ET3 form (which sets out an employer’s response to tribunal claims).
The employer appealed this £4,695 portion of the award, arguing that there has to be a causal relationship between the conduct of the party bringing proceedings and the costs awarded to them.
The EAT’s decision
In Sunuva Ltd v Martin, the EAT agreed with the ET’s decision and dismissed the employer’s appeal. The EAT noted that the Employment Tribunals Rules of Procedure do not limit the definition of costs to a particular stage of proceedings – the only restriction is that costs incurred while not legally represented cannot be awarded.
The EAT referred to the Court of Appeal’s 2004 decision in McPherson v BNP Paribas (London Branch) that the ET’s discretion to award costs “does not impose any such causal requirement”.
The law is crystal clear: costs awards are not limited to certain stages of the proceedings, an employment tribunal has a wide discretion as to the costs it awards and this is good news for claimants. However, individuals need to be aware that they are very unlikely to be able to recover absolutely all their costs as there are limits on the amount a tribunal can order.