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Deposit Orders

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Should a party without the means to pay be ordered to pay a deposit order?

No, held the EAT in Hemdan v Ismail. The Claimant was a victim of trafficking who brought employment tribunal claims against her former employers. An employment tribunal ordered the Claimant, who received benefits with an income in the region of £125 per week, to pay deposits of £75 each in respect of three allegations. On appeal, with one order disposed of by consent, the EAT reduced the remaining two orders to £1 per allegation.

The EAT noted that the purpose of a deposit order is not "to make it difficult to access justice or to effect a strike out through the back door", but to identify at an early stage claims with little prospect of success, to discourage the pursuit of those claims by requiring a sum to be paid, and by creating a risk of costs if the claim fails. The level of a deposit order should not be set so high that a Claimant could not realistically comply with it, as that would impede access to justice. On the facts, as the Claimant was a trafficking victim, nominal orders were imposed, and so the deposits were set at £1 per allegation. Although nominal, the consequential costs warnings would continue to have effect.


Thanks to Ed McFarlane of Deminos HR for preparing this case summary