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Costs in Employment Tribunals

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Thanks to Vanessa Latham of Berrymans Lace Mawer for preparing this case summary

Can the employment tribunal order costs on an indemnity basis against an ex-employee without considering the impact of such an order on the Claimant, or without considering imposing a cap on recoverable costs?

No, says the EAT in Howman v Queen Elizabeth Hospital.

The Claimant brought a claim in the employment tribunal, which was dismissed. The tribunal found that the Claimant must have known that his case "never had a chance of success", that he had been advised at the case management discussion to "carefully consider his position", and ordered that the Claimant pay the Respondent's legal costs on an indemnity basis, subsequently assessed at £43,076.

The EAT found that costs should be assessed on the indemnity basis only "when the conduct of the paying party has taken the situation away from even that very limited number of cases in the employment tribunal where it is appropriate to make orders for costs".

The employment tribunal did not appear to have considered the impact on the Claimant of losing his house, or of the impact on his family. Further, it had failed to consider imposing a cap on the amount of costs for which the Claimant could be liable. As such, its conclusion could not stand and the question of costs was remitted to the employment tribunal.