The general rule in Employment Tribunals (ET) is that each party will bear their own costs. This is unlike the civil courts where the general rule is that the winning party’s costs are met by the losing party, subject to some exceptions and special rules. When you issue a claim in the ET you are unlikely to have any significant costs risk unless your case falls within one of the following categories:
- A party has acted vexatiously, abusively, disruptively or otherwise unreasonably in bringing or conducting proceedings, or a part of them, and/or,
- A claim, response or reply has no reasonable prospect of success.
In discrimination claims it is particularly difficult to strike out a claim for having no reasonable prospects of success because a tribunal cannot adjudicate on the likely outcome without hearing evidence. It is very hard to defeat at an early stage on a procedural basis. This is particularly so when often in discrimination cases hard evidence is difficult to find and the evidence of the parties will be vital to determining what really happened.
If a claimant brings a claim with virtually nothing to support the allegations of discrimination or brings a case purely out of spite and to cause nuisance think again: there is still a risk of costs being awarded against them.
When a tribunal has to decide whether a costs order is appropriate, they must adopt a two-stage approach:
- Decide whether one of the threshold criteria apply i.e. has a party acted unreasonably or does the claim have no reasonable prospects of success, and then,
- Decide whether it is appropriate to exercise their discretion to award costs (following the decision in Robinson v Hall Gregory Recruitment Ltd [2014] IRLR 761.
The fact that a claimant is a litigant in person is relevant to the question of costs. The EAT held in AQ Ltd v Holden [2012] IRLR 648 that tribunals should not judge a litigant in person to the same standard as a professional representative. LIPs are likely to lack the objectivity and knowledge of law of a professional adviser. Accordingly, tribunals cannot take such a draconian view as they might with a claimant who is supported by a solicitor. If an LIP has had little or no access to legal advice tribunals ought to tread more carefully.
In Madu v Loughborough College [2025] EAT 52 the Employment Appeal Tribunal (EAT) held that it was an error to make a costs award against a claimant who brought a race discrimination claim initially as a litigant in person. The EAT sent the case back to a fresh tribunal to decide on the matter of costs.
Mr Madu did some way through the process secure legal advice but the tribunal which awarded costs made erroneous assumptions about the advice he had received which was covered by legal advice privilege. The tribunal had concluded that the claimant must have been advised that his claim had no reasonable prospects of success and this was a significant component of the tribunal’s decision to make a costs award against him. There was no evidence that this was the case.
The tribunal also failed to take account of the difficulties faced by an unrepresented claimant who is trying to determine whether he has a viable claim. The tribunal identified unreasonable conduct by the claimant but the EAT held that none of this conduct could have had a significant effect of the costs incurred by the respondent in defending the claim and that costs should not have been awarded against Mr Madu.
Mr Madu brought a race discrimination claim following the failure of Loughborough College to appoint him to a part-time lecturer role, preferring a white candidate who scored more highly on interview questions. There was a second white candidate who also failed to be appointed. Mr Madu argued that since only 2.9% of the College’s staff were non-white this evidenced his being treated differently due to his ethnicity. His claims were dismissed at full hearing. During proceedings the College had not applied for strike out or a deposit order and had not warned him that they might seek costs. The sincerity of Mr Madu’s belief was not enough to assert discrimination. A freshly constituted tribunal will now determine whether the costs award against him should stand.
