Posted: Friday 12 August 2011
Employment Tribunal Costs – Record £100,000 Costs Award
I recently read an interesting article in the Telegraph, the focus of which was the tale of Mr Watts, a multi-millionaire chairman of a recruitment company in the Midlands.
Mr Watts had been accused of victimisation and discrimination by his former executive Debbie Smith, who took her claim to an Employment Tribunal. She claimed, amongst other things that he subjected her to degrading and offensive comments including calling her a “sexy nurse”.
The Tribunal decided that Ms. Smith's claim was false and found in Mr Watts’ favour, ordering Smith to pay Mr Watts a staggering £100,000 by way of costs and lighting a beacon of hope for employers throughout the land.
Tribunals are usually extremely reluctant to award costs to the successful party. To give you an idea (looking at the last available set of statistics from the Tribunal which relate to 1 April 2009 to 21 March 2010), costs were awarded in only 412 Tribunal claims. 324 of those awards were in favour of the employer. This is though an insignificant number compared with the 236,100 claims accepted by the Tribunal during that period. The median cost award was only £1000 which highlights just how unusual the costs award that Mr Watts’ received is.
There is usually a cap of £10,000 for costs. However, the Tribunal can award a higher figure if they require a detailed assessment of costs to be taxed in Scotland according to a table of fees prescribed for proceedings in the sheriff court or assessed in a county court in England & Wales which is presumably what happened in Mr Watts’ case.
From reading the article it looks like Mr Watts was determined to send a message to employees thinking of doing something similar. According to the Telegraph Mr Watts said:-
“What I’d like this to do is send a message to all the opportunists and chancers and vexatious spongers who bring these cases that it can backfire......It’s crippling the economy. Running a business, especially a small business, has become a nightmare. The time and the money involved in fighting cases just makes the whole thing prohibitive for employers. All this has happened by sleight of hand. All in the name of employee protection. So we’ve now got something like 40,000 different employment laws and regulations to deal with – most of them imposed from Europe – and if you can’t find grounds for a case in that lot, you aren’t trying.”
Many employers will no doubt sympathise with Mr Watts’ views. Defending a case all the way to a Tribunal hearing can be expensive and it is understandable that some employers, unlike Mr Watts, are not willing or able to pay the price simply to prove a point - even where they are in the right. Interestingly, Mr Watts suggests a compulsory arbitration session before cases reach Tribunal and it will be interesting to see whether the results of the Government's on going review of employment law regulations suggests anything similar to ease employer's worries. In the meantime, this case shows that employers do have some redress against employees who bring false claims.
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