This case is a stark reminder of how parties who pursue litigation which has no prospects of success and/or behave in either an unreasonable, scandalous or vexatious manner are not immune to significant financial consequences.
The Claimant pursued a non-meritorious claim against a leading luxury retailer resulting in the dismissal of all claims and an Order to pay the Respondent’s costs in the sum of £20,000, the maximum cap for costs under summary assessment. It is noteworthy that the costs incurred could have been considerably higher, had the Respondent elected to pursue a detailed assessment as to costs.
At an early juncture, the various claims had been subject to multiple Deposit Orders, the Claimant had been directed to sources of Legal Advice, as appended to the Employment Tribunal Orders, and was made acutely aware that pursuit of those claims may lead to an award of costs. The Claimant had also been placed on notice as to costs by the Respondent, detailing clear reasons for why those claims were doomed to fail.
At the final hearing it was readily apparent that the majority of claims pursued were wholly without merit and that the Claimant conducted themselves in an “abusive” and unacceptable manner. Unsurprisingly, the Claimant’s impugned credibility during the proceedings was also a factor upon which the application for costs was advanced.
The case highlighted:
- Rule 40(7) ET Rules 2024 – as the claims pursued by the Claimant were found to be non-meritorious and without prospects then Rule 74 ET Rules 2024 would be engaged and those deposits should be paid to the Respondent;
- The application of the tripartite test as set out in Willis v GWB Harthills & Ors [2025] EAT 79 was considered. Stage 1, has the threshold for conduct for a costs order been met i.e., has there been unreasonable conduct? Stage 2, should an Order be made? Relevant factors can include the merit of the defence, benefit of legal advice etc.. Stage 3, a decision on quantum and consideration of a parties’ ability to pay, although it is not obliged to do so. Indeed, as the Court of Appeal pointed out in Kovacs v Queen Mary and Westfield College and another [2002] EWCA Civ 352, although a tribunal may take a party’s ability to pay into account, this does not mean that: “poor litigants may misbehave with impunity and without fearing that any significant costs order will be made against them, whereas wealthy ones must behave themselves because otherwise an order will be made”. The requisite elements of the test were met in this case; and
- Where a party does not provide details of their ability to pay, when requested, a Tribunal should proceed cautiously and take note of the prevailing Presidential Guidance on costs awards.
Whilst costs are often considered the exception, rather than the rule, this case accentuates the fact that parties who pursue a claim or defend a claim with little or no discernible basis in law and/or pursue such matters in order to subject a party to harassment and expense out of all proportion, can find themselves subject to significant financial consequences.
