Cost warning for islanders appealing Employment Tribunal

Wednesday 26 May 2021

Islanders need better warning that appealing an Employment Tribunal decision could lead to them facing substantial legal costs, a judge has concluded.

Commissioner Julian Clyde-Smith made the observation in a judgment ordering that an academic unfairly dismissed from her position at the Institute of Law should pay £4,500 in costs to her former employer, after losing her appeal against an interim judgment by the Tribunal.

Professor Claire de Than claimed unfair dismissal and discrimination when she was given notice to leave the Institute of Law in 2019. Her unfair dismissal claim has been accepted by her former employer, but the discrimination claims are being contested and are part of an ongoing Tribunal case.

However, Professor de Than sought to make claims against named directors of the Institute rather than the charity as a single body. This was rejected by the Tribunal and subsequently by the Royal Court on appeal.

The Institute of Law then applied to recover its legal costs from Professor de Than. Although the Royal Court granted this, the judge did raise concerns that it was not clear that appealing the Tribunal – which has no power to order costs – could lead to a legal bill.

In his judgment, Commissioner Clyde-Smith wrote: “The fact that the Tribunal has no power to make orders for costs, or for expenses, is explained in its guidance note ‘Guidelines for making a claim and completing the claim form’.  

“The Tribunal is... an inexpensive forum in which no costs at all can be ordered against a claimant. Claims are therefore brought by claimants free from the fear and the very considerable risk of adverse costs orders.

“The Tribunal’s guidelines explain clearly how claimants have a right of appeal, and how to exercise that right, but there is nothing that I could see to warn claimants that in exercising that right, they are moving into a quite different environment in which costs can be ordered against them.  

“In addition to there being no warning there is no published case in which the Royal Court has awarded costs on such an appeal. As just noted, legal costs incurred in prosecuting or defending an appeal are likely to be disproportionately large in the context of the level of damages that are at play within the Tribunal.

“With the Tribunal being an inexpensive and costs free environment, it seems somewhat incongruous that appeals from decisions of the Tribunal to the Royal Court on points of law should expose claimants and respondents to the potentially disproportionately high level of costs that can be awarded, applying the usual rule as to costs in civil proceedings.  

“Consideration might be given, therefore, to whether the Royal Court rules should be amended to restrict the power of the Royal Court to award costs on appeals from the Tribunal to where appellants or respondents have acted vexatiously, abusively, disruptively or otherwise unreasonably in bringing or responding to an appeal.”

The £4,500 that Professor de Than must pay the Institute is significantly less than the £13,053 it sought. This was after the judge made a summary order of £9,000 and then cut it in half.

This was because the judge thought that £9,000 was “disproportionate when set against the level of awards that the Tribunal can make” and he was “not persuaded” that [Professor de Than] was aware of the risk of costs being sought when she made the application to appeal.

The £4,500 does not have to be paid by Professor de Than until the final determination of all her claims before the Tribunal, regardless of the outcome of those claims.