Charles Pigott explains how, in certain circumstances, costs awards are undeniably on the up
Employment tribunals’ general discretionary power to award costs has not substantially changed in recent years. Both the 2004 rules of procedure, and the 2013 rules which replaced them in July 2013, broadly speaking impose the same test. To be exposed to the risk of a costs order the paying party must either have conducted the proceedings unreasonably, or have brought or defended proceedings with no reasonable prospects of success. Since 2004, tribunals have had the power to consider the ability to pay, and will invariably do so where a substantial order for costs is being considered.
What has changed is the value of costs orders a tribunal may make without referring them to the county court for detailed assessment. For many years the limit stood at £10,000, but was increased to £20,000 in April 2012. In consultation about the 2013 rules, the government proposed to remove the limit entirely, but in the end this idea has not been implemented—at least for
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