Cost awards against Claimants

Facing an employment tribunal claim from a disgruntled employee can be one of the most time consuming and costly exercises a business owner or HR Director will face throughout their career.

When an employee, or former employee, brings a claim which is misconceived or without any merit, employers rightly look to ways and means to protect the business and often look to recover any legal costs associated with defending such spurious claims.

For regular followers of the blog, you may recall my article in December 2016, where I covered the basic process of when and how costs may be ordered against claimants. The article is still available online and can be found here.

The position in 2016, referred to above, has seen little change and costs awards are, unfortunately, still the exception rather than the rule in employment tribunal proceedings.

Employers will, however, be pleased to hear a report on a recent employment tribunal cost award against a claimant. The case of Mr C.H. Tan v Copthorne Hotels dates back to an employment tribunal judgment in 2018. The costs award has only just been released and it is, what I believe to be the largest cost award against a claimant in UK employment tribunal history.

Mr Hwee Tan was Senior Vice President for Procurement for the Copthorne hotel chain and was employed for just over 5 years. Following his dismissal for redundancy, he brought claims against his former employer for unfair dismissal, automatically unfair dismissal, age discrimination, race discrimination, discrimination because of sexual orientation, victimisation, harassment, whistleblowing detriment and unlawful deductions from wages. The exact details of the claims are lengthy and I direct the reader to the judgment which is linked at the end of this article.

Following a seven day hearing, with a further two additional days spent in Chambers by the judge and wing members, the tribunal found in favour of the Respondent, Copthorne Hotels. In its judgment, the tribunal was extremely critical of Mr Hwee Tan, and made reference to the “tens of hundreds of hours of covert recordings” made by him. In his submissions, Mr Hwee Tan provided covert recordings and transcripts of a number of employees, the chairman’s driver and even the doctor who was instructed to review him following the claimant being signed off sick during the redundancy process. Referring to the covert recordings, the Tribunal made it clear that had they found that the redundancy was unfair, they felt the Claimant “would have been dismissed in any event as soon as the Respondent found out about the making of his covert recordings”.

The Tribunal went on to comment on the “duplicitous and underhand conduct on the part of the Claimant who was collecting evidence for the purposes of proceedings”.  In particular, Mr Hwee Tan was criticised for his allegations that he was discriminated against based on his sexuality and the selective evidence he put forward in respect of the same. Full disclosure of the Whatsapp conversations referred to by the Claimant revealed a completely different tone of conversation to that described by the Claimant.

Owing to the extremely critical judgment delivered by the Tribunal, the Respondent made a costs application. The defence of the claim had been particularly expensive for the Respondent given the length of the hearing and the input from the Respondent’s various offices, based worldwide, that were required to provide evidence in relation to the claims.

Following a five day costs hearing, the Tribunal confirmed that the Claimant was liable to pay the Respondents legal fees and disbursements amounting to £432,001.85.

What should you be doing now?

Employment Tribunal claims can be an extremely time-consuming and costly exercise for businesses. In order to be fully prepared for such claims, all evidence should be preserved as early as possible and certainly as soon as you are notified of a claim or potential claim.

As shown above, evidence, including relevant Whatsapp messages, emails and telephone records can be critical in defending claims and evidencing incorrect or exaggerated statements from a Claimant.

Businesses should, however, always comply with their data protection obligations in respect of the retention of email and phone records and companies should have a policy in relation to the same.

What does this mean for you or your business?

Employers should be seeking legal advice at an early stage as to whether there is a legal basis to put a Claimant on a costs warning and/or whether they should be making a subsequent application for costs.

As the above case shows, successful costs applications can cover some, if not all, of a party’s legal fees in bringing or defending a claim in the employment tribunal. When such fees are in the tens or even hundreds of thousands of pounds, it can make a huge difference to a company’s finances and of course will send a message to any future claimants that you mean business when it comes to defending spurious claims.

A copy of the final judgment in this matter can be found here with the costs judgment available here.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.