Consequences of loosing the case in Employment Tribunal

katekat

My husband is 2 weeks away from the hearing at ET and he started to freak out as he has to represent himself, all his witnesses turned him down last minute and he is scared he will lose. His company solicitors sent him a threat letter few weeks back threatening they will sue him for legal cost if he loses. Someone else told him that if he lose and his company sue him he can loose his house and become a bankrupt!!!
From what I read it is worse if someone withdraws from the case last minute then the court can order a payment up to 10k for wasting tribunal's time.
Please help, should we be freaking out and running away or is it better to go to court anyway and fight just with the written evidence we have (race discrimination and part time workers discrimination). What are really the consequences of losing the ET case? Can they really sue us for legal cost? The legal cost should not be more than 10k anyway, so how come one can become a bankrupt because of that???

keithrgj

Employment tribunals are different to the courts when it comes to costs. Unlike the courts, you don't automatically have to pay your employer’s legal costs if you lose the case. You may still have to pay your representative, depending on what you agreed beforehand.
But there is only a very small chance that you will have to pay your employer's costs. Figures show that costs orders are only made in less than 1% of cases. Your employer's representative may say they will apply for you to pay costs but, usually, they are just trying to scare you into dropping the case or accepting a low offer of settlement.
There are a few situations where there is a risk that you might have to pay costs. For example, this might be if you brought a hopeless case that had no chance of success, or you behaved very badly in the way the case was run or you turned down a good offer to settle.

chanie

I don't know what the legal position is but I can advise you from personal experience. I work in HR and we had an ET. Our legal costs totalled about £60,000 and our solicitors advised us that even if we won, its unlikely that we would be awarded costs as most claimants would never have that sort of money and judges are mindful of this.

We did end up winning the ET and the judge did make a point of putting us off claiming costs because although the case was dismissed, the claim was in good faith.

Uncertain

I would agree with the above two replies.

You would have to do far worse than just lose for their to be any possibility of costs being awarded against you. Normally there would also have been a fairly clear warning at a pre hearing if this was even likely. Unless this has happened and you have ignored it there should be little to worry about.

Unless I'm out of date, the maximum that could be awarded would be about £10K regardless of how much the other side had spent

katekat

This is quite reassuring. I need as much evidence as possible to convince my husband there is nothing we are risking.
We had a union representing us for most of the time, as they though the chances were more than 50%, but they pulled out last minute when our witnesses turned us down... To me this is an evidence our case is not hopeless or ridiculous...
Any more examples from those who lost?

I am still positive we could win even without witnesses (we have one written statement of a witness stating my husband's manager was mocking my husband's accent while they had a conversation/argument - and some hopes he might turn up at the hearing).

ohreally

Costs tend to be awarded if the case is vexatious or frivolous. You would have been getting heavy hints by now if this were the case.

I saw it happen to a chap who lost his case, was unemployed and the tribunal awarded £3k costs, his only income was benefits.

At a PHR, a judge or a full tribunal in some cases, also has the power to order a party to pay a deposit if it believes that they are arguing a case that has little prospect of success but is still arguable. The deposit, which can be up to £500, is usually refunded after the claim or can be used to offset any order for costs.
A tribunal can also strike out a claim or a response that is “scandalous, vexatious or has no reasonable prospect of success”, or which has been conducted in a “scandalous, unreasonable or vexatious manner”. Claimants who fail to actively pursue their claims — for example, by failing to comply with directions or orders given by the tribunal — are also at risk of having those claims struck out.

ETA

Costs orders
In limited circumstances, a tribunal has the power to issue an order for costs (called “expenses” in Scotland) against a party. This will generally be where that party or their representative has acted “vexatiously, abusively, disruptively or otherwise unreasonably”, or where their proceedings were “misconceived” (meaning that they had no reasonable prospect of success).
A tribunal can choose to award:
• a fixed sum of up to £10,000; or
• a sum agreed by the parties; or
• the whole or a specific part of the costs incurred, to be assessed by a court.
Where a party has been found to be lying, the tribunal may very well be forced to award costs.
Two significant changes under the 2004 rules were the introduction of wasted costs orders and preparation time orders. Both of these are made in similar circumstances to other costs orders.
A wasted costs order can be made against a legal or any other representative who has caused another party, including their own client, to incur costs through their “improper, unreasonable or negligent act or omission”. This applies only where the representative has charged for their services, so does not apply to representatives from voluntary or not-for-profit organisations or trade unions. The rules do not specify a limit on the amount of a wasted costs order.
Preparation time orders, however, can be awarded in favour of a party who has not incurred any legal costs. This means that unrepresented parties or those represented by representatives from the voluntary or not-for-profit sector can recover costs for their time spent preparing a claim. The amount can be up to £10,000.
A tribunal can now take account of a party’s ability to pay when assessing the amount of an order for costs, although there is no obligation on it to do so. Overall, the award of costs is rare (occurring in less than one per cent of cases) and sums due are well below the maximum that can theoretically be awarded (typically £100-£1,000).
It used to be that withdrawing a case before a hearing was more likely to attract an award of costs than losing the case after a hearing. However, the decision in Unegbu v Newman Stone Ltd UKEAT/0157/08/ZT corrected this. Withdrawal is now not in itself a reason for awarding costs — however, (especially late) withdrawal can be taken into account by a tribunal when considering whether to award costs.

Uncertain

katekat wrote: »

I am still positive we could win even without witnesses (we have one written statement of a witness stating my husband's manager was mocking my husband's accent while they had a conversation/argument - and some hopes he might turn up at the hearing).

You can apply for a witness order. Ultimately if the person still refuses they could go to prison!

However, although they will be on oath, reluctant witnesses can be unpredictable.

TrickyWicky

katekat wrote: »

The legal cost should not be more than 10k anyway, so how come one can become a bankrupt because of that???

Because not everyone has more money than sense like you do. To some people a £10k expense is enough to destroy their lives and if they don't have it, the other side is almost guaranteed to get a court order for bailiffs to seize goods. Would you write off £10k that someone owes you? I don't know anyone who would.

The only way to them avoid it is to pay your dues and apply to become a bankrupt. You still loose everything but you can forget about owing the £10k. Perhaps you can now understand it?

As for the witnesses, you can apply for a witness order from the ET judge to force your witnesses to come forward. You can also apply for an order to force the company to produce records / documents relating to the employment.

spacey2012

Sounds like he has them very worried.

spacey2012

Sorry just to add, the letter threatening to sue, can be used as evidence of intimidation, threats to sue for what is at a judges discretion never go down well and the solicitor may be asked to explain the intimidation tactic.
If they are trying to fight now, they fear his case and may come up with an eleventh hour offer once they get no response to the threats.
If the case involves racial elements, do not forget to tip off the local press about the hearing.
If they want to play hard ball, hit it back.

steampowered

Get familiar with the rules. They are available here, paragraphs 38 to 48, especially paragraph 40: http://www.legislation.gov.uk/uksi/2004/1861/schedule/1/made

The most relevant bit is this:
"(2) A tribunal or chairman shall consider making a costs order against a paying party where, in the opinion of the tribunal or chairman (as the case may be), any of the circumstances in paragraph (3) apply. Having so considered, the tribunal or chairman may make a costs order against the paying party if it or he considers it appropriate to do so.

(3) The circumstances referred to in paragraph (2) are where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived.

(4) A tribunal or chairman may make a costs order against a party who has not complied with an order or practice direction"

Costs orders are only made in a small number of cases. They are not made simply because you lost. They normally reflect the Tribunal disapproving of the way you have handled the case. If you have some evidence for your claim and it was brought in good faith, and you carefully check to make sure that you have complied with all the orders, its very unlikely you will get a costs order. I would inform the tribunal and other side that the witnesses have pulled out so everyone knows it will be a shorter hearing.

If you are worried it would be sensible to make a settlement offer before telling the company your witnesses have pulled out. You can offer to settle your claim for a fraction of what you are asking for. It is very comon for ET cases to settle at a late stage, the company might be willing to do this becuase it would mean it doesn't have to pay legal costs for representation at the hearing.