Unlike the other civil courts in the UK, costs are not necessarily awarded to the winning side. Instead, costs can be awarded generally only when a party has acted, amongst other things, unreasonably.
In the recent case of Sunuva Limited v Mrs C Martin the Employment Tribunal awarded costs for time before the ET3 had been filed where the respondent acted unreasonably by lodging a response that had no reasonable prospects of success.
Mrs Martin was an International Sales Manager for Sunuva Limited. In January 2016 Sunuva commenced a restructuring exercise which eventually led to Mrs Martin’s dismissal in April 2016.
Shortly thereafter Mrs Martin instructed solicitors and began incurring legal fees. Part of these costs incurred a letter before action asserting the redundancy process had been a sham. Mrs Martin then lodged a claim for unfair dismissal and discrimination. Sunuva lodged their ET3 and grounds of resistance on around 7 October 2017 denying that the redundancy process had been unfair and claimed to have several witnesses to substantiate this point.
On the fourth day of the five day hearing one of Sunuva witnesses, whilst giving oral evidence, confessed that the redundancy process had been a sham and that the decision to dismiss Mrs Martin had been a predetermined outcome.
Mrs Martin applied for costs in the region of £25,000 on the basis that Sunuva had acted unreasonably in lodging a defence to a claim that had no reasonable prospects of success. The Tribunal had to carefully consider what the effect would have been, had Sunuva conceded unfair dismissal at the outset. It found that, in this case, without the claim for unfair dismissal, there would have been no requirement for a hearing and so two thirds of Mrs Martin’s costs could be awarded. Mrs Martin’s was awarded £17,136.90 for costs with some £7,000 of being incurred before Mrs Martin had received ET3.
Sunuva’s appeal to the EAT was rejected.
It is always good to take a proactive and positive stance to defending claims. Where a defence has no reasonable prospects of success the defence should be drafted to set out the facts with mitigating factors but not try to unreasonably defend a claim. Being open and transparent will not only gain favour with the tribunal hearing the claim it will also demonstrate reasonableness and limit the issues, lowering costs for all parties involved.
The other point to note for this claim is that clearly redundancy processes must be entered into without any pre-determinations of who will be dismissed.
