Employment Tribunal Costs: Can You Be Ordered to Pay Costs Even If Part of Your Claim Succeeds?

Many employees choose to bring claims in the Employment Tribunal believing that each party will pay their own legal costs, regardless of the outcome.

Whilst that is generally the case, there are important exceptions.

A recent Employment Tribunal decision in Ms S Stewart v Harris Solicitors Limited (Case No. 6020550/2024) serves as a reminder that employment tribunal costs orders remain available where a party acts unreasonably during litigation, even if they are successful on part of their claim.

Although Employment Tribunal costs operate differently from those in the County Court or High Court, the judgment reinforces a principle that costs lawyers encounter across all areas of litigation; that is, the way in which a case is conducted can have a significant impact on costs.

Employment Tribunal Costs Orders: The case

In Ms S Stewart v Harris Solicitors Limited, the claimant, a solicitor acting as a litigant in person, brought claims against her former employer for disability discrimination and outstanding holiday pay.

The holiday pay claim was successful by consent. However, the disability discrimination claim was dismissed.

Following the conclusion of the proceedings, Harris Solicitors Limited applied for a costs order. The firm argued that the claimant had repeatedly been warned that the disability discrimination claim had little prospect of success but had continued to pursue it through to a full final hearing.

The Employment Tribunal accepted that the claimant had not acted vexatiously or with any improper motive. However, it concluded that she had acted unreasonably by continuing with the discrimination claim after it should have become apparent that it lacked merit.

Employment Judge Shepherd described the claimant’s conduct as “naïvely and, possibly foolishly” pursuing the claim and ordered her to pay £7,000 towards the firm’s legal costs.

Costs are unusual, but not impossible

Unlike civil litigation, where the unsuccessful party will often be ordered to pay a significant proportion of the successful party’s legal costs, Employment Tribunals generally operate on the principle that each party bears its own costs.

However, this does not mean costs orders are unavailable.

The Tribunal has discretion to award costs where a party has acted unreasonably in bringing, pursuing or conducting proceedings.

In this case, the Tribunal made it clear that the claimant was not being penalised simply because she lost part of her case. Rather, it was the decision to continue pursuing a claim that had no reasonable prospects of success that justified the costs order.

Partial success is not always enough

One of the most interesting aspects of the decision is that the claimant did not lose every aspect of her case.

Her claim for outstanding holiday pay succeeded. Nevertheless, the Tribunal considered it just and equitable to require her to contribute towards the respondent’s legal costs because of the unreasonable conduct associated with the unsuccessful discrimination claim.

This is a useful reminder that costs decisions are rarely determined solely by who wins and who loses. Courts and tribunals will often look more closely at how proceedings were conducted and whether unnecessary costs were incurred.

Conduct can influence costs

From a costs perspective, this decision reflects a wider trend seen throughout litigation.

Whether proceedings are brought in the Employment Tribunal, County Court or High Court, parties are expected to keep the merits of their case under review as litigation progresses.

A claim that appears arguable at the outset may become increasingly difficult to justify as evidence emerges or legal issues become clearer.

Where a party continues to pursue weak arguments despite clear warnings or changing circumstances, they may expose themselves to adverse costs consequences.

Although the threshold for obtaining a costs order in the Employment Tribunal remains higher than in ordinary civil litigation, this case demonstrates that the Tribunal will not hesitate to exercise its discretion where the circumstances justify it.

Why this matters for solicitors

For solicitors advising clients in employment disputes, the judgment highlights the importance of managing costs risk throughout proceedings.

It is not enough to assess the merits of a claim when instructions are first received. As litigation develops, advisers should continue reviewing the available evidence, reassessing prospects of success and discussing settlement opportunities where appropriate.

Doing so not only helps clients make informed decisions but can also reduce the risk of unnecessary legal costs should the Tribunal conclude that proceedings have been pursued unreasonably.

From a wider litigation perspective, the principles in Ms S Stewart v Harris Solicitors Limited closely mirror those seen in civil costs disputes, where litigation conduct frequently influences both liability for costs and the basis upon which those costs are assessed.

Robert Collington’s commentary

Robert Collington, Costs Lawyer at ARC Costs, comments:

“Employment Tribunal costs orders remain the exception rather than the rule, but this case demonstrates that parties cannot assume there is no costs risk. If a claim is pursued after it becomes clear that it has little or no realistic prospect of success, the Tribunal has the power to make a costs order.”

He continues:

“Across all forms of litigation, we regularly see how the conduct of the parties influences costs. Reviewing the merits of a case as it progresses, rather than simply at the outset, is an important part of managing both litigation strategy and costs exposure.”

How ARC Costs can help

At ARC Costs, we advise solicitors and law firms on every aspect of legal costs, including Bills of Costs, Points of Dispute, Replies, Detailed Assessment proceedings and strategic costs advice throughout litigation.

While Employment Tribunal costs follow their own procedural rules, the underlying message from Ms S Stewart v Harris Solicitors Limited is one that applies across the wider litigation landscape. Keeping the merits of a claim under regular review, adopting a proportionate approach to litigation and seeking specialist costs advice where appropriate can significantly reduce costs risk.

Whether acting for a paying or receiving party, our experienced team helps clients navigate complex costs issues, maximise recovery and achieve commercially sensible outcomes.

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