Employment tribunal costs, including ‘without prejudice save as to costs’

Employment tribunal costs in 2021

Nowadays claimants do not have to pay a fee to bring a case to an employment tribunal.  It’s been like that since 2017, when the Supreme Court held that legislation which existed then, and which required employees to pay a fee, was in fact unlawful. 

But whilst there is presently no fee for lodging a claim at an employment tribunal, or to attend a final hearing, there are other costs involved, as this guide outlines.

What are the main costs of taking a case to employment tribunal?

The law used to be straightforward enough for employees to represent themselves in many cases.  But it has become increasingly complex and most people will choose legal representation to guide them expertly through the process, and to represent their interests in the tribunal. 

So, when considering taking your employer to tribunal, you will have to take into account legal fees. It is very rare for any employment law practice to offer a ‘no-win no-fee’ payment agreement for a case that is going to tribunal.  

As mentioned in our guide to employment tribunals, if you are a  member of a trade union or have legal expenses insurance (which is often an option add-on to a home insurance policy), this may cover your legal costs.

Otherwise, you need to check out fees and funding options with an employment law specialist solicitor who has a strong track record of representing employees in employment tribunal cases (like Monaco Solicitors).

Solicitors’ fees for employment tribunals

Solicitors’ fees for representing you for an employment tribunal will vary, depending on such factors as the complexity of the case and the reputation/experience of the law firms and lawyer/s taking your case.   

So it’s not really possible to give you any national average fees, because ‘average’ will vary from one firm to another. Suffice it to say that the more complex your case is, the higher the solicitors’ fees will be.  

Some law firms will give you a lower and upper estimate of their fees, whilst others may be willing to quote you for a ‘no win no fee’ arrangement, which is typically a fixed percentage of any amount you are awarded should you win your tribunal case. 

In addition to researching the reputation and success of your prospective lawyers at winning tribunal claims for similar cases as yours, you should also check on whether any fees you are quoted include all costs. 

For example, do they include the costs of barristers (‘counsel’) to represent you during the tribunal hearing?  Do they include the writing and/or preparation of all documents likely to be required for a tribunal, such as the ET1 Claim form, taking and drafting witness statements, etc?

Who pays the legal costs associated with an employment tribunal claim?

Traditionally, in the civil court’s jurisdiction the rules regarding legal costs are that the losing party pays the winner’s legal costs. Different rules have always applied in the employment tribunal where there is generally a ‘no-cost’ regime.  This means that each party pays for their own lawyers, whether they win or lose.

This has generally helped with an individual’s right and ability to access justice, as there is no worry about having to find potentially tens of thousands of pounds to pay for the employer’s expensive solicitors and QCs if the claim is unsuccessful.

Unfortunately over the years, case law has established that tribunals are more minded to award costs against the losing party if the conduct of the party was unreasonable, vexatious and/or misconceived.

This can happen if the claim brought had no reasonable prospect of success or if a party fails to comply with tribunal’s orders or directions.  

This can also happen if a reasonable settlement offer is made and is not accepted and later the claim is unsuccessful. This is explored in more detail below. Claimants (ie employees) are more likely to have costs awarded against them than respondents (employers).

Without prejudice ‘save as to costs’ – what does it mean?

If you’ve read our articles on without prejudice letters and without prejudice meetings, you’ll understand the meaning of the phrase without prejudice. 

So now we can introduce you to the term ‘save as to costs’ which can be used as an extension to the without prejudice rule. This term is often used in settlement offer letters from the employer to the employee, but employees can, and should, use this too.  

The term ‘without prejudice save as to costs’ used in a legal letter heading, means that you cannot show the letter to a tribunal during the proceedings.  However, it might be relevant at the end of the case if there is an application for legal costs to be paid.

This often happens when there are offers made to settle and then the employee loses their case at tribunal or gets awarded less than their original offer.

The employer would argue that the whole hearing could have been avoided had the employee accepted the offer, so the costs associated with the main hearing could have also been avoided (ie. the cost of preparing witness statements and the barrister’s fees for the hearing).

This can be a significant amount.  But this rule works both ways – see below for more information.

 

Can an employee use the rule ‘without prejudice save as to costs’?

Employees can also make use of this rule to put forward a proposal to settle the case and, if not accepted, this will support their own application for legal costs if successful (or mitigate against the employer’s cost application).  

For example, the employer offers £2,500 to settle a claim worth £15,000. The employee makes an offer of £8,000 to settle ‘without prejudice save as to costs’ (just over 50% of the value of the case). The claim is successful and the employee is awarded her damages in full.

Her barrister asks for the costs of trial preparation and attendance at the tribunal to be paid by the employer, as the whole hearing could have been avoided had the employer accepted the £8,000 offer made months before.   

 

Without prejudice tactics

Without prejudice save as to costs letters are usually tactical and advice should be sought on the best approach. 

A strategically written without prejudice letter will put pressure on the opponent to consider settlement at an earlier stage, particularly if they take into account how they might be perceived by a judge if they do not engage in settlement discussions.   

Similarly, if the prospects of a case are poor, then this can protect the party from having to pay the other side’s costs if they make a low and strategic offer. 

So, if the fortunes of the parties in the example above were reversed, and the employer wins and the employee loses, an offer of £8,000 might not save the employee from an adverse costs order, whereas an offer of £3,000 might.  

Ultimately, the award of costs is at the discretion of the employment tribunal judge so it is worth being aware of these issues when embarking on a claim in the tribunal.

In summary

  • Correspondence marked ‘without prejudice’ can only be shown to the court if both parties agree.
  • Correspondence marked ‘without prejudice save as to costs’ can be referred to by all parties when tribunal proceedings have been concluded in order for the court to assess cost applications.
  • So when a communication is marked as ‘without prejudice save as to costs’ it remains between the employer and the employee (and their legal representatives) but only until the case has come to a conclusion.

 

See our Templates on Tribunal Claim ET1 Forms for some good examples of completed claim forms. You might also find helpful the related guides below.

Our helpful guides:
020 7717 5259

Request a free consultation now

Request callback