History changes in Limits

[SweetLorraine]

Hello,

 

 

this is an 'academic' query I'd like to ask.

 

 

I was doing some background reading recently around ET matters (I'm doing some voluntary work at a CAB at the mo) and I noticed that there was a time apparently when tribunals were limited to a costs award of £500 against a claimant (a golden age?).

 

 

Could someone tell me when this all changed? I imagine it must have been years ago given the blank look I got when I asked at work.

 

 

(I assume that when the limit was removed it may have had a similar effect on the number of ET claims submitted as had the 'recent' introduction of upfront fees?)

 

 

PS - heartening to see so much helpful advice and support still be shared on this site.

 

[citizenB]

Is this what you are looking for ?

 

[ATTACH=CONFIG]53580[/ATTACH]

[citizenB]

Or this one - it looks like the answer to your question would be...

 

 

In particular, revised employment tribunal

procedural rules, which came into force on

16 July 2001, increased from £500 to £10,000

the maximum amount of costs that a tribunal

can award,

 

 

16 July 2001

 

[ATTACH=CONFIG]53581[/ATTACH]

[SweetLorraine]

citizenB! This is fantastic, you have unpicked my own (unrealised) confusion between the £500 relating to deposit orders and the £500 relating to costs orders.

 

 

So the costs order limit lifted from £500 to £10,000 way back in 2001, and it interesting to read a CAB digest from 2004 talking about employer's using costs threats to intimidate claimants (a problem that is still around today). Costs are a particular bugbear of mine.

 

 

The ceiling of costs awards was further increased from £10,000 to £20,000 in the 2013 changes.

 

 

Thank you very much for this clarification.

[SweetLorraine]

I have another query.

 

Under the 2013 rules (78a) an employment panel can make a costs order of up to £20,000 against a claimant if the claim fails. More than £20,000 it has to be assessed by a county court. OK.

 

I understand that the tribunal does have a lot of latitude in determining the level of a costs order between £0 and £20,000, but surely there must be some means of assessment that a panel would have to use to determine a total costs award figure? I am told that the usual rule of thumb is a third of the total that the employer is claiming. Can it be as simple as that?

[citizenB]

I must admit, it was a lucky find Google was my friend on that occasion.

 

I will have another search for this other information, I am pretty certain I did see something that from what you describe.. might fit the bill.

[citizenB]

http://www.adviceguide.org.uk/wales/work_w/work_problems_at_work_e/et_employment_tribunals_from_29_july_2013_e/et_valuing_a_claim_e/et_basic_award_e/et18_how_to_work_out_the_basic_award.htm

 

Interesting that this is a CAB article ^^^^^

 

And this one might help as well...

 

http://www.steenandco.co.uk/how-tribunals-calculate-compensation-_101/

[Pusillanimous]

I have another query.

 

Under the 2013 rules (78a) an employment panel can make a costs order of up to £20,000 against a claimant if the claim fails. More than £20,000 it has to be assessed by a county court. OK.

 

I understand that the tribunal does have a lot of latitude in determining the level of a costs order between £0 and £20,000, but surely there must be some means of assessment that a panel would have to use to determine a total costs award figure? I am told that the usual rule of thumb is a third of the total that the employer is claiming. Can it be as simple as that?

 

There are narrow constraints in when a tribunal can make a cost order. The most recent development is that they can now do so if the claim had no reasonable prospect of success. This is in addition to acting unreasonably or the claim being misconceived.

 

It is important to note it is not based simply on having lost. There needs to be a conduct issue.

[steampowered]

Hi,

 

20k is only the maximum fixed sum which can be awarded by an ET. It is not a maximum amount. If the Tribunal thinks that costs should exceed 20k, it can send costs for what is known as 'detailed assessment' by an employment judge or the county court.

 

As far as I'm aware, there is no upper limit on the amount of costs which can come out of an assessment. There have been Employment Tribunal cases where costs much greater than 20k have been awarded following an assessment. This is the same procedure which is used when costs are awarded following a court case.

 

There is a fair amount of case law and procedure built up around how to determine what costs should be awarded. The same principles are applied in ET that are applied by the courts. The key principle is that the employer should not be enriched - basically, if he instructed lawyers, he should only receive his legal bill and nothing more. Other principles (such as reasonableness and proportionality) are also applied. There are also 'standard' hourly rates published by the MOJ for different grades of solicitor which give an indication of what a reasonable hourly rate might be.

 

I don't agree with the rule of thumb that an employer gets a third of what they are asking for. In the vast majority of ET cases, the winning side gets no costs at all (since costs are only supposed to be awarded in ET against a side who has behaved unreasonably or brought a claim with no reasonable prospect of success).

 

In cases where costs are awarded, to be honest, in my experience the winning side gets most of it. I would say two-thirds is a good rule of thumb but to be honest it really depends on the situation and will often be 100%. Once costs are awarded people will start from the position that the winning side should be reimbursed for their full legal bill and it will be for the paying side to show any of the costs claimed are not reasonable. It is a bit of an 'all or nothing' situation.

[SweetLorraine]

http://www.adviceguide.org.uk/wales/work_w/work_problems_at_work_e/et_employment_tribunals_from_29_july_2013_e/et_valuing_a_claim_e/et_basic_award_e/et18_how_to_work_out_the_basic_award.htm

 

Interesting that this is a CAB article ^^^^^

 

And this one might help as well...

 

http://www.steenandco.co.uk/how-tribunals-calculate-compensation-_101/

 

 

Thanks again citizenB, however I was thinking about costs orders against claimants only (not the respondents - which may say a lot about my mindset!), these articles seem to deal with compensatory awards for claimants.

[SweetLorraine]

Thanks for the information steampowered. I take your point about reasonable behaviour etc; and if a claimant has charged forth in a blind fury with no chance of success then he/she rightly lays themselves open to the possibility of picking up the bill.

 

However I believe employers could do more to avoid things getting as far as they do. I have come across several examples where, with a little more common sense on both sides, things could have been probably resolved without a full hearing.

 

For example (I have come across this three times now) I don't understand why some employer's legal reps threaten/intimidate a claimant with a costs warning letter but do not mention a figure, and only show the costs schedule to the claimant when all the parties (and their witnesses) are sitting in a tribunal waiting room suited and booted a hour or so prior to the hearing itself.

 

Surely if one wished to instil the heebeegeebees into a claimant or, more kindly perhaps, give them a reality check, a more effective way of doing things might be to warn the claimant of the said figure weeks in advance (and let them stew on the consequences of proceeding)?

 

Maybe there is some tactical advantage for the respondent only to reveal such a thing only at the last minute - but it is beyond me as to what that advantage might be, other than to induce instant fear/terror.

 

I do think it is unfair on the claimant (and the tribunal) to behave in this way. If someone could enlighten as to why it is done at the 11th hour I would be a much more effective advisor.

[citizenB]

Thanks again citizenB, however I was thinking about costs orders against claimants only (not the respondents - which may say a lot about my mindset!), these articles seem to deal with compensatory awards for claimants.

 

Sorry about that

[SweetLorraine]

Sorry about that

 

 

citizenB, please there is no need to apologise, you have already helped me understand something that has been puzzling me for some time.

[steampowered]

I do think it is unfair on the claimant (and the tribunal) to behave in this way. If someone could enlighten as to why it is done at the 11th hour I would be a much more effective advisor.

 

I completely agree with the sentiments expressed in your post. It is very common for respondents to threaten to claim costs, even if there are no real grounds for doing so.

 

This is partly driven by people having a poor understanding of the Tribunal system (a lot of people just assume the same rules apply as in large court cases) and partly driven by legal advisers wanting to look like they are being active.

 

I agree that it is unfair to hit a claimant with a bill which is excessive without prior warning. If a claimant has not been warned about the likely size of the bill, that is a good reason for asking the Tribunal to knock the amount down. I have seen this argument used successfully in the past (though not always).

 

One major reason why this all happens at the 11th hour is that employers do not want their advisers to begin preparing for trial until quite close to the Tribunal date. The reason is to avoid incurring early legal expenses if the case ends up settling anyway.

 

The other reason is that lawyers don't like giving estimates unless they have to. Cases often end up costing more than expected and if you give an estimate it is difficult to convince people why they should pay the extra - I am not talking about the claimant here, I am talking about the lawyer's own client.

[SweetLorraine]

 

....The key principle is that the employer should not be enriched - basically, if he instructed lawyers, he should only receive his legal bill and nothing more.

 

 

 

Hi steampowered, I thought I'd look a bit deeper into the 'enriched' principle, but the link doesn't seem to lead me to anywhere (it might be me just being dozy!) Can you recommend any websites that might expand on this key principle?

 

 

Regards. SL

[steampowered]

Hi, you should have more luck if you search for the 'indemnity principle'