This guide is maintained as a current resource for July 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Guide to costs orders in Employment Tribunals in England and Wales, explaining when costs can be awarded, tribunal rules, unreasonable conduct, legal thresholds, and how costs are assessed and applied in employment law claims.
Costs orders in Employment Tribunals are financial orders requiring one party to pay some or all of the other party's legal costs. Unlike civil courts, Employment Tribunals are designed to be more accessible and less punitive in relation to costs. As a result, costs orders are relatively rare and only made in specific circumstances.
The governing framework is set out in the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, which give tribunals discretion to award costs where a party has acted unreasonably, vexatiously, abusively, or where a claim or response has no reasonable prospect of success.
This article explains when costs orders may be made, how they are calculated, procedural rules, and key risks for claimants and employers.
What Is a Costs Order in an Employment Tribunal?
A costs order is a direction by an Employment Tribunal requiring one party to pay the legal costs incurred by another party.
Costs can include:
- Solicitors' fees
- Counsel (barrister) fees
- Expert report fees
- Travel and accommodation expenses related to the case
- Preparation and hearing costs
However, unlike in the civil courts, Employment Tribunals do not routinely award costs to the winning party.
The general rule is that each party bears their own costs unless an exception applies.
Legal Basis for Costs Orders
Costs orders are governed primarily by:
- Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013
- Rule 76 (unreasonable conduct and other grounds)
- Rule 78 (assessment of costs)
- Case law interpreting “unreasonable” behaviour thresholds
The tribunal has a wide discretion but must act fairly and proportionately when deciding whether to make a costs order.
When Can an Employment Tribunal Make a Costs Order?
A tribunal may make a costs order where it considers that a party has:
1. Acted unreasonably
This is the most common ground. Examples include:
- Pursuing weak or speculative claims
- Refusing to engage in settlement discussions without justification
- Ignoring tribunal directions
- Causing unnecessary delay or expense
2. Acted vexatiously, abusively, or disruptively
This includes behaviour such as:
- Harassing the other party during proceedings
- Using tribunal process to intimidate
- Frivolous or oppressive litigation conduct
3. Had no reasonable prospect of success
Costs may be ordered where:
- A claim or defence was clearly unsustainable
- A party continued the case after it became obvious it would fail
- Weak claims were pursued without evidence
4. Failure to comply with tribunal orders
Examples include:
- Missing deadlines without good reason
- Failing to disclose documents
- Ignoring case management orders
5. Wasted costs orders (legal representatives)
In some cases, costs may be ordered against a representative (such as a solicitor or barrister) if they have acted improperly, negligently, or unreasonably.
Types of Costs Orders
1. Standard costs order
This requires one party to pay a specified amount towards the other party's costs.
2. Detailed assessment
Where costs are not agreed, the tribunal may:
- Order a detailed assessment of costs
- Require evidence of legal fees and expenses
- Set a cap or limit on recoverable costs
3. Summary assessment
In some cases, the tribunal may:
- Assess costs immediately at the hearing
- Set a fixed amount payable without further assessment
4. Wasted costs order
This applies specifically to legal representatives and is used where their conduct has caused unnecessary expense.
How Much Can Be Awarded?
There is no fixed limit on costs orders in Employment Tribunals.
However:
- Costs are usually modest compared to civil court litigation
- Awards are often limited to specific parts of the case
- Tribunals aim to ensure proportionality
In practice, many costs orders are in the range of a few thousand pounds, although higher awards are possible in complex or prolonged litigation.
The Threshold for Costs Orders
The threshold for costs is deliberately high.
Tribunals emphasise that:
- Losing a case is not enough to justify costs
- Parties are entitled to bring or defend claims in good faith
- Costs are reserved for serious misconduct or unreasonable conduct
This ensures access to justice is not discouraged.
Procedure for Applying for Costs
A party seeking costs must usually:
- Make an application to the tribunal
- Identify the legal basis (e.g. unreasonable conduct)
- Provide evidence of costs incurred
- Explain why a costs order is justified
The tribunal may deal with costs:
Factors Tribunals Consider
When deciding whether to make a costs order, tribunals consider:
- Conduct of both parties
- Complexity of the case
- Whether the party acted reasonably in bringing or defending the claim
- Financial means of the paying party
- Whether settlement was attempted
- Proportionality of awarding costs
Ability to pay is an important consideration and may reduce the amount ordered.
Costs Cap and Protective Measures
In some cases, tribunals may:
- Limit recoverable costs to a fixed sum
- Order partial contribution rather than full reimbursement
- Refuse costs even where conduct was unreasonable if financial hardship is shown
This ensures fairness, particularly for unrepresented individuals.
Costs in Different Types of Claims
Unfair dismissal claims
Costs are rarely awarded unless conduct is clearly unreasonable.
Discrimination claims
Costs may arise where claims are weak or pursued abusively, but tribunals remain cautious.
Whistleblowing claims
Costs are possible but uncommon due to complexity and seriousness of allegations.
Common Misconceptions
“The losing party always pays costs”
Incorrect. This does not apply in Employment Tribunals.
“Winning guarantees costs recovery”
Incorrect. Costs depend on conduct, not outcome.
“Costs are automatic in weak claims”
Incorrect. The threshold for unreasonable conduct is high.
Risks of Costs Orders
Parties may face costs exposure where they:
- Pursue claims without evidence
- Ignore tribunal directions
- Act aggressively or unreasonably during proceedings
- Refuse reasonable settlement without justification
Legal advice is often sought where costs risk becomes significant.
Key Takeaways
Costs orders in Employment Tribunals are discretionary financial orders requiring one party to pay the other's legal costs. They are governed by the Employment Tribunal Rules 2013 and are only made in limited circumstances, typically involving unreasonable conduct, weak claims, or failure to comply with tribunal directions.
Unlike civil courts, Employment Tribunals do not routinely award costs to the winning party. The focus is on fairness, proportionality, and maintaining access to justice, meaning costs orders remain an exception rather than the rule.
