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Employment Law

Legal guidance - compliance - software

14 MAY 2015

An order for costs - what happens when a union pays the tribunal fees?

Jessica Ryan
Solicitor, Veale Wasbrough Vizards

In a recent Employment Tribunal decision, a costs award has been made in favour of a group of claimants whose fees had been paid by their union under a loan agreement.

In Legge and others v Prestige Homecare Ltd, the claimants were represented by trade union appointed solicitors. At the outset, the union had paid the claimants a sum equal to the amount they each were obliged to pay in Tribunal fees, on the basis that this would be repayable if all or part of their claims succeeded.

Unsuccessful settlement negotiations took place between the parties prior to the hearing. At the hearing, the claimants were successful albeit they were awarded less compensation than had been offered to them during settlement negotiations.

The claimants successfully applied for their costs following the decision. The application succeeded notwithstanding the fact that the Tribunal fees had been paid by Unison. The application succeeded on the basis that the money was loaned to claimants rather than given. The Tribunal held that the claimant's solicitor was acting as their agent in paying the fees. This would not be the case if fees were paid by the trade union outright, with no expectation of repayment.

The respondents argued that the claimants had been unreasonable in refusing their settlement offer, the Tribunal award was less generous. The Tribunal dismissed this argument on the basis that the claimants had simply been optimistic about their potential award and this was not tantamount to being unreasonable. The fact that the respondents had not made an offer until the Tribunal issue fee had been paid and had not included the fees in their subsequent offers was also taken into account and indicated that the claimants' actions were not unreasonable.

Best practice

This case demonstrates that, when contemplating settlement, proper account should be taken of any Tribunal fees already paid by the other side. Where a settlement offer takes no such account of fees incurred, a claimant may be unlikely to be considered unreasonable by a Tribunal for rejecting the offer and putting the respondent to the cost of a full hearing.
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