Calculating a Costs Order
The case discussed below is a useful illustration of the factors tribunals will take into account when making a costs order.
Ward v Dimensions UK
Mr Ward brought claims for ordinary unfair dismissal, automatic unfair dismissal and whistleblowing detriment, all of which were dismissed by the Tribunal.
Following this Dimensions made an application for on the grounds that:
- Mr Ward had acted unreasonably in bringing the proceedings
- Mr Ward had failed to comply with orders to provide further particulars of his claim
- His public interest disclosure claims had no reasonable prospects of success.
The Tribunal accepted that Mr Ward had acted unreasonably in making multiple changes to his allegations through the litigation process and by refusing a settlement offer of £18,500 (equivalent to a year's salary).
In light of this it made a costs order against Mr Ward of £5,000, a small proportion of Dimensions' actual costs. When setting the level of costs the Tribunal took into account Mr Ward's monthly income and expenditure. It held his income was £1,300 and his expenditure was £690. It found he had no significant capital assets.
The Tribunal held that £5,000 was a proportionate sum to award against Mr Ward in light of his income and expenditure.
Mr Ward appealed the decision on the grounds the Tribunal had failed to properly calculate his expenditure, which was in fact £1,245.28. The appeal was successful and the question of the level of costs has been remitted to the same tribunal to consider again.
It is now likely that the cost award will be lower given how little disposable income Mr Ward has each month.
What Can We Learn from This Case?
This case illustrates how important it is for employers to look at all the factors in any particular case when considering whether to make an application for costs. Is the cost of the application worthwhile if the Claimant has little in the way of disposable income or assets?
It also points to the wider commercial decision making that needs to take place when thinking about the merits of fighting a case as opposed to settlement. In any particular case there may be several factors which need to be thought about before reaching a decision.
