Cost awards: In-house legal costs are recoverable in the employment tribunal
Published 8 October 2014
The claimant had an award of costs made against him because of his unreasonable behaviour in bringing his claim. The claimant had argued that the definition of costs in the Employment Tribunals Rules of Procedure 2013 (" the Rules") did not include the costs of a legal representative employed in-house.
The EAT held that the words "fees, charges, disbursements or expenses" found in the Rules should not be read restrictively and that to draw a distinction between in-house lawyers and independent solicitors would be absurd, and was not the intent of the legislation.
The tribunal had some difficulty in calculating exactly which costs could be said to have been "incurred" by the in-house legal team. The EAT commented that the costs of in-house work are not to be defined by the remuneration of a particular employee and that the same exercise which is used to assess the costs of an independent firm of solicitors should be followed. The Tribunal suggested that the exercise should involve calculating the time spent and then applying a charging rate. It is therefore imperative that in-house teams record their time and activities carefully.
What this means for employers:
This case is a reminder that in-house legal teams need to clearly record the time they spend on litigation and that record needs to be in a format which can be put before the tribunal, if they wish to recover their costs of litigation.