The usual rule in Employment Tribunal claims is that each party will bear their own costs in respect of the proceedings. However, in certain circumstances the Employment Tribunal can consider whether it may be appropriate to make a costs award against a party who has displayed unreasonable conduct.
In a recent Employment Appeals Tribunal case consideration was given to the failure to consider a reasonable settlement offer. In this case the former claimant was resisting the appeal in the EAT and had been offered an out of court settlement figure. This offer was originally rejected by the claimant but was then accepted at the last minute. At this stage further costs had been incurred by both sides.
The Tribunal confirmed that unreasonable conduct in respect of settlement offers can give rise to a justified costs award being made against the party concerned.
This Judgment highlights the importance of settlement negotiations and illustrates the careful consideration which must be given to offers when they are first proposed. Failure to give consideration to reasonable settlement offers, even if it means just making a reasonable counter-offer could impact upon whether a party has to bear some or all of the costs of the proceedings.
By employment law advisor, Ami Vallet
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