Lord Sugar’s reputation has been under fire recently, from a contestant and eventual winner of the television show that made him a household name. The Apprentice’s Stella English brought a claim for unfair constructive dismissal against one of Lord Sugar’s IT companies, Viglen. Unfortunately for Ms English, her claim failed and to make matters worse Viglen issued an application for a costs order compelling Ms English to reimburse Viglen for the fees it had incurred in defending her claim, to the tune of £50,000.
Ms English’s claim ‘should never have been brought’ according to the Tribunal which places her in a camp which attracts a lot of bad press for exacerbating the perceived something-for-nothing mentality of modern day Britain. Even Lord Sugar took to twitter to dub his win as ‘a victory for the law against the claim culture’. It was on this element of the ruling that the application for costs was made.
Ms English defended the costs application on the grounds that despite the fact the Tribunal had decided her claim should not have been brought, she still made the claim honestly. The Tribunal sided with Ms English and decided not to make the costs order.
Costs orders are notoriously rare in the tribunals, where they are granted in less than 1% of cases. They are only made in very limited circumstances for instance where it is obvious that one of the parties has acted unreasonably by not accepting a reasonable offer to settle; because the claim brought never had any chance of success; or, by not abiding by the guidelines and regulations that govern the parties’ conduct in the run up to trial.
Meritless tribunal claims have long caused employees to unnecessarily incur costs in defending themselves. However, the introduction of tribunal fees promises to significantly cut the number of claims being issued in the tribunal. Accordingly, the number of costs orders are set to also take a tumble assuming of course that Unison, who are challenging the introduction of fees on the grounds that they consider them to block access to justice, do not get their own way. Unison’s case is presently undergoing judicial review and could stop the Government and their fees policy squarely in their tracks.
Lord Sugar will undoubtedly have been advised that the chances of him obtaining a costs order against Ms English were slim, which begs the question why he pursued the application. Some of the more cynical in the industry will think that Viglen’s main aim was to drag the matter back into the media’s eye and remind the public that they, and Lord Sugar, (their home-grown TV personality) were absolved of blame.
This latest case demonstrates once again just how difficult it can be for employers to recover costs in the employment tribunals. Respondent lawyers have long argued that the costs system forces employers to consider commercial settlements, given that the costs of defending a claim could well exceed the cost of settlements. It is hoped that tribunal fees will reduce the need for employers to consider early payment options. Indeed, since the introduction of tribunal fees our advice to employers who have had a letter before action landing on their desk, has been to not even consider settlement until the claim has been issued. A scheme where the default position is that the loser pays the winner’s costs would seem very preferable. However, the chances of any government making this change are very thin on the ground. Had Viglen had the benefit of an indemnity policy, such as the Glaisyers Absolute HR scheme, they may have been less concerned about the rather hefty legal bill they will now have to foot. Who knows, maybe Viglen will see the error of their ways and Glaisyers will be receiving a phone call from the Lord himself in the very near future.