Tribunals to ignore financial situation when ordering costs

Employment tribunals should not take into account an individual's financial situation when determining liability for an employers' costs following 'frivolous' claims, the Court of Appeal has ruled.

The landmark decision came in Kovacs v Queen Mary & Westfield College and the Royal Hospitals NHS Trust, in which it was held that Dr Iren Kovacs brought a sex and race discrimination claim against the trust purely as a determined vendetta.

Her appeal that the tribunal had not investigated whether she had the means to pay her employers' costs was dismissed as 'not relevant'.

Phil Allen, a senior employment lawyer at Beachcroft Wansbroughs, which acted for the trust, said: 'This decision greatly increases an employer's chances of obtaining an order for costs and removes the opportunity for vexatious litigants to pursue unmeritorious claims without any personal risk, simply because they are not well off.'

Jane Mann, chairwoman of the Employment Lawyers Association, said: 'The Court of Appeal has laid down a principle that everybody should face the same risk of penalty if they behave in a wholly unreasonable way in the context of an employment tribunal.'

Andrew Towler