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Employment Tribunal Awards Record Costs of £100,000

31st August, 2011

A case was reported in the Telegraph earlier this month which is sure to send out a message to employees who are considering making a false claim against their employer. This involved a multi-millionaire chairman of a recruitment company in the Midlands, Mr Watts, who was accused of victimisation and discrimination by his former executive, Debbie Smith. She pursued her claim to the Employment Tribunal, arguing that he had made degrading and offensive comments towards her; and that he had even called her a “sexy nurse”.

However, the Tribunal decided that Ms Smith’s claim was false and ordered her to pay Mr Watts a record £100,000 by way of costs. There is usually a cap of £10,000 on costs awarded however, the Tribunal is able to award a higher figure if they require a detailed assessment of costs. Usually, Tribunals are very reluctant to award costs to the successful party and even when they do so, the median cost award has been reported as only £1,000 (according to the statistics from the Tribunal from the 1April 2009 to 31 March 2010).

The Telegraph reported that Mr Watts commented subsequently: “what I’d like this to do is send a message to all the opportunists and chancers and vexatious spongers who bring these cases that it can backfire……It’s crippling the economy. Running a business, especially a small business, has become a nightmare. The time and the money involved in fighting cases just makes the whole thing prohibitive for employers. All this has happened by slight of hand. All in the name of employee protection. So we’ve now got something like 40,000 different employment laws and regulations to deal with – most of them imposed from Europe – and if you can’t find grounds for a case in that lot, you aren’t trying.” This case demonstrates that there may be some redress available where employers are successful in defending spurious claims.

For further advice on any of the issues raised in this article, please do not hesitate to contact Claire Brook, Partner, Employment Team at [email protected]

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