Employment tribunal costs are one of the first things to understand before starting or defending a claim in the UK. Unlike the civil courts, where the loser usually pays the winner’s legal bill, employment tribunals are generally a costs-free jurisdiction: each side normally bears its own costs, whatever the outcome. This guide explains how employment tribunal costs work, when a tribunal can order one party to pay the other’s costs, how preparation time orders and wasted costs orders operate, what bringing or defending a claim typically involves in expense, and the funding options that can help you manage the bill. For the full step-by-step process, see our guide to the employment tribunal process.
Employment Tribunal Costs: The General Rule
The starting point for employment tribunal costs is simple: costs do not follow the event. In the county court or High Court, the unsuccessful party is normally ordered to pay a large part of the successful party’s costs. Employment tribunals work the opposite way. Each party, whether the claimant employee or the respondent employer, pays their own legal fees and expenses, win or lose.
Tribunal claims often involve individuals of modest means taking on employers, and a loser-pays rule would deter meritorious claims. There are also no tribunal fees: since the Supreme Court’s 2017 decision in R (UNISON) v Lord Chancellor, bringing a claim is free, and ACAS early conciliation is free too. Your own representation costs are therefore the main employment tribunal costs to plan for.
That said, the general rule has important exceptions. A tribunal can order one side to pay the other’s costs in defined circumstances, and the bill can be substantial. Understanding those exceptions is essential for both employees and employers.
When Can the Tribunal Make a Costs Order?
Under the Employment Tribunals Rules of Procedure, a tribunal may make a costs order against a party where:
- the party, or their representative, has acted vexatiously, abusively, disruptively or otherwise unreasonably in bringing or defending the proceedings, or in the way the case has been conducted;
- the claim or response had no reasonable prospect of success from the outset;
- a party has breached an order or practice direction; or
- a hearing has been postponed or adjourned on a party’s application made less than seven days before it was due to start.
In practice this covers pursuing hopeless claims, making serious allegations without evidence, ignoring case management, ambushing the other side with late disclosure, or abusing witnesses or the tribunal. Costs orders remain the exception rather than the norm, and tribunals do not punish parties simply for losing.
The Two-Stage Test for Costs Orders
When a costs application is made, the tribunal applies a two-stage test. First, the threshold stage: has one of the grounds for a costs order been made out? If not, the application fails at once. Second, the discretion stage: even where a ground is established, should the tribunal exercise its discretion to award costs? The tribunal looks at all the circumstances, including the nature, gravity and effect of the conduct in question.
At the discretion stage, remember that costs orders are compensatory, not punitive: they reimburse the receiving party’s wasted expenditure. The tribunal may take the paying party’s ability to pay into account, and it can award a proportion of costs, or costs for one stage of the case only, such as an adjournment.
On amount, a tribunal can summarily assess costs itself up to £20,000. Above that figure, the assessment goes to the county court for detailed assessment. Either way, the figures involved show why the costs of an employment tribunal dispute deserve serious attention before proceedings begin.
Preparation Time Orders: Costs for Self-Represented Parties
Many claimants represent themselves, and many small employers do the same. A litigant in person cannot recover solicitor’s fees they never incurred, but the rules provide an alternative: a preparation time order. This compensates a self-represented party for time spent preparing the case, though not for time spent attending the hearing itself, where the same two-stage test is met.
Preparation time is paid at a fixed hourly rate set by the rules, currently £39 per hour, and the tribunal assesses how many hours were reasonably and proportionately spent. For an employee who has spent evenings and weekends assembling a strong claim only to face unreasonable conduct from the other side, a preparation time order can provide meaningful recognition of that effort.
Wasted Costs Orders Against Representatives
A wasted costs order is directed not at a party but at their representative: a solicitor, barrister or other paid representative. It can be made where costs have been incurred as a result of an improper, unreasonable or negligent act or omission by the representative, who is then ordered to meet those costs personally.
Wasted costs orders are rare, and tribunals approach them with care. Still, they underline that how a case is conducted affects employment tribunal costs: a competent representative, properly instructed, protects both your claim and your pocket.
How Much Does an Employment Tribunal Cost?
There is no single answer to how much an employment tribunal costs, because so much depends on the complexity of the case and how it is funded. The costs for employment tribunal proceedings fall into two buckets: tribunal-related expenses, which are minimal, and your own legal costs, which are not.
On the first bucket, there is genuinely little to pay. There are no issue fees or hearing fees, ACAS conciliation is free, and disbursements such as printing and postage are modest. Occasionally there are larger disbursements, for example a private medical report in a disability discrimination claim, but these are the exception.
On the second bucket, employment tribunal legal fees, the figures vary widely:
- Solicitors: most employment solicitors charge hourly rates, commonly from around £200 to over £500 per hour depending on seniority, region and complexity. A straightforward unfair dismissal claim taken to a one-day hearing might generate £5,000 to £12,000 in fees, while a multi-day discrimination or whistleblowing claim can easily exceed £25,000.
- Barristers: counsel are often instructed for the final hearing, usually on a brief fee ranging from around £1,500 for a junior in a simple one-day case to £10,000 or more for senior counsel in a complex multi-day trial.
- Paralegal support: delegating routine document work is a proven way to reduce employment tribunal costs, since paralegal support typically costs far less per hour than a solicitor or barrister. It suits bundling documents, paginating evidence and drafting chronologies.
- Employers: the average cost of an employment tribunal to an employer defending a claim is often quoted at £8,000 to £15,000 for a straightforward case, with complex claims costing several times that. Management time spent giving instructions and attending hearings is an additional, often overlooked, cost.
These are broad indications, not quotations: always ask any adviser for a written estimate and regular updates as the case progresses.
Funding Options for Employment Tribunal Claims
Faced with those figures, how do people pay? Several funding routes are available for employment tribunal claims:
- No win, no fee agreements: many employment solicitors act under conditional fee agreements or damages-based agreements, where you pay little or nothing upfront and the solicitor takes an agreed share of any compensation if you win. Under a damages-based agreement the fee is capped by regulations at 50% of the sums recovered, and in practice many firms charge between 25% and 35%. Check what counts as a win and what happens to disbursements if the claim fails.
- Legal expenses insurance: check your home contents insurance, as many policies include legal expenses cover extending to employment disputes. Insurers usually require reasonable prospects of success, often assessed at 51% or better, and will normally insist on using their panel solicitors, at least initially.
- Trade union support: union members can often obtain free advice and representation through their union’s legal scheme, one of the most valuable benefits of membership.
- Fixed-fee stages: some firms offer fixed fees for defined stages, such as ACAS conciliation, drafting the claim form or a single hearing day, which makes budgeting far easier.
- Pro bono help: organisations such as the Free Representation Unit provide free advocacy in deserving cases, though capacity is limited and early application is essential.
Employers should check whether commercial legal expenses or directors’ cover extends to tribunal defence costs, and weigh early commercial settlement against the cost of fighting to the bitter end.
Employment Tribunal Costs If You Lose
The question most claimants ask concerns employment tribunal costs if you lose: will you have to pay the employer’s legal bill? In the great majority of cases, the answer is no. The general rule means you simply bear your own costs and the respondent bears theirs. Losing does not, of itself, trigger a costs order.
The risk arises only where one of the costs grounds is made out, typically unreasonable conduct or a claim with no reasonable prospect of success. Take an objective view of your claim’s merits before issuing, and keep that assessment under review: persisting after it has become clear the claim cannot succeed is a classic route to a costs order. Also pay attention to deposit orders. Where a tribunal considers an allegation has little reasonable prospect of success, it can order a deposit of up to £1,000 per allegation to continue it. If you press on and lose for substantially the reasons the tribunal gave, you are treated as having acted unreasonably for costs purposes, so a deposit order is a warning to take seriously.
Keeping Employment Tribunal Costs Down: Settlement and Cost Control
The cheapest tribunal claim is the one that settles. Most claims settle before a final hearing, and settlement is almost always cheaper than fighting to judgment:
- Use ACAS early conciliation properly: it is free, and a COT3 settlement through ACAS ends the dispute with no admission of liability and no tribunal hearing.
- Consider a settlement agreement: our guide to settlement agreements explains how these binding contracts resolve disputes on agreed terms, often with the employer contributing to your legal fees, at a fraction of the cost of a contested hearing.
- Send and answer costs warning letters: a well-judged letter putting the other side on notice that you will seek costs if they behave unreasonably can concentrate minds and encourage settlement.
- Comply with tribunal orders: missed deadlines and ignored directions are among the most common triggers for costs applications.
- Get early advice on the merits: an honest assessment from employment contract lawyers or an employment solicitor at the outset costs far less than discovering fatal weaknesses on the morning of the hearing.
- Control the scope: agree a sensible list of issues, keep witness evidence focused, and avoid satellite disputes about disclosure or correspondence.
For employers, the same logic applies in reverse: robust early case assessment, realistic settlement authority and disciplined litigation conduct are the most effective ways to contain the average cost of an employment tribunal to the business.
Employment Tribunal Costs: Frequently Asked Questions
Do I have to pay a fee to bring an employment tribunal claim?
No. There are no tribunal fees, and ACAS early conciliation is free.
Can I recover my legal costs if I win?
Not automatically. You must persuade the tribunal to make a costs order or preparation time order on one of the statutory grounds. Winning alone is not enough.
Can costs be awarded against me if I represent myself?
Yes. Costs orders and preparation time orders can be made against or in favour of litigants in person, who are expected to meet the same standards of reasonable conduct.
What if I cannot afford a solicitor?
Consider no win, no fee agreements, legal expenses insurance, trade union support, fixed-fee advice for key stages, or pro bono representation. Many claimants also represent themselves successfully, with a preparation time order as a backstop.
Employment tribunal costs reward the reasonable and the well prepared. Understand the general rule, respect the exceptions, fund your case sensibly, and treat settlement as a strategy rather than a surrender. This article provides general information about UK employment law and is not legal advice: if you face a tribunal claim, take advice on your specific circumstances at an early stage.
