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Costs under the draft new ET rules

The costs regime in the new ET Rule have been restructured rather than substantively changed.

The provisions currently found at rr. 40 (2)-(4) are reflected in the new discretionary r. 70 (1).  There is no specific provision, as present, applying to late adjournments but such conduct would arguably fall under “otherwise unreasonably” under the new r. 70 (1) (a).

Of significance there is now a stand-alone provision reflecting the “misconceived” ground for costs in the current rules.  Rule 70 (1) (b) makes reference to “no reasonable prospects of success” – the definition of “misconceived” under the present rules.

Given the new “sift” approach to case management and express reference to “no reasonable prospects of success” to dismiss a claim (or part of it) at an initial stage (see new r. 23), the new r. 70 (1) (b) virtually invites an application for costs if a claim is dismissal at that stage or following a Preliminary Hearing as having “no reasonable prospects of success”.  Costs would, though, be presumably fairly limited at that stage.

One argument in response will be that, if a claim has successfully passed the “sift” (either on the papers or following a Preliminary Hearing), then the claim cannot be said to have “no reasonable prospects of success”.  Here the current EAT approach is informative; such an argument does not prevail.

The mandatory rule currently found at r. 39 is reflected in new r. 70 (2), concerning evidence about re-instatement or re-engagement.

The new r. 71 allows a costs application to be made “at any stage up to 28 days after the after the date on which the judgement finally determining the proceedings as against that party”.  Currently multiple costs applications can be made at different stages of proceedings.  Given reference to “finally determining proceedings” in the new rules, one wonders whether this will now be possible.  There is, though, no suggestion in Mr Justice Underhill’s note that that was the intention of new r. 71.

As has already been widely publicised the cap on the amount that ET can summarily assess has gone up to £20,000 or otherwise the matter must be subject to detailed assessment by either the County Court or an Employment Judge applying the same principles: new r. 72. Given the amount of detail and knowledge of the CPR needed for detailed assessment, one wonders whether it will only be in very high cost cases that such an assessment will be worthwhile either in terms of costs or delay.

As currently, a paying party’s means “may” be taken into when deciding what amount of costs is to be awarded.  The current case law on point should, therefore, remain applicable.

Finally, successful deposit orders “will” lead to a finding that the paying party has acted “unreasonably” for the purposes of the new cost regime if the case is determined against that party for substantially “the reasons given in the deposit order”: new r. 36 (5) (a).  This reflects current practice
Related link:  Profile of John Mehrzad
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