£20,000 costs award overturned 

In this recent case, the employment appeal tribunal (EAT) overturned a £20,000 costs order made against a claimant following an unsuccessful race discrimination claim. 

Mr A E Madu v Loughborough College [2025] EAT 52  

Facts of the case 

The claimant, M, a black British man of African descent, applied for a position at Loughborough College in September 2018.   

M and two other candidates, both of whom were white, were interviewed and scored by the hiring managers. M received the second-highest score and was not offered the position. 

M commenced employment tribunal proceedings against the college in March 2019, bringing complaints of direct race discrimination. Whilst he was initially a litigant in person, he was represented by solicitors from September 2020 onwards. 

Following a hearing in November 2021 and May 2022, M’s complaints were dismissed by the tribunal.     

Costs application 

The college applied for its costs on the grounds that M had acted unreasonably in pursuing his claim, and that the claim had no reasonable prospects of success.   

Following a hearing in February 2023, the tribunal ordered M to pay £20,000 towards the college’s costs. In reaching its decision, the tribunal relied heavily on an assumption that, once M had obtained legal representation, he would have been advised that the claim had no reasonable prospects of success.   

M appealed to the EAT. 

EAT decision 

The EAT upheld M’s appeal and remitted the college’s costs application to be reconsidered by a differently constituted employment tribunal. 

In determining M’s appeal, the EAT reached the following conclusions: 

1. The tribunal erred in finding that M must have been advised that his claim had no reasonable prospects of success, which involved making assumptions about what would have been privileged advice from his solicitor. 

2. The tribunal failed to have regard to the difficulties faced by M in assessing the prospects of success in a claim which essentially turned on why the decision not to appoint him was taken; and 

3. The tribunal did not properly analyse the nature, gravity and effect of M’s unreasonable conduct when determining the costs application. 

The EAT also noted the similarities between the tests and policy considerations that apply to strike out applications and costs applications in discrimination claims. In particular, the fear of a tribunal being too readily prepared to award costs against a claimant could act as a barrier to discrimination claims being brought and considered on their merits. 

The Birketts view 

This case serves as a useful reminder to employers of the exceptional nature of costs orders in employment tribunal proceedings, particularly in discrimination claims and against litigants in person. 

Whilst the legal test for determining costs applications in discrimination claims is the same as other types of claim, discrimination cases can be particularly complex. The outcome will often turn on the strength of witness evidence and cross-examination, and their proper determination is considered to be of high public interest.   

It is therefore unlikely to be sufficient for a respondent to demonstrate, in hindsight, that a claim had no reasonable prospects of success. Costs applications will need to be made based on the information available to the parties prior to the hearing and further justified on public policy grounds. 

It is important for employers to be aware of the high bar to recovering their costs of defending employment tribunal proceedings, even where a claim is misconceived or lacking in merit.   

Where we identify a claim as having little or no reasonable prospects of success, we would typically advise employers to take early steps to notify the claimant (and, if appropriate, the tribunal). Depending on the circumstances, such steps may include, for example, sending a costs warning or making an application to strike out the claim and/or for a deposit order.  Even if such an application is unsuccessful, it would serve to put the claimant on notice of the weakness of their claim and could potentially be relied upon in support of a future costs application.   

Care should always be taken, however, to avoid acting in a heavy-handed or oppressive manner towards litigants in person, which is likely to attract criticism from a tribunal and can, in severe cases, lead to aggravated damages being awarded against the respondent.