Managing vexatious tribunal claims

Kevin Charles outlines the practical steps companies can take to deter employees from pursuing cases with little merit

Following defeat in the Supreme Court at the hands of Unison in 2017, the government abolished the ill-fated fees regime in the employment tribunal. Part of the policy justification behind the introduction of fees was to disincentivise claimants from bringing weak and unmeritorious claims, which had no prospect of success but were a significant cost to businesses in defending them. Now the fees have been abolished there is little to deter a vexatious litigant determined to pursue a claim as, unlike in the civil courts, tribunals generally do not award costs against a losing party.

In A-G v Barker (2001), Lord Bingham provided the following illuminating definition of ‘vexatious litigation’: “The hallmark of a vexatious proceeding is in my judgment that it has little or no basis in law (or at least no discernible basis); that whatever the intention of the proceedings may be, its effect is to subject the defendant to inconvenience, harassment and expense out of all proportion to any gain likely to accrue to the claimant; and that it involves an abuse of the process of the court…” 

This definition is wide enough to cover a whole range of vexatious conduct, from issuing a claim with false or misleading allegations, to issuing serial claims and bringing claims purely to harass and inconvenience the employer. Whatever the intentions of the claimant may be, the consequences on the respondent can be grave and potentially out of all proportion to the actual value of the case, with respondents likely to incur significant financial costs, management time, lost productivity and potentially reputational damage in defending such claims. 

While an employment tribunal’s ability to restrain and deter vexatious litigants has its limits, there are some practical steps employers can take, including:

  • If a claim has been received and you suspect the claimant may be a serial litigant, check whether they have made similar claims before – all recent tribunal judgments are now online.
  • Check whether they have been subject to the attorney general’s ‘vexatious litigants’ list or a civil restraint order, preventing them from issuing claims.
  • If the claim appears weak and without any reasonable prospect of success, highlight this on the ET3 ‘grounds of response’ and apply for a strike out or a deposit order, whereby the tribunal can order the payment of a deposit of up to £1,000 as a condition for allowing the claim to proceed.
  • Consider issuing a costs warning letter, putting the claimant on notice that you will apply for costs if they proceed with the claim and are unsuccessful.

Employment tribunal rules

The employment tribunal has some tools at its disposal, through its Rules of Procedure 2013, which – if used robustly – could see some vexatious cases falling at the first hurdle. 

The Rules of Procedure provide for an initial ‘judicial sift’ stage, which allows a judge to review a case based on the ET1 and ET3, and to strike out the claim (or response) where it has ‘no reasonable prospect of success’, which would apply to vexatious claims. The rationale is to weed out weak and meritless claims at the earliest possible stage.

In practice, few claims are dismissed at this initial stage and the hurdle to have a claim struck out is high. Employment judges have tended to take a cautious approach to striking out claims, following guidance in the case of Anyanwu v South Bank Students’ Union (2001), where the House of Lords cautioned against striking out discrimination claims, except in the most obvious cases, given that there may be facts in dispute that can only be resolved after a full hearing. This approach has also been applied to whistleblowing cases and, as such, other than in the most simple, straightforward and obvious cases where there are no reasonable prospects of success, very few claims will be struck out before a full hearing.

In addition to the power to strike out claims at the initial stage, the employment tribunal can also strike out claims at any stage of the proceedings on the grounds that the claim (or part of it) is “scandalous or vexatious or has no reasonable prospect of success”; however, as with the initial judicial sift stage, this remains a high hurdle to overcome.

When it comes to costs, the employment tribunal has tended to show more willingness to award costs against litigants where their conduct is “vexatious, abusive, disruptive or otherwise unreasonable”. For example, in Kotecha v Insurety, the claimant lost his claim of race discrimination and the tribunal made a costs order against him of £10,000 on the basis that he had acted vexatiously in the conduct of proceedings and had not been honest with the tribunal. In French v Brent Walker, the tribunal made a costs award of £1,000 against the claimant who had brought a claim of unfair dismissal but who the tribunal found had resigned to set up his own business and must have known that his claim was groundless and his intention was simply to harass the employer.

Kevin Charles is a consulting barrister at Crossland Employment Solicitors