Cost orders in the Employment Tribunal: A Word of Caution from Madu v Loughborough College [2025] EAT 52

Hot off the press, the Employment Appeal Tribunal (EAT) in Madu v Loughborough College is a timely reminder of the difficulties in securing a cost order against litigants in person in the Employment Tribunal (ET). 

The Test for Costs in the ET

The default position in the ET is that each party bears their own costs. However, the ET may make a costs order where one of the following conditions are met: 

(a) Unreasonable conduct: A party has acted vexatiously, abusively, disruptively, or otherwise unreasonably in bringing or conducting proceedings;

(b) Hopeless claim: The claim or response has no reasonable prospect of success; or,

(c) Hearing adjourned or postponed: where this arises due to an application made by a party and the adjournment/postponement occurs less than 7 days before the date on which that hearing begins.  

Even where one of these thresholds is met, the Tribunal must exercise its discretion. The fact that a party is unrepresented remains an important consideration. Litigants in person may lack legal knowledge and access to specialist advice.

The ET must also weigh policy factors when deciding on costs. For instance: 

• Access to justice: It can be difficult for a Claimant (especially a litigant in person) to know whether their claim has real prospects of success until the explanation of the employer’s conduct is heard, seen and tested in court. This is particularly true in discrimination claims. 
• Avoiding hindsight bias: When considering whether a litigant should have appreciated that a claim had no reasonable prospects of success, it is important to avoid being influenced by the hindsight of how the evidence in fact unfolded at trial. 

What happened in Madu?

Mr Madu, a black British man of African descent, applied for a lecturing position at Loughborough College (LC), a further education college. Two other candidates – AB (white British) and DW (white Irish) – also applied.

Madu was unsuccessful at interview. AB scored the highest mark at interview and was offered the role. The Claimant came second, and DW third. 

Madu brought a race discrimination claim citing several points including:

• His interview could not be rescheduled, whereas DW’s was postponed until the following day;
• LC delayed in responding to his request for feedback and to his grievance; 
• Only 2.9% of staff at LC were non-white.

The ET found that Madu should have realised when acting in person that his claim had no reasonable prospect of success and that after he obtained legal representation, he must have received advice to that effect. On this basis, the ET ordered Madu to pay £20,000 in costs.

Madu appealed the ET’s costs order.

The EAT’s Key Findings

The appeal was allowed on the following basis: 

1. The ET incorrectly assumed that when Madu obtained legal representation, he was advised that his claim had no reasonable prospect of success. This assumption was a significant component of the decision to award costs. 
2. The ET failed to properly consider the difficulties that face a Claimant in determining whether a discrimination claim has no reasonable prospect of success prior to the hearing.  
3. The ET was wrong to find it irrelevant that LC had not sought strike out, a deposit order, or given a costs warning. The EAT explicitly stated that, it was surprising for the ET to conclude that Madu, while acting in person prior to the hearing, should have realised that the claim had no reasonable prospects of success, while also concluding it was irrelevant that the professionally represented Respondent did not apply for strike out, which would have required the application of a very similar test.
4. The ET was wrong to conclude that there was no evidence that race played any part in what happened. It is not necessary that the Claimant’s race be the sole reason for the treatment, it is only necessary that race was a factor. 

What to take away

This decision reaffirms that:

• Practitioners should remind clients that the threshold for securing a costs order in the ET is high, due to policy reasons. This is because the ET system is designed to support access to justice, especially for Claimants navigating complex discrimination claims without legal representation.
• Costs orders against litigants in person remain exceptional, particularly in discrimination cases where Claimants often lack legal knowledge and early access to legal advice.
• If a Respondent believes a claim is misconceived or unreasonable, they should take early procedural steps such as making a costs warning or pursuing a strike-out/ deposit order application. Taking these steps can bolster the chances of a Respondent successfully pursuing a Claimant for costs.
• To assume that a Claimant has understood that their claim had no reasonable prospect of success merely because they have secured legal representation at some stage is not straightforward (particularly where privilege is not waived).

The judgment can be accessed here.