Costs orders and no costs

Generally, if you take legal action against someone and you lose, the court or commission will order you to pay for some or all of the costs of the other party (the person you took the legal action against). However, if you take legal action against your employer, generally you and the employer will each bear your own legal costs. In other words, if you lose, generally you will not have to pay the employer’s legal costs. Usually, you will only be ordered to pay the employer’s legal costs in very limited circumstances – for example, where you made a claim or continued with a claim frivolously, vexatiously or without a reasonable prospect of success.

If you know that it is very unlikely that your claim will succeed when you make a claim (or if you continue a claim after becoming aware it is very unlikely to succeed) then your claim may be frivolous, vexatious or without a reasonable prospect of success. This means that you may risk having a costs order being made against you.

You should also be aware that for some employment law claims, you can be ordered to pay the employer’s costs if you are unsuccessful.

If you are:

• unsure about what the rules are for costs for a particular employment law claim; or
• unsure if your claim has a reasonable prospect of success;

then you may wish to seek legal advice before commencing a claim, to make sure you know the possible financial consequences of making the claim.