Last year saw a record breaking 9,100 employment tribunal claims across the UK, marking a staggering 234% increase on the year prior.
As tribunal claims rise, so does the question of how many result in cost awards, where a tribunal orders an employer to pay an employee, or vice versa. While facing a tribunal claim can be daunting for businesses, new LegalVision analysis of Ministry of Justice data covering more than two million tribunal claims between 2007 and 2024 reveals some interesting trends.
The average cost award now stands at £4,313, up 210% since 2007/08
The average maximum cost award has grown fivefold – from £35,915 across the first five years of the study to £197,504 across the most recent five
This is despite cost awards falling by 58% in volume between 2007/08 and 2023/24
When they are given, they mostly favour employers, who receive 68% of the awards
The introduction of tribunal fees briefly pushed the cost award rate to 1.42% in 2014/15, nearly four times the long-run average
For employers facing tribunal claims, the main finding is clear: the cost of defending against dubious or unreasonably pursued claims has risen, but so too has the financial recovery possible when costs are rewarded.
Cost awards value rise
Cost awards have grown significantly in value over the past 17 years, according to LegalVision’s data. The median award has tripled from £1,000 in 2007/08 to £3,000 in 2023/24, while the average has risen from £2,095 to £6,492 over the same period. The average maximum award has also increased more than fivefold, from £35,915 across the first five years of the study to £197,504 in the most recent five.
The data also paints an encouraging picture for employers. Of the 8,245 cost awards made between 2007/08 and 2023/24, 68% were granted to employers. In total, 5,641 awards went to employers, compared with 2,604 awarded to claimants, suggesting tribunals most often award costs against claimants where unreasonable conduct is identified.
Cost awards remain rare overall. Across 2,205,913 claims lodged during the 17-year period, just 0.37% resulted in a cost award—around 1 in every 267 cases. This suggests tribunals reserve cost awards for genuinely unreasonable conduct rather than applying them routinely, giving well-prepared employers confidence that a properly conducted defence is unlikely to result in a cost award against them.
The impact of tribunal fees
The introduction of tribunal fees in 2013 had a dramatic effect on claim volumes, with cases falling from 236,103 in 2009/10 to just 61,308 in 2014/15, a drop of almost 75%.
However, cost awards did not fall at the same rate, which briefly pushed the proportion of claims resulting in a cost award to 1.42% in 2014/15, nearly four times the long-run average of 0.37%.
Following the Supreme Court’s abolition of tribunal fees in 2017, claim volumes recovered and the cost award rate returned to its historical norm.
What this means in practice
For employers facing tribunal claims, the legal team say the findings offer three clear takeaways:
Employers should not assume they have no cost recovery options. Businesses receive more than two-thirds of all cost awards, and the average award value has risen by 210% since 2007/08, making cost recovery an increasingly valuable option.
Businesses should document unreasonable conduct throughout proceedings. A successful cost application relies on clear evidence of behaviour such as pursuing a weak claim, rejecting a reasonable settlement offer, or failing to comply with tribunal orders.
Seek legal advice early. Expert guidance helps identify conduct that may support a cost application and enables employers to build the strongest case for cost recovery from the outset.
