3 things you need to know about deposit orders in employment tribunals

3 things you need to know about deposit orders in employment tribunal claims

If you are involved in an employment tribunal claim, especially if you are unrepresented, an employment tribunal may have put you on notice that your employer or ex-employer has applied for a deposit order and there will be a preliminary hearing to consider the application.

(1)  What is a deposit order?

Employment tribunals are governed by the Employment Tribunals Act 1996 and the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013. Deposit orders are specifically governed by rule 39 of the Employment Tribunal Rules of Procedure 2013, which is a schedule to the Regulations.

A deposit order is something an employment judge during employment tribunal proceedings can make requiring you to pay a sum of money to the tribunal, as a condition for continuing to pursue any specific allegation or argument set out in your claim form.

In deciding whether to make a deposit order, an employment judge will consider whether any specific allegation or argument in your claim has ‘little reasonable prospect of success’. If so, a deposit order will be made.

If a deposit order is made against you, the employment judge will set out the reasons for doing this in an order, which will be sealed and will not be considered by a subsequent tribunal at the final hearing.

(2)  How much will you have to pay if a deposit order is made?

An employment judge can order you to pay £1000 for each specific allegation or argument being pursued in your claim that the judge considers has ‘little reasonable prospect of success’ by a specified date.

Before deciding on the amount of the deposit to be paid by you, an employment judge must make reasonable enquiries into your ability to pay the deposit. The purpose of the deposit order is not to make it difficult for you to find the sum payable or to make it difficult to access justice or to ensure your claim is struck out.

If you fail to pay the deposit by the specified date, the specific allegation or argument to which the deposit order relates will be struck out.

You can challenge a deposit order on the ground that it would be in the interests of justice to do so and apply for it to be varied, suspended or set aside.

(3)  What happens if you pay a deposit and lose your employment tribunal claim?

If you pay the deposit in accordance with the deposit order, there may be implications for you at a final hearing where an employment tribunal rejects or dismisses finds the specific allegation or argument that is the subject of the deposit order. In such circumstances, unless the contrary is shown, you will be treated as having acted unreasonably in pursuing that specific allegation or argument, should your employer or ex-employer apply to the tribunal for a costs order or preparation time order.

If a costs order or preparation time order is made against you, the deposit will be paid to your employer or ex-employer (and any other party to the claim) as the employment tribunal orders.

If a tribunal does not make a costs order or preparation time order, the deposit will be refunded to you.

If you have been found by an employment tribunal to have acted unreasonably in pursuing a specific allegation or argument following a deposit order, it will not automatically follow that a costs order or preparation time order will be made against you. Even where unreasonable conduct has been found, the tribunal has a discretion as to whether or not costs should be awarded, and to what amount, and must consider all relevant circumstances in exercising that discretion (Oni v UNISON)