Good news for organisations represented by in-house solicitors
The nature of compensation able to be sought under a ‘preparation time order’ has been plunged into the spotlight following the recent case of Ladak v DRC Locums Ltd (UKEAT/0488/13/LA).
This shake up holds positive ramifications for organisations represented by in-house solicitors in employment tribunal claims, who, it is suggested, should be compensated in exactly the same way as a non-represented party.
Historically, the statutory provisions from which to award ‘costs or expenses’ did not contain any definitions of such terms. 2004, however, saw the introduction of a more sophisticated costs regime, and accordingly provision not only for costs was made, but preparation time orders and wasted costs orders. However, there was a clear distinction drawn between costs and expenses, and preparation time orders, the latter being intended for those who were not legally represented.
HHJ Richardson, sitting alone in this matter, held that the costs of an in-house representative were recoverable as a charge or expense under Rule 38(3):
“To my mind it is plain that the words ‘fees, charges, disbursements or expenses’ are not to be read restrictively… I consider that it is a normal and permissible use of language to describe the costs of an in-house legal department as a charge or expense upon the employer”
From a practical perspective, this poses important considerations. Firstly, there is the obvious; we should include time incurred by in-house legal representatives in defending employment tribunal claims in any application for costs. Moreover, moving forward, this means a clear record of time spent must be kept, most probably to the standard expected of similar time recording practices in private firms.
Secondly, and conceivably even more problematic, is what hourly rate should be included when seeking to recover costs? It seems this vital decision will, most probably, rest on the employer’s shoulders. The most plausible option, we think, is to use the guideline hourly rates utilised in civil proceedings, which can conveniently be found in our Costs & Fees Encyclopaedia. This approach, it seems, would not only provide uniformity but consistency across the spectrum of costs.
Written by Charlotte Brasher, Bristol Office