“ERRORS of law” were made by the Employment and Discrimination Tribunal when interpreting new powers allowing it to impose legal costs of up to £10,000, the Royal Court has ruled.
In a recently published judgment, Deputy Bailiff Mark Temple said the costs regime was intended to punish and deter unreasonable behaviour during proceedings – not simply compensate a party for money wasted.
The ruling followed an appeal by the States Employment Board against a Tribunal decision concerning former employee Erika Francioso.
New rules introduced in July 2025 allow costs to be awarded where a party or their representative has acted “vexatiously, abusively, disruptively or otherwise unreasonably” when bringing or conducting proceedings.
Both the SEB and Ms Francioso applied for costs following the Tribunal’s decision on her unfair dismissal and discrimination claims.
However, both applications were refused after the Tribunal described the regime as “compensatory and not punitive” and said applicants had to demonstrate that specific “wasted costs” had been incurred.
The Royal Court found that both conclusions were legally incorrect, explaining that the purpose of the power was “to deter and sanction” unreasonable conduct – and could even be used against the party which ultimately won a case.
Mr Temple said: “The Tribunal should therefore take a broader view of the costs incurred by a party where the other party has conducted itself” in one of the ways specified by the rules.
Costs must still have been genuinely incurred, meaning the Tribunal cannot impose a separate fine. Any award is capped at £10,000 and the person’s ability to pay must also be considered.
Ms Francioso and the SEB reached a settlement covering her appeal against the underlying Tribunal decisions and the costs dispute.
However, the SEB continued the case as a point of law because, as Jersey’s largest employer, it considered the issue to be of “general importance”.
The costs application will not return to the Tribunal because that part of the dispute has been settled.
