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Cost v Benefit Analysis of Covert Recordings in Employment Relationships: Tread carefully unless you have deep pockets!

12th October 2020

For the majority of cases in the Employment Tribunal, unlike most claims in the civil courts, each party is expected to bear their own costs, regardless of which party is successful. However, in the recent game changer costs hearing in Tan v Copthorne Hotels Limited, the Tribunal ordered the Claimant to pay the Respondent an unprecedented six figure sum, highlighting the importance of considering potential costs risks when bringing or defending a claim.

It’s a very useful case for employers to have in their armoury if they find out that an employee has been covertly recording internal meetings and conversations. Senior executive clients who frequently ask us whether they can record internal meetings without their employer or colleagues’ knowledge should think twice before doing so, unless they have very deep pockets, given the amount of the six figure costs award in this case.

With most employees now working remotely, the risk of covert recordings is higher than ever, so employers should make sure that their disciplinary procedures expressly state that it’s a disciplinary offence to covertly record internal meetings or discussions with colleagues. They should also make this clear to employees at the beginning of any formal workplace meeting, i.e. redundancy consultation, disciplinary hearing, grievance meeting or internal investigation.

Facts

In 2018 Mr Tan brought a kitchen sink claim against his former employer, Copthorne Hotels Limited, after being made redundant. Mr Tan’s numerous claims included unfair dismissal, automatic unfair dismissal, whistleblowing detriment and dismissal, discrimination on the grounds of age, race, sex, marital status and/or sexual orientation, harassment, and victimisation. Prior to commencing his claim, Mr Tan was required to pay a deposit order to the Tribunal before his claims could progress (which suggests that the Tribunal considered some, if not all, of Mr Tan’s claims to be weak.  This should have been a warning sign to Mr Tan.)  During the full merits hearing, the Tribunal was subjected to hours of covert recordings that Mr Tan had taken during private conversations with his colleagues and there were more than 3,000 pages of documents in the hearing bundle. Several of Mr Tan’s claims were dismissed prior to the full merits hearing, but in any event Mr Tan refused to reach a compromise with his former employer regarding the legal fees they would have to pay to defend his weak claims and instead continued with a lengthy and costly trial which his employer had to pay to defend.

Judgment

The Tribunal dismissed all of Mr Tan’s claims, stating that Mr Tan was deceitful towards his colleagues when he covertly recorded them and that he was fully aware that his conduct amounted to wrongdoing. The Tribunal held that Mr Tan’s actions showed “duplicitous and underhand conduct on the part of the Claimant who was collecting evidence for the purposes of proceedings”. The Tribunal further held that “had we not found the dismissal to be fair, we would have found this conduct to have completely eroded any trust and confidence between the parties and this would have led to his dismissal in any event, had the Respondent known about it”.

Mr Tan’s former employer argued that because of the decision to dismiss all of Mr Tan’s claims, Mr Tan should be liable for its costs in defending this case. As such, in a separate costs hearing the Tribunal ordered Mr Tan to pay his former employer the highest costs award to date of £432,001.85 against which his employer gave credit for monies already paid.

Conclusion

This case acts as a stark reminder that there can be significant costs risks associated with bringing a claim and this can be particularly influenced by the actions of those involved. In addition, it highlights the fact that a “kitchen sink” approach to bringing a claim will not be tolerated by the Tribunal, (particularly where the Tribunal has given a firm steer that it does not feel that the claims have reasonable prospects of success, by ordering the Claimant to pay a deposit to continue with them) and that the parties should focus all and any claims on their strongest arguments only.

Authors: Michelle Chance & Verity Ingle

Michelle Chance is an employment partner and Verity Ingle is an employment solicitor at Rosenblatt.