Costs awards in an Employment Tribunal are very much the exception rather than the rule. Saying that, under the Employment Tribunal Procedure Rules 2024, SI 2024/1155, Rule 74(2), the tribunal has a discretion as to whether to make a costs order or a preparation time order, and must consider whether to do so (even if no application is made for an order), where it considers: either that a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either: – the bringing of the proceedings (or some part of the proceedings)—i.e. the fact that the proceedings, or some part of them were instituted in the first place, or – the way that the proceedings (or part of the proceedings) have been conducted or that a claim, response or reply had no reasonable prospect of success In the recent High Court claim of Commerzbank AG v Ajao [2025] EWHC 2904 (KB) Mr Ajao (a former banking analyst) had stood trial for contempt of court after he lost his employment tribunal claims in April 2024 of harassment, sexual harassment, victimisation and race discrimination following his dismissal in November 2019. Mr Ajao accused a female manager (Ms Q) of commenting on his string vest under his shirt while they were in the staff canteen. He also claimed he had to slap her hand away when she reached for his Gucci belt. He had accused Q of trying to grab his crotch, also alleging that she had mistreated him because he refused her sexual advances. Mr Ajao had denied fabricating the allegations, arguing that the bank had not presented solid evidence that he was dishonest. The employment tribunal had ruled that Mr Ajao had fabricated sexual assault allegations against Q. The manager Q went on to develop a serious psychiatric illness as a result of the disproved allegations. Employment Judge Snelson awarded costs against Mr Ajao in the sum of £20,000 in the judgment below: https://www.gov.uk/employment-tribunal-decisions/mr-d-ajao-v-commerzbank-ag-and-others-2206071-slash-2019-and-2200216-slash-2020 Following the Tribunal judgment in April 2024 the employer sought permission from the High Court to bring a claim against Mr Ajao for contempt of court (making a false statement under oath). Permission was granted and the bank was successful in this claim with High Court Judge Martin Spencer sentencing Mr Ajao to 20 months’ imprisonment, concluding that he had known his allegations of harassment, discrimination and sexual harassment were false. Mr Ajao will be released from custody after eight months to serve the remainder of the prison term on licence. Judge Spencer said:- “There is no other way to protect our system of justice … There were such discrepancies, inconsistencies and impossibilities in [Mr Ajao’s] evidence that it was quite incapable of acceptance … your lies were deliberate and perpetuated over a significant period of time and included the giving of false evidence on oath. They represented an attempt to deceive the court into awarding you substantial damages. They had no regard to the effect on Ms. Q, but deliberately and unjustifiably victimised her…when she was vulnerable.” The judge held that a fine would be an insufficient response to his contempt and also ruled that Mr Ajao had made false entries in a diary to support his claims. In addition, Mr Ajao was ordered to pay the bank’s legal fees of £150,000. Note that is very rare (and indeed expensive) for a party to bring contempt of court proceedings although this case demonstrates the substantial powers of redress that are available from the Court in these exceptional circumstances. As always, this advice is general in nature and will need to be tailored to any one situation. As a MILS member you have access to the MILS Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.