If you're involved in a claim before the Employment Tribunal, whether it's related to unfair dismissal, discrimination, or another workplace issue, you may have heard the term "deposit order." But what exactly is a deposit order, and how might it affect you as an employee? In this article, we'll explain what deposit orders are, why they are used, and what you can do if the Tribunal considers one in your case.

What is a Deposit Order?

A deposit order is a financial order that an Employment Tribunal can make in certain situations. It requires a party, typically the employee or claimant, although it can be the employer or respondent, to pay a sum of money into the Tribunal's account as a condition of:

• Continuing to participate in the legal process – if you are the claimant, the ability to continue with your claim
• Pursuing any specified allegations or arguments.

The Tribunal can decide to make a deposit order of its own accord or following the application of one of the parties. It is common for a party to apply for an opponent’s case to be struck out, or for one or more deposits to be made in the alternative, if the application to strike out the case is not successful. 

The purpose of a deposit order is not to punish either party, but rather to ensure that both sides are serious about the case and ready to present their claims or defences. It can also act as a way to deter frivolous or weak claims.

When Can the Tribunal Make a Deposit Order?

If an Employment Judge considers that any specific allegation or argument in a claim or response is has “little reasonable prospects of success”, they can make an order requiring the party to pay a deposit to the Tribunal, as condition of being allowed to continue with that allegation or argument. 

How Much is a Deposit Order?

The amount of money ordered by the Tribunal for a deposit order can vary. The Employment Tribunal has a broad discretion in this regard, but the amount is usually between £100 and a maximum of £1,000. The deposit is refundable if the case is successful, but it is unlikely to be refunded if the case fails and the Tribunal orders costs against the claimant.

A Tribunal has the power to order a party to pay a deposit for multiple specified allegations or arguments. For example, in the case of Roberts v RELX Group PLC and others, a Tribunal ordered that the claimant pay a deposit of £60 each for 83 arguments or allegations pursued in his claim, totalling £4,980.

What Happens If You Don't Pay the Deposit?

A deposit order will set out the Tribunal’s reasons for making the order, the potential consequences of the order and the consequences if the deposit is not paid by the specified deadline. 

If a deposit order is made and the employee (or claimant) fails to pay it within the time frame specified, the Tribunal has the power to strike out the claim. This means the claim could be dismissed entirely, and the employee would lose the opportunity to have their case heard.

However, employees who cannot afford the deposit may be able to apply for an exemption or reduction based on financial hardship. It’s essential to inform the Tribunal if you’re unable to pay the deposit. The Tribunal must make reasonable enquiries into the paying party’s ability to pay the deposit and take this into account when deciding the amount of the deposit.

What Can Employees Do to Protect Their Interests?

If the other party has threatened to make or has made a deposit order application, there are a few things you can do to protect your interests:

1. Evaluate Your Claim: Consider whether your claim has a strong foundation and whether you can provide evidence to support it. The Tribunal might impose a deposit order because they believe your case is weak, so gathering relevant evidence can help address any concerns the Tribunal may have about your claim.
2. Request an Exemption: If you're facing financial hardship, you may be able to apply for a reduction or exemption from the deposit order. Be prepared to provide evidence of your financial circumstances, such as your income, savings, and any dependents.
3. Negotiate: If you're worried about the costs of taking your case forward, discuss with your solicitor whether settlement or alternative dispute resolution (such as mediation) might be a viable option. A settlement might help you avoid the risks and costs associated with a Tribunal hearing and any application for a deposit order. 
4. Understand the Risks: If your claim is unsuccessful, you may be ordered to pay costs. A deposit order can be a sign that the Tribunal believes your claim is weak, so it’s important to carefully assess whether pursuing the case is in your best interest.

Conclusion

While a deposit order can feel like an extra financial burden, it’s important to remember that it’s just one part of the process in the Employment Tribunal. The Tribunal uses deposit orders to ensure that claims are legitimate and that parties are prepared to proceed with their cases. If you’ve been ordered to pay a deposit or the other party has recently made an application for a deposit order, take the time to review your case carefully and seek legal advice if necessary. 

If you need any legal advice on the Employment Tribunal process, need to respond to an application for a deposit order made against you or have received a deposit order, please get in touch  0800 915 7777

Click on the links below for further reading in this area:

What is a Deposit order?

https://www.springhouselaw.com/what-is-a-deposit-order-in-the-employment-tribunal

For employees
Understanding Deposit Orders in the Employment Tribunal: What Employees Need to Know

For Employers

Understanding Deposit Orders in the Employment Tribunal: What Employers Need to Know

Listen to the audio version of this article below

Article by

Sally Eastwood

Senior Associate

0800 915 7777

This blog provides general information about deposit orders in the Employment Tribunal and is not intended as legal advice. If you are considering making a claim or have received a deposit order, it is strongly recommended that you seek legal advice to ensure that your rights are protected and that you understand the specific circumstances of your case.

We offer a range of services, so please contact our friendly customer services team to discuss further via  hello@kilgannonlaw.co.uk or  0800 915 7777.

Disclaimer 

The above provides a general overview of areas in employment law and is not intended nor construed as providing specific legal advice.  This article is for information purposes only and is correct at the time of publication. It does not constitute legal advice.

14.02.25