As an employer, dealing with claims brought before the Employment Tribunal can be both time-consuming and costly. If you're facing a claim, whether for unfair dismissal, discrimination, or any other workplace dispute, you might encounter the term "deposit order." What does a deposit order mean for you as an employer, and how could it impact your case? In this article, we will explain what deposit orders are and why they may be used.

What is a Deposit Order?

A deposit order is a financial order made by the Employment Tribunal that requires a party, usually the claimant (employee) but in some cases, the respondent (employer), to pay a sum of money into the Tribunal’s account as a condition of:

• Continuing with the legal process: This could affect whether the claimant can proceed with their claim, or in some cases, whether you as the employer are able to continue defending your position.
• Pursuing specific allegations or arguments: If the Tribunal believes a particular part of the claim has little chance of success, it may require the claimant to pay a deposit to continue pursuing that specific aspect.

The Tribunal can make a deposit order either of its own accord or after an application from one of the parties. Often, a party might apply for the other party's case to be struck out or for deposit orders to be imposed, as an alternative.

The primary purpose of a deposit order is not to penalise either party but to ensure that both sides are serious and ready to proceed with the case. It can also serve as a deterrent to frivolous or weak claims.

When Can the Tribunal Make a Deposit Order?

The Tribunal may make a deposit order when it considers that a specific allegation or argument in the claim or defence has little reasonable prospects of success. In such cases, the Tribunal may order that the claimant (or respondent) pay a deposit as a condition of continuing with that specific aspect of the case.

If you, as the employer, believe the employee’s claim is weak or unlikely to succeed, you can consider making an application for a deposit order.

How Much is a Deposit Order?

The amount of money ordered by the Tribunal for a deposit order can vary. The Tribunal has broad discretion but typically orders deposit payments ranging from £100 to a maximum of £1,000. The deposit is generally refundable if the case is successful. However, it is unlikely to be refunded if the claimant (or respondent) loses the case and is ordered to pay costs.

In some cases, the Tribunal may issue multiple deposit orders for various allegations or arguments. For instance, in the case of Roberts v RELX Group PLC, a Tribunal ordered the claimant to pay a deposit of £60 for each of 83 allegations, totalling £4,980.

What Happens If the Deposit Is Not Paid?

If a deposit order is made and the claimant (or respondent) fails to pay the deposit by the specified deadline, the Tribunal has the authority to strike out the claim. This means the claim could be dismissed entirely, and the opportunity for the claimant to have their case heard would be lost.

For employers, this can be beneficial as it may lead to the claim being dismissed outright if the claimant is unable to meet the deposit requirements.

Key Points to Consider

Employers should consider the following:

1. Evaluate the strength of the Claims: Assess whether the claimant’s case has a solid foundation. You can consider whether to apply for a deposit order to ensure that only serious claims proceed.
2. Apply for a Deposit Order: If you believe that specific allegations in the claimant’s case have little reasonable prospects of success, you may apply for a deposit order to prevent the continuation of those claims. This can help narrow the issues in dispute and potentially reduce costs.
3. Consider Settlement: You could raise the fact that you intend to make an application for a deposit order to encourage a claimant to properly consider any offer of settlement you may wish to make in the meantime, to see if the dispute can be resolved. Mediation can also be a more cost-effective and efficient way to resolve the dispute without proceeding to a full hearing.
4. Costs: If a party is required to pay a deposit, and loses the argument to which it relates, it could be seen that continuing with the argument was unreasonable and could put that party at risk of costs. In addition, the Tribunal may order that the deposit is paid to the other party. For these reasons, deposit orders can be used to benefit employers when responding to weak claims. 

Conclusion

Deposit orders are an important tool for ensuring that claims are legitimate, and the claimant is serious about pursuing them. If you are considering making an application for a deposit order or have received a deposit order, it’s essential to understand the potential implications for your case. 

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

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

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Article by

Sally Eastwood

Senior Associate

0800 915 7777

This article provides general information about deposit orders in the Employment Tribunal and is not intended as legal advice. If you're involved in an Employment Tribunal claim, it's strongly recommended that you obtain legal advice to ensure your position is properly assessed and represented.

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