Employment tribunals have two distinct mechanisms for awarding costs against a party whose conduct has caused unnecessary expense. The first, a costs order, applies where the receiving party has been legally represented. The second, and less commonly understood of the two, is a preparation time order.

Understanding how a preparation time order works, when employment tribunals can make one, and how the amount is calculated is important for both solicitors advising on employment matters and individuals representing themselves in tribunal proceedings.

 

What Is a Preparation Time Order?

A Preparation Time Order – commonly referred to as a PTO – is an award made in favour of a party who has not been legally represented in employment tribunal proceedings. Rather than compensating for legal fees incurred, it recognises the time that party has spent on preparatory work for the case: researching the claim, organising documents, preparing witness statements, and getting ready for the hearing itself.

The PTO is the tribunal’s way of acknowledging that unrepresented parties invest significant time in their cases, and that where the other party’s conduct has caused that investment to be wasted or increased, some compensation is appropriate.

Crucially, a preparation time order and a costs order cannot both be made in favour of the same party within the same proceedings. Where a party has been legally represented for part of a case and unrepresented for another part, the tribunal must decide which order is most appropriate and can only make one.

 

When Can a Preparation Time Order Be Made?

The grounds for making a preparation time order mirror those for a costs order and are set out in Rule 76 of the Employment Tribunal Rules of Procedure 2013.

A tribunal may make an order or a preparation time order where a party, or that party’s legal representative, has:

• Acted vexatiously, abusively, disruptively or otherwise unreasonably in bringing or conducting the proceedings
• Had no reasonable prospect of success in pursuing or responding to a claim or a particular allegation at the time it was made
• Been in breach of any order or practice direction made by the tribunal
• Caused a hearing to be postponed or adjourned through their own application where it is just to make an award

Losing a case does not, in itself, justify a preparation time order. The tribunal must be satisfied that the conduct or the lack of any reasonable prospect of success crosses the relevant threshold. A claimant who brings an unfair dismissal claim that ultimately fails on the merits is not automatically exposed to a PTO – but one who pursues a claim with no prospect of success, or who acts unreasonably throughout, may well be.

 

How Is the Amount Calculated?

The amount awarded under a preparation time order is based on the number of hours of preparation time the tribunal considers reasonable, multiplied by a prescribed hourly rate set annually by the Secretary of State.

This hourly rate is fixed – it bears no relation to the paying party’s actual earnings or the value they might otherwise place on their own time. It applies uniformly regardless of whether the receiving party is a senior professional or someone with no formal employment.

The tribunal will assess what preparation time was reasonably and necessarily spent. Time that was excessive, duplicated, or not genuinely connected to the conduct of the case is unlikely to be included. The receiving party should therefore be prepared to provide a clear account of the preparatory work undertaken and the time involved.

 

The Role of Ability to Pay

As with costs orders, employment tribunals must have regard to the paying party’s ability to pay when deciding whether to make a preparation time order and, if so, for how much.

This is a meaningful safeguard that distinguishes the employment tribunal regime from civil litigation costs. Even where the grounds for a PTO are clearly established, the tribunal may reduce or decline to make an award if it is satisfied the paying party genuinely cannot meet it. Parties applying for a preparation time order should be prepared for the ability to pay to be raised, and should not assume that a successful application will result in full recovery.

 

Preparation Time Orders and the 28-Day Rule

Applications for a preparation time order must generally be made during the proceedings or, if the tribunal considers it appropriate, within 28 days of the judgment being sent to the parties. Applications made outside this window require the tribunal’s permission and will not automatically be accepted.

This time limit is frequently missed, particularly by unrepresented parties who may not be aware of it. Where a party believes they may have grounds for a PTO, taking advice promptly after the outcome of the hearing is strongly recommended.

 

How a Preparation Time Order Differs From a Costs Order

The distinction between a preparation time order and a costs order is worth setting out clearly, as the two are often conflated.

Costs Order

Who receives it: Legally represented party

What it covers: Legal fees incurred

How it’s calculated: Actual costs (up to £20,000 without assessment)

Preparation Time Order

Who receives it: Unrepresented party

What it covers: Time spent on preparatory work

How it’s calculated: Hours x prescribed hourly rate

Can both a costs order and a preparation time order be awarded?: No – only one in favour of the same party

For a broader overview of how costs work across employment tribunal proceedings, including wasted costs orders and the circumstances in which a costs award can be made, see our guide to costs in employment tribunal proceedings.

 

How Greener Costs Can Help

At Greener Costs, our qualified costs lawyers and costs draftsmen advise on employment tribunal costs, including preparation time orders and costs order applications. Whether you are pursuing or defending a PTO application, or need support navigating the costs consequences of tribunal proceedings, we can provide clear, practical advice on your position.

We offer transparent, upfront pricing on all instructions with no hidden fees.

Get in touch today to discuss your requirements.

📞 01204 263047

✉️ info@greenercosts.co.uk

 

Frequently Asked Questions

What is a preparation time order in an employment tribunal?

A preparation time order is an award made in favour of an unrepresented party in employment tribunal proceedings. It compensates them for the time spent preparing their case, calculated at a prescribed hourly rate set annually by the Secretary of State.

When can a preparation time order be made?

A PTO can be made where a party has acted vexatiously, abusively, disruptively or otherwise unreasonably, pursued a claim with no reasonable prospect of success, breached a tribunal order, or caused a hearing to be postponed or adjourned.

Can a party receive both a costs order and a preparation time order?

No. A costs order and a preparation time order cannot both be awarded in favour of the same party in the same proceedings. The tribunal must make one or the other.

How is the hourly rate for a preparation time order calculated?

The hourly rate is a fixed amount prescribed annually by the Secretary of State. It is not based on the individual’s personal earnings or professional rate – it applies uniformly to all unrepresented parties.

What is the time limit for applying for a preparation time order?

Applications must generally be made during the proceedings or within 28 days of the judgment being sent to the parties. Applications outside this period require the tribunal’s permission.

Does the paying party’s ability to pay affect a preparation time order?

Yes. The employment tribunal must consider the paying party’s ability to pay when deciding whether to make an order and how much to award. A PTO may be reduced or declined if the paying party cannot reasonably meet it.