Deposit order
A tribunal judge thinks part of your case is weak — but instead of throwing it out, orders you to put money down to keep going with it. That is a deposit order, and ignoring the costs warning attached to it is a common and expensive mistake.
What is the maximum deposit a tribunal can order?
£1,000 per allegation or argument. This is a ceiling, not a default figure — the tribunal must make reasonable enquiries into your ability to pay and take your financial circumstances into account when deciding the actual amount, which can be, and often is, considerably less than £1,000.
Does a deposit order mean I'm going to lose my case?
No. A deposit order is a preliminary assessment that a specific allegation or argument has little reasonable prospect of success, made before the full evidence is heard at a final hearing. It is not a finding against you, and you can still succeed at the final hearing. But if you continue and the tribunal later decides against you substantially for the same reasons given in the deposit order, there are real consequences on costs.
What happens to the deposit if I lose?
If the tribunal later decides against you, substantially for the reasons given when the deposit order was made, the deposit is paid to the other party. You are also treated as having acted unreasonably for the purposes of a costs or preparation time order, unless you can show otherwise — and any deposit already paid counts toward such an order. Tribunal costs orders are the exception rather than the rule, so this presumption is the real sting in a deposit order.
What happens to the deposit if I win, or if I don't pay it?
If you pay the deposit and are not later found against for the reasons given in the order, it is refunded to you. If you fail to pay by the deadline set by the tribunal, the allegation or argument the deposit order relates to is struck out — you lose the ability to pursue or defend it at all, without the case being decided on its merits.
Can a deposit order be made against a respondent as well as a claimant?
Yes. A deposit order can apply to any party, in relation to any specific allegation or argument — whether that is a claimant's allegation of discrimination, or a respondent's specific defence, such as an argument that the claimant was not actually dismissed.
Why deposit orders exist
Employment tribunals are designed to be accessible without a lawyer, and most claims proceed all the way to a final hearing regardless of how strong they look on paper. But some allegations or arguments, considered at an early stage, are plainly weak — not hopeless enough to be struck out immediately, but weak enough that a judge wants to discourage pursuing them without serious reflection.
A deposit order is the tool for that middle ground. At a preliminary hearing, if a judge takes the view that a specific allegation or argument has little reasonable prospect of success, they can order the party relying on it to pay a deposit, up to £1,000, as a condition of being allowed to continue with it. This is a current rule under the Employment Tribunal Procedure Rules 2024 (SI 2024/1155, in force from 6 January 2025), at Rule 40 — the direct successor to rule 39 of the earlier 2013 Rules, which some older guidance and case law still refers to by the old number.
Crucially, a deposit order is not a decision on the merits. The party can still proceed to a full hearing and the allegation can still succeed. What changes is the financial and procedural risk of continuing: Rule 40 requires the tribunal to make reasonable enquiries into your ability to pay and to take your financial circumstances into account when fixing the amount, so the figure ordered is often well below the £1,000 ceiling, particularly for an individual claimant with limited means.
What happens next, and why the costs consequence matters most
- 1 The order is made. Usually at a preliminary hearing, the tribunal identifies the specific allegation or argument it considers weak, sets a deposit amount reflecting your means, and sets a deadline to pay it.
- 2 You decide whether to continue. Paying the deposit keeps the allegation or argument alive. Not paying by the deadline means it is struck out, without any hearing on its substance.
- 3 The final hearing happens. The case proceeds as normal, with the deposit sitting in reserve rather than affecting how the hearing itself is run.
- 4 The tribunal decides. If you lose the specific point, substantially for the reasons given in the deposit order, Rule 40(7) treats you as having acted unreasonably for costs purposes unless you show otherwise — and the deposit itself is paid to the other side, counting toward any costs order made.
A claimant brings an unfair dismissal claim with two separate arguments: that the dismissal process was procedurally unfair, and that the real reason for dismissal was actually a protected characteristic, raised as an afterthought with little supporting evidence. At a preliminary hearing, the judge considers the discrimination argument has little reasonable prospect of success and makes a deposit order of £250 against it, having checked the claimant's means. The procedural unfairness argument is unaffected.
Discrimination argument only
£250 (below the £1,000 maximum)
Unaffected — proceeds normally
If claimant loses the discrimination point at trial
Deposit paid to respondent; presumption of unreasonable conduct for costs
If the claimant pays the £250 and later loses the discrimination allegation at the final hearing, substantially for the reasons the judge gave at the preliminary hearing, the deposit goes to the respondent and counts toward any costs order. If the claimant instead succeeds on that allegation, or loses it for different reasons than those identified, the deposit is returned.
Employment Tribunal Procedure Rules 2024, Rule 40
Employment Tribunal Procedure Rules 2024, Rule 74
Employment tribunal procedure rules
Deposit Order — Employment Tribunal Glossary
What an Employment Tribunal deposit order is, the £1,000 maximum, and the costs consequence that makes ignoring it a costly mistake.