DIFC employment disputes: New rules on fees, costs, and confidentiality explained
On 9 October 2025, the Dubai International Financial Centre (DIFC) Courts quietly ushered in a new era for employment disputes with Practice Direction No. 1 of 2025 (PD 1/2025). This was more than a procedural tweak. The changes reshape the risk landscape, access to justice, and the practicalities of litigation in the DIFC Court of First Instance (CFI).
If you haven’t read the Practice Direction, here’s what you need to know:
KEY CHANGES AT A GLANCE
1) Court fees waivers and reductions
Currently, the standard CFI filing fee is 5% of the claim value, subject to minimum and maximum caps. The exact fee will vary depending on the value of the claim. The Court Registrar now has discretion to waive, reduce, or cap filing fees, considering the claimant’s financial means, the complexity and merits of the case, and the interests of justice. Instalment payments may also be allowed for claimants demonstrating financial hardship.
The cost of bringing a claim has long deterred employees weighing the risk of taking on well-resourced and/or insurance-backed employers, particularly those who have just lost their primary income source or work in lower-paid roles such as in the retail, hospitality, and leisure sectors.
The new regime signals that access to justice should not depend on ability to pay but has stopped short of removing fees altogether to ensure the system remains manageable.
2) Legal costs: Each party pays their own
The new default rule is that each party bears its own legal costs, aligning the CFI with the DIFC Small Claims Tribunal and marking a clear shift away from the traditional ‘loser pays’ principle. Now, costs generally lie where they fall, rather than being automatically imposed on the unsuccessful party.
Employers can no longer rely on the threat of an adverse costs order to deter would-be claimants. However, employers nervous that this leaves the door wide open to frivolous litigation, should be relieved that the Court retains discretion to make an adverse costs order where a party has brought or conducted proceedings unreasonably, acted vexatiously or in bad faith, or where it is otherwise in the interests of justice.
3) Private and anonymous proceedings
By default, employment cases will now be heard in private, with judgments published in anonymised form unless full publication is warranted in the interests of justice. For employees and employees, this offers welcome protection against reputational harm and unwanted publicity.
However, there is a trade-off as moving hearings behind closed doors reduces transparency, which is important for keeping court processes fair and clear. The Court may lift confidentiality where necessary for public accountability or to prevent prejudice or abuse, but it is unclear what the criteria is for doing so.
FINAL THOUGHTS
PD 1/2025 marks a cultural shift in how employment disputes are resolved in the DIFC CFI. Legal and HR teams anticipating an increase in employment claims should consider reviewing internal decision-making processes, ensure documentation is robust, and seek professional legal advice early, especially when contemplating dismissals or other significant actions. In this new environment, early settlement and mediation seem likely to become even more attractive and effective ways to resolve disputes.
CONTACT US
Stephenson Harwood’s Employment team is highly experienced in managing employment disputes before the DIFC Courts. We support clients at every stage - from risk assessment and negotiation to litigation and alternative dispute resolution.
Our expertise includes advising on and preparing settlement agreements that comply with DIFC statutory requirements, as well as guiding clients through judge-led and private mediation processes. We can provide independent mediation services through an accredited mediator.
If you would like help reviewing your settlement agreements, preparing new templates, or would like to discuss the contents of this alert, please contact Emily Aryeetey, Sona Poghosyan, or your usual contact at Stephenson Harwood.
