DIFC Courts issue new Practice Direction to improve access to justice

Aiming to improve access to justice, in October 2025, the DIFC Courts issued new Practice Direction No. 1 of 2025 to enhance the procedural framework governing employment claims before the Court of First Instance (CFI).

Key Changes

These are the key changes effective 9 October 2025:

Court Fees (paragraph 2)

The Registrar now has the discretion to waive or reduce court fees payable in employment claims, taking into account (i) the claimant's financial means, (ii) the complexity and merits of the claim, and (iii) the interest of justice. In some instances, a fee cap may be appropriate. The claimant will be able to pay these fees in instalments if they can demonstrate financial hardship.

This change is significant given that court fees in the CFI are substantial – 5% of the claim value for the first USD 500,000 (with a minimum of USD 5,000), with a fixed fee plus a percentage for amounts above USD 500,000. Court fees can often pose as a barrier for employees who typically do not have the same financial means as their employers, creating imbalances from the outset, as in many cases, they may not have the resources to pay the court fees upfront. As a result, many claimants have historically had no choice but to cap their claim at AED 500,000 to allow them to qualify for the Small Claims Tribunal (SCT) (which has lower court fees), sacrificing the opportunity for full recovery. 

Adverse Costs (paragraph 3)

In employment disputes, each party will now bear its own costs unless the Court determines, in its discretion, that (i) a party has brought or conducted proceedings unreasonably; (ii) a party has acted vexatiously or in bad faith; or (iii) it is otherwise in the interests of justice to do so. 

This marks a significant departure from the previous position, where an unsuccessful employee could typically need to bear the employer's costs (and vice versa).  Given that employers are often represented by experienced and sophisticated legal counsel, the risk of facing substantial costs was a major deterrent for employees considering claims before the CFI.

The other side of the coin is that some employees may in fact have been keener to recover their own costs, even at the risk of paying the other side's – particularly where the employee has also instructed legal representatives and is confident in the merits of its case. In most cases, this is now no longer possible.  

While some fear this change could spur on vexatious litigants to bring meritless claims against their employers, seeking personal vindication, this may be a rare occurrence given that the court could still depart from the now standard position if it considers the employee has acted vexatiously or in bad faith.

Confidentiality (paragraph 4)

As with the SCT, employment hearings before the CFI shall now, by default, be conducted in private unless it is in the interest of justice to lift confidentiality, and judgments will in most cases be anonymised. This change offers employees the benefit of shielding disputes from potential future employers, who might otherwise hesitate to hire someone involved in litigation against a previous employer.

Comment

Overall, many practitioners will no doubt commend the DIFC Courts' efforts in improving the framework for employment disputes in the CFI and they represent progress in the right direction.

In particular, changes to filing fees and costs may encourage self-represented employees to commence claims in the CFI, rather than the SCT. The CFI allows employees the opportunity to provide oral evidence, and adduce expert evidence, which may be critical for more complex disputes – for example, those involving allegations of breach of confidentiality or misappropriation of company property. 

It remains to be seen whether disagreements will arise as to what qualifies as an employment dispute for the purposes of this Practice Direction, particularly in cases where the employee may also have a stake in the business or a managerial role.