EAT Practice and Procedure : Costs – Employment Tribunal award of costs
Employment Tribunal (Constitution and Rules of Procedure) Regulations 2004 Schedule 1 rr.38-42
Pursuant to r.41(2), the means of the paying party might be taken into account in considering (1) whether to make an award of costs; and/or (2) as to how much should be awarded.
It was not mandatory for an Employment Tribunal to have regard to paying party’s means: it ‘may have regard to the paying party’s ability to pay’; it was not obliged to so do. Moreover, the fact that a party’s ability to pay was limited did not require the Employment Tribunal to assess a sum confined to an amount that he or she could pay (see, eg, Arrowsmith v Nottingham Trent University [2012] ICR 159, CA, and Vaughan v London Borough of Lewisham [2013] IRLR 713, EAT).
That said, discretion thus afforded to Employment Tribunal to make award of costs would have to be exercised judicially (Doyle v North West London Hospitals NHS Trust UKEAT/0271/11/RN). As with any exercise of discretion on the part of an Employment Tribunal, the Employment Appeal Tribunal would only interfere if a relevant matter had been taken into account or there had been a failure to have regard to a relevant matter or if the conclusion reached was perverse (Bastick v James Lane (Turf Accountants) Ltd [1979] ICR 778, EAT). An appeal against a costs order will be doomed to failure unless it is established that the order is vitiated by an error of legal principle or was not based on the relevant circumstances (see Yerrakalva v Barnsley MBC [2012] ICR 420, CA per Mummery LJ).
Here the Employment Tribunal had considered the Claimant’s ability to pay to be a relevant matter in deciding to make an award of andpound;9,000 costs against him. On the evidence before the Employment Tribunal, however, it had reached the unfounded conclusion that he had been able to obtain well paid work as a freelance consultant. The actual evidence was of two examples of paid consultancy work from 2006. There was no evidence of a ‘recent history’ of well paid consultancy work. The only relevant work had been undertaken some 7 years’ previously; was limited in time; and had given rise to a total of andpound;4,300 fees. Otherwise the evidence was that the Claimant had a history of low paid, temporary engagements with significant periods of unemployment, including a period of some three years prior to working for the Respondent.
Thus, having decided it was relevant to take into account the Claimant’s ability to pay, the Employment Tribunal failed to take into account these relevant matters, alternatively took into account irrelevant matters or simply reached a perverse conclusion on evidence before it.
On disposal, however, this was ultimately a matter of discretion for the Employment Tribunal and it would be inappropriate for the Employment Appeal Tribunal – on the basis of submissions from one party – to usurp the Employment Tribunal’s function by substituting its own decision. Even on the evidence as to the Claimant’s means, it was possible that the Employment Tribunal would still consider it appropriate to make a nominal award of costs in this case. In the circumstances, the appropriate order on disposal was to direct that the matter be remitted to the same Employment Tribunal to determine the Respondent’s application for costs (if still pursued) in the light of the evidence as to the Claimant’s means and ability to pay.
Eady QC J
[2014] UKEAT 0147 – 14 – 0909
Bailii
Employment Tribunal (Constitution and Rules of Procedure) Regulations 2004
England and Wales
Employment
Updated: 22 December 2021; Ref: scu.537755