Pump Court Costs Reports Updated June 2012 v2

CHAMBERS OF OBA NSUGBE QC
Pump Court Costs Reports

Editor: Gary Morton, Barrister Pump Court Chambers Compiled by: Heather Platt, Barrister Pump Court Chambers
LONDON
WINCHESTER
SWINDON
Costs Reports
PUMP COURT CHAMBERS
PUMP COURT CHAMBERS

CHAMBERS OF OBA NSUGBE QC Index
HIGHVOGUE LIMITED AND MR N MORRIS V. MISS T K DAVIES ................................................................................... 7 UKEAT/0093/07/RN ................................................................................................................................................. 7 8 OCTOBER 2007 ......................................................................................................................................................... 7 EMPLOYMENT TRIBUNALS - COSTS - WASTED COSTS - INADEQUATE WITNESS STATEMENTS, NON-DISCLOSURE OF RELEVANT DOCUMENTS AND REFUSAL TO DESIST FROM REPETITIVE, UNNECESSARILY LENGTHY AND IRRELEVANT CROSS-EXAMINATION - RULE 48........................ 7 MITCHELLS SOLICITORS V. FUNKWERK INFORMATION TECHNOLOGIES YORK LIMITED ............................................... 8 UKEAT/0541/07/MAA .............................................................................................................................................. 8 8 APRIL 2008 .............................................................................................................................................................. 8 EMPLOYMENT TRIBUNALS - COSTS - CLAIMANTS DISCRIMINATION CLAIM FAILED - RESPONDENT SOUGHT COSTS FROM CLAIMANT OR WASTED COSTS FROM HER SOLICITOR - EMPLOYMENT TRIBUNAL AWARDED WASTED COSTS - RULE 48. .............................................. 8 RATCLIFFE DUCE AND GAMMER V.(1) MRS L BINNS T/A PARC FERME (2) MR N MCDONALD....................................... 9 UKEAT/0100/08/CEA ................................................................................................................................................ 9 23 APRIL 2008 ............................................................................................................................................................ 9 EMPLOYMENT TRIBUNALS - COSTS - CLAIMANTS UNFAIR DISMISSAL CLAIM FAILED - RESPONDENT SOUGHT COSTS FROM CLAIMANT'S SOLICITORS - EMPLOYMENT TRIBUNAL AWARDED WASTED COSTS - RULES 40 & 48....................................................................... 9 GILL V. HUMANWARE EUROPE LIMITED ...................................................................................................................11 [2010] EWCA CIV 799 & [2010] ICR 1343 ....................................................................................................................11 3 FEBRUARY 2010 .......................................................................................................................................................11 EMPLOYMENT TRIBUNALS - CLAIMANT APPEAL ON ERROR OF LAW AND BIAS - ALLEGES PRIVATE CONVERSATION BETWEEN EMPLOYMENT JUDGE AND RESPONDENT'S COUNSEL - APPEAL SUCCEEDS AND CASE REMITTED TO A FRESH EMPLOYMENT TRIBUNAL - EAT WASTED COSTS AGAINST RESPONDENT'S COUNSEL - RULE 34C EAT RULES 1993.............................................................................................11 HCA INTERNATIONAL LIMITED V. MRS J L MAY-BHEEMUL.........................................................................................13 UKEAT/0477/10/ZT .................................................................................................................................................13 23 MARCH 2011 ........................................................................................................................................................13 EMPLOYMENT TRIBUNALS - COSTS - AT A PHR THE REGIONAL EMPLOYMENT JUDGE REFUSED TO STRIKE OUT OR ORDER A DEPOSIT CLAIMANT CLAIMS DISMISSED AFTER A TWELVE DAY HEARING - RESPONDENT COSTS APPLICATION - NO COSTS AWARDED - RESPONDENT APPEALED - RULE 40.....................................................................................................................................................13 MISS T MIRIKWE V. WILSON & CO SOLICITORS & OTHERS.........................................................................................15 UKEAT/0025/11/RN ................................................................................................................................................15 11 MAY 2011 ............................................................................................................................................................15 Pump Court Costs Reports
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PUMP COURT CHAMBERS

EMPLOYMENT TRIBUNALS - COSTS - CLAIMANT DID NOT ATTEND COSTS HEARING - CONDUCT OF PROCEEDINGS WAS "OUTRAGEOUS" EMPLOYMENT TRIBUNAL FOUND CLAIMANT'S CONDUCT UNREASONABLE - COSTS TO BE ASSESSED ON AN INDEMNITY BASIS IN THE COUNTY COURT - RULES 40-41. .................................................................................................................................................15 WILSON SOLICITORS V. (1) CRAIG & SYBIL JOHNSON (2) BTSTU LIMITED (IN LIQUIDATION) (3) BTS GROUP LIMITED (4) ALEXANDER MCCALLUM ..........................................................................................................................................17 UKEAT/0515/10/DA & [2011] ICR DIGEST D21 ............................................................................................................17 20 MAY 2011 ............................................................................................................................................................17 EMPLOYMENT TRIBUNALS - COSTS - WASTED COSTS - EMPLOYMENT JUDGE MADE WASTED COSTS ORDER BECAUSE OF ABORTIVE CMD RULE 48. ...................................................................................................................................................................17 MR P JACKSON V. CAMBRIDGESHIRE COUNTY COUNCIL & OTHERS ...........................................................................19 UKEAT/0402/09/JOJ ................................................................................................................................................19 8 JUNE 2011 ..............................................................................................................................................................19 EMPLOYMENT TRIBUNALS - COSTS - WASTED COSTS - EMPLOYMENT TRIBUNAL MADE WASTED COSTS ORDER - REPRESENTATIVE WAS NOT ACTING IN PURSUIT OF PROFIT - RULE 48(4). ......................................................................................................................19 ARROWSMITH V. NOTTINGHAM TRENT UNIVERSITY ................................................................................................21 [2011] EWCA CIV 797 & [2012] ICR 159 ......................................................................................................................21 10 JUNE 2011 ............................................................................................................................................................21 EMPLOYMENT TRIBUNALS - COSTS - CLAIMANT TOLD UNTRUTHS - ACTING UNREASONABLY - CONTRIBUTION TO RESPONDENT'S COSTS RELEVANCE OF CLAIMANT'S MEANS TO THE COSTS ORDER - RULES 40-41. .................................................................................21 SHIELDS AUTOMOTIVE LIMITED V. MR RONALD GREIG .............................................................................................23 UKEATS/0024/10/BI ................................................................................................................................................23 15 JULY 2011.............................................................................................................................................................23 EMPLOYMENT TRIBUNALS - EXPENSES/COSTS - CLAIMANT ACTING UNREASONABLY - EMPLOYMENT TRIBUNAL ORDERED A CONTRIBUTION TO RESPONDENT'S COSTS - CLAIMANT MISREPRESENTED HIS REGULAR OUTGOINGS AND CAPITAL - EAT DECIDED TO DISREGARD MEANS INCOME, OUTGOINGS AND CAPITAL SENT FOR ASSESSMENT TO THE AUDITOR OF THE SHERIFF COURT - RULES 40-41. ..........................23 GODFREY MORGAN SOLICITORS LIMITED V. COBALT SYSTEMS & ANOTHER ..............................................................25 UKEAT/0608/10 & [2012] ICR 305 .............................................................................................................................25 31 AUGUST 2011........................................................................................................................................................25 EMPLOYMENT TRIBUNALS - COSTS - WASTED COSTS - SOLICITOR'S DELAY IN WITHDRAWING CLAIM - EMPLOYMENT TRIBUNAL MADE WASTED COSTS ORDER -RULE 48. ....................................................................................................................................25 MR H BOUHENICHE V. SECRETARY OF STATE FOR WORK AND PENSIONS ..................................................................27 UKEATPA/0559/11/SM ............................................................................................................................................27 12 OCTOBER 2011 ......................................................................................................................................................27 EMPLOYMENT TRIBUNALS - COSTS - CLAIMANT'S CLAIMS PARTLY SUCCESSFUL - RESPONDENT COST APPLICATION - CLAIMANT GUILTY OF UNREASONABLE CONDUCT - ORDER FOR 2,000 COSTS - RULES 40-41. ...................................................................................27 Pump Court Costs Reports
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PUMP COURT CHAMBERS

BARNSLEY METROPOLITAN BOROUGH COUNCIL V. YERRAKALVA .............................................................................28 [2011] EWCA CIV 1255 & [2012] IRLR 78.....................................................................................................................28 3 NOVEMBER 2011 .....................................................................................................................................................28 EMPLOYMENT TRIBUNALS - COSTS - CLAIMANT WITHDREW CLAIM AFTER ADJOURNED PHR - WHETHER CLAIMANT SHOULD PAY RESPONDENT'S COSTS ON THE GROUND THAT SHE LIED AT THE PHR - RULE 40. ...........................................................................28 MRS H PUROHIT V. HOSPIRA UK LTD LIMITED ..........................................................................................................30 UKEAT/0296/11/ZT & 0297/11/ZT............................................................................................................................30 9 NOVEMBER 2011 .....................................................................................................................................................30 EMPLOYMENT TRIBUNALS - STRIKING OUT - COSTS - CLAIMANT MADE A PREMATURE APPLICATION - CLAIMANT ACTED UNREASONABLY AND HER HARASSMENT CLAIM WAS MISCONCEIVED - CLAIMANT ORDERED TO PAY 2,000 COSTS - RULE 40. ...........................................30 MISS J WHITBREAD V. LANCASHIRE TEACHING HOSPITALS NHS FOUNDATION TRUST ...............................................31 UKEATPA/0231/11/LA & 0233/11/LA .......................................................................................................................31 23 NOVEMBER 2011 ...................................................................................................................................................31 EMPLOYMENT TRIBUNALS - COSTS - CLAIMANT MADE AN APPLICATION FOR A REVIEW OF EMPLOYMENT TRIBUNAL JUDGMENT RESPONDENT ISSUED A COSTS WARNING - EMPLOYMENT TRIBUNAL FOUND REVIEW APPLICATION WAS MISCONCEIVED - ABILITY TO PAY TAKEN INTO ACCOUNT - CLAIMANT ORDERED TO PAY 4,429, HALF OF RESPONDENT'S COSTS - RULES 40-41. ...................................31 DR C OSONNAYA V. QUEEN MARY UNIVERSITY OF LONDON .....................................................................................33 UKEAT/0225/11/SM ................................................................................................................................................33 25 NOVEMBER 2011 ...................................................................................................................................................33 EMPLOYMENT TRIBUNALS - COSTS - CLAIMANT DELAYED APPLYING FOR POSTPONEMENT OF PHR - EMPLOYMENT TRIBUNAL FOUND CLAIMANT'S CONDUCT UNREASONABLE - TOKEN COSTS OF 500 WERE AWARDED - RULES 40-41. ..................................................33 MRS C E GROWCOTT V. GLAZE AUTO PARTS LIMITED ...............................................................................................35 UKEAT/0419/11/SM ................................................................................................................................................35 6 FEBRUARY 2012 .......................................................................................................................................................35 EMPLOYMENT TRIBUNALS - COSTS - RESPONDENT EMAILED COSTS WARNING TO CLAIMANT - COSTS AWARDED FROM DATE OF EMAIL - RULE 38. ..........................................................................................................................................................................35 C V. M LIMITED ........................................................................................................................................................36 UKEAT/0549/10/LA .................................................................................................................................................36 22 FEBRUARY 2012 .....................................................................................................................................................36 EAT - COSTS - CLAIMANT'S APPEAL AGAINST STRIKE-OUT AND COSTS ORDERS - STRIKE-OUT JUSTIFIED AS CLAIM MISCONCEIVED EMPLOYMENT TRIBUNAL JUDGE ENTITLED TO AWARD LEGAL COSTS - CLAIMANT FAILED TO ATTEND EAT FULL HEARING - EMPLOYER AWARDED LIMITED COSTS OF EAT FULL HEARING - RULE 34A(1) EAT RULES 1993. ....................................................................36 MR D ROGERS V. DOROTHY BARLEY SCHOOL ...........................................................................................................37 UKEAT/0013/12/LA .................................................................................................................................................37 14 MARCH 2012 ........................................................................................................................................................37 Pump Court Costs Reports
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PUMP COURT CHAMBERS

EMPLOYMENT TRIBUNAL NO JURISDICTION TO HEAR CLAIMANT'S CLAIM - CLAIMANT APPEALS TO EAT - EAT FINDS APPEAL WAS MISCONCEIVED - RULE 34A(1) EAT RULES 1993. ...............................................................................................................37 PEAT & OTHERS V. BIRMINGHAM CITY COUNCIL ......................................................................................................38 UKEAT/0503/11/CEA ...............................................................................................................................................38 10 APRIL 2012 ...........................................................................................................................................................38 EMPLOYMENT TRIBUNALS - COSTS - AWARDED ON TWO BASES - FIRSTLY THE CLAIMANTS ACTED UNREASONABLY IN PURSUING THEIR CASE AFTER THE RESPONDENTS COSTS WARNING LETTER - SECONDLY POST-TERMINATION OF EMPLOYMENT EVENTS WERE NOT RELEVANT AND THOSE ASSERTIONS WERE MISCONCEIVED - RULE 40. ............................................................................................................38 MRS L S ANDORFUL V. LONDON BOROUGH OF HAMMERSMITH & FULHAM..............................................................40 UKEAT/0410/11/SM ................................................................................................................................................40 11 APRIL 2012 ...........................................................................................................................................................40 EMPLOYMENT TRIBUNALS - COSTS - PRE-HEARING REVIEW - EMPLOYMENT JUDGE ENTITLED TO STRIKE-OUT - 10,000 COSTS AWARD CLAIMANT'S MEANS ONLY PARTIALLY CONSIDERED - RULES 40-41. ..........................................................................................40 MISS H E JACKSON V. WALSALL METROPOLITAN BOROUGH COUNCIL .......................................................................42 UKEAT/1247/10/JOJ & 1430/10/JOJ .........................................................................................................................42 11 APRIL 2012 ...........................................................................................................................................................42 EMPLOYMENT TRIBUNALS - COSTS - CLAIMANT'S CLAIMS DISMISSED AS MISCONCEIVED AND UNREASONABLE - 10,000 COSTS AWARD RULE 14 OF THE 2001 RULES. .........................................................................................................................................42 AQ LIMITED V. MR J A HOLDEN ................................................................................................................................43 UKEAT/0021/12/CEA ...............................................................................................................................................43 16 APRIL 2012 ...........................................................................................................................................................43 EMPLOYMENT TRIBUNALS - COSTS - EMPLOYMENT TRIBUNAL REFUSED EMPLOYER'S COSTS APPLICATION - RULES 40-41. .....................43 TURNING POINT SCOTLAND V. (1) MRS M PERRY (2) MRS K HAMILTON ....................................................................45 UKEATS/0049/11/B1 ...............................................................................................................................................45 18 APRIL 2012 ...........................................................................................................................................................45 EMPLOYMENT TRIBUNALS - COSTS - EMPLOYMENT JUDGE REFUSED EMPLOYER'S COSTS APPLICATION - RULES 25, 38, 40-421. .............45 MS Y DOYLE V. NORTH WEST LONDON HOSPITALS NHS TRUST .................................................................................47 UKEAT/0271/11/RN ................................................................................................................................................47 20 APRIL 2012 ...........................................................................................................................................................47 EMPLOYMENT TRIBUNALS - COSTS - CLAIMANT TO PAY RESPONDENTS COSTS - EMPLOYMENT TRIBUNAL FAILED TO CONSIDER ABILITY TO PAY - RULES 40-41. ...........................................................................................................................................................47 MR K BAKER V. TOTE BOOKMAKERS LIMITED T/A TOTESPORT ..................................................................................49 UKEAT/0538/11/ZT .................................................................................................................................................49 16 MAY 2012 ............................................................................................................................................................49 Pump Court Costs Reports
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PUMP COURT CHAMBERS

EMPLOYMENT TRIBUNALS - COSTS - ONE OF THE CLAIMANT'S CLAIMS SUCCEEDED THE REST WERE DISMISSED - APPLICATION FOR 75% OF EMPLOYER'S LEGAL COSTS WAS SUCCESSFUL - RULES 40-41. ..................................................................................................49

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Employment Appeal Tribunal
Highvogue Limited and Mr N Morris v. Miss T K Davies
UKEAT/0093/07/RN 8 October 2007 Beatson J, Mr C Edwards, Miss SM Wilson CBE
Employment tribunals - Costs - wasted costs - inadequate witness statements, non-disclosure of relevant documents and refusal to desist from repetitive, unnecessarily lengthy and irrelevant cross-examination - Rule 48.
The wasted costs order was made in favour of Miss Davies the claimant in the employment tribunal against Alan Roberts & Company a firm of solicitors who were Highgrove's solicitors. The claimant's successful claims of sex discrimination, unfair dismissal and unlawful deduction of pay were heard over five days. Subsequently the claimant made a costs application. Documents were served and the employment tribunal heard oral submissions on 24 April 2006. It decided that the respondent's defence was not a completely misconceived defence but contentions and lines of defence were put forward which had no reasonable prospect of success. The claimant's character and conduct had been attacked and the statutory defence, with no supporting evidence, had been put forward very late in the day. The employment tribunal found that the solicitor was responsible and not the respondent (paragraph 4). The EAT considered Ridehalgh and Medcalf. The employment tribunal had directed itself in accordance with the three stage test in Ridehalgh, i.e. (i) whether the legal representative has acted improperly, unreasonably or negligently, (ii) whether his conduct has caused the other side to incur an identifiable sum of wasted costs, (iii) whether it is just that an order for wasted costs should be made. The employment tribunal found that under stage (i) the respondent's solicitor's conduct was not improper but it was unreasonable (paragraph 15). Under stage (ii) his conduct had caused the other side wasted costs (paragraph 17). Under stage (iii) the claimant's costs were increased by 35% because of the respondent solicitor's unreasonable conduct (paragraph 19). The EAT concluded by dismissing the respondent's appeal. The following cost cases are referred to in the judgment of Beatson J: Ridehalgh v. Horsefield & Another [1994] Ch 205, CA. Medcalf v. Mardell [2002] UKHL 27. Comment: This case confirms that the civil courts wasted costs jurisdiction applies in the employment tribunals.
Gary Morton, Barrister Pump Court Chambers, 24 March 2012.

7
PCCR 8 October 2007
PUMP COURT CHAMBERS

Mitchells Solicitors v. Funkwerk Information Technologies York Limited
UKEAT/0541/07/MAA 8 April 2008 Burke J, Mr P Smith, Mr S Yeboah
Employment tribunals - Costs - Claimants discrimination claim failed - Respondent sought costs from claimant or wasted costs from her solicitor - Employment tribunal awarded wasted costs - Rule 48.
The claimant's sex discrimination and unfair dismissal claims were heard over five days in October/November 2006. Her claims failed. The respondent sought costs from the claimant and wasted costs from her solicitor for pursuing a hopeless case ab initio after the third day when the hopelessness was manifest. On 3 July 2007 the employment tribunal dismissed the costs application against the claimant and ordered her solicitors to pay 3,325 in wasted costs. This consisted of the respondent's solicitor's and counsel's costs for three days including the costs hearing (paragraphs 1-3). The EAT found that the employment tribunal were not referred to the guidance in Ridehalgh and Medcalf or even to the summary in Harvey (case summary). The EAT decided that the employment tribunal had erred in principle in not applying that guidance and in (i) failing to consider whether the pursuing of a hopeless case was not only very negligent but amounted to an abuse of the court, (ii) failing to consider whether the solicitor between the third and fourth days made any assessment of the merits, and if so what it was and how he reached it, (iii) failing to consider whether the solicitor's failure had caused the costs of the fourth and fifth days, i.e. whether, if advised, the claimant would have withdrawn. The EAT allowed the appeal. The parties did not seek remission. The wasted costs application was dismissed. The following cost cases are referred to in the judgment of Burke J: Ridehalgh v. Horsefield & Another [1994] 3 All ER 848, CA. Medcalf v. Mardell [2002] 3 WLR 172, UKHL. Persuad v. Persuad [2003] EWCA Civ 394. Highvogue Ltd v. Morris (8 October 2007) UKEAT/0093/07/RN. Comment: In wasted cost applications employment tribunals need to go through the three stages set out in Ridehalgh, i.e. (i) whether the legal representative has acted improperly, unreasonably or negligently, (ii) whether his conduct has caused the other side to incur an identifiable sum of wasted costs, (iii) whether it is just that an order for wasted costs should be made. Gary Morton, Barrister Pump Court Chambers, 24 March 2012.
8
PCCR 8 April 2008
PUMP COURT CHAMBERS

Ratcliffe Duce and Gammer v.(1) Mrs L Binns t/a Parc Ferme (2) Mr N McDonald
UKEAT/0100/08/CEA 23 April 2008 Elias J
Employment tribunals - Costs - Claimants unfair dismissal claim failed - Respondent sought costs from claimant's solicitors Employment tribunal awarded wasted costs - Rules 40 & 48.
The claimant alleged that he had been employed from 1 September 2005 to 16 November 2006. The respondent's ET3 initially accepted that the claimant had been an independent contractor between September 2005 and December 2005 and an employee thereafter. Later the respondent retracted this pleading and denied that the claimant had ever been their employee (paragraphs 2-3). The employment tribunal found that the claimant did not have twelve months service to be able to claim unfair dismissal and dismissed his claim. The employment tribunal gave his solicitors notice asking why a wasted costs order should not be made against them under rule 40(3) (paragraph 5). The claimant's solicitor gave a detailed response and the employment judge expressly applied McPherson, i.e. a rule 40 case (paragraph 6). She decided that the "pursuance of the case after June 2007 was unreasonable since the case was obviously misconceived at that date" and went on to award costs from a particular date when she thought that the solicitors ought to have appreciated that the case had no prospect of success (paragraph 7). The fundamental appeal point advanced by the claimant's solicitors was that the employment judge purported to make an order under rule 40(3) whereas a wasted costs order is made under rule 48. The EAT decided that this approach was wholly misconceived (paragraphs 8-10). The EAT noted that rule 48(3) is mirrored by the definition in section 51 of the Supreme Court Act 1981 therefore "the authorities applicable to wasted costs in the civil law generally are equally applicable here." Ridehalgh, Medcalf and Mitchells were identified as the relevant authorities (paragraphs 11-12). The EAT gave guidance on rule 48 and said that "The Tribunal should give the representative a reasonable opportunity to make oral or written submissions as to why the order should not be made (rule 48(7)). But whilst the other party may apply for an order - although the issue can exceptionally be raised by the Tribunal at its own initiative - it does not thereafter comment on the submissions, and it will never be appropriate for the receiving party to cross examine the representative against whom the order is made (paragraph 14). The Ridehalgh threestage test was endorsed (paragraph 18). The appeal succeeded. Had the right principles been applied there would have been no basis for the wasted costs order which was dismissed (paragraph 25). The following cost cases are referred to in the judgment of Elias J:
9
PCCR 23 April 2008
PUMP COURT CHAMBERS

McPherson v. BNP Paribas [2004] ICR 1398. Ridehalgh v. Horsefield & Another [1994] 3 Ch 205, CA. Medcalf v. Mardell [2002] UK HL 27, [2003] 1 AC 120, HL. Mitchells Solicitors v. Funkwerk Information Technologies York Limited UKEAT/0541/07/MAA. Comment:
This confirms the decision in Mitchells that when they are dealing with wasted cost applications employment tribunals need to go through the three stages set out in Ridehalgh.

10
PCCR 23 April 2008
PUMP COURT CHAMBERS

Court of Appeal
Gill v. Humanware Europe Limited
[2010] EWCA Civ 799 & [2010] ICR 1343
3 February 2010
Lord Neuberger MR, Longmore, Smith LJJ
Employment tribunals - Claimant appeal on error of law and bias - alleges private conversation between employment judge and respondent's counsel - appeal succeeds and case remitted to a fresh employment tribunal - EAT wasted costs against respondent's counsel - Rule 34C EAT Rules 1993.
The unrepresented claimant complained of unfair constructive dismissal. At the outset of the hearing the employment tribunal refused to let him give evidence about earlier grievances which had been investigated and upheld by the respondent. After a two day hearing in January 2008 his claim was dismissed. The claimant appealed over errors of law and bias. He claimed that he had been excluded from a discussion between the employment judge and Miss Twine the respondent's counsel about case management and that on another occasion they had a private conversation in the employment judge's room. The EAT allowed the appeal as apparent bias had been established and the exclusion of the earlier grievances had been an error of law. The case was remitted to a differently constituted tribunal (27 February 2009, UKEAT/312/08 & [2009] ICR Part 7, Recent Points). The claimant applied for a 1,400 costs order against the respondent's solicitors and counsel. The application dealt with written submissions despite Miss Twine's request dated 15 May 2009 that she wished to be represented by counsel at a hearing if the EAT was minded to make a costs order. On 3 June 2009 the same EAT, McMullen J, Ms J P L Drake and Mr D G Smith, made a 750 wasted costs order against Miss Twine who they found had acted improperly in the two incidents involving the employment judge. Miss Twine appealed to the Court of Appeal on seven grounds (i) the claimant had pursued a costs order solely against the respondent's solicitor, (ii) the EAT had wrongly found that Miss Twine had set out her full written submissions when she had wanted to be represented by counsel, (iii) the EAT had wrongly refused to let Miss Twine make oral submissions or be represented by counsel, (iv) the EAT had failed to conduct the application fairly or in accordance with the guidance in Ridehalgh, (v) the costs application was disproportionate as the costs of the application far outweighed the money sought, (vi) the EAT had erred in its analysis of the evidence, and (vii) if the EAT had properly analysed the evidence and whether any costs had flowed from the alleged misconduct then they would have dismissed the application. Smith LJ observed that "It is clear from rule 34C itself that a wasted costs order can be made only if the improper or unreasonable or negligent conduct complained of results in wasted costs. Ridehalgh v. Horsefield and other cases stress the need for causation to be proved. The test, in my judgment, should be the usual test of causation. In this case, the test is whether, but for the actions complained of, the employee would have avoided some
11
PCCR 3 February 2010 CA
PUMP COURT CHAMBERS
expense and, if so, how much" (paragraph 34). He went on to note that "however much Miss Twine's conduct might be deprecated, it had not affected the course of proceedings at all" (paragraph 34). The appeal was allowed (paragraph 38). The following cost cases are referred to in the judgment of Smith LJ: Ridehalgh v. Horsefield & Another [1994] 3 Ch 205, [1994] 3 WLR 462, [1994] All ER 848, CA. In re Freudiana Holdings Ltd [1995] CA Transcript No 1778. Medcalf v. Mardell [2002] UK HL 27, [2003] 1 AC 120, [2002] 3 WLR 172, [2002] 3 All ER 721, HL (E). Hedrich v. Standard Bank London Ltd [2008] EWCA Civ 905.
Comment: A wasted costs application needs to identify what costs have been incurred because of the improper or unreasonable or negligent conduct complained of, i.e. a "but for" test.

12
PCCR 3 February 2010 CA
PUMP COURT CHAMBERS
PUMP COURT CHAMBERS

HCA International Limited v. Mrs J L May-Bheemul
UKEAT/0477/10/ZT
23 March 2011
Cox J, Ms N Sutcliffe, Ms P Tatlow
Employment tribunals - Costs - At a PHR the regional employment judge refused to strike out or order a deposit - Claimant claims dismissed after a twelve day hearing - Respondent costs application - no costs awarded - Respondent appealed - Rule 40.
The claimant claimed detriment on the ground of protected disclosures, unfair constructive dismissal and that the reason, or principal reason, for her dismissal was that she had made a protected disclosure. After a twelve day hearing all her claims were dismissed. On the second day of the hearing on 25 September 2008 the claimant broke down and the hearing was adjourned. On 26 September 2008 the respondent's solicitors wrote a "Without prejudice save as to costs" letter to the claimant's solicitors in which they said that their estimated costs were 14,500 by the end of the adjourned hearing and that the respondent would apply for its full costs if the claimant's claims were dismissed in their entirety. 2,500 was offered in full and final settlement (paragraph 11). On 10 November 2008 the claimant's solicitors replied rejecting the offer and replied in some detail to the respondent's assertion that the claimant's claims had no reasonable prospects of success. They observed that the matters raised were essentially questions of fact which the employment tribunal would need to determine after hearing all the evidence (paragraph 12). There was a PHR with judgment and reasons dated 27 August 2009. The regional employment judge (London Central) refused to strike out the claims or, alternatively, order a deposit (paragraphs 14 and 52-55). At the conclusion of the full hearing the employment tribunal set out their conclusions by reference to an agreed list of issues on liability which was annexed to their judgment. It was a lengthy list reflecting the many factual issues to be determined in addition to questions of legal liability (paragraph 16). The employment tribunal found that the claimant was honest and genuine in her beliefs and allegations even though the allegations of fraud and financial irregularities were found not to be objectively reasonable. The claim of unfair constructive dismissal failed as there was no fundamental breach of contract (paragraphs 18-23). The costs application was made on the basis of written submissions only and the respondent relied on six factors. The claimant's solicitor responded in detail and dealt with each of the six factors (paragraphs 24-25).

13
PCCR 23 March 2011
PUMP COURT CHAMBERS

The EAT examined the respondent's (in the employment tribunal) authorities and said "Thus, a lie on its own will not necessarily be sufficient to found an award of costs. It will always be necessary for the Tribunal to examine the context and to look at the nature, gravity and effect of the lie in determining the unreasonableness of the alleged conduct" (paragraph 39). "As this last case makes abundantly clear, no point of principle of general application is established in any of the cases being relied on by Mr Beyzade. In our judgment the Employment Tribunal's reasoning in the present case, at paragraph 12 of their judgment, is unimpeachable. Where, in some cases, a central allegation is found to be a lie, that may support an application for costs, but it does not mean that, on every occasion that a Claimant fails to establish a central plank of the claim, an award of costs must follow" (paragraph 40). The EAT observed that "In this case there were no findings at all that the claimant's central allegations, or indeed any allegations made by her, were lies, or that she had deliberately persisted in pursuing complaints that she knew to be untrue" (paragraph 41). The EAT accepted the claimant's representative's proposition that "the objective unreasonableness of genuine belief, and a consequent failure on a Claimant's part to establish the necessary legal elements of the claim, does not equate to unreasonable conduct of the proceedings" (paragraph 42). The EAT decided that there was no error of law in the employment tribunal's reasoning, the perversity challenge failed and the appeal was dismissed. The following cost cases are referred to in the judgment of Cox J: McPherson v. BNP Paribas [2004] ICR 1398. Daleside Nursing Home Ltd v. Mathews [2009] UKEAT/0519/08/RN and Dunedin UKEAT/0477/10/ZT. Canmore Housing Association Ltd v. Mrs Margaret Donaldson [2009] UKEATS/0014/09/0807BI. Nicolson Highlandwear Ltd v. Gordon Nicolson [2010] IRLR 859, EAT. Annapoornamma Yerrakalva v. Barnsley Metropolitan Borough Council and the Governing Body of Dearne Carrfield Primary School UKEAT/0231/10/RN. Comment: The EAT's approach in paragraphs 39-40 was endorsed by Rimmer J in Arrowsmith v. Nottingham Trent University [2012] ICR 159 at paragraphs 32-33.

14
PCCR 23 March 2011

Miss T Mirikwe v. Wilson & Co Solicitors & Others
UKEAT/0025/11/RN
11 May 2011
Mr Recorder Luba QC
Employment tribunals - Costs - Claimant did not attend costs hearing - conduct of proceedings was "outrageous" - Employment tribunal found claimant's conduct unreasonable - Costs to be assessed on an indemnity basis in the county court - Rules 40-41.
The claimant is a law graduate. She was dismissed after five months employment with the respondent. She made claims of race and sex discrimination and breach of contract. The hearing took six days. The claims were dismissed by the employment tribunal and the respondent's counter-claim of 65 succeeded. The respondent applied for costs at the end of the liability hearing and the employment tribunal said that it would deal with the application after lunch. The claimant was represented by her father, a trainee solicitor, but in the afternoon he returned to the tribunal hearing room but the claimant, although in the court building, stayed away from the costs hearing. The employment tribunal ordered the claimant to pay the respondent's costs to be assessed on an indemnity basis in the county court. The single ground of appeal before the full hearing was that "The Tribunal erred in treating her non-attendance punitively. In essence, they punished her for her non-attendance by not taking her means into account" (paragraph 6). Firstly, the claimant's counsel said that "the Employment Tribunal gave improper weight in exercising its discretion on costs, and particularly whether to take into account the means of the paying party, to the fact that Ms Mirikwe had not returned to the Tribunal hearing room on 8 February 2010. Secondly, or alternatively, that it had taken that matter into account in a punitive sense; that is to say as a punishment for non-attendance" (paragraph 7). The parties only found one appellate judgment considering the ambit of rule 41(2), i.e. Jilley v. Birmingham and Solihull Mental Health NHS Trust, and agreed that paragraph 53 was the most relevant paragraph in the present case: "The first question is whether to take ability to pay into account. The Tribunal has no absolute duty to do so. As we have seen, if he does not do so, the County Court may do so at a later stage. In many cases it will be desirable to take means into account before making an order; ability to pay may affect the exercise of an overall discretion, and this course will encourage finality and may avoid lengthy enforcement proceedings. But there may be cases where for good reason ability to pay should not be taken into account: for example, if the paying party has not attended or has given unsatisfactory evidence about means." The employment tribunal had decided not to take the claimant's means into account because of her failure to attend the costs hearing and her unreasonableness in conducting the litigation.
15
PCCR 11 May 2011
PUMP COURT CHAMBERS

The EAT agreed with the employment tribunal that the bringing or conducting of proceedings by the claimant had been unreasonable and that the non-attendance of a party at a costs hearing was a relevant factor in the exercise of an employment tribunal's discretion (paragraph 30). The claimant's appeal was dismissed. The following cost cases are referred to in the judgment of Mr Recorder Luba QC:
Jilley v. Birmingham and Solihull Mental Health NHS Trust (21 November 2007) UKEAT/0584/06/DA & 0155/07/DA. McPherson v. BNP Paribas [2004] EWCA Civ 569 & [2004] ICR 1398. Comment: The EAT declined to issue general guidance on rule 41(2) and said that any guidance in very general terms as might properly be given was to be found in Jilley (paragraph 40). The detailed assessment on an indemnity rather than a standard basis was not a ground of appeal at the full hearing.

16
PCCR 11 May 2011
PUMP COURT CHAMBERS
Wilson Solicitors v. (1) Craig & Sybil Johnson (2) BTSTU Limited (In Liquidation) (3) BTS Group Limited (4) Alexander McCallum
UKEAT/0515/10/DA & [2011] ICR Digest D21
20 May 2011 Underhill J (President), Sir A Graham, Mr P Smith

Employment tribunals - Costs - Wasted costs - Employment judge made wasted costs order because of abortive CMD - Rule 48.
Wilsons represented the Johnsons who brought claims against two associated companies the second and third respondents. The fourth respondent was said to be the ultimate owner of the second and third respondents. Wilsons completed an ET1 on behalf of both claimants. The ET1 claimed unfair dismissal, sex and disability discrimination, redundancy payments and a variety of claims for sums due. Details were said to be given in the separate particulars of claim which were very poorly pleaded. Mrs Johnson's employment was terminated on 9 February 2009 under the terms of a compromise agreement. Mr Johnson was summarily dismissed on 7 May 2009. He claimed that around that time his employment TUPE transferred from BTSTU (which was in liquidation) to BTS. On 9 November 2009, three days before a two hour telephone CMD listed for 12 November 2009, Wilsons emailed to the respondents and the employment tribunal proposed amended particulars of claim. These made it clear that an unfair dismissal claim was being pursued on behalf of Mrs Johnson even though she had signed a compromise agreement and her effective date of termination was three months before the date of the ET1. At the CMD Ms Cox the employment judge found that the amended particulars of claim were still substantially incomplete and unclear. Mr Wilson was unable during the CMD to provide any further details or clarity. The employment judge made a detailed order that the claimants should file with the employment tribunal their proposed amended particulars of claim particularising the legal bases of their claims (paragraphs 6-7). Following the CMD the solicitors for BTSTU and BTS wrote respectively on 20 and 23 November 2009 to the employment tribunal under rules 38-47 and sought wasted costs against the claimants. On 27 November 2009 Wilsons withdrew Mrs Johnson's claims and sought permission to amend the particulars of claim in accordance with a new draft (paragraphs 8-9). At a further CMD on 19 March 2010 the employment judge ordered (i) Wilsons to pay BTSTU 403 and BTS/Alexander McCallum 660 in wasted costs in relation to the 12 November 2009 CMD and (ii) Wilsons to repay the Johnsons their costs of the CMD (paragraph 12). Wilsons appealed to the EAT. Underhill J observed "Wasted costs are always, as the cases emphasise, a serious matter, involving as they do a finding of negligence (at least) on the part of the representative. We have observed a tendency among some judges to deal with them without full reasoning. That is to be deprecated. In every case
17
PCCR 20 May 2011
PUMP COURT CHAMBERS

where a wasted costs order is made the judge should remind himself or herself of the terms of rule 48 and of the relevant principles appearing from the authorities; and it is good practice to do so explicitly in the reasons given" (paragraph 28).
Underhill J upheld the wasted costs order on the basis that the fault was Wilsons and not the Johnsons. He observed that "The Judge's criticism - see paras. 12 and 13 of the reasons - was of the defects in the pleadings and of Mr Wilson's inability at the CMD to rectify those defects by clarifying the nature of his clients' case. No doubt in principle such failures could still be the fault of the client; but more typically they are the fault of the lawyer and result from failure to put the necessary work or thought into the preparation of the case. A judge will normally be well-placed to recognise failings of the latter kind (cf. the observations of the Court of Appeal in Ridehalgh at p.270C-E). The defects in the pleadings - both in their original and their amended form - were not of a kind which typically flow from failures by the client: they were failures of analysis and accurate formulation. Mr Wilson, as we have said, raised no question about his responsibility for the defects: rather, he denied that they existed. In those circumstances the Judge was in our view entitled to treat them as resulting from his negligence" (paragraph 30).
The following cost cases are referred to in the judgment of Underhill J: Ridehalgh v. Horsefield & Another [1994] 3 Ch 205, CA. Medcalf v. Mardell [2003] 1 AC 120, HL. Mitchells Solicitors v. Funkwerk Information Technologies York Limited (8 April 2008) UKEAT/0541/07/MAA. Ratcliffe Duce and Gammer v. (1) Mrs L Binns t/a Parc Ferme (2) Mr N McDonald (23 April 2008) UKEAT/0100/08/CEA.
Comment: This case is a salutary reminder to lawyers that a poorly pleaded ET1 may lead inexorably to a wasted costs order. Gary Morton, Barrister Pump Court Chambers, 26 March 2012.

18
PCCR 20 May 2011
PUMP COURT CHAMBERS

Mr P Jackson v. Cambridgeshire County Council & Others
UKEAT/0402/09/JOJ 8 June 2011 Underhill J (President), Lady Drake CBE, Mr M Worthington
Employment tribunals - Costs - Wasted costs - Employment tribunal made wasted costs order - Representative was not acting in pursuit of profit - Rule 48(4).
The claimant was a teacher at Bottisham Village College in Cambridgeshire. He was suspended in December 2005 following an allegation that he had struck a pupil. he resigned in February 2007 and issued proceedings in April 2007. He died on 9 June 2007. Following her sons death his mother Betty Lloyd continued his unfair constructive dismissal, sex and disability discrimination claims. The claimant's representative was Paul Jackson who was Andrew Lloyd's cousin. He was a solicitor with a practising certificate who was neither an employment specialist nor a litigator. He represented the claimant in the internal proceedings and in employment tribunal. The employment tribunal hearing started on 9 January 2009. After seven days the hearing was adjourned partheard to 21 September 2009. Mr Jackson posted material on a Facebook page called "Justice for Mr Lloyd" and the respondent objected contending that this was contempt of court. There was a CMD on 7 April 2009. Mr Jackson undertook to make no more Facebook entries and the employment judge decided not to refer the matter to the Attorney-General. The hearing was set down for eight days from 10-20 June 2009 (paragraph 5). Shortly before the resumed hearing Mr Jackson wrote to the regional employment judge complaining about employment judge Cole. The complaint was supported by transcripts of recordings from the tribunal room when the parties were absent and possibly from the retiring room as well (paragraphs 6-7). On 10 June 2009 Mr Jackson applied to the employment tribunal to recuse itself. The respondent said that the application and Mr Jackson's associated conduct was vexatious and an abuse of process and said that if the application was refused then they would apply to strike out the claim. On 12 June 2009 the recusal application was refused. The strike out application was heard on 12 & 15 June and on 16 June 2009 the claim was struck out (paragraphs 8-9). On 16 June 2009 the respondent applied for costs against Mrs Lloyd and/or wasted costs against Mr Jackson. Judgment and reasons were given on 22 June 2009. The employment tribunal ordered Mr Jackson to pay 16,037.04 in wasted costs. The three elements were (i) 1,335 (50%) of the costs of replying to unnecessarily prolix and to a considerable extent irrelevant DDA questionnaires, (ii) 3,251.50 for the respondent's costs of attending the CMD on 7 April 2009 to deal with Mr Jackson's unreasonable conduct over the Facebook entries, and (iii), 11,450.54 for the respondent solicitor's refreshers for four days in June 2009 on the basis that these costs had been wasted in dealing with a wholly misconceived application and the consequent strike-out (paragraphs 10-11).
19
PCCR 8 June 2011
PUMP COURT CHAMBERS
The EAT found that Mr Jackson had not been "acting in pursuit of profit" and it followed that the employment tribunal was not entitled to make a wasted costs order against him and allowed his appeal (paragraph 27).
Underhill J observed that with wasted costs applications there could be no general rule as to whether the application should be heard at the end of the hearing or adjourned to another date. At the end of the hearing might be appropriate if the representative has been notified in advance about the application with sufficient detail to enable him/her to prepare or the issue will be one which is sufficiently straightforward for a professional to be able to deal with without substantial prior notice. Alternatively, an adjournment might be appropriate if the issues are not straightforward or perhaps simply because time is too short "bad decisions are sometimes made at the end of a long day" (paragraph 28). The following cost cases are referred to in the judgment of Underhill J: Ridehalgh v. Horsefield & Another [1994] 3 Ch 205, CA. Medcalf v. Mardell [2003] 1 AC 120, HL. Mitchells Solicitors v. Funkwerk Information Technologies York Limited (8 April 2008) UKEAT/0541/07/MAA. Ratcliffe Duce and Gammer v. (1) Mrs L Binns t/a Parc Ferme (2) Mr N McDonald (23 April 2008) UKEAT/0100/08/CEA. Comment: At paragraph 28 Underhill J referred to a professional dealing with a wasted costs application. Should a non-legal representative or litigant in person be granted the option of an adjourned hearing so that they can seek legal advice? Gary Morton, Barrister Pump Court Chambers, 26 March 2012.

20
PCCR 8 June 2011
PUMP COURT CHAMBERS
PUMP COURT CHAMBERS

Court of Appeal
Arrowsmith v. Nottingham Trent University
[2011] EWCA Civ 797 & [2012] ICR 159
10 June 2011
Laws, Richards, Rimer LJJ
Employment tribunals - Costs - Claimant told untruths - Acting unreasonably - Contribution to respondent's costs - Relevance of claimant's means to the costs order - Rules 40-41.
The claimant worked for the respondent as an agency worker. She claimed that she had been guaranteed a job as a business development officer but was not appointed because before her interview for the job the respondent found out that she was pregnant. The employment tribunal preferred the evidence of the respondent's witnesses on this crucial point and dismissed the claimant's sex discrimination claim. The respondent applied for its costs on the grounds that the claimant had acted unreasonably in bringing proceedings based on a series of untruths. The employment tribunal took the claimant's means into account, she was unemployed and her statutory maternity pay had ceased, and ordered her to pay 3,000 towards the respondent's costs. The EAT (the President Underhill J and McMullen J) dismissed her appeals against the costs order but Sedley LJ (paragraphs 25 & 27) gave her permission to appeal to the Court of Appeal because the employment tribunal had made no finding that she had lied to it and therefore he thought it extremely doubtful whether there was unreasonable conduct under rule 40(3). He was also concerned as to how the employment tribunal had arrived at the figure of 3,000 when the claimant was unemployed and temporarily without maternity benefit. The Court of Appeal decided that when the employment tribunal found that the claimant's assertions were untrue that meant that it considered that she had lied. Rimer LJ said that unless the employment tribunal was making such a finding it was inconceivable that it could have found her conduct unreasonable under the 2004 rules (paragraph 35). Rimer J said that under rule 41(2) the employment tribunal was not obliged to have regard to the claimant's means but having done so it was not confined to ordering an amount that she could pay (paragraph 37). The following cost cases are referred to in the judgment of Rimer LJ: Daleside Nursing Home Ltd v. Mathew UKEAT/519/08 (unreported) 18 February 2009. HCA International Ltd v. May-Bheemul UKEAT/477/10 (unreported) 23 March 2011. Comment: The EAT's approach in paragraphs 39-40 of HCA International Limited v. Mrs J L May-Bheemul UKEAT/0477/10/ZT was endorsed by Rimmer J at paragraphs 32-33. Paragraph 40 of HCA included Daleside Nursing Home Ltd v. Mathews [2009] UKEAT/0519/08/RN.
21
PCCR 10 June 2011 CA
PUMP COURT CHAMBERS

The leading authority on ability to pay was not referred to by the Court of Appeal. Jilley v. Birmingham and Solihull Mental Health NHS Trust (21 November 2007) UKEAT/0584/06/DA & 0155/07/DA, at paragraphs 44-55, sets out the approach that an employment tribunal should follow when applying rule 41(2). If an employment tribunal decides to take into account ability to pay then it should set out its findings about ability to pay and say what impact this has had on its decision on whether to award costs, or on the amount of costs, and explain why. If it decides not to award costs it should also say why.

22
PCCR 10 June 2011 CA
PUMP COURT CHAMBERS

Shields Automotive Limited v. Mr Ronald Greig
UKEATS/0024/10/BI 15 July 2011 Smith J, Mr P Pagliari, Mr R Thomson
Employment tribunals - Expenses/costs - Claimant acting unreasonably - Employment tribunal ordered a contribution to respondent's costs - Claimant misrepresented his regular outgoings and capital - EAT decided to disregard means - Income, outgoings and capital sent for assessment to the Auditor of the Sheriff Court - Rules 40-41.
The claimant, who had less than one years service, brought a claim of unfair dismissal against his former employer. At a CMD the respondent indicated that it would be seeking costs if the claimant (who had resigned as general manager in circumstances where the respondent had reasonable grounds to dismiss him for misconduct) persisted in his unfair dismissal, whistleblowing, racial discrimination, sexual harassment, deduction from wages and bonus and pension contributions claims. After the CMD the respondent wrote to the claimant and said that they would be seeking a full award of costs because his claims were vexatious. The employment tribunal found that the bringing and conducting of the proceedings was unreasonable and that the claimant had lied under oath. The employment tribunal examined the claimant's income and outgoings and noted that following his divorce the net proceeds from the sale of the matrimonial home would be 135,000. The respondent's legal costs were 21,460.20 excluding VAT. The employment tribunal found that the claimant had "very little, if any, free income on a monthly basis at present. His ability to pay costs is therefore not good" (paragraph 22) and ordered the claimant to pay a sum restricted to 4,000. The respondent appealed to the EAT on two grounds. Firstly, the failure to have regard to the claimant's capital and secondly that new evidence was available. The EAT heard the new evidence and found that the claimant was not a credible or reliable witness. He had not given his wife 3,000 in cash and nor was he incurring all the items of expenditure on the list that he had given to the employment tribunal. The EAT decided that the claimant's evidence about his means was inherently unsatisfactory and misleading and could not be taken into account when deciding on his ability to pay and that the claimant's capital assets were a highly relevant aspect of his and anyone's means. The EAT rejected the claimant's solicitor's submission that capital is not relevant if it is not in immediately accessible form and said that "a person's capital will often be represented by property or other investments which are not as accessible as cash but that is not to say that it should be ignored" (paragraph 47). The employment tribunal was directed to remit all the respondent's costs to the Auditor of the Sheriff Court. The following cost cases are referred to in the judgment of Smith J: Jilley v. Birmingham and Solihull Mental Health NHS Trust (21 November 2007) UKEAT/0584/06/DA & 0155/07/DA.
23
PCCR 15 July 2011 EAT
PUMP COURT CHAMBERS

McPherson v. BNP Paribas [2004] IRLR 558, UKEATS/0024/10/BI.
Comment: This case is authority for the proposition that when an employment tribunal takes a claimant's means into account then a party's means includes his or her capital.

24
PCCR 15 July 2011 EAT
PUMP COURT CHAMBERS

Godfrey Morgan Solicitors Limited v. Cobalt Systems & Another
UKEAT/0608/10 & [2012] ICR 305 31 August 2011 Underhill J (President)
Employment tribunals - Costs - Wasted costs - Solicitor's delay in withdrawing claim - Employment tribunal made wasted costs order -Rule 48.
The claimant entered into a contingency fee agreement with Godfrey Morgan solicitors where he had to pay barrister's fees if the case went to an employment tribunal hearing. On 19 August 2008 his solicitors presented an ET1. There was a PHR on 22 December 2008 and on 13 January 2009 the claimant's sex discrimination claim was withdrawn. On 14 January 2009 the employment tribunal issued standard directions. In May 2009 the unfair dismissal claim was listed for 17-18 August 2009. At the time the case was listed for hearing his solicitor told the claimant that he would have to pay for a barrister. His response was that he was unable to pay for a barrister and could not continue his claim. His solicitors told the respondent's solicitors that his claim was being withdrawn in a letter dated 13 August 2009. On 14 August 2009 the respondent applied for its wasted costs against the claimant or his solicitor. The costs hearing took place on 12 January 2010. The employment judge ordered the claimant's solicitor to pay the respondent's wasted costs of 7,313 as "the writing was on the wall by May 2009 at the latest. The employment judge was referred to McPherson, a rule 40 authority, but no authorities on wasted costs were cited by either party. The claimant's solicitor appealed against the wasted costs judgment under three heads (i) that evidence had not been admitted, (ii) allowing the respondent to cross-examine and make submissions, and (iii) lack of reference to the case law. The EAT decided on (i) that the claimant's solicitor had tried to introduce a file containing various letters and attendance notes that he wanted to take the claimant through. He had not supplied copies to the parties in advance of the hearing and Underhill J decided that it was within the employment judge's discretion not to admit these documents so late in the day. On (ii) Underhill referred to Ridehalgh, Medcalf, Mitchells Solicitors, Ratcliffe Duce and Gammer and Wilson Solicitors to support the proposition that the guidance in Ridehalgh should be followed in rule 48 cases (paragraph 24). He said that he could not see why as a matter of principle there should be any general rule as appeared to be propounded by Elias J in Ratcliffe Duce and Gammer at paragraph 14 who said "whilst the other party may apply for an order - although the issue can exceptionally be raised by the tribunal at its own initiative it does not thereafter comment on the submissions, and it will never be appropriate for the receiving party to cross-examine the representative against whom the order is being considered". Underhill J observed that "in a
25
PCCR 31 August 2011
PUMP COURT CHAMBERS

case like the present, where the representative is no longer acting for the party, where privilege has already been waived, where an oral hearing has been fixed and where the party and the representative have given different accounts of the facts which may be central to the issue before the tribunal, cross-examination would seem a fair and proportionate way of helping it get to the right result" (paragraph 25-26).
On (iii) Underhill J said that the failure of both solicitors to refer the employment judge to the authorities on wasted costs did not reflect well on either of them (paragraph 29). The appeal was dismissed. The following cost cases are referred to in the judgment of Underhill J: Myers v. Elman [1940] AC 282, [1939] 4 All ER 484, HL (E). Ridehalgh v. Horsefield & Another [1994] 3 Ch 205, CA. Medcalf v. Mardell [2003] 1 AC 120, HL. Persuad v. Persuad [2003] EWCA Civ 394, [2003] PNLR 519, CA. McPherson v. BNP Paribas [2004] EWCA Civ 569 & [2004] ICR 1398. Mitchells Solicitors v. Funkwerk Information Technologies York Limited (8 April 2008) UKEAT/0541/07/MAA. Ratcliffe Duce and Gammer v. (1) Mrs L Binns t/a Parc Ferme (2) Mr N McDonald (23 April 2008) UKEAT/0100/08/CEA. Gill v. Humanware Europe Limited [2010] EWCA Civ 799 & [2010] ICR 1343. Wilson Solicitors v. (1) Craig & Sybil Johnson (2) BTSTU Limited (In Liquidation) (3) BTS Group Limited (4) Alexander McCallum (20 May 2011) UKEAT/0515/10/DA & [2011] ICR Digest D21. Mr P Jackson v. Cambridgeshire County Council & Others (8 June 2011) UKEAT/0402/09/JOJ. Comment: Underhill J concluded this appeal with "Further observations" (paragraphs 35). This is valuable guidance and should read, absorbed and applied by employment law practitioners.

26
PCCR 31 August 2011

Mr H Bouheniche v. Secretary of State for Work and Pensions
UKEATPA/0559/11/SM
12 October 2011
McMullen J
Employment tribunals - Costs - claimant's claims partly successful - respondent cost application - claimant guilty of unreasonable conduct - Order for 2,000 costs - Rules 40-41.
In a judgment dated 10 May 2010 the claimant succeeded in his claim of unlawful discrimination on racial grounds and was awarded 7,053.94 and interest of 105.81. He was also awarded damages of 90.34 gross of tax for breach of contract. A claim of pre-employment race discrimination had been struck out. On 10 March 2011 the employment judge ordered the claimant to pay 2,000 towards the respondent's costs. The employment judge made a costs order because the claim of racial discrimination in employment could have been withdrawn at or very shortly after the PHR in August 2009. The complaint against an individual respondent could also have been withdrawn at that time and if the claimant had given his representative the relevant documents and information then the full hearing could have proceeded in May 2010 without the need for a PHR earlier in that month. The employment judge found that "The claimant was guilty of unreasonable conduct, it was of considerable gravity and it did put the respondent to substantial additional expense" (paragraph 9). The costs award was kept down to 3,000 but in the light of the claimant's ability to pay it was reduced to 2,000 (paragraphs 10-11). The claimant's appeal was rejected on the EAT sift. At the rule 3(10) hearing the claimant made written submissions. McMullen J found that the central basis upon which the employment judge had ordered costs was that the claimant had asserted that he had lodged a statutory grievance in accordance with section 32 of the Employment Act 2002 and did not disclose to his representative that he had not done this. He could not have brought a claim for race discrimination occurring during the course of his employment unless he had presented a grievance which he never did. Had this matter been made clear at the outset then costs would not have been incurred and it was unreasonable of him to have continued in this way (paragraphs 7-8). The appeal was dismissed. No cost cases are referred to in the judgment of McMullen J. Comment: A claimant can succeed on one or more of his/her claims yet still be liable for costs because s/he has brought or conducted the proceedings unreasonably. Gary Morton, Barrister Pump Court Chambers, 22 March 2012.
27
PCCR 12 October 2011
PUMP COURT CHAMBERS
PUMP COURT CHAMBERS

Court of Appeal
Barnsley Metropolitan Borough Council v. Yerrakalva
[2011] EWCA Civ 1255 & [2012] IRLR 78
3 November 2011
Mummery LJ, Patten LJ, Sir Henry Brooke
Employment tribunals - Costs - Claimant withdrew claim after adjourned PHR - Whether claimant should pay respondent's costs on the ground that she lied at the PHR - Rule 40.
The claimant, a primary school teacher, brought race, sex and disability discrimination claims and a victimisation claim in August 2005. In November 2006 she withdrew the sex discrimination claim. In August 2007 after three days a PHR was adjourned because of the illness of the employment judge. In February 2008 the claimant withdrew her disability discrimination claim. An employment judge found that the claimant had lied about (i) the state of her health, (ii) personal injury claims, and (iii) about her financial means. The employment judge regarded the respondent's costs claim of 92,500 as a "highly exorbitant figure" given that the case was never heard but went on to order under rule 40 that the claimant should pay the respondent's full costs up to the date of the costs hearing. The employment judge relied on the judgment in Macpherson v. BNP Paribas (London Branch) that the "exercise of the tribunal's discretion is not dependent upon the existence of any causal nexus between the conduct relied upon and the costs incurred." In a judgment dated 8 December 2010 (UKEAT/231/10 & [2011] ICR Digest D6) the President, Underhill J, allowed an appeal by the claimant. He noted that the employment judge had not concluded that (i) the claim had no merit from the outset, (ii) the claimant was solely to blame for the claim's lack of progress, (iii) or that the withdrawal of the claim was recognition that her claim was misconceived or otherwise in itself gave grounds for an award of costs. Underhill J decided that lying was unreasonable conduct under rule 40(3) but the "nature, gravity and effect" of that conduct needed to be taken into account: Macpherson v. BNP Paribas (London Branch) [2004] ICR 1398 at 1408. The purpose of an award of costs under rule 40 was compensatory and not punitive: Lodwick v. Southwark London Borough Council [2004] ICR 884 at 892B. Underhill J said that it was hard to see how the lies told at the PHR caused the respondents any loss entitling them to compensation. The respondent appealed. Mummery LJ commented that "The actual words of rule 40 are clear enough to be applied without the need to add layers of interpretation, which may themselves be open to different interpretations. Unfortunately, the leading judgment in Macpherson delivered by me has created some confusion in the employment tribunals, EAT and in this court" (paragraph 40). He went on to say that "The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had" (paragraph 41). Mummery LJ
28
PCCR 3 November 2011 CA
PUMP COURT CHAMBERS

went on to restore the employment tribunal's costs order but varied it from 100% to 50% of the respondent's costs reasonably and necessarily incurred in relation to the PHR and the subsequent costs hearing in the employment tribunal (paragraphs 53-54). The following cost case is referred to in the judgment of Mummery LJ: Macpherson v. BNP Paribas (London Branch) [2004] IRLR 558, CA. Comment:
Mummery LJ noted that the claimant was the owner of two houses in reasonable condition with a total value of 280,000 and that she had the means to meet a costs order (paragraph 27). The claimant's ability to pay does not appear to have been an issue in these proceedings and Shields Automotive Limited v. Mr Ronald Greig (15 July 2011) UKEATS/0024/10/BI is not cited but Mummery LJ's acceptance that the claimant's capital was relevant to her ability to pay is implicit approval of Shields Automotive. Gary Morton, Barrister Pump Court Chambers, 20 March 2012.

29
PCCR 3 November 2011 CA
PUMP COURT CHAMBERS

Mrs H Purohit v. Hospira UK Ltd Limited
UKEAT/0296/11/ZT & 0297/11/ZT 9 November 2011 McMullen J
Employment tribunals - Striking out - Costs - Claimant made a premature application - Claimant acted unreasonably and her harassment claim was misconceived - Claimant ordered to pay 2,000 costs - Rule 40.
The claimant claimed that the respondent had discriminated against her on the grounds of her Indian race. An employment judge decided that the claimant had jumped the gun in presenting a claim to the employment tribunal before the respondent had completed its investigation into the origins of an offensive text that had been sent to the claimant. The author of the offensive text was found to be an outsider who had played a tasteless prank on one of the claimant's work colleagues by misusing his mobile phone to text the claimant. The employment judge found that the claimant's claim that the respondent had failed to carry out a timely investigation was unreasonable and that her claim that she was further harassed because the investigation did not occur within three days was truly misconceived. The claimant was ordered to pay 2,000 in costs. The EAT decided not to interfere with the exercise of the employment judge's discretion to award costs under rule 40 (paragraph 12). The EAT noted that in another case (UKEAT/0229/11) involving the same respondent and the claimant's husband his claims were dismissed and he was ordered to pay 10,000 costs (paragraph 3).
The following cost cases are referred to in the judgment of McMullen J: Arrowsmith v. Nottingham Trent University [2011] EWCA Civ 797. Barnsley Metropolitan Borough Council v. Yerrakalva [2011] EWCA Civ 1255. Dean & Dean (a Firm) & Others v. Sofia Dionissiou-Moussaoui [2011] EWCA Civ 1332. Comment: This is a salutary reminder to claimants that they should give respondents the opportunity to conduct and conclude investigations within the three month time limit for presenting claims to the employment tribunal.

30
PCCR 9 November 2011
PUMP COURT CHAMBERS

Miss J Whitbread v. Lancashire Teaching Hospitals NHS Foundation Trust
UKEATPA/0231/11/LA & 0233/11/LA
23 November 2011
McMullen J
Employment tribunals - Costs - Claimant made an application for a review of employment tribunal judgment - Respondent issued a costs warning - Employment tribunal found review application was misconceived - Ability to pay taken into account - Claimant ordered to pay 4,429, half of respondent's costs - Rules 40-41.
In the employment tribunal the claimant lost her claim. She applied for a review of the judgment. The employment judge who had dealt with her claim decided under rule 35 to hold a review. He did not take the view that the application contained no reasonable prospect of success. The subsequent review hearing took place over two days. The review application did not succeed except for the amending of a minor slip in the judgment. The respondent activated its letter before the review which threatened costs if the claimant lost. The respondent claimed that the claimant had acted unreasonably or the bringing of the review had been misconceived. The claimant opposed the costs application on the grounds that under rule 35 the employment judge would have refused the review if he had considered that there were no grounds for the decision to be revoked under rule 34(3) or if there was no reasonable prospect of the decision being varied or revoked. The employment tribunal considered the application and considered that "... a costs order is appropriate on the basis that the claimant's review application was misconceived. We may and indeed have taken into account the means of the claimant, who tells us that she has an income that is exceeded by her expenditure but she has a house that she has lived in for 25 years which is an asset. We do however note it is lived in by her and her two children so we hope whatever order is made will not mean that the respondent will take any precipitate action that would prejudice that. But taking into account those means we take the view it is appropriate the claimant pays the contribution of one half of the respondent's costs of the review in the sum of 4,429" (paragraph 32). The appeal against the order for costs was allowed to proceed to a full hearing. McMullen J said that "It seems to me that there is no direct consideration here of the word "misconceived". It is not impossible for a case to be sent to review and yet be misconceived. But it does require, in my judgment, a careful explanation for that, given that Judge Creed, who heard this case over many days, ordered the review which, by definition, means that it cannot be said it had no reasonable prospect of success" (paragraph 35). McMullen J continued "The second issue relates to the Claimant's unreasonableness in bringing the application. Again, more is required if it is to be said that it is unreasonable to bring the application, it having passed the test of rule 35(3). Mr Ritchie {ELAAS representative} says with some force that this Judgment required more careful attention, given that it was Judge Sherratt's Tribunal making the order for costs, and not Judge Creed and his Tribunal. In those circumstances, it seems to me that the tribunal may have erred in making the award of costs on the material which was there, and so this case will go to a hearing" (paragraph 36).
31
PUMP COURT CHAMBERS

The following cost cases are referred to in the judgment of McMullen J: Arrowsmith v. Nottingham Trent University [2011] EWCA Civ 797. Barnsley Metropolitan Borough Council v. Yerrakalva [2011] EWCA Civ 1255. Dean & Dean (a Firm) & Others v. Sofia Dionissiou-Moussaoui [2011] EWCA Civ 1332. Comment:
The leading authority on ability to pay was not considered in this rule 3(10) hearing. Jilley v. Birmingham and Solihull Mental Health NHS Trust (21 November 2007) UKEAT/0584/06/DA & 0155/07/DA, at paragraphs 44-55, sets out the approach that an employment tribunal should follow when applying rule 41(2). If an employment tribunal decides to take into account ability to pay then it should set out its findings about ability to pay and say what impact this has had on its decision on whether to award costs, or on the amount of costs, and explain why. If it decides not to award costs it should also say why.

32

Dr C Osonnaya v. Queen Mary University of London
UKEAT/0225/11/SM
25 November 2011
McMullen J
Employment tribunals - Costs - Claimant delayed applying for postponement of PHR - Employment tribunal found claimant's conduct unreasonable - token costs of 500 were awarded - Rules 40-41.
A PHR was due to take place on 12-15 January 2010. By December 2010 the claimant knew of certain matters which might affect the PHR. The claimant applied for an adjournment at the commencement of the PHR. It was postponed by the employment judge who decided that the claimant had acted unreasonably within rule 40. In March 2010 there was a costs hearing. The respondent's application was for a token sum of 500 costs for the postponed PHR which was awarded (paragraph 5). The employment judge did not consider the claimant's ability to pay (paragraph 11). There were two live issues before the full hearing. Firstly, that the employment judge made findings of fact without hearing evidence on matters in dispute between the parties which amounted to a serious procedural irregularity and secondly that the employment judge failed to taken into account the means of the claimant or state brief reasons for not doing so. Clark J at the rule 3(10) hearing invited the employment judge to give further reasons to clarify the basis of her findings in the light of the new grounds of appeal which she did (paragraph 7). McMullen J noted that "The use of the word "unreasonable" requires a high threshold to be passed, when a costs order is made. The Judge may consider the ability to pay of the paying party, but that is a discretionary matter and she is not obliged to do so" (paragraph 19). McMullen J went to say that "HHJ David Richardson in Jilley v. Birmingham and Solihull Mental Health NHS Trust indicated the exceptional nature of costs and what must be considered. A number of cases have been drawn to my attention in addition to those. They are Mirikwe v. Wilson & Co Solicitors & Others and the three recent Judgments of the Court of Appeal {below}. The Employment Tribunal is required, if the matter is raised, to consider ability to pay. If the matter is not raised, there is no authority imposing a legal duty on the Judge to raise the question, even with a litigant in person. I do not consider that there is" (paragraph 20). McMullen J was satisfied that ability to pay had not been raised by the claimant and decided that there was no duty on the employment judge to inquire into the claimant's ability to pay (paragraph 28) and dismissed the claimant's appeal. The following cost cases are referred to in the judgment of McMullen J: Jilley v. Birmingham and Solihull Mental Health NHS Trust (21 November 2007) UKEAT/0584/06/DA & 0155/07/DA.
33
PUMP COURT CHAMBERS
PUMP COURT CHAMBERS

Mirikwe v. Wilson & Co Solicitors & Others (11 May 2011) UKEAT/0025/11/RN. Arrowsmith v. Nottingham Trent University [2011] EWCA Civ 797. Barnsley Metropolitan Borough Council v. Yerrakalva [2011] EWCA Civ 1255. Dean & Dean (a Firm) & Others v. Sofia Dionissiou-Moussaoui [2011] EWCA Civ 1332. Comment:
Jilley v. Birmingham and Solihull Mental Health NHS Trust at paragraph 44 states that "Rule 41(2) gives to the Tribunal a discretion whether to take into account the paying party's ability to pay. If a Tribunal decides not to do so, it should say why. If it decides to take into account ability to pay, it should set out its findings about ability to pay, say what impact this has had on its decision whether to award costs or on the amount of costs, and explain why." Either way the employment tribunal has to consider ability to pay and must give reasons for its decision.

34

Mrs C E Growcott v. Glaze Auto Parts Limited
UKEAT/0419/11/SM
6 February 2012
Burke J, Mr B Beynon, Mr S Yeboah
Employment tribunals - Costs - Respondent emailed costs warning to claimant - Costs awarded from date of email - Rule 38.
The claimant was dismissed for misconduct. Her unfair dismissal claim was dismissed by the employment tribunal as was her rule 3(10) appeal to the EAT. The respondent sought a costs order from the date of the respondent's costs email to the claimant warning her of the issues in unfair dismissal proceedings including the Burchell principles. At a costs hearing on 7 December 2010 the employment tribunal rejected the respondent's submission that the claim was misconceived but accepted the respondent's alternative case that the claimant had been unreasonable in pursuing her claim after their email dated 14 June 2010. She was ordered to pay 1,972.50 in costs to the respondent (paragraph 6). The claimant appealed on costs to the EAT but failed to appear at the full hearing. The EAT found that the employment tribunal was entitled to find that the claimant had acted unreasonably in continuing her claim after her receipt of the email and dismissed her appeal (paragraph 19). The following cost case is referred to in the judgment of Burke J: Mr Roy Lake v. Arco Grating (UK) Limited (3 November 2004) UKEAT/0511/04/RN. Comment: The rule 41(2) ability to pay was not raised as a ground of appeal.

35
PCCR 6 February 2012
PUMP COURT CHAMBERS

C v. M Limited
UKEAT/0549/10/LA 22 February 2012 Clark J
EAT - Costs - Claimant's appeal against strike-out and costs orders - Strike-out justified as claim misconceived - Employment tribunal judge entitled to award legal costs - Claimant failed to attend EAT full hearing - Employer awarded limited costs of EAT full hearing Rule 34A(1) EAT Rules 1993.
The claimant pursued a hopeless and unreasonable claim. At the pre-hearing review dealing with the employer's costs application the claimant behaved outrageously and the employment judge understandably and correctly asked her to leave the hearing room. Under those circumstances the employment judge was perfectly entitled to make a costs order against the claimant (paragraph 16). The employer's costs of responding to the claimant's appeal to the EAT were 13,234.42 plus VAT. Clark J accepted that the claimant's conduct of the appeal proceedings had been unreasonable and noted that she was of limited means subject to her ownership of a mortgage free house. He limited the award of costs to 2,785 inclusive of VAT for the attendance of counsel and the employer's solicitor at the full hearing on 22 February 2012 (paragraph 18). The claimant had previously been warned by Clark J that if she persisted unnecessarily with a hearing rather than having the appeal dealt with on paper then she might be liable to pay the costs of that further hearing (paragraphs 3-5). No cost cases are referred to in the judgment of Clark J: Comment: Clark J noted that the claimant's appeal had fallen apart following the rule 3(10) inter-partes hearing on 4 May 2011 yet decided to exercise his residual discretion to order costs for the hearing on 22 February 2012 and not from an earlier date, i.e. a date after 4 May 2011 (paragraphs 1 & 18). Gary Morton, Barrister Pump Court Chambers, 21 May 2012.

36
PCCR 22 February 2012
PUMP COURT CHAMBERS

Mr D Rogers v. Dorothy Barley School
UKEAT/0013/12/LA 14 March 2012 Recorder Luba QC
Employment tribunal no jurisdiction to hear claimant's claim - Claimant appeals to EAT - EAT finds appeal was misconceived - Rule 34A(1) EAT Rules 1993.
The claimant was a school caretaker living in a caretaker's house who received a water rates bill which was normally paid by the school. An employment judge decided that the employment tribunal did not have jurisdiction to hear the claimant's claim because (a) there was no deduction from his pay as the school paid the bill and (b) there was no breach of contract claim as he was still employed at the school (paragraph 1). The EAT decided that the employment tribunal did not have jurisdiction to hear his claim and neither did the EAT have jurisdiction to hear his appeal (paragraph 7). The school sought an order for costs on the grounds that the appeal was misconceived. The EAT agreed that the appeal was misconceived and that it had a discretion in that respect (paragraph 8). However, the EAT went on to conclude that it would not be right to order costs because:(i) the respondent had known for many months that the claimant was acting in person but had not written or intimated to him that if he proceeded the respondent would make a costs application, (ii) no recent notice of the application for costs had been given at all, (iii) the respondent had not given any notice to the claimant of the extent of the costs it would seek so he had not had the opportunity to assess or contest the amount proposed by the respondent, and (iv) it was conceded by the school that water bills were presented to the claimant when they should not have been (paragraph 9). No cost cases are referred to in the judgment of Recorder Luba QC. Comment: Should the reasons in (i)-(iii) above also apply to a costs application in the employment tribunal? Gary Morton, Barrister Pump Court Chambers, 2 May 2012.
37
PCCR 14 March 2012
PUMP COURT CHAMBERS

Peat & Others v. Birmingham City Council
UKEAT/0503/11/CEA 10 April 2012 Supperstone J, Baroness Drake, Dr B V Fitzgerald
Employment tribunals - Costs - Awarded on two bases - Firstly the claimants acted unreasonably in pursuing their case after the respondents costs warning letter - Secondly post-termination of employment events were not relevant and those assertions were misconceived - Rule 40.
The respondent sought to implement a 1997 single status agreement which was resisted by the claimants and their trade unions. As no collective agreement was reached the respondent dismissed the claimants and offered them re-engagement on new terms and conditions of employment. Ten test case claimants out of around 300 claimed that they had been unfairly dismissed by the respondent who had engaged in extensive collective consultation with the trade unions. The respondent stated that the reason for the dismissals was some other substantial reason and that they were fair. The issue before the employment tribunal dealing with liability was whether there had been a need for the respondent to engage in individual consultation. Before the hearing of the unfair dismissal claims in December 2010 the respondent had written a costs warning letter dated 18 October 2010 to Thompsons/Nottingham the solicitors acting for the Unison claimants. On 19 October 2010 Unison replied to that letter and confirmed that the Unison claims were being pursued. However, prior to 18 October 2010 three firms of solicitors acting for other claimants had withdrawn their claims: (i) EADS solicitors withdrew the GMB and Unite/T&GWU claimants on 8 October 2010, (ii) OH Parsons withdrew the UCATT claimants on 15 October 2010, and (iii) Thompsons/Birmingham had withdrawn the Unite/Amicus claimants before the start of the hearing and there was no costs application made against them (paragraphs 4-6). The Unison unfair dismissal claims were dismissed on 15 December 2010 and on 12 January 2011 the respondents applied for costs on the basis that the claimants had acted unreasonably in arguing that posttermination events were relevant to the fairness of the dismissals under section 98(4) of the ERA 1996. On 18 April 2011 the respondent applied to amend their costs claim on the grounds that the claimants had acted unreasonably in not withdrawing from the proceedings at an earlier stage. At the start of the costs hearing on 21 April 2011 the employment tribunal allowed the amendment. The tribunal decided that the claimants represented by EADS solicitors and OH Parsons had not acted unreasonably and the respondent's costs application against them failed (paragraphs 7-10). The EAT noted that the employment tribunal had found that the costs warning letter had predicted the outcome on the central point on a reasoned basis, i.e. that individual consultation would not have made any difference to
38
PCCR 10 April 2012
PUMP COURT CHAMBERS

the outcome. The EADS solicitors and OH Parsons claimants came late to a realisation of their position but according to the employment tribunal "sanity never dawned for the Thompsons Nottingham claimants" (paragraph 21).
The EAT accepted the respondent's submission that in order to succeed on unreasonable conduct it was not necessary for the respondent to satisfy the employment tribunal that the claimants had no reasonable prospects of success (paragraph 29). The employment tribunal had decided that it could not take into account any matter post 31 March 2008 when the dismissals took place. The EAT agreed with the employment tribunal that all matters post 31 March 2008 were irrelevant to the issue of the fairness of the dismissals and that it was misconceived to advance that point (paragraph 46).
The following cost cases are referred to in the judgment of Supperstone J: Beynon & Others v. Scadden & Others [1999] IRLR 700, EAT. Scott v. Commissioners of Inland Revenue [2004] IRLR 713, CA. Lake v. Arco Grating (UK) Ltd (3 November 2004) UKEAT/0511/04/RN. NPower Yorkshire Ltd v. Daly (23 March 2005) UKEAT/0842/04/ILB. Barnsley Metropolitan Borough Council v. Yerrakalva [2012] IRLR 78, CA.
Comment: The employment tribunal found that the claimants represented by EADS solicitors and OH Parsons did not act unreasonably and the respondent's costs applications against them failed. It appears from the EAT judgment that the 18 October 2010 date of the costs warning letter is crucial as EAD solicitors and OH Parsons withdrew before that date while Thompsons/Nottingham carried on after that date. Gary Morton, Barrister Pump Court Chambers, 24 April 2012.

39
PCCR 10 April 2012
PUMP COURT CHAMBERS

Mrs L S Andorful v. London Borough of Hammersmith & Fulham
UKEAT/0410/11/SM 11 April 2012 Clark J
Employment tribunals - Costs - Pre-hearing review - Employment judge entitled to strike-out - 10,000 costs award - Claimant's means only partially considered - Rules 40-41.
At the PHR on 3 December 2010 the question was whether the claimant had no reasonable prospect of succeeding in her race discrimination claim. She had to show that Mrs Sorrell, an HR relationship manager, had deliberately fabricated a story in an email to the UK Border Agency dated 16 March 2010 that the claimant had her own visa for the express purpose of finding a reason to dismiss her when the real reason for her dismissal was that she was pregnant (paragraphs 3 & 7). The employment judge heard evidence from Mrs Sorrell. The claimant did not attend but she was represented by her husband. The employment judge described the claimant's allegation as "totally preposterous" and found that the race discrimination claim was misconceived and vexatious. The claimant's appeal against the strike-out order was rejected (paragraphs 4, 8, 15 & 18). The employment judge's discretion to award costs was triggered by his permissible finding that the claim had no reasonable prospects of success (whether or not it could be properly characterised as vexatious). The respondent's solicitor's total bill of costs was 10,710 and counsel's fees inclusive of VAT was 1,811.10. The employment judge ordered assessed costs of 10,000 (paragraphs 19-20). The employment judge noted that the claimant was still working for the respondent on 3 December 2010 but did not take into account the fact that (i) the claimant was on maternity leave at the relevant time on 79% of her normal pay, and (ii) the claimant and her husband rented rather than owned their own home (paragraphs 21-22). Clark J relied on Yerrakalva for the proposition that the employment judge had fallen into error as he had exercised his discretion to take means into account but had failed to take into account the claimant's financial position. The costs order was reduced from 10,000 to 5,000 (paragraphs 23-24). The following cost case is referred to in the judgment of Clark J: Barnsley Metropolitan Borough Council v. Yerrakalva [2012] IRLR 78, CA.
40
PCCR 11 April 2012
PUMP COURT CHAMBERS
Comment: This decision shows that the amount a claimant may be ordered to pay at a costs hearing is related to her income and/or capital (See: Yerrakalva and Shields Automotive Limited v. Mr Ronald Greig (15 July 2011) UKEATS/0024/10/BI). Gary Morton, Barrister Pump Court Chambers, 22 May 2012.

41
PCCR 11 April 2012
PUMP COURT CHAMBERS

Miss H E Jackson v. Walsall Metropolitan Borough Council
UKEAT/1247/10/JOJ & 1430/10/JOJ 11 April 2012 McMullen J
Employment tribunals - Costs - Claimant's claims dismissed as misconceived and unreasonable - 10,000 costs award - Rule 14 of the 2001 rules.
The claimant was a barrister with employment law experience. Her litigation ran for 8 years. She made unfounded allegations of deceit against officers of the respondent and the employment tribunal awarded costs against her (paragraphs 3-4). After a nine day hearing in 2010 the employment tribunal dismissed the claimant's five claims and decided to award 10,000 costs under rule 14 of the 2001 rules because the claimant had pursued claims that were misconceived, she had acted unreasonably in the pursuit of those claims and this was made worse by the fact that she was a barrister experienced in employment law (paragraphs 8-9). The claimant was a locum agency worker who worked for the respondent for a little over four months in late 2001 and early 2002. Her substantive appeal against the employment tribunal's decision was dismissed as was her appeal against the order to pay 10,000 costs (paragraphs 10-18). The following cost cases are referred to in the judgment of McMullen J: Arrowsmith v. Nottingham Trent University [2011] EWCA Civ 797. Barnsley Metropolitan Borough Council v. Yerrakalva [2011] EWCA Civ 1255. Dean & Dean (a Firm) & Others v. Sofia Dionissiou-Moussaoui [2011] EWCA Civ 1332. Comment: The respondent appears to have been remarkably restrained in not applying for its full costs by way of a detailed assessment. Gary Morton, Barrister Pump Court Chambers, 1 June 2012.
42
PCCR 11 April 2012
PUMP COURT CHAMBERS

AQ Limited v. Mr J A Holden
UKEAT/0021/12/CEA 16 April 2012 Richardson J, Mr M Clancy, Mr M Worthington
Employment tribunals - Costs - Employment tribunal refused employer's costs application - Rules 40-41.
The claimant's claim of unfair constructive dismissal failed. The employment tribunal refused the employer's costs application. The employer, a systems security company, appealed on the grounds of an error of law (paragraphs 1-2). The claimant had several disputes with his employer and in May 2009 he was offered another job and resigned giving six week's notice. His new job started on 29 June 2009 (paragraphs 3-5). At a CMD in December 2009 the regional employment judge noted that the remedy for unfair dismissal would be no more than a 1,300 basic award. On 4 February 2012 the employer offered to settle the employment claim for 1,300. The claimant refused and cited Telephone Information Services v. Wilkinson [1991] IRLR 148 in support of his right to seek a judgment in his favour (paragraphs 9-10). Efforts to settle the case (including an attempt at judicial mediation) continued along with settlement negotiations over civil proceedings brought by each party against the other. A hearing was listed for 4-5 August 2011 and on 28 July 2011 the claimant said that he would settle the employment tribunal proceedings for 1,300. The employer rejected this offer (paragraphs 11-13). The employment tribunal preferred the evidence of the managing director to that of the claimant whose evidence was "in general inconsistent and not credible" (paragraphs 14-15). The employer's costs application was on the grounds that the claimant's claim was misconceived from the very beginning and that his behaviour in continuing with the claim was unreasonable. Also he was vexatious in certain matters including making derogatory references about his employer on the internet. The employment tribunal refused the application for costs finding that the claim was not originally misconceived and that the claimant had not acted unreasonably (paragraphs 16-17).

43
PCCR 16 April 2012
PUMP COURT CHAMBERS
The EAT applied the guidance in Yerrakalva (paragraphs 7-9, 41 & 49) and concluded that:- (i) an employment tribunal cannot and should not judge a litigant in person by the standards of a professional representative, (ii) the failure of the employer to apply for a PHR was a relevant consideration because if the claim had been truly misconceived or vexatious there could have been an application to strike out or for a deposit order, (iii) the claimant wanted a judgment to vindicate his position, i.e. Wilkinson, (iv) with guidance the claimant might have been well advised not to pursue his claim but it did not follow that his conduct was vexatious or unreasonable. There was no error of law and the costs appeal was dismissed (paragraphs 27-40). The following cost case is referred to in the judgment of Richardson J: Barnsley Metropolitan Borough Council v. Yerrakalva [2012] IRLR 78, CA. Comment: The EAT's conclusions in (i)-(iv) above offer useful guidance to an employer when dealing with a litigant in person. Gary Morton, Barrister Pump Court Chambers, 23 May 2012.

44
PCCR 16 April 2012
PUMP COURT CHAMBERS

Turning Point Scotland v. (1) Mrs M Perry (2) Mrs K Hamilton
UKEATS/0049/11/B1 18 April 2012 Smith J
Employment tribunals - Costs - Employment judge refused employer's costs application - Rules 25, 38, 40-421.
On 13 & 14 January 2011 Thompsons presented two ET1s. One claimant was paid 15,979 and the other 19,661 a year. Both claimants stated that their sleepover shifts were working time under the Working Time Regulations 1998 and that they had been paid less than the rate under the National Minimum Wage Act 1998. The employer responded in the ET3s that even if the claimants working hours were around 60 hours a week they were still being paid the NMW. The employer said that their working hours were about 39 hours a week. The employer sought costs on the grounds that the claimants were acting vexatiously and/or unreasonably and their claims were misconceived. There was also a time point as one of claimants had last worked for the employer on 21 January 2010 (paragraphs 4-10). On 9 March 2011 the employer's solicitor sought further information but Thompsons failed to respond to the email or the warning that if the information was not disclosed within 7 days then the employer would apply for an order. On 21 March 2011 Thompsons sought counsel's opinion. On 22 March 2011 an employment judge made an order with a deadline of 31 March 2011. On 14 April 2011 Thompsons responded to the order with some but not all of the information and on 6 May 2011 withdrew the claims (paragraphs 11-18). The employment judge decided not to award costs against the claimants because (i) the employer had not sought dismissal of their claims and therefore their cases had not been determined, (ii) as there had been no hearing the employment tribunal had not heard all the evidence, and (iii) the claimants and Thompsons had done as much checking as was reasonable for them to do prior to lodging the ET1s (paragraphs 26-35). The EAT decided that the employment judge had fallen into error for the following reasons: (i) he had conflated an employee's "case" and that of a set of "proceedings" and failed to note that they are separate concepts, (ii) he had construed the word "determine" too narrowly, (iii) he had misinterpreted rule 38(2) as it is not a provision to limit a costs application by a legally represented party, (iv) a withdrawal under rule 25(3) does not prejudice a party's right to seek costs (i.e. Verdin v. Harrods Ltd [2006] ICR 396), (v) there was nothing before him to demonstrate that the claimants had taken any steps prior to or after the presentation of the ET1s to determine whether their national minimum wage claims were soundly based as a matter of fact let alone law (i.e. South Manchester Abbeyfield Society Ltd v. Hopkins [2011] ICR 254, handed down on 30 November 2010), (vi) it was not unreasonable for Thompsons to have checked the claims before presenting them and at the very least to have
45
PCCR 18 April 2012
PUMP COURT CHAMBERS

promptly responded to any challenges to their assertions in the ET3s, particulary where a costs warning was included. The EAT concluded that the claims were misconceived, it was unreasonable to raise them and that they were conducted in an unreasonable manner. The appeal was upheld and costs were remitted to the employment tribunal to determine the amount of the award under rule 41 (paragraphs 44-56). The following cost cases are referred to in the judgment of Smith J: Marler v. Robertson [1974] ICR 72. Cartiers Superfoods Ltd v. Laws [1978] IRLR 315. Keskar v. Governors of All Saints Church of England School [1991] ICR 493. Beynon v. Scadden [1999] IRLR 700. NPower Yorkshire Ltd v. Daly (23 March 2005) UKEAT/0842/04/ILB. Barnsley Metropolitan Borough Council v. Yerrakalva [2011] EWCA Civ 1255.
Comment: Fundamentally wrong on the facts and wrong on the law. Costs awarded from the presentation of the ET1s. Ability to pay is irrelevant as the claimants' were represented by their trade union. Gary Morton, Barrister Pump Court Chambers, 23 May 2012.

46
PCCR 18 April 2012
PUMP COURT CHAMBERS

Ms Y Doyle v. North West London Hospitals NHS Trust
UKEAT/0271/11/RN 20 April 2012 Shanks J, Mr P Pagliari, Mr M Smith OBE JP

Employment tribunals - Costs - Claimant to pay respondents costs - Employment tribunal failed to consider ability to pay - Rules 4041.
After a seven day hearing the employment tribunal dismissed the claimant's claim for breach of contract and twelve complaints of race discrimination or victimisation brought against the respondent and six named individuals. The respondent told the employment tribunal that its costs were estimated at around 60,000 and the EAT was informed that the respondent had presented bills totalling some 95,000. The employment tribunal sent the whole costs of the proceedings to the county court for a detailed assessment (summary and paragraph 1). The EAT considered the applicable case law and endorsed Jilley at paragraphs 44 & 47 where Richardson J said that under rule 41(2) if an employment tribunal decides not to take the paying party's ability to pay into account then it should say why and also that it was open to an employment tribunal to take account of ability to pay by placing a cap on an award of costs even where it orders a detailed assessment (paragraphs 5-6). The respondent had successfully argued in the employment tribunal that the bringing of proceedings was both misconceived and unreasonable (paragraph 7). The EAT said that the employment tribunal had asked itself the right questions and had found, in effect, that the claimant's whole case was not brought in good faith (paragraph 12). The EAT then turned to ability to pay and said that it was common ground that the employment tribunal had made an order for costs amounting to 100,000 without giving any consideration at all to the claimant's means. The respondent argued that the claimant's counsel did not raise the issue of ability to pay but the EAT (and in particular the lay members who regularly sat in the employment tribunals) were firmly of the view that the question of means should have been raised by the employment tribunal before making a decision on the costs application (paragraphs 13-16). The EAT allowed the appeal on ability to pay and remitted the matter to the same employment tribunal with the directions that:Pump Court Costs Reports
47
PCCR 20 April 2012
PUMP COURT CHAMBERS
(a) they make reasonable enquiries into her means, and (b) they consider (in the light of those enquiries along with their findings in their judgment dated 17 November 2010 and any further submissions by the parties):- (i) whether to have regard to her ability to pay; and (if so) (ii) what is the appropriate costs order having regard to her ability to pay.
The EAT did not limit the time for considering ability to pay, i.e. if there were substantial changes either way over the years since the proceedings started then the employment tribunal could look at the whole picture (paragraph 17). The following cost cases are referred to in the judgment of Shanks J: Mrs J O Benjamin v. Interlacing Ribbon Ltd (1 November 2005) UKEAT/0363/LA & 0420/05/LA. Jilley v. Birmingham and Solihull Mental Health NHS Trust (21 November 2007) UKEAT/0584/06/DA & 0155/07/DA. Arrowsmith v. Nottingham Trent University [2011] EWCA Civ 797. Barnsley Metropolitan Borough Council v. Yerrakalva [2011] EWCA Civ 1255. Comment: In Interlacing Ribbon Richardson J noted that in contra-distinction to the position before the 2004 rules an employment tribunal may take into account the means of a paying party but is not obliged to do so, e.g. where a party is an employer with very large financial resources. The employment tribunal ought to have stated in its reasons whether it did take ability to pay into account and how it did so. As the employment tribunal had failed to give adequate reasons for its decision to award 5,000 costs the matter was remitted to the same employment tribunal (paragraphs 33-35).
Gary Morton, Barrister Pump Court Chambers, 2 May 2012.

48
PCCR 20 April 2012
PUMP COURT CHAMBERS

Mr K Baker v. Tote Bookmakers Limited t/a Totesport
UKEAT/0538/11/ZT 16 May 2012 Clark J, Mrs J M Matthias, Mrs L S Stringley
Employment tribunals - Costs - One of the claimant's claims succeeded the rest were dismissed - Application for 75% of employer's legal costs was successful - Rules 40-41.
The claimant's claims were heard by the employment tribunal between 13-21 September 2010. His claims of unfair dismissal, disability discrimination and for a protective award were dismissed. His breach of contract claim succeeded. His appeal against the liability decision was rejected under rule 3(7) of the EAT's 1993 rules and he did not apply for a rule 3(10) hearing (paragraph 1). The employer applied for 75% of its legal costs which totalled around 120,000. A costs hearing was held on 21 March 2011. Judgment was given on 15 July 2011. The employment tribunal ordered costs subject to a detailed assessment in the county court. The EAT proceeded on the basis that the claimant faced a costs bill of approximately 90,000 as the assessment had not taken place (paragraph 2). At the costs hearing the employment tribunal found that: (i) some of the claimant's allegations were untrue, some were vexatious and overall these allegations were wholly unreasonable, (ii) the claimant's evidence as to his means was wholly inadequate, (iii) it was unacceptable that parts of the claimant's evidence at the main hearing was untrue, he had behaved unreasonably in the conduct of the proceedings and it was appropriate to make an order for costs, and (iv) the 25/75% apportionment of costs was generous to the claimant (paragraphs 911). The EAT concluded that an award of 75% costs was a permissible conclusion bearing in mind what the employment tribunal had heard about his means. The appeal failed and was dismissed (paragraphs 19-20). The following cost cases are referred to in the judgment of Clark J: Marler v. Robertson [1974] ICR 72, NIRC. Lodwick v. Southwark London Borough Council [2004] ICR 884. Yerrakalva v. Barnsley Metropolitan Borough Council (8 December 2010) UKEAT/0231/10 & [2011] ICR Digest, D6. Daleside Nursing Home v. Matthew (18 February 2009) UKEAT/0519/08.
49
PCCR 16 May 2012
PUMP COURT CHAMBERS

Arrowsmith v. Nottingham Trent University [2012] ICR 159. Barnsley Metropolitan Borough Council v. Yerrakalva [2012] IRLR 78.
Comment: This case shows that a party can make a successful costs application which is apportioned to reflect the other party's unreasonableness in the bringing or conducting of the proceedings, etc. Gary Morton, Barrister Pump Court Chambers, 23 May 2012.

50
PCCR 16 May 2012
PUMP COURT CHAMBERS

Pump Court Costs Reports Updated June 2012 v2

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Pump Court Costs Reports Updated June 2012 v2

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CHAMBERS OF OBA NSUGBE QC