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STING IN THE TAIL

27th September 2016

Discrimination claims are hard to win because of their very nature that the evidence must be factual and very strong; any weakness is pounced on by the opposition and can result in a costs order against you and/or your advisors.

Claimants do not bring their cases lightly to the Tribunal. The claimant has exhausted or tried all avenues of reconciliation and bring their case to the Tribunal as a last resort. This is because they feel cornered or so anguished by what has occurred that their only resort is the Tribunal.

It is accepted that often the claimant may begin their case out of anger, frustration and just to be heard. But by the time the matter reaches the tribunal the claimant is not only distressed, miserable and even tormented by what has happed to them at work that their confidence has been shattered, their self-worth is at low ebb, they need the finality of a tribunal hearing – win or lose. To have the sword of Damocles hanging over them will prevent all but the most tenacious claimant from the tribunal and a lot of deserved claims will not see the Tribunal for fear of heavy costs. True the ability to pay will be considered by the Tribunal before ordering costs.

Whist costs are not usual in the employment tribunal watch out for the opposition being hot on your tail with section 76 and advocates be aware of Section 80 of The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (Regs). Two very nasty sections and believe you me costs are coming in a big way.

Section 76 provides for when a costs order or a preparation time order “may or shall” be made. Such an order can be made:
76.—(1) (a) a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or
(b)any claim or response had no reasonable prospect of success.
Vexatious and abusive conduct
Conduct is vexatious “if an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some other improper motive” (ET Marler Ltd – v – Robertson [1974] ICR 72).

Section 80 provides for when a wasted costs order may be made against a representative in favour of any party where:
80.—(1) (a) as a result of any improper, unreasonable or negligent act or omission on the part of the representative; or
(b)which, in the light of any such act or omission occurring after they were incurred, the Tribunal considers it unreasonable to expect the receiving party to pay.

A wasted costs order:
• May order the representative to pay the whole or part of any wasted costs of the receiving party.
• May disallow any wasted costs otherwise payable to the representative, including an order that the representative repay to their client any costs that have already been paid.
• Must state the amount to be paid, disallowed or repaid.
Unreasonable conduct. This is used to describe conduct that is designed to harass the other side (in a vexatious manner), rather than progress the case. – no such conduct took place as far as the claimant and her representative can see. In fact, the claimant was informed at all times of any request or offers made by the respondent. Instructions were taken and relayed to the respondent. I may of, on the odd occasion, expressed my opinion as indeed I did in the email regarding what my client called a derisory offer. I requested that perhaps if they came back with a better offer my client might reconsider.
Negligent conduct. Whilst this should be considered in a non- technical way, as a failure to act with the competence reasonably expected of ordinary members of the legal profession.
• The Court of Appeal also gave the following general guidance which was cited before the EAT in Mitchell Solicitors – in a Matter of Costs Order – v – Funkwerk Information Tek Ltd UKEAT/0541/07:

 The wasted costs jurisdiction should be exercised with great caution and as a last resort.
 A wasted costs order should only be made if the court or tribunal is satisfied that the conduct of the impugned representative can properly be characterised as improper, unreasonable or negligent.
 A legal representative, solicitor or counsel, should not be held to have acted improperly, unreasonably or negligently simply because they have acted for a party who pursues a hopeless case.
 A tribunal can only make a wasted costs order in such a case if it is shown that:

• the legal representative has presented a case which they consider is bound to fail; and
• in doing so, they have failed in their duty to the court and the proceedings amount to an abuse of process.

At present the Tribunals may be little reluctant to entertain these section but the opposition will push especially if the case was weak and lost accordingly; the claim will be made on the basis that the claim presented was “misconceived and without prospects”. If the claimant is represented these cost could be levelled at the representative for perceived bad advice and your client having lost their case will, in an odd sort of way, give support to that proposition e.g. “I would not have gone to trial but for the advice”.

Further, in order for the Tribunal to assess the costs, if against the advisor, the claimant has to waive privilege. If they waive privilege, not understanding that this means looking at the whole of their file, the way the case was conducted including any advice given regarding any offers made can be very damaging.
In Isteed v London Borough of Redbridge UKEAT/0442/14/DA The Employment Judge erred in failing adequately to deal with causation and the justice of such an order. The wasted cost order was made against the Solicitor’s firm representing the claimant. The file was reviewed by the Tribunal and the opposition had the opportunity of reviewing it as well giving them an insight into how the case was run, what advice given and rejected, and picking any errors made whether innocent or not thus helping their cause to seek costs on a vexatious frivolous no prospects claim. The individual Solicitor who had conduct of the matter was heavily criticised. There was also an issue about tribunal bias. There should be no bias or procedural irregularity raised if a wasted costs order is granted.
Again, the Court of Appeal has given guidance in Barnsley Metropolitan Borough Council – v – Yerrakalva [2012] IRLR 78, which provides 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.)

The need for sufficient evidence on which to base an award was reiterated by the EAT in Flint – v – Coventry University UKEAT/0147/14. While tribunals have a broad discretion in making a costs order, an order can still be challenged on appeal where the tribunal has taken an irrelevant matter into account, has failed to take account of a relevant matter or has reached a perverse conclusion.

The question – is the Tribunal the right place for such assessment of costs if costs are to be sought and ordered? I would say no since there is already a tried and tested costs forum. Costs should, in my opinion, be sent to the costs court under Part 44 Civil Procedure Rules where the costs can be properly assessed on standard or indemnity basis. Costs judges are familiar with costs applications and able to deal with them fairly and without claim by either side of bias or prejudice.

Further, if costs are going to be considered then the claimant should also seek costs on the success of the claim, otherwise it leaves the procedure as little lopsided in favour of the respondent.
If the Tribunal is going to consider costs applications from the respondent, then should the usual tenant of costs follow the winner not be an appropriate way of finding a level playing field between the parties? Costs following the winner is likely to weed out the weak cases, poorly presented cases and a lot of litigants in person.

Someone needs to stand with these claimants and if the representative is afraid of a costs order against them personally or against their firm for perceived error of judgement, they will be less likely to take on cases. This is again further loss to the proper evolution and natural development of this area of law, it becomes stifled and clogged.

The claimant will be fearful of costs and since they are already so low financially and emotionally this extra burden is likely to undermine their confidence even more and even deserved cases will never be brought to justice; so justice is never done nor seen to be done. I am not sure that this is a fair or equitable outcome for the sake of costs; it certainly is not justice.

Finally, is it right to constrain justice in an area of law where the master and servant perception prevails due to fear of costs? Is there a level playing field here or is the one with deep pockets going to ride roughshod over the little man? Was bringing in fees not enough of a hit for the impoverished employee? I do not know! All I know is the employee needs representation for Justice to be served and the shackle of costs should not prevent her from seeing the legitimacy of the claim before her; after all, is she not blind till then??

Please contact Azra on:
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