Clarke v Frank Staddon Ltd

A successful appellant ordinarily receives the costs of the appeal. The court retains a discretion, but a departure from that approach requires justification. The parties’ relative size or means does not, without more, justify withholding costs where both pursued a point of principle and the appellant obtained the relief sought. Where lower-level fact-finding was conducted on a material misunderstanding of the governing law, a later clarification of that law may require the decisions to be set aside and the matter reheard. In assessing costs, the court should consider substantially similar costs incurred in related proceedings and guard against double recovery.

The claimant brought an Employment Tribunal claim for unpaid holiday pay and lost on 28 February 2002. The Employment Appeal Tribunal later remitted the claim for further fact-finding on two issues. On an earlier appeal, the Court of Appeal referred questions concerning the Working Time Directive to the European Court of Justice, following a provisional view that differed from the approach expressed by the Court of Session in MPB Structures Ltd v Munro [2003] IRLR 350.

The European Court of Justice gave its answers on 16 March 2006. The parties agreed that the appeal should be allowed, the Employment Tribunal and Employment Appeal Tribunal decisions set aside, and the claim remitted for rehearing in light of the clarified law. The remaining issue was the costs of the appeal and the European reference.

1. Disposition and remittal. The appeal was allowed by agreement. The judgments of the Employment Tribunal and the Employment Appeal Tribunal were set aside, and the matter was remitted to the London Central Employment Tribunal for a complete rehearing taking account of the European Court of Justice’s judgment. The lower-level fact-finding had been geared to a material misapprehension of the law and was therefore deficient. A complete rehearing was the inevitable consequence of that change in the legal landscape ([4]-[6], [14]).
2. Costs. The starting point in the Court of Appeal is that a successful appellant should receive the costs of the appeal. That rule is subject to discretion, but the court found no justification for departing from it. The claimant had obtained the order sought, and both parties had pursued the litigation to establish a point of principle. The respondent’s comparatively small size and the claimant’s trade-union support did not alter the result. The respondent was ordered to pay the costs of the appeal, including the cost of the European reference, assessed on the standard basis if not agreed ([7]-[10], [14]).
3. Costs assessment guidance. Any costs judge should consider the fact that substantially similar costs in related proceedings had been incurred in the Court of Appeal and Luxembourg at the same time. The court did not determine the accuracy of the figure agreed in those proceedings, but indicated that the overall position should be considered so that costs were not double counted ([11]-[12]). Laws LJ and Bodey J agreed with Maurice Kay LJ ([15]-[16]).

• Court of Appeal (Civil Division): The appeal was allowed. The Employment Tribunal and Employment Appeal Tribunal decisions were set aside, the claim was remitted for rehearing, and the respondent was ordered to pay the appeal and reference costs.
• Employment Appeal Tribunal: After hearing the appeal in June 2003, it remitted the claim for further fact-finding and gave judgment in July 2003.
• Employment Tribunal: The holiday-pay claim was dismissed on 28 February 2002.