Eweida v British Airways Plc

A protective costs order is confined to public law litigation. It is unavailable in an ordinary private claim merely because the appeal raises an issue of general public importance.

A costs-capping order under rule 44.18 of the Civil Procedure Rules 1998 may be made only where all three conditions in rule 44.18(5) are satisfied. In particular, the court must find that the risk of disproportionate costs cannot be controlled adequately through case management or detailed assessment. Excessive hourly rates or unnecessary work can ordinarily be addressed by a costs judge and do not, without more, justify advance capping.

An employee brought employment tribunal proceedings alleging religious discrimination after her employer prevented her from displaying a cross outside her uniform. The tribunal dismissed the claim, and the Employment Appeal Tribunal dismissed her appeal on indirect discrimination.

After permission was granted for a further appeal, the employee sought protection from the employer’s costs. Sedley LJ initially refused a protective costs order but subsequently capped recoverable costs at £25,000. The employer required the application to be reconsidered at an oral hearing.

The court had to determine whether an ordinary private employment appeal could attract a protective costs order and whether the statutory conditions for a costs-capping order were satisfied.

1. The employer’s challenge was allowed. Sedley LJ’s costs-capping order was discharged, and no replacement order was made. Lloyd and Moses LJJ and Maurice Kay LJ agreed.

2. A protective costs order could not be made. The principles in R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192 were confined to public law litigation. This was an ordinary private claim by an individual employee against her employer. Its general importance did not alter the private nature of the proceedings.

3. Wilkinson v Kitzinger [2006] EWHC 835 (Fam) created no true exception. Those proceedings were essentially quasi-public and could have been brought by judicial review but for a statutory provision. Moreover, the order ultimately made there was properly characterised as a costs-capping order rather than a protective costs order.

4. Even if jurisdiction to make a protective costs order had existed, discretion would have been exercised against the employee. Although the private-interest requirement in Corner House could be approached flexibly, her personal interest in compensation and other remedies was too significant.

5. A costs-capping order under rule 44.18 of the Civil Procedure Rules 1998 applies only to future costs and excludes any conditional-fee uplift. All three conditions in rule 44.18(5) must be satisfied. It is insufficient merely to show a risk that costs will be incurred disproportionately; that risk must also be incapable of adequate control through case management or detailed assessment.

6. The alleged excesses concerned hourly rates and the amount of work anticipated. Those were central matters for detailed assessment. A costs judge could reduce recoverable costs to a reasonable and proportionate level. The employee therefore could not satisfy rule 44.18(5)(c), and it was doubtful that rule 44.18(5)(b) was satisfied.

1. Court of Appeal: In [2009] EWCA Civ 1025, the court discharged Sedley LJ’s order capping the employer’s recoverable appeal costs and refused to impose any replacement limitation.

2. Employment Appeal Tribunal: The tribunal dismissed the employee’s appeal concerning indirect religious discrimination. Its judgment was given on 20 November 2008; no neutral citation is stated.

3. Reading Employment Tribunal: The tribunal dismissed the claims of direct and indirect religious discrimination and harassment. Its judgment was issued on 7 January 2008.