St Andrews Catholic Primary School & Ors v Blundell

An appellate court will rarely interfere with an Employment Tribunal’s discretionary costs decision. Intervention requires an error of legal principle, failure to take account of relevant circumstances, or an outcome that is obviously wrong.

Reasons for a costs decision may properly be concise. Where the basis for the decision is clear from the parties’ application, the response and the Tribunal’s earlier findings, the Tribunal need not repeat the full history. Under rule 40, satisfaction of a threshold for costs does not compel an award. At the discretionary stage, the Tribunal may assess the overall circumstances of the litigation.

The School appealed against an Employment Tribunal decision of 27 January 2013 refusing its application for costs against its former employee. The application followed a remitted reassessment of compensation, in which the Tribunal reduced the award after fresh evidence showed that the employee had undertaken part of a Masters course.

The School contended that the employee had intentionally misled the Tribunal, or had acted unreasonably by failing to correct its understanding of her evidence and by resisting attempts to obtain further information. It also argued that the Tribunal’s brief reasons for refusing costs were inadequate and that its alternative discretionary refusal was flawed.

The central issues were whether the earlier factual finding was perverse, whether the costs reasons were legally sufficient, and whether the Tribunal could take account of the litigation as a whole when exercising its costs discretion.

1. Appeal dismissed. The Employment Tribunal’s finding that the employee had not deliberately misled it was not perverse. A perversity appeal can succeed only where an overwhelming case shows that no reasonable Tribunal, properly appreciating the evidence and law, could have reached the decision. The Tribunal had considered its notes of the evidence and its assessment of the employee’s evidence as a whole.

2. The Tribunal’s reasons for refusing costs were sufficient. The general duty to give reasons applied, but a costs decision need not rehearse the factual background already recorded in the substantive judgments. The application did not allege a legal duty on the employee or her solicitors to volunteer the information. The short issue was whether their failure to do so was unreasonable. The Tribunal’s negative answer was clear in context.

3. Under rule 40 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, a threshold ground must first be established. Even if it is, the Tribunal retains a discretion whether to award costs. The Tribunal was entitled, at that discretionary stage, to consider the overall history and conduct of the litigation, including the School’s victimisation of the employee and its conduct at the remedies hearing.

4. Although fuller reasons might have been preferable, the appellate tribunal could not interfere merely because it might itself have given more detailed reasons or reached a different discretionary assessment.

5. The Tribunal observed, without deciding the point, that it would ordinarily be an abuse of process to refrain from appealing a liability or remedy finding and later seek to impugn it through an appeal concerning costs. There might be an exception where the earlier finding could not itself disclose an error of law.

• Employment Appeal Tribunal: The appeal against the Employment Tribunal’s refusal of costs was dismissed.
• Employment Tribunal: On 27 January 2013, the Tribunal refused the School’s costs application. It held that no rule 40 threshold was met and, alternatively, would not exercise its discretion to award costs.
• Court of Appeal: In earlier proceedings, the court dismissed the School’s compensation appeal but admitted fresh evidence and remitted compensation to the same Tribunal: [2011] EWCA Civ 427.