Jackson v Cambridgeshire County Council & Ors

A wasted costs order may be made only against a representative acting in pursuit of profit, including under a conditional fee arrangement. A representative’s pursuit of settlement, or an application for costs on behalf of a client, does not by itself establish that condition, since those matters are equally consistent with pro bono representation.

Where the representative expressly denies acting for profit and advances a potentially credible explanation, the tribunal must address that explanation. Suspicion and a general assessment that the representative is unreliable are insufficient. Fairness may require an opportunity to provide further particulars or evidence.

The appellant, a solicitor and family member of the claimant in Employment Tribunal proceedings, represented the claimant without charge. After the proceedings were struck out for abuse of process, the Employment Tribunal made a wasted costs order against him under rule 48 of the Employment Tribunal Rules of Procedure.

The order covered costs arising from allegedly prolix discrimination questionnaires, a case management discussion, and the claimant’s unsuccessful applications and conduct. The appellant contended that he was not acting in pursuit of profit. The central issue was whether the Tribunal had properly determined that statutory precondition.

1. Appeal allowed. The Employment Tribunal was not entitled to make the wasted costs order because the appellant was not acting in pursuit of profit.
2. Under rule 48(4) of the Employment Tribunal Rules of Procedure, a wasted costs order can be made only against a representative acting in pursuit of profit, including under a conditional fee arrangement. The appellant’s conduct in seeking to exert pressure for a financial settlement was not probative of that condition. Such conduct was equally consistent with acting pro bono, particularly in a case involving a close family relationship.
3. The appellant had expressly denied receiving payment and had explained that the costs application he had made related to expenses incurred for research and administrative assistance. That explanation was not inherently implausible. The Tribunal was required to address it and could not reject it merely by describing the appellant as an unreliable witness. An unreliable witness cannot be assumed never to be telling the truth.
4. Fairness required the Tribunal, if it considered the explanation insufficiently particularised, to say so and give the appellant an opportunity to provide further detail, sworn evidence or supporting material. If necessary, it could then have drawn appropriate inferences or considered an adjournment, taking account of the notice given.
5. The EAT exercised its powers under section 35 of the Employment Tribunals Act 1996 and found on the evidence that no formal or informal agreement existed under which the appellant would be paid. Payments made to assistants did not establish that he himself acted for profit.
6. It was unnecessary to determine the separate notice ground. A wasted costs application is intended to be summary, but fairness takes priority. There is no general rule that it must be heard at the same hearing. The tribunal should balance efficiency, adequate notice, complexity, available time and proportionality. A separate hearing may be disproportionate, in which case the application may be refused.

• Employment Tribunal, Bury St Edmunds struck out the underlying proceedings and made a wasted costs order of £16,037.04 against the appellant.
• Employment Appeal Tribunal allowed the appeal and held that the wasted costs order could not stand.