Oni v NHS Leicester City

An employment tribunal should ordinarily hear both liability and costs issues. Adverse findings on credibility, unreasonable conduct, or case management do not themselves require recusal. Recusal is required where the tribunal has expressed concluded views which anticipate the costs decision before hearing submissions.

The tribunal must apply the apparent-bias test by considering all relevant circumstances and asking whether a fair-minded and informed observer would conclude that there was a real possibility of bias. A finding that a party has means to pay substantial costs cannot stand where the tribunal has material indicating limited means but has made no proper assessment. In substantial costs cases, the tribunal should ordinarily raise the question of means and give practical directions for evidence.

The Claimant’s claims for constructive unfair dismissal, direct race discrimination and victimisation were dismissed by an Employment Tribunal after a lengthy hearing. In its liability reasons, the Tribunal made strong findings about the Claimant’s credibility, the lack of foundation for the discrimination claims, and the unreasonable conduct of the proceedings.

The Tribunal later ordered the Claimant to pay the Respondent’s entire costs, subject to detailed assessment. It refused an application for recusal and concluded that the Claimant had means to pay, despite material indicating that her income consisted only of a state pension. The appeal concerned apparent bias and the proper treatment of means in a costs application.

1. The appeal was allowed and the costs application was remitted to a differently constituted Employment Tribunal.

2. The apparent-bias test requires the appellate court to ascertain all relevant circumstances and ask whether a fair-minded and informed observer would conclude that there was a real possibility of bias. It is generally in the interests of justice for the tribunal which heard liability to determine costs.

3. A tribunal may and should express full and trenchant findings necessary to decide liability, including findings about credibility and explanations for case-management decisions. Such findings do not, without more, demonstrate pre-judgment of costs.

4. However, the Tribunal’s separate discussion of the conduct of proceedings culminated in concluded views which directly anticipated the threshold conditions for a costs order. The informed observer would regard those passages as showing a real possibility that the costs issue had been pre-judged. The Tribunal should therefore have recused itself.

5. The mandatory wording of rule 40(2) did not require or entitle the Tribunal to reach final conclusions on costs before hearing the parties. The Tribunal had to keep an open mind. A mere allegation of bias made in an appeal concerning the liability hearing did not itself require recusal.

6. The finding that the Claimant had means to pay could not stand. The Tribunal had material indicating that she received only a state pension and had not made a contrary finding after proper enquiry. The differently constituted Tribunal was to decide afresh whether the threshold conditions were met, whether means should be considered, and whether a costs order should be made and in what amount.

7. The Claimant was directed to lodge and serve a statement of means using form EX 140 within 21 days of the seal date if she wished her means to be taken into account.

• Employment Appeal Tribunal: allowed the appeal against the Employment Tribunal’s costs judgment and remitted the application to a differently constituted tribunal.
• Employment Tribunal: dismissed the underlying claims and ordered the Claimant to pay the Respondent’s costs, subject to detailed assessment.
• Employment Appeal Tribunal: the Claimant’s earlier appeal against the liability judgment had been dismissed as disclosing no reasonable ground of appeal on a question of law.