Nouchin v Norfolk County Council & Anor

An Employment Tribunal may award costs under rule 40 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 where a party has conducted proceedings unreasonably, vexatiously, abusively or disruptively. Where a claim is withdrawn before findings on liability, the Tribunal must do the best it can with the material available. It may rely on evidence heard before withdrawal and on the documents.

Reasons must enable the parties to understand why the order was made. They need not provide a detailed analysis of every item of evidence, particularly on a costs application. An infelicitous or unnecessary comment does not invalidate a costs order where the Tribunal has made independent, sustainable findings that justify it.

The Claimant, a mathematics teacher, brought five Employment Tribunal claims against his school and the local education authority. They included discrimination, victimisation, protected-disclosure detriment and unfair-dismissal complaints. After approximately nine days of evidence and cross-examination, he withdrew all claims.

The Employment Tribunal dismissed the claims on withdrawal and later ordered the Claimant to pay the Respondents' costs, subject to detailed assessment. It found that his claims and conduct had been dishonest, vindictive, vexatious, misconceived and abusive. The Claimant appealed on the basis that the Tribunal had given inadequate reasons for the costs order.

The central issue was whether the Tribunal's reasons and the available material lawfully supported a full costs order despite the merits hearing ending before findings on liability.

1. Appeal dismissed. The Employment Tribunal's order that the Claimant pay the Respondents' costs, to be subject to detailed assessment, stood.

2. The Tribunal had made clear and sustainable findings concerning the Claimant's conduct. It was entitled, having heard him give evidence and be cross-examined over nearly nine days, to find that capability concerns pre-dated his race-discrimination complaints. It was also entitled to find that some claims and documents had been fabricated. Those findings provided a proper basis for concluding that he had acted unreasonably and dishonestly in conducting the proceedings.

3. The applicable power was rule 40 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004. Although costs awards in Employment Tribunals are exceptional, a costs hearing is intended to be relatively short and robust. Following the approach in [2012] IRLR 78, a Tribunal whose case has ended on withdrawal must do the best it can with the material available. The absence of final merits findings did not prevent a costs order.

4. The reasons challenge failed. Reasons need explain in broad terms why a party has won or lost, but must be read in their procedural context. The Tribunal's reasons made apparent why it found the statutory threshold satisfied. It was unnecessary for the Tribunal to identify every document or to set out a detailed factual analysis.

5. The Tribunal's unnecessary and pejorative observation about possible proceedings elsewhere was unfortunate and should not have been included. It was not, however, a finding underlying the costs order. It did not vitiate the Tribunal's separate and robust findings on which that order rested.

• Employment Appeal Tribunal: dismissed the Claimant's appeal and upheld the Employment Tribunal's costs order.
• Employment Tribunal: after the Claimant withdrew all claims during the merits hearing, dismissed them on withdrawal and later ordered him to pay the Respondents' costs, subject to detailed assessment.
• Employment Appeal Tribunal procedural stages: His Honour Judge Peter Clark refused an out-of-time appeal against the withdrawal order; His Honour Judge Serota QC subsequently permitted a fresh reasons challenge to proceed to a full hearing.