Doyle v North West London Hospitals NHS Trust

An Employment Tribunal has a discretion to award the whole of a party’s costs where unreasonable or misconceived conduct has affected the proceedings. It need not establish a precise causal link between each instance of conduct and each item of costs, but it must assess the whole picture, identify the unreasonable conduct and its effects.

Although rule 41(2) of the Employment Tribunals Rules of Procedure makes ability to pay discretionary, the discretion must be exercised judicially. Where a very substantial costs order is sought against a claimant and there is reason to doubt that it is affordable, the Tribunal may have to raise means itself. Representation alone does not make silence on means a sufficient reason to ignore the issue.

The Appellant’s claims for breach of contract, race discrimination and victimisation were dismissed by the Employment Tribunal sitting at Watford after a seven-day hearing. The Tribunal then ordered her, under rule 41(1)(c) of the Employment Tribunals Rules of Procedure, to pay the whole of the Respondent’s costs, to be assessed. The likely liability was very substantial.

She appealed the costs order. She contended that the Tribunal had been wrong to award all costs and that it had failed to consider her ability to pay. The central issue was whether, despite the discretionary wording of rule 41(2), the Tribunal should have raised and considered means before making an order approaching £100,000.

1. Appeal allowed. The Employment Appeal Tribunal set aside the costs order and remitted the costs application to the same Employment Tribunal.

2. The Tribunal had jurisdiction to make a costs order and was entitled to find that some order was appropriate. It was not required to establish a precise causal link between particular unreasonable conduct and particular costs. The correct approach was to examine the whole course of the proceedings, identify the unreasonable conduct and its effects, and exercise the discretion accordingly. On a fair reading of the costs reasons in the context of the judgment as a whole, the Tribunal had found that the Appellant’s case had not been brought in good faith. Subject to means, it was therefore within its discretion to order her to pay the whole of the assessed costs.

3. Rule 41(2) of the Employment Tribunals Rules of Procedure did not oblige a Tribunal to take account of ability to pay. However, a decision not to do so had to be judicial. A Tribunal which considered means should make findings and explain the effect of those findings; one which chose not to consider means should say why.

4. In the circumstances, the Tribunal should itself have raised means. It was asked to make an exceptionally large order against a claimant, there was no indication that she could pay it, and there was a real risk that her counsel had overlooked the point. The fact that she was represented did not, by itself, justify ignoring means. The omission was an error of law which might have caused substantial injustice.

5. The remitted Tribunal was directed to make reasonable enquiries into means and then decide whether to take them into account and, if so, the appropriate costs order. It could consider the whole financial picture, including material changes since the proceedings began. A cap on costs remained available even if costs were to be assessed in detail.

• Employment Appeal Tribunal: allowed the appeal, set aside the whole-costs order, and remitted the costs application to the same Tribunal.
• Employment Tribunal (Watford): dismissed the substantive claims on 24 August 2010 and ordered the Claimant to pay the Respondent’s whole costs, to be assessed, under rule 41(1)(c) of the Employment Tribunals Rules of Procedure.