Baker v Tote Bookmakers Ltd (t/a Totesport) (Practice and Procedure : Costs)

An Employment Tribunal costs order will only be disturbed on appeal for an error of legal principle. Although costs orders remain exceptional, a tribunal may order costs where a party has brought or conducted material parts of proceedings unreasonably, including by advancing allegations known, or which ought to have been known, to be untrue.

There is no automatic rule that costs must follow an untruthful central allegation. The decision remains fact-sensitive. A tribunal may take account of its findings at the substantive hearing and of inadequate evidence about means. It may also apportion costs to reflect the unreasonable parts of a mixed case. An appellate tribunal should not interfere with a permissible apportionment.

The claimant brought claims arising from his dismissal by his former employer. The Employment Tribunal dismissed his claims for unfair dismissal and disability discrimination, although a breach of contract claim succeeded with remedy adjourned. A paper-sift appeal against the adverse liability findings was rejected.

The respondent then sought 75 per cent of its costs. The Employment Tribunal found that allegations supporting the claimant’s conspiracy and disability discrimination case were untrue, vexatious and wholly unreasonable. It ordered 75 per cent of the respondent’s costs, subject to detailed assessment.

The claimant appealed the costs order. The central issues were whether the tribunal had erred in relying on its liability findings, in its treatment of the claimant’s means, and in awarding a proportion of costs.

1. Appeal dismissed. The Employment Tribunal made no error of law in ordering the claimant to pay 75 per cent of the respondent’s costs.

2. Costs orders in employment tribunals are exceptional, but the power to make them arose under rules 40–41. Following Yerrakalva v Barnsley MBC [2012] IRLR 78, an appeal could succeed only if the order was vitiated by an error of legal principle. The Tribunal had been entitled to assess the case actually advanced and to rely on its primary findings from the liability hearing.

3. The claimant’s conspiracy allegation had been central to his case. The Tribunal had permissibly found that he had advanced allegations which he knew, or ought to have known, were untrue, and that his conduct was unreasonable. This was not a case of a genuinely held but mistaken belief.

4. The EAT accepted that costs do not automatically follow whenever a party lies about a central allegation. The exercise is fact-sensitive. Here, however, the Tribunal had not treated untruthfulness as automatically decisive. Its conclusion that a costs order was appropriate was not obviously wrong.

5. A tribunal is not obliged to consider a party’s means, but it may do so. The Tribunal was entitled to regard the claimant’s evidence of means as wholly inadequate and to draw the inferences it did from the information before it.

6. The Tribunal’s apportionment reflected its conclusion that only 25 per cent of the respondent’s costs related to tenable parts of the case. That was a permissible evaluative conclusion. The EAT would not interfere with it.

• Employment Appeal Tribunal: dismissed the claimant’s appeal against the Employment Tribunal’s costs order.

• Employment Tribunal: ordered the claimant to pay 75 per cent of the respondent’s costs, subject to detailed assessment, after finding material parts of his case unreasonable.

• Employment Tribunal: had earlier dismissed the principal unfair dismissal and disability discrimination claims. A paper-sift appeal against those adverse liability findings was rejected.