Topic v Hollyland Pitta Bakery & Ors

An Employment Tribunal may award costs where proceedings are misconceived, including where they have no reasonable prospect of success, or have been conducted unreasonably. It must assess the whole picture, while recognising that costs remain exceptional in Employment Tribunal litigation.

A claimant's genuine belief, impaired perception or absence of deliberate lying does not prevent a finding that proceedings were misconceived. Mental health is relevant to the discretionary stage and its weight is for the Tribunal. A failure to raise a grievance may also be relevant to an objective assessment of prospects; section 207A does not confine its relevance to compensation adjustments.

The claimant brought claims of direct sex discrimination, harassment, victimisation and holiday pay against her former employer and a manager. The Employment Tribunal at Watford dismissed all claims, finding the allegations untrue and the claimant's evidence unreliable, although it did not find that she had deliberately lied.

On the respondents' subsequent application, the Tribunal ordered the claimant to pay costs, to be assessed by the County Court. It found the claims misconceived because they had no reasonable prospect of success and, alternatively, found unreasonable conduct in the production of further and amended particulars.

The claimant appealed, contending that the Tribunal had relied on irrelevant medical and grievance matters, could not find the claim misconceived without deliberate lying, and had failed to apply the restricted Employment Tribunal costs jurisdiction.

1. Appeal dismissed. The Employment Tribunal made no error of law in ordering costs.

2. Under rule 40(3) of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, a finding that proceedings were misconceived may rest on their having no reasonable prospect of success. The claimant's mental state and intention were not determinative of that objective question, but were relevant to the Tribunal's discretionary decision once the costs jurisdiction arose.

3. The Tribunal had considered the claimant's impaired perception, lack of deliberate dishonesty, medical circumstances and refusal of counselling. The evidence had been placed before it without objection. It was entitled to take it into account, and the Article 8 objection could not succeed.

4. The Tribunal was also entitled to treat the claimant's refusal to provide details and failure to initiate a grievance as relevant to the objective assessment of prospects. Section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 concerns adjustment of compensation where a successful claimant has failed to comply with the ACAS Code. It does not make that the sole context in which an absence of grievance may be material.

5. The absence of corroboration did not automatically defeat a discrimination claim. However, its absence was relevant when assessing prospects. Equally, a finding that a claimant had not lied did not preclude a conclusion that the claim was misconceived or unreasonably pursued. The Tribunal was entitled to assess all circumstances, including late attempts to add allegations, and its conclusions were not perverse.

• Employment Appeal Tribunal: dismissed the claimant's appeal against the Watford Employment Tribunal's costs order.
• Employment Tribunal at Watford: dismissed the substantive discrimination, harassment, victimisation and holiday-pay claims, and subsequently ordered the claimant to pay the first respondent's costs, subject to County Court assessment.