Ghosh v Nokia Siemens Network UK Ltd

An Employment Tribunal may award costs after finding that a party acted unreasonably in bringing or conducting proceedings. Once that threshold is met, the award remains discretionary and the Tribunal must decide whether an order is appropriate, including consideration of the paying party’s means.

The mere failure of a claim does not establish unreasonable conduct. However, a Tribunal may properly find unreasonable conduct where a claimant persists in numerous serious allegations which are wholly unsubstantiated, including allegations founded on factual assertions which the Tribunal has rejected. An appellate tribunal will not interfere where the costs jurisdiction has been correctly directed and the discretionary decision is open to the Tribunal.

The claimant, a UK national of Indian origin, brought claims of race discrimination and unfair dismissal against her employer and her former line manager. The Employment Tribunal dismissed all discrimination claims but found the dismissal procedurally unfair because adverse information from previous managers had not been disclosed to her.

At the remedies hearing, the Tribunal made no basic or compensatory award and ordered the claimant to pay £5,000 costs. It held that her pursuit of serious and unmeritorious discrimination allegations constituted wholly unreasonable conduct. A preliminary Employment Appeal Tribunal decision dismissed the claimant’s other liability and remedy grounds, leaving only the costs issue for a full hearing. Permission to appeal that preliminary decision was later refused by the Court of Appeal.

The issue was whether the Employment Tribunal had erred in exercising its discretion to award costs.

1. Appeal dismissed. The Employment Tribunal correctly applied rule 41 of the 2004 Employment Tribunal Rules of Procedure. It identified the threshold question—whether the claimant had acted unreasonably in bringing or conducting the proceedings—and then considered whether it was appropriate to award costs.

2. The Tribunal had not proceeded on the basis that costs must follow merely because discrimination claims fail. Its reasoning was conventional and discretionary. It considered the number and seriousness of the allegations, its findings that they were wholly unsubstantiated, the expense of a nine-day hearing and the substantial preparation required, and the claimant’s limited means.

3. There was no need for an express finding that the claimant had been dishonest. The Tribunal was entitled to find unreasonable conduct because many allegations against the line manager had been rejected, in some instances because the events asserted had not occurred. The claimant’s pursuit of those allegations was capable of meeting the unreasonable-conduct threshold.

4. The Tribunal was also entitled to regard the allegations as particularly serious, given its findings that the manager had been supportive and had managed the claimant sensitively. The reduced award of £5,000 reflected consideration of her means. The order would not deter proper claims; it was directed to unreasonable conduct in litigation.

• Employment Appeal Tribunal: this appeal, [2013] UKEAT 0125_12_2506, dismissed the challenge to the £5,000 costs order.

• Employment Appeal Tribunal: at a preliminary hearing, HHJ McMullen QC dismissed the claimant’s liability and remedy grounds but referred the costs issue to a full hearing.

• Court of Appeal: refused permission to appeal the preliminary Employment Appeal Tribunal decision.

• Employment Tribunal: dismissed the race-discrimination claims, found the dismissal unfair, made no basic or compensatory award at the remedies hearing, and awarded £5,000 costs against the claimant.