Dunn v Estée Lauder Cosmetics Ltd

An Employment Appeal Tribunal costs order is discretionary even where the conditions in rule 34A are met. The rule extends to unreasonable conduct in proceedings necessarily ancillary to an appeal, including a costs application. Whether abusive or threatening communications form part of bringing or conducting proceedings is a fact-sensitive contextual question.

Costs orders in the Appeal Tribunal remain unusual, so the statutory descriptions of improper, vexatious, misconceived and unreasonable conduct are construed restrictively in practice. The Tribunal may moderate the amount awarded and may consider ability to pay, particularly where reliable evidence of means is provided.

The claimant's Employment Tribunal claims for unlawful deductions, breach of contract and holiday pay had been struck out as having no reasonable prospect of success. The Employment Judge also ordered her to pay costs because the claims and their conduct were scandalous, vexatious, unreasonable and misconceived.

Her appeal alleged, among other matters, an unfair hearing. It was initially rejected at the sift stage, but a renewed application was permitted to proceed on a limited arguable unfair-hearing point, subject to repeated costs warnings. The appeal was later withdrawn. The respondent then sought its costs of the appeal and the consequential costs proceedings.

The central issue was whether the claimant's conduct, including abusive correspondence, the pursuit and withdrawal of the appeal, and non-attendance at the costs hearing, justified an order under the Employment Appeal Tribunal Rules 1993.

1. The costs application was granted. The claimant was ordered to pay the respondent £5,000.

2. Rule 34A(1) of the Employment Appeal Tribunal Rules 1993 encompasses unreasonable conduct in proceedings necessarily ancillary to an appeal. That includes conduct which increases the costs of pursuing a costs application. There would otherwise be an unjustified gap in the Rules.

3. Costs orders in the Appeal Tribunal are unusual. Although no separate requirement of exceptional circumstances exists, the expressions “unnecessary, improper, vexatious or misconceived” and “unreasonable” are coloured by practice and should be construed restrictively. Even when the threshold condition is established, the Tribunal retains a discretion whether to make an order.

4. Abusive or threatening communications are not automatically conduct in bringing or conducting proceedings merely because they arise from litigation. The question depends on context. On the facts, the offensive correspondence was sufficiently connected with the continued appeal to constitute unreasonable conduct. The claimant's request for an oral costs hearing, followed by her non-attendance despite notice, also caused unnecessary expense.

5. The appeal was, on balance, misconceived. The underlying wage case had no proper evidential challenge to the employer's calculation, and the complaints of unfairness did not identify objectively ascertainable impropriety. The late withdrawal had caused substantial preparation costs.

6. The Tribunal exercised its separate discretion as to amount under rule 34B. It took account of the claimant's apparent limited means, existing liability for Employment Tribunal costs, and the need for a modest award marking unacceptable litigation conduct. It therefore declined to award the respondent's claimed costs exceeding £30,000 and fixed costs at £5,000.

• Employment Appeal Tribunal: On the respondent's costs application, the Tribunal ordered the claimant to pay £5,000: [2013] UKEAT 0392_12_0810.
• Employment Appeal Tribunal: The appeal was initially rejected at the sift stage. On a renewed application, it was allowed to proceed on a limited arguable unfair-hearing issue after costs warnings, but was subsequently withdrawn.
• Employment Tribunal (Reading): Employment Judge John Warren struck out the claims for wages, breach of contract and accrued holiday pay, and awarded costs of £6,915.50. No citation is stated in the judgment.