Chadburn v Doncaster & Bassetlaw Hospital NHS Foundation Trust & Anor (Practice and Procedure: Costs)

An Employment Tribunal has a broad judicial discretion to award costs after finding unreasonable conduct. It may have regard to the paying party’s means both when deciding whether to award costs and when fixing the amount, but it need not do so or calculate a presently affordable maximum.

Where means are considered, a costs award may exceed present ability to pay if there is a realistic prospect of future ability to pay. An assessment necessarily involves some prediction of future circumstances. A speculative consideration does not vitiate the award where it was not material to the result. The Tribunal may make a proportionate broad-brush award having regard to the whole circumstances, including the gravity and cost consequences of false allegations.

The Claimant unsuccessfully brought discrimination and other claims against her former employer and a named respondent. The Employment Tribunal found that she had invented race-discrimination allegations to obtain jurisdiction over harassment complaints. It treated that conduct as unreasonable and ordered her to pay £10,000 in costs.

After further evidence showed that her debts were substantially greater than originally understood, the Employment Judge reconsidered the order under Rule 72(1) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, but refused to vary or revoke it. The Claimant appealed both the costs order and that refusal. She contended that the Tribunal had relied on a speculative possible divorce payment and had failed to give sufficient effect to her true debt position.

1. Appeal dismissed. The Employment Tribunal’s costs order and its refusal to reconsider it disclosed no error of law.

2. The Tribunal had correctly approached costs as a two-stage exercise. Having found unreasonable conduct within Rule 76, it had a discretion whether to award costs and, if so, in what amount. Its reasons showed that it considered the enlarged scope, hearing length and additional expense caused by the knowingly false race-discrimination allegations, while recognising the Claimant’s present inability to pay.

3. The possible financial effect of future divorce proceedings was not a material basis for the award. The principal basis for the Tribunal’s conclusion that the Claimant might later pay was her age, remaining working life and realistic prospect of a return to earnings after recovery. The Tribunal was entitled to take account of that future possibility. Some uncertainty about future events was unavoidable and there was no evidence that she had no realistic prospect of future employment.

4. Under Rule 84 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, means were discretionary considerations. Although the Tribunal chose to consider them, it was not required to identify a precise sum the Claimant could pay immediately or within a defined period, nor to confine the award to such a sum. The corrected debt figure might delay payment, but did not undermine the Tribunal’s conclusion that future payment was realistically possible.

5. The award was a permissible broad-brush assessment. It was less than one third of the approximately £35,000 additional costs attributed to the false allegations and was compensatory rather than punitive. The Tribunal had balanced the Claimant’s serious present indebtedness against the substantial cost consequences of her unreasonable conduct.

• Employment Appeal Tribunal: dismissed the appeal from the Employment Tribunal’s £10,000 costs order and from the refusal to reconsider that order.
• Employment Tribunal: found unreasonable conduct in the invention of race-discrimination allegations and made a £10,000 costs award. On reconsideration, it refused to vary or revoke the award.