Employment Rights Advice Ltd v Thew & Anor

An Employment Tribunal must give a representative a fair opportunity to provide evidence of means where that evidence may affect whether a wasted-costs order should be made and its amount. Under Employment Tribunal Rules 2004, Rule 48(6), ability to pay is relevant to both questions.

Where the record of the hearing is materially ambiguous, no written directions were issued, and it was reasonable to await directions after a provisional decision on costs, an award made without that opportunity is unsafe. Procedural mistakes, even cumulatively, do not establish apparent bias unless the informed and fair-minded observer would see a real possibility of bias. A later and irrelevant judicial comment, learned of only after the decision, could nevertheless justify remission to a fresh tribunal if it reasonably undermines confidence in a future fair hearing.

The Employment Tribunal made a wasted-costs award of £3,600 against Employment Rights Advice Ltd, which had represented Mrs Thew in her unsuccessful employment claim. The representative appealed, alleging that it had not had a fair opportunity to provide evidence of its means and that the Tribunal's conduct gave an appearance of bias.

The appeal concerned uncertainty following the costs hearing. The Tribunal's available records differed, no written directions were sent, and a lay member died before the costs application was completed. The central issues were whether the representative had been denied a fair hearing on means and whether the circumstances satisfied the test for apparent bias.

1. Appeal allowed in part. The wasted-costs award was unsafe because ERA had been denied a proper opportunity to provide evidence of means. Rule 48(6) of the Employment Tribunal Rules 2004 permitted the Tribunal to take ability to pay into account both when deciding whether to make a wasted-costs award and when fixing its amount.

2. The evidence showed that both parties recognised that ERA should have an opportunity to provide evidence of means if the wasted-costs jurisdiction was engaged. The contemporaneous notes and attendance note left uncertain whether that evidence had to be supplied immediately or only after the Tribunal indicated that it was minded to award costs. No written order or directions were issued. It was reasonable for ERA to understand that it should await that indication and further directions. The Employment Judge's later note was not accepted as a reliable record of directions actually given at the hearing.

3. The apparent-bias ground was dismissed. Applying Porter v Magill, [2002] 2 AC 357, the procedural errors and delays did not cause the fair-minded and informed observer to conclude that there was a real possibility of bias. The Employment Judge's later disclosure of peripheral material concerning Mr Broomhead was gratuitous and capable of another explanation. In any event, she learned it only after the relevant costs decision, so it did not evidence bias in that decision.

4. The wasted-costs application against ERA was remitted to a differently constituted three-member Employment Tribunal. The original Tribunal's conclusion that its wasted-costs jurisdiction was engaged was undisturbed. The fresh Tribunal was to give ERA a specified opportunity to adduce means evidence and could reach the same conclusion on liability and amount. A fresh panel was necessary because the later judicial comment reasonably undermined ERA's confidence in a future fair hearing.

5. Under Rule 34A(2A), ERA recovered £600 from the College, being half the hearing fee. The Tribunal exercised its broad discretion by taking account of ERA's late settlement approach and its failure on the bias ground. Permission to appeal that costs order was refused.

• Employment Appeal Tribunal: Allowed the appeal on procedural unfairness, dismissed the apparent-bias ground, and remitted the wasted-costs application to a fresh Employment Tribunal.
• Employment Tribunal: Made a wasted-costs award of £3,600 against Employment Rights Advice Ltd in a judgment sent on 5 September 2013. Its underlying conclusion that the wasted-costs jurisdiction was engaged was not disturbed.