Hussain v Nottinghamshire Healthcare NHS Trust

An employment tribunal may properly warn a party about the risks of continuing weak claims, including a possible costs order. Such case-management guidance does not create apparent bias unless it conveys that the tribunal has already reached a concluded view on an issue which would arise only on a future costs application.

For apparent bias, the question is whether a fair-minded and informed observer would see a real possibility of bias. A party subject to a costs order must also be able to understand the tribunal’s reasons for both the engagement of its costs jurisdiction and the amount awarded. A broad-brush allocation between claims may be permissible, but an award of a proportion of all costs requires clear reasoning where unreasonable conduct is found only from a stated later date.

The Claimant brought four consolidated Employment Tribunal claims, including discrimination, victimisation and unfair dismissal complaints. Following dismissal of all claims, the Respondent sought costs of £94,156.96. The Employment Tribunal ordered the Claimant to pay 85% of those costs.

The Claimant appealed the costs judgment. He contended that the tribunal should have recused itself because its earlier costs warning during the merits hearing gave rise to apparent bias. He also challenged the adequacy of the reasons for the 85% award, particularly because the tribunal considered the unfair dismissal claim potentially arguable and found unreasonable conduct at latest from the Respondent’s first written costs warning.

The central issues were apparent bias and whether the reasons adequately explained the scope and amount of the costs award.

1. Appeal allowed in part. The apparent-bias challenge failed. Applying Porter v Magill, the question was whether a fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias.

2. The tribunal’s earlier intervention was a warning, not a concluded determination that the claims were unreasonable or that costs would be awarded. A tribunal must be able to guide parties about the way their case or conduct may be viewed and the risks of continuing. It must, however, avoid deciding a costs issue before hearing any application and the parties’ submissions. In context, the warning invited the Claimant to reflect on the merits in light of the evidence then heard. It did not pre-judge a future costs application.

3. Prior complaints of bias and adverse findings in the merits judgment did not themselves require recusal. The Claimant’s failure to object when the tribunal raised Oni at the costs hearing was relevant evidence of his contemporaneous understanding, whether or not it amounted to waiver.

4. The reasons challenge succeeded in part. The tribunal was entitled to make a broad-brush assessment that 15% of the costs related to the unfair dismissal claim. It was best placed to assess the likely hearing time and costs attributable to that claim.

5. However, the tribunal had not clearly explained why its 85% award covered costs incurred before the first written costs warning. Its finding of unreasonable pursuit was expressed as arising at latest from that warning, while the 15% deduction related only to unfair dismissal. The matter was remitted to the same tribunal, if possible, to decide whether the 85% applied only to post-warning costs or to all costs and, if to all costs, on what basis.

• Employment Appeal Tribunal: Allowed the appeal in part and remitted the limited costs-reasons issue to the same Employment Tribunal.
• Employment Tribunal: On 14 May 2015, ordered the Claimant to pay 85% of the Respondent’s costs, to be assessed by the County Court.
• Earlier liability appeal: The Claimant’s appeal against the Employment Tribunal’s liability judgment, including bias allegations, was rejected on the papers as totally without merit.