Faithorn Farrell Timms LLP v Bailey

An Employment Appeal Tribunal may award costs under Rule 34A(1) where a party’s conduct of an appeal has unreasonably caused unnecessary expense, even though the appeal was not wholly unnecessary or unreasonable when brought.

Partial success does not create an entitlement to recover appeal fees under Rule 34A(2A). The Tribunal must exercise its discretion in light of the extent and quality of that success and the party’s conduct. A proportionate costs award may be confined to the costs caused by the unreasonable aspect of the appeal.

The claimant pursued sex-discrimination and unfair-dismissal claims in the Employment Tribunal. The employer appealed, and the claimant cross-appealed, concerning the admissibility of settlement-related material. The substantive appeal and cross-appeal were each allowed in part.

Both parties then sought costs in the Employment Appeal Tribunal. The employer sought recovery of part of its appeal fees under Rule 34A(2A) of the Employment Appeal Tribunal Rules 1993. The claimant sought costs under Rule 34A(1), alleging that the appeal had been unnecessary, vexatious and unreasonably pursued. The central issue was whether the employer’s conduct of the appeal engaged the Tribunal’s costs jurisdiction and, if so, what order was proportionate.

1. The employer’s application to recover appeal fees was dismissed. Although it had achieved partial success, that success was limited to the unfair-dismissal claim and might ultimately prove of little practical value. It had failed on the sex-discrimination aspect and had unreasonably failed to address waiver of without-prejudice privilege arising from its own Employment Tribunal pleading.

2. The claimant’s application under Rule 34A(1) of the Employment Appeal Tribunal Rules 1993 succeeded in part. The appeal was not shown to have been brought in bad faith, nor was it wholly unnecessary, vexatious or unreasonable from the outset. The Employment Tribunal’s approach to admissibility under section 111A of the Employment Rights Act 1996 warranted a Full Hearing.

3. However, the employer’s challenge concerning common-law admissibility in the sex-discrimination claim unreasonably failed to engage with the obvious issue of waiver. The claimant had raised that issue below, the employer was on notice of it, and the cross-appeal was unanswerable insofar as the Employment Tribunal had not addressed it. That conduct caused the claimant unnecessary expense and engaged the costs jurisdiction.

4. A proportionate summary assessment justified an award of £1,000 towards the claimant’s appeal costs. No order was made for the costs of the costs applications themselves.

• Employment Appeal Tribunal: the substantive appeal and cross-appeal were each allowed in part after a Full Hearing, with outstanding admissibility issues remitted to the Employment Tribunal. This subsequent decision determined the parties’ costs applications.

• Employment Tribunal: sex-discrimination and unfair-dismissal claims remained pending. Its rulings on the admissibility of settlement-related material gave rise to the appeal and cross-appeal.