Soll (Vale) v. Jaggers

Where the Employment Appeal Tribunal exercises the Employment Tribunal’s powers and finally disposes of the tribunal proceedings, its judgment is the judgment which finally determines those proceedings for the time limit in Rule 77 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013.

The EAT may determine a timely application for ET costs, but should ordinarily leave its merits and amount to the ET where that tribunal made the material factual findings. Under Rule 34A(1) of the Employment Appeal Tribunal Rules 1993, there is no material distinction between misconceived and unreasonable proceedings. Even where an aspect of an appeal defence may have been unreasonable, costs remain discretionary and should not be awarded without a proper basis for identifying the additional costs caused by that conduct.

The Employment Tribunal found that the Claimant had been unfairly dismissed and listed remedy for a further hearing. On the Respondent’s appeal, the EAT set aside that judgment and substituted a nil award under Polkey, thereby ending the ET proceedings.

The Respondent then sought £142,500 costs for both the ET and EAT proceedings. It relied principally on the Claimant’s falsification of a contractual document and dishonesty concerning it. The Claimant contended that the ET costs application was late and that he had reasonably defended the appeal.

The issues were whether the ET costs application was in time, whether the EAT should determine it, and whether costs should be awarded for the appeal.

1. The applications were dismissed. The Respondent’s application for costs incurred in the ET was made in time. In substituting a nil award, the EAT exercised the ET’s powers under section 35(1) of the Employment Tribunals Act 1996. Its order therefore finally determined the ET proceedings for Rule 77 purposes. The earlier ET liability judgment had not done so because a remedy hearing remained necessary.

2. The EAT nevertheless declined to determine the merits or amount of ET costs. It had jurisdiction, but the exercise of that jurisdiction was discretionary. The ET had heard the evidence and made the findings concerning the falsified contract, the alleged dishonesty and the circumstances of dismissal. It was accordingly best placed to assess the nature, gravity and effect of that conduct in deciding whether costs were appropriate. The fact that the ET had sat with three members was a further discretionary consideration, although not a jurisdictional bar.

3. The EAT refused costs for the appeal under Rule 34A(1) of the Employment Appeal Tribunal Rules 1993. There was no substantive distinction between proceedings being misconceived and being unreasonable. The Claimant’s defence of the ET’s unfair-dismissal finding was not misconceived: although the EAT had allowed the appeal, its reasoning on liability would otherwise have required remission and did not establish that only one outcome was possible.

4. The Claimant might arguably have acted unreasonably in defending the Polkey issue, which the EAT had found perverse. That issue concerned only part of the appeal, however, and a hearing on liability would have occurred in any event. The EAT could not identify what additional costs, if any, resulted from the defence of that issue. It was therefore inappropriate to award EAT costs.

• Employment Appeal Tribunal: In the substantive appeal, the EAT set aside the ET’s judgment and substituted a nil award applying Polkey. This costs judgment refused the Respondent’s EAT costs application and left the timely ET costs application to the ET.
• Employment Tribunal: The ET found the Claimant unfairly dismissed and had yet to determine remedy. Its reserved judgment was sent to the parties on 15 April 2016.