Sykes v Wright (Practice and Procedure: Costs)

A compromise of a costs application against a claimant does not, without more, bar a wasted costs application against that claimant’s representative. Issue estoppel and the analogous Henderson v Henderson principle require the relevant identity of parties and issues; a claimant’s liability for costs and a representative’s liability for wasted costs arise under different rules and involve different issues.

An appellate tribunal will not interfere where an Employment Tribunal has correctly directed itself on the wasted-costs principles and has reached findings open to it on the evidence about improper or incompetent conduct, causation and expense. Procedural fairness does not require an opportunity to answer late material that was immaterial to the decision, particularly where the affected party has already had adequate written and oral opportunities to be heard.

The appellant had represented Mr Wright in Employment Tribunal proceedings against his former employer. The claims failed. The employer sought costs against Mr Wright under Rule 76 and a wasted costs order against the appellant under Rule 80 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations.

The employer compromised its costs application against Mr Wright but continued the wasted costs application against the appellant. The Employment Tribunal made a wasted costs order of £2,000 on 12 June 2015, based on the appellant’s conduct of the liability hearing.

The appellant challenged that order on grounds of res judicata or the Henderson principle, misapplication of the Ridehalgh test, and procedural unfairness arising from late written submissions and refusal of an adjournment. The employer’s cross-appeal was contingent on the appeal succeeding.

1. Appeal dismissed. The Employment Tribunal had jurisdiction to make a wasted costs order against the appellant notwithstanding the compromise of the claimant’s separate costs liability.

2. Res judicata, issue estoppel and the analogous Henderson v Henderson principle did not assist the appellant. The claimant and the representative were different parties. Further, an application against a claimant under Rule 76 raised different issues from an application against a representative under Rule 80 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations. The employer had raised both applications at the appropriate time; compromise of one did not preclude pursuit of the other.

3. The Employment Tribunal had correctly identified the relevant wasted-costs principles, including those in Ridehalgh v Horsefield [1994] 3 All ER 848. Its conclusions were factual findings open to it after observing the eight-day hearing. It was entitled to find, in the alternative, improper conduct intended to gain preparation time or conduct below the competence expected of a representative. It was also entitled to find that the conduct caused additional expense, notwithstanding delays attributable to external causes.

4. There was no procedural unfairness. The appellant had already made extensive written submissions and oral submissions, knew that the later determination would be on the papers, and had an independent opportunity to make further written submissions. The employer’s late interim submission was material only to the race claim, which did not found the wasted costs order. Refusing a further adjournment was a case-management decision within the Tribunal’s proper judgment. There was no breach of Article 6.

5. The contingent cross-appeal did not arise and required no determination.

• Employment Appeal Tribunal: dismissed the representative’s appeal against the Employment Tribunal’s wasted costs order of £2,000.
• Employment Tribunal: on 12 June 2015 made a wasted costs order against the claimant’s representative following the dismissal of the underlying employment claims.