B Wentworth-Wood & Ors v Maritime Transport Ltd

An Employment Tribunal must give sufficient reasons for a costs or wasted costs order to identify the conduct relied on, why it was unreasonable or negligent, and why the resulting order is justified. A judgment which simply adopts a successful party’s submissions without stating or explaining them is neither adequately reasoned nor accessible and public.

Wasted costs are an exceptional, last-resort jurisdiction. The Tribunal must apply the three-stage approach in Ridehalgh: identify improper, unreasonable or negligent conduct; determine whether it caused unnecessary costs; and decide whether an order is just in all the circumstances.

LGV drivers brought claims for holiday pay and unlawful inducements relating to collective bargaining after their employment transferred to the respondent. Their claims were struck out following an Unless Order. A previous appeal restored certain claims because the Employment Tribunal had wrongly construed that Order.

The Employment Judge later ordered ordinary costs against the claimants and wasted costs against their solicitors, OH Parsons LLP. The claimants and solicitors appealed. The respondent did not resist the appeal and agreed that both costs applications should be dismissed. The central issues were whether the costs reasons could stand after the earlier appeal, whether they satisfied the reasons requirement, and whether the wasted costs jurisdiction had been lawfully applied.

1. Appeal allowed. The Employment Appeal Tribunal set aside both the ordinary costs order and the wasted costs order, and substituted an order dismissing the respondent’s applications for costs.

2. The Employment Judge’s general finding that the claimants had failed to comply with the Unless Order could not stand after the earlier appeal. It failed to identify which claimant had breached which requirement and impermissibly treated the claimants as a single unit. The error was particularly acute for the Adams claimants, to whom the Unless Order did not apply.

3. The costs judgment fell far below the minimum standard required by Meek v City of Birmingham District Council [1987] IRLR 250. It did not identify the relevant breaches, the conduct said to be unreasonable, the costs caused by that conduct, or the reasons for rejecting the solicitors’ response. A judgment that wholesale adopts the successful party’s unexpressed reasons does not explain why the losing party lost and is not accessible or public.

4. Under Rule 80(1) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, the Tribunal had to use the three-stage Ridehalgh approach. It had to identify specific improper, unreasonable or negligent conduct; decide whether it caused unnecessary costs; and decide whether an order was just. It also had to recognise the penal and exceptional character of the jurisdiction, the constitutional position of the lawyer, and that wasted costs are a last resort.

5. The Employment Judge instead equated unreasonable conduct with negligence, did not identify a relevant breach of duty or resulting unnecessary costs, and did not undertake the required justice assessment. Given the unsettled law concerning the underlying claims, there was no basis for finding conduct akin to an abuse of process. Had the correct principles been applied, neither form of costs order could properly have been made.

• Employment Appeal Tribunal: Allowed the appeal from the Employment Tribunal’s costs judgment and substituted an order dismissing both costs applications.
• Employment Appeal Tribunal: An earlier appeal, Wentworth-Wood & Others v Maritime Transport Ltd UKEAT/0316/15/JOJ, held that the Unless Order had been wrongly construed and reinstated certain claims.
• Employment Tribunal: Employment Judge Laidler struck out claims after an Unless Order and subsequently made ordinary and wasted costs orders on 11 January 2016.