Kuwait Oil Company (K.S.C) v Al-Tarkait

An Employment Tribunal may take account of a paying party’s ability to pay when making a non-fixed costs order for the whole or a specified part of costs, under Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, rule 78(1)(b). It may therefore impose a cap exceeding £20,000.

Such a cap does not usurp the detailed-assessment jurisdiction. The assessing judge determines the sum payable below the cap; the Tribunal fixes only the maximum liability. An order must nevertheless identify the specified part of costs with sufficient certainty. A cap linked partly to an amount still to be assessed may satisfy that requirement where its practical range is clear, although an exact monetary cap is preferable.

The claimant, a former employee, brought claims for disability discrimination, unfair dismissal and wrongful dismissal. The Employment Tribunal dismissed the discrimination and wrongful-dismissal claims, but upheld unfair dismissal subject to a Polkey reduction and an 80% reduction of the basic award for contributory conduct.

At a later remedies and costs hearing, the Tribunal awarded the claimant compensation of £79,724.20 and limited the employer’s recoverable costs for historic allegations excluded during the proceedings. The cap was the claimant’s compensation plus the claimant’s recoverable costs, the latter not yet assessed.

The employer appealed, contending that the cap was outside rule 78(1)(b) and impermissibly assumed the function of a judge conducting detailed assessment. The claimant’s cross-appeal was not pursued and disclosed no arguable point of law.

1. Appeal dismissed. The Tribunal’s costs order was within its powers and was upheld. The cross-appeal was dismissed.
2. Rule 84 permits a Tribunal to consider ability to pay both when deciding whether to make a costs order and when deciding its amount. That discretion applies to a non-fixed order under rule 78(1)(b), as well as to a fixed order under rule 78(1)(a). There was no textual or practical basis for confining ability-to-pay considerations to awards of £20,000 or less.
3. A Tribunal may order payment of a specified part of costs and impose a maximum recoverable amount. Rule 78(3) confirms that an order under rule 78(1)(b) may exceed £20,000. The approach in Jilley v Birmingham and Solihull Mental Health NHS Trust [2007] UKEAT/0584/06/DA was correct: detailed assessment does not prevent the Tribunal from making a costs order which reflects ability to pay.
4. The cap did not determine the amount payable and did not displace the assessing judge’s jurisdiction. A judge conducting detailed assessment would still decide the recoverable costs, subject to the maximum set by the Tribunal.
5. The cap was sufficiently certain to identify the specified part of the employer’s costs. One component was the known compensation award and the other was the claimant’s costs award, estimated at about £4,900 and still to be assessed. The resulting range was sufficiently clear, although an exact cap would have been better and could readily have been stated.
6. Had the order been unlawful, the proper course would have been to set it aside and remit the employer’s costs application to the same Tribunal, rather than simply remove the cap. No such remittal was necessary.

• Employment Appeal Tribunal: appeal dismissed; the Employment Tribunal’s capped costs order was upheld.
• Employment Tribunal: in a judgment dated 7 November 2018, following a remedies and costs hearing, it awarded compensation for unfair dismissal and made reciprocal costs orders, including the capped order in the employer’s favour.