Kuwait Oil Company v Al-Tarkait

In employment tribunal proceedings, a costs order under rule 78(1)(b) may require detailed assessment and still be subject to a maximum sum. Reading rule 78(1)(b) with rule 84, the tribunal may set that ceiling by reference to the paying party’s ability to pay. The order may cover a percentage of total costs or costs attributable to a defined issue or part of the proceedings. A cap fixes only the outer limit. It does not determine the amount payable or remove the assessor’s jurisdiction to conduct the detailed assessment.

Following lengthy proceedings, Dr Al-Tarkait’s claims for disability discrimination and wrongful dismissal failed, but his unfair dismissal claim succeeded. The Employment Tribunal awarded compensation and made reciprocal costs orders. It ordered Kuwait Oil Company’s costs relating to historic allegations, subject to a maximum equal to the compensation and costs awarded to Dr Al-Tarkait. The Employment Appeal Tribunal dismissed Kuwait Oil Company’s appeal in UKEAT/0210/19/00. The central issue before the Court of Appeal was whether an Employment Tribunal could impose that cap under rule 78(1)(b) and rule 84 while directing detailed assessment of costs exceeding £20,000.

The appeal was dismissed. Lady Justice Simler gave the leading judgment, with Lord Justice Bean and Lady Justice Andrews agreeing.

1. Rules 78(1)(b) and 84 of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013 must be read as part of a single costs scheme. They permit a tribunal to order payment of a specified part of costs, subject to detailed assessment and a maximum sum, while taking the paying party’s ability to pay into account.
2. The phrase specified part of the costs is wide enough to cover a fixed percentage of total costs or costs attributable to a particular issue or part of the proceedings. The tribunal may therefore impose a ceiling even where the eventual costs exceed £20,000.
3. A cap does not determine the specific amount payable and does not usurp the assessor’s function. The tribunal sets the outer limit. The assessor remains responsible for determining the amount following detailed assessment by reference to the factors in the Civil Procedure Rules 1998, which do not include ability to pay.
4. This construction avoided an irrational distinction between costs below and above £20,000. Jilley v Birmingham and Solihull Mental Health NHS Trust [2007] UKEAT/0584/06/DA and Swissport Ltd v Exley & Ors [2017] UKEAT/0007/16/JOJ provided persuasive support.
5. As an alternative observation, if the order had been unlawful, the proper course would have been to set it aside and remit the costs application to the same Employment Tribunal, rather than simply remove the cap. The existing costs order was upheld.

• Court of Appeal (Civil Division): Dismissed the appeal and upheld the capped costs order.
• Employment Appeal Tribunal: Dismissed the appeal in UKEAT/0210/19/00, holding that ability to pay could be considered when making a non-fixed costs order under rule 78(1)(b).
• Employment Tribunal: Ordered Kuwait Oil Company’s costs relating to historic allegations, subject to a maximum equal to the compensation and costs awarded to Dr Al-Tarkait.