Mark Ward v Dimensions (UK) Ltd

Where an Employment Tribunal takes a party’s means into account when fixing the amount of a costs order, it must accurately assess the evidence bearing on ability to pay. A material error concerning monthly expenditure may make the amount awarded unsafe, particularly where the corrected expenditure substantially reduces the party’s disposable income.

Limited means do not necessarily prevent a costs award or cap its amount. However, if the tribunal elects to make an award despite those means, it must explain its approach. The appropriate remedy will ordinarily be a narrow remission to the original tribunal where it can reconsider the amount with knowledge of the wider case.

The Employment Tribunal dismissed the appellant’s unfair dismissal and protected-disclosure claims. It later ordered him to pay £5,000 towards the respondent’s costs, having found unreasonable conduct in changes to his Scott Schedule and his refusal of a settlement offer.

The tribunal stated that the appellant’s monthly expenditure was about £690. His evidence in fact put total monthly expenditure at £1,245.28, against monthly income of about £1,300. The respondent accepted the error but contended that it was immaterial. The appeal concerned whether the error made the costs award unsafe and, if so, the proper remedy.

1. Appeal allowed. The Employment Tribunal’s finding that the appellant had acted unreasonably was not open for reconsideration. Its order fixing the amount of costs at £5,000 was nevertheless unsafe.

2. An Employment Tribunal has no absolute duty to take account of a paying party’s financial means. Nor do limited means necessarily cap the amount of a costs award: [20211] EWCA Civ 797 and [2013] IRLR 713. If, however, the tribunal takes means into account, it must make and use accurate findings. If it decides to award costs notwithstanding limited means, it must clearly explain that course.

3. Here the tribunal expressly took the appellant’s means into account, but mistakenly treated £690 as his total monthly expenditure. That figure represented only personal expenses. His evidence gave total expenditure of £1,245.28. The difference was material because his estimated monthly income was only £1,300, leaving substantially less disposable income than the tribunal had understood. The error could therefore have had an important effect on the amount selected.

4. The amount of the costs order was remitted to the same Employment Tribunal. Applying Sinclair Roche & Temperley & Ors v Heard & Anor, the original tribunal was best placed to reconsider the amount in light of the corrected expenditure, its existing findings, and any updated written financial evidence. The remission was limited to whether costs should be awarded and, if so, their amount. The finding of unreasonable conduct must not be reopened.

• Employment Appeal Tribunal: allowed the appeal against the amount of the costs order and remitted that issue to the same Employment Tribunal: [2022] EAT 159.
• Employment Tribunal, Watford: dismissed the substantive employment claims and subsequently ordered the claimant to pay £5,000 in costs. The costs decision was sent to the parties on 19 April 2021.