Liliana Vassallo v Mizuho International Plc & Anor

An Employment Appeal Tribunal costs order remains exceptional and is not punitive. However, where an appeal ground is misconceived, or a party conducts proceedings unreasonably, the Tribunal may award costs under the Employment Appeal Tribunal Rules 1993.

The Tribunal should identify the unreasonable conduct and its effect, but may assess costs broadly and need not establish a direct causal link between every act of conduct and the costs claimed. A party’s failure to co-operate over evidence, clarify grounds, or comply with procedural requirements may be unreasonable where it causes the opposing party needless work. Ability to pay is relevant to the amount awarded and may justify a substantial reduction.

The claimant’s substantive appeal had previously been dismissed by the Employment Appeal Tribunal in [2024] EAT 170. Following that hearing, the respondents applied for costs against the claimant under Rules 34 and 34A of the Employment Appeal Tribunal Rules 1993. In the alternative, they sought wasted costs against counsel under Rule 34C.

The respondents relied on a ground of appeal held to be misconceived and on alleged unreasonable conduct in the appeal. That conduct included failure to co-operate over hearing notes, unclear grounds, points outside the permitted appeal, and deficient bundles. The claimant disputed that her conduct justified costs and relied on her limited means.

1. The respondents’ application for costs succeeded. The Tribunal awarded the respondents £1,000 against the claimant. It made no wasted costs order against counsel.

2. Rule 34A permits a costs order where proceedings are misconceived or where there has been unreasonable conduct in bringing or conducting them. Applying D’Silva v NATFHE and Ors, the Tribunal treated costs as exceptional rather than punitive. It identified the conduct relied upon and its practical effect, consistently with Sud v Ealing London Borough Council. It assessed the matter broadly and did not require a direct causal link between conduct and costs, applying Yerrakalva v Barnsley Metropolitan Borough Council and another.

3. One appeal ground had already been found misconceived. The claimant had also acted unreasonably in pursuing it. She did not provide her own hearing notes or co-operate in resolving the dispute over what had occurred before the Employment Judge, while opposing the respondents’ application for the Judge’s notes. This caused unnecessary work in preparing the answer, dealing with the notes application, and preparing for the appeal hearing.

4. The claimant’s wider conduct was also unreasonable. Her grounds incorporated a reconsideration application without identifying the relevant parts. Her skeleton argument went beyond the permitted grounds. She filed an unagreed and unpaginated core bundle which omitted the permission decision, and an inadequate authorities bundle. The fact that the Tribunal could work through those defects did not remove the needless work imposed on the respondents. The Employment Appeal Tribunal Practice Direction 2023 expressly warned of costs risk for failure properly to co-operate in producing a bundle or comply with skeleton-argument requirements.

5. The claimant was substantially impecunious, with no material assets, limited Universal Credit income and debt. Under Rule 34B(2), the Tribunal therefore reduced the claimed £10,882.50 to £1,000: £750 for the misconceived ground and its conduct, and £250 for the wider unreasonable conduct.

• Employment Appeal Tribunal: This costs judgment allowed the respondents’ costs application following the dismissal of the claimant’s substantive appeal. Costs of £1,000 were awarded; no wasted costs order was made.
• Employment Appeal Tribunal: The claimant’s substantive appeal was dismissed in Vassallo v Mizuho International plc and another [2024] EAT 170.
• Employment Tribunal: The underlying Employment Judge decision was the subject of the substantive appeal. Its citation is not stated in the judgment.