Lavinia Day v East and North Hertfordshire NHS Trust

When assessing costs, a tribunal may consider third-party resources only to the extent they affect the paying party’s own ability to pay. It must examine whether and how those resources are available; household income cannot simply be treated as the paying party’s means. Ability to pay is a discretionary consideration, and an award need not be capped at what the party can pay immediately. Where the tribunal orders a specified sum within the statutory cap, it must carry out a summary assessment, scrutinise whether the costs are reasonable and proportionate, and indicate briefly that it has done so.

Lavinia Day, a clinical support worker employed by East and North Hertfordshire NHS Trust, claimed that sickness absence review meetings were disciplinary meetings at which she had been denied her statutory right to be accompanied. The Employment Tribunal found that the meetings concerned her health and return to work, dismissed her claim, and ordered her to pay £14,123.39 in costs after finding that the claim had no reasonable prospects and that she had acted unreasonably in pursuing it.

Day appealed the costs order. She challenged the tribunal’s reliance on her husband’s earnings when assessing her ability to pay and contended that it had not assessed the claimed costs for reasonableness and proportionality. The central questions were whether the tribunal had properly assessed her own ability to pay and whether it had conducted a summary assessment.

Appeal allowed in part. The challenge to the decision to make a costs order was dismissed. The challenges to the assessment of Day’s means and to the amount of costs were allowed. Those questions were remitted to a fresh Employment Tribunal.

1. A costs decision has three stages: threshold conduct, whether to make an award, and the amount of the award. Ability to pay may be considered at the discretionary and quantum stages. A tribunal need not address it separately at the discretionary stage if its quantum assessment establishes that the paying party can meet the full sum sought. If a tribunal takes ability to pay into account, it should summarise its findings and explain their effect. The Employment Tribunal was entitled to consider Day’s choice to retrain rather than work, her potential future earnings, and her conduct despite warnings and legal advice. Its exercise of discretion was not contrary to principle or plainly wrong. The EAT applied the approach in Willis v GWB Harthills LLP [2025] EAT 79.

2. A tribunal may consider a third party’s means only insofar as they affect the paying party’s ability to pay. It must examine the actual financial arrangements and cannot assume that a spouse’s disposable income is available to the paying party. An exact allocation is not required in every case, but the assessment must focus on the paying party’s own resources. The Employment Tribunal referred to household income and to the husband meeting household costs, but did not establish what part of his remaining income was available to Day. It therefore used the wrong statutory lens under rule 84 of the Employment Tribunal Rules of Procedure 2013, as explained in Abaya v Leeds Teaching Hospital NHS Trust UKEAT/0258/16 and QR v The GI Group Ltd [2025] EAT 178.

3. A tribunal need not limit an award to the amount the party can pay immediately or determine a firm maximum by reference to present means. Affordability is not the sole criterion, and future circumstances may be assessed broadly. The EAT relied on Arrowsmith v Nottingham Trent University [2012] ICR 159, Vaughan v London Borough of Lewisham [2013] IRLR 713 and Willis v GWB Harthills LLP [2025] EAT 79 for those principles.

4. A specified sum within the £20,000 cap is a summary assessment. The tribunal must scrutinise the sums claimed for reasonable incurrence, reasonable amount and proportionality, and briefly indicate that it has applied those principles. It need not explain each figure in detail. The Employment Tribunal awarded the full amount claimed without any apparent scrutiny or assessment. That was an error of law. The EAT applied Kovacs v Queen Mary and Westfield College [2002] IRLR 414 and Ayoola v St Christopher’s Fellowship UKEAT/0508/13.

A fresh tribunal was to assess Day’s ability to pay and, taking that assessment into account, determine what costs were payable. It was then to summarily assess those costs for reasonableness and proportionality.

• Employment Appeal Tribunal — In [2026] EAT 110 , dismissed the challenge to the decision to make a costs order, allowed the challenges concerning ability to pay and summary assessment, and remitted those questions to a fresh tribunal.
• Employment Tribunal — Dismissed Day’s claim and ordered her to pay £14,123.39 in costs. The decision citation is not stated in the judgment.