Costs News

14 November 2019
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Tribunal wrongly substituted own view of claimant’s decisions in making costs order

An employment tribunal (ET) that ordered an unsuccessful claimant to pay costs of £20,000 made the mistake of substituting its own view of decisions taken by the litigant, rather than reviewing the reasonableness of those decisions, the Employment Appeal Tribunal (EAT) has ruled.

In Solomon v University of Hertfordshire and Anr, the ET rejected complaints of unlawful discrimination, victimisation and harassment, but upheld the claimant’s complaint of unfair dismissal to a limited extent and awarded her compensation of £1,900.

In the run-up to the hearing, she had rejected a settlement offer of £50,000, with an additional offer to pay £500 to take independent advice on it. After the merits judgment, the claimant rejected a further offer to pay the basic award of £1,900 in full and final settlement, which would have prevented the defendants from pursuing an application for costs, but would also have prevented the claimant from appealing.

The tribunal awarded the defendants costs of £20,000 – the most it can award without a detailed costs assessment – for three main reasons: the claimant deciding against attending a judicial mediation at 4pm on the day before and continuing with the litigation rather than accepting either the pre-hearing offer or post-judgment offers.

The claimant was represented before the employment tribunal and the EAT by her husband, although she also spoke herself following his submissions.

The EAT, with His Honour Judge David Richardson giving the ruling, noted that there was no finding that any part of the claim lacked a reasonable prospect of success.

“It is, we think, important for an ET, when it is dealing with the question whether the conduct of litigation is unreasonable, to keep in mind that in many (though not all) circumstances, there may be more than one reasonable course to take.

“The question for the ET is whether the course taken was reasonable; the ET must be careful not to substitute its own view, but rather to review the decision taken by the litigant. Even where a party is legally represented, there may be more than one reasonable course; and the ET must also bear in mind that it is not to judge a person who is representing herself or who has a lay representative by the standards of a legal professional.”

The EAT said many litigants, whether represented or not, might have found the post-judgment offer a difficult decision to take: “We can see that it would have been reasonable to accept the offer, but we do not see why it was unreasonable to refuse it. The claimant went on to instruct counsel who drafted grounds of appeal; they were in due course found to provide reasonable grounds for appealing and sent through to a full hearing.

“It is precisely the kind of decision where litigants, represented or unrepresented, may take different courses without either course necessarily being considered unreasonable.

“The ET’s reasoning is quite short; it does not recognise the possibility that litigants may form different views as to whether they should give up their right of appeal without either view being characterised as unreasonable. We think its conclusion on this point indicates that it has approached the matter on the basis of its own view, without first considering the position of the claimant and then applying the range of reasonable responses test apposite to this question. In short, we think the ET’s decision is based on an error of law.”

Although the position was not so clear as regards the £50,000 offer, “we conclude that the ET has adopted a similar approach”.

The EAT also commented on the offer of £500 to pay for legal advice on the first offer. “We think it clear that the advice which the Claimant could expect to receive for this sum (or any sum remotely like it) would only relate to the terms and effect of the proposed settlement and its effect on her ability to pursue her rights thereafter (see section 203(3) of the Employment Rights Act 1996).

“Any advice as to the merits of the claimant’s claim and the likely award of compensation would require reading and consideration on a quite different scale. So even if the claimant had sought advice, she would still have had to make her own lay assessment as to the merits of her claim and the likely award of compensation. The ET said, in paragraph 10 of its reasons, that the offer of £500 plus VAT was for a solicitor ‘to advise on the merits of a settlement’. If so, the offer was wholly unrealistic.”

The EAT allowed the appeal and remitted the defendant’s costs application for re-hearing.

Christian Ameadah (the appellant’s husband) and Mrs Sharmain Solomon (the appellant in person) for the appellant. Daniel Dyal (instructed by Pinsent Masons) for the defendants.

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