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Employee Must Pay £60,000 Costs

In a stark reminder that launching employment tribunal proceedings can have serious financial consequences, a woman who pursued misconceived allegations against her employers and others during a costly tribunal hearing which lasted 20 days has been ordered to contribute an estimated £60,000 to the heavy legal costs of the case.

The woman had made claims of discrimination, victimisation, harassment on grounds of race and/or disability and of detriments suffered as a whistle-blower against her local authority employer, a previous employer from whom she had been transferred under TUPE and a number of individual colleagues (the defendants).

After a lengthy hearing, at which the woman appeared in person, an employment tribunal (ET) dismissed all her claims as misconceived and unreasonably pursued.  She was ordered to pay one third of the defendants’ legal costs, which they estimated at £260,000. Although those costs were likely to be reduced on formal assessment, the woman was left facing a bill in the region of £60,000.

In dismissing the woman’s appeal against that costs order, the Employment Appeal Tribunal (EAT) noted that there was no evidential or rational basis for the woman’s conviction that she was the victim of a conspiracy or a serious injustice and ruled that the ET’s decision was ‘unimpeachable’.

The defendants had not sought an order requiring the woman to deposit money with the tribunal as security for costs and had, prior to the hearing, offered to settle her claims for a global sum of £95,000. However, the EAT ruled that that offer did not imply any acceptance by the defendants that the woman had an arguable case.

The EAT noted that it was notorious that the costs of defending a long case against a persistent claimant can be such that, from a purely commercial point of view, it makes more sense to offer a substantial sum by way of settlement regardless of the merits of the case. The defendants had, in the event, comprehensively won the case.

Notwithstanding the woman’s plea that she was in poor health and did not have the means to pay the costs bill, the EAT ruled that there was a reasonable prospect of her being able to return to well-paid employment in the future. Noting that affordability was not the sole criterion for the exercise of the discretion to award costs, the EAT ruled that the sum the woman had been ordered to pay was reasonable.