24th October, 2023

Employment Tribunals are not a costs-free zone

A frequent refrain of solicitors who represent respondents in Employment Tribunal proceedings is that it is virtually impossible to obtain a costs order against a claimant who has brought an unmeritorious claim, or that there are no consequences when outlandish allegations are made in pursuit of a claim. The case of Cairns v The Wellness Zone Case No: 2414495/2021 provides a salutary reminder to parties engaged in Employment Tribunal proceedings that, in an appropriate case, the Tribunal will exercise its costs jurisdiction, and not merely in a token way. The case also serves as a cautionary tale for claimants making serious allegations in pursuit of their claims.

The Claimant was employed by the Respondent, essentially a Wellness Clinic, as a Personal Wellness Trainer and was later assigned practice management responsibilities. The Respondent’s principal was a practising doctor. Having initially claimed unfair constructive dismissal, disability discrimination, whistleblowing detriment/dismissal together with a redundancy payment, notice pay and holiday pay, the Claimant, on a piecemeal basis, and gradually over time, withdrew all of her claims save for that of constructive unfair dismissal.

The liability judgment is available here. The case was heard by Judge Brian Doyle, former President of Employment Tribunals in England and Wales. The Tribunal found (1) that the Claimant told “obvious untruths” (2) that she made up parts of her case as she went along; (3) that she was evasive; (4) that she answered questions which she wished she had been asked rather than those she had been asked; (5) that she employed a “distraction technique” when giving her answers; (5) that she sought to support her case with documents when, in fact, no such support existed; (6) that she appeared to believe that she was telling “her truth” rather than “the truth”; (7) that her evidence was “riddled with exaggeration and hyperbole”; (8) that there were many examples of “sheer contradiction” in her evidence, and (9) that some of her evidence, far from being honest but mistaken, was “actually mendacious”.

The latter finding was made in relation to allegations the Claimant made to the General Medical Council regarding the Respondent’s principal, allegations which had potentially career ending implications for him.

Experienced Tribunal practitioners will be aware that the telling by a party of a lie will not necessarily of itself be sufficient to justify the making of a costs order (see for example HCA International Limited v May-Bheemul UKEAT/0477/10 - March 2011, per Cox J, and Kapoor v Governing Body of Barnhill Community High School UK EAT/0352/13, per Singh J).

As to the means of the potential paying party’s ability to pay, Employment Tribunal Rule 84 permits the Tribunal to have regard to the paying party's ability to pay but it does not have to do so (Jilley v Birmingham and Solihull Mental Health NHS Trust and Single Homeless Project v Abu UKEAT/0519/12, per HH Judge Richardson).

In the instant case the Claimant (unusually) admitted that a costs award was merited but submitted that she did not have the means to pay.

Notwithstanding the Claimant’s concession, in its costs judgment (also attached) the Tribunal, (this time Employment Judge Butler) nevertheless considered whether the Claimant had acted unreasonably so as to “cross the threshold”, justifying a costs award in principle, and concluded that it was satisfied that the Claimant’s conduct of proceedings had indeed been unreasonable, referring tin particular to the observations of Employment Judge Doyle in relation to the Claimant’s oral evidence, her untruths, her placing of misleading interpretation on documents, exaggeration and the giving of mendacious evidence “in respect of matters that went to the core of her claim”.

With regard to the issue of the Claimant's ability to pay, she had provided the Tribunal with very little detail in respect of her means and, compounding the untruths she had told at the liability stage, the Tribunal found that she had been untruthful about her income. The material she provided on her means raised a number of questions as to how she was funding her existence.

The Respondent applied pursuant to Rule 78(1)(b) for an order that the Claimant be ordered to pay the whole or a specified part of its costs, with the precise amount to be assessed by the County Court, and, in the alternative, pursuant to Rule 78(1)(a) for an order that the Claimant pay the Respondent £20,000, the maximum specific amount which could be awarded. The Tribunal ordered the latter.

Whilst it is a first instance decision, Cairns does refer to a number of authorities of appellate standing, and provides the following takeaways:

  1. Parties cannot proceed on the assumption that the Employment Tribunal is a costs-free zone.
  2. There will be circumstances where the conduct of a party may come under scrutiny in the context of a costs application.
  3. A claimant who invites an Employment Tribunal to have regard to their ability to pay in the context of whether a costs award should be made, needs to be careful to provide the Tribunal, as far as their means are concerned, with the full picture. And a truthful picture at that.
  4. In an appropriate case, a Tribunal can and will make a meaningful costs order.

The case also serves as a reminder that, save in exceptional circumstances, Employment Tribunal judgments, containing full reasons, are published on the relevant gov.uk website. Many employers conduct due diligence on potential employees, much of that work being internet-based. It may give a sense of empowerment to make a potentially career-ending allegation against the opposing party in a claim form. For the Tribunal to then conclude that “in places”, the evidence of the maker of the allegation “was not simply honest but mistaken, but actually mendacious” is a judicial finding which can follow someone for the rest of their career, if not their life.

Paul Gilroy KC appeared for the Respondent in Cairns.



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