In April I reported on the first of two appeals by Ms A A Vaughan, which related to the admissibility of covert recordings in Tribunal proceedings. Following the dismissal of all her claims Ms Vaughan brought a second appeal, this time against a costs order of between £60,000 to £87,000 (depending on how the cost assessments went) against her. Ms Vaughan was successful in her last appeal but not with regard to costs. The order was made after her discrimination and whistleblowing claims were dismissed and she appealed on multiple (and diffuse) grounds, including that:
- Her employers had never given her any warning that they would apply for costs, or applied for an order that she pay a deposit to be allowed to carry on with the case;
- The employer had made a settlement offer, and had shown bad faith in negotiations;
- No proper consideration had been given to the fact she was unrepresented or that she had a disability;
- The costs order was punitive rather than compensatory; and
- Her lack of means had not properly been considered – she was unemployed and she could not pay anything immediately.
Judgment on the costs issue was reserved and has now been published. All of the grounds put forward by Ms Vaughan failed. Although no one doubted that the she genuinely believed in her case, it was misconceived in the sense it had no reasonable prospect of success. The Employment Appeal Tribunal found that although there was some scope to argue that the tribunal had not expressly dealt with all her arguments in its written reasons, it was undoubtedly right that the claims had no reasonable prospect of success and so the tribunal had a discretion to make a costs order.
The EAT observed that:
- Whilst deposit orders are a valuable tool for averting weak claims, not seeking an order does not mean that the employer accepts that a claim is arguable;
- Making a commercial offer of settlement is not an acceptance that a claim has any strength. Defending a claim can be costly and offering settlement with a view to avoiding those costs is a perfectly legitimate approach for employers to take, which does not necessarily imply anything about the validity of the allegations;
- A genuine belief in a claim does not mean it is not misconceived;
- The claimant’s ill health was not relevant, on the facts, to the question of costs;
- While it was relevant that she was unrepresented, the reason for the costs order was not related to the employee’s lack of experience as a litigant but was due to her "fundamentally unreasonable appreciation" of her employer’s actions; and
- There is no requirement for a tribunal to consider means at all when deciding on a costs order and the tribunal was perfectly entitled to make a substantial order which could be enforced later if the claimant’s health improved and/or she got a job.