costs employment law

Ordered to pay costs despite inability to do so

calculatorIt is a central maxim of international jurisprudence that, other than in the most exceptional circumstances, a judgment or order should not be made if it cannot be complied with by the person against whom it is made. This is why, for example, individuals who may owe thousands of pounds are often ordered to make nominal payments of, say, £1 or £5 per month, simply because they cannot afford any more.

The rationale is that to do otherwise is to undermine the authority of the court. If a court makes an order that it knows cannot be complied with it is effectively forcing a contempt of court since the element of choice does not exist. Contempt of court, according to its definition, entails disobedience or disrespect to a court in a form which opposes or defies authority, justice and the dignity of the court. It is therefore pretty clear why a court would not generally wish to bring about a contempt of court which does not involve any exercise of choice on the part of the contemnor.

Against this background the decision of the Employment Appeal Tribunal in the case of Mrs D M Chadburn -v- Doncaster and Bassetlaw Hospital NHS Foundation Trust and Mann makes interesting reading. In general costs are not awarded in employment tribunal proceedings unless a party has behaved unreasonably. Consequently there is a punitive element in such an award (even though some protest otherwise), reflecting the tribunal’s disapproval of a party’s behaviour.

Mrs Chadburn made a number of discrimination claims against her former employer. The tribunal rejected her claims and, significantly, found that she had made up allegations of race discrimination as a means of giving the tribunal jurisdiction over her complaints of harassment. The tribunal took the view, understandably, that this was unreasonable behaviour and went on to award costs against her in the sum of £10,000, thought to be under a third of the actual costs incurred by the respondents.

Mrs Chadburn’s appeal against the costs award was initially rejected. However, following a hearing in July 2014, it was allowed to proceed on the basis that it was suggested that the tribunal did not take into account the full evidence concerning the claimant’s current means, so it was arguable that the costs award was made on a false basis.

Further evidence was introduced suggesting that the claimant’s debts were not £600 as had been thought but were nearer to £4,285. However an application for reconsideration of the award was refused. The appeal was therefore made against both the initial costs judgment and the refusal to reconsider it. Mr Justice Simler was robust in his rejection of the appeal. He referred to Rule 84 of the Rules of Procedure which provides that the means of a paying party may be taken into account when considering whether or not to make an order and, if an order is made, when deciding how much to award. However there is no obligation to do so. Taking into account relevant case law (Arrowsmith -v- Nottingham Trent University) there must (my emphasis) be “a realistic prospect that the Appellant might at some point in the future be able to afford to pay”. As I go on to indicate, that prospect in this case was based on what can only be regarded as speculation.