Costs in discrimination cases
30 Apr 2009
By James Medhurst
The case of Daleside Nursing Home v Mathew is a very unusual one in that the Employment Appeal Tribunal interfered with the decision of the tribunal below not to award costs. In his reasons, Justice Wilkie is careful to emphasise that the case does not raise any issue of legal principle but it is difficult to see how it can avoid doing so, in light of the conclusion that a deliberate and cynical lie amounts to unreasonable conduct necessitating an award of costs. On its face, this appears uncontroversial, but the problem is that, in most cases, one or other of the parties is lying and most lies are both deliberate and cynical. It would seem to follow that any claimant who is alleging an act of discrimination or, indeed, any employer who is denying one, is at serious risk of such an award.
Suffice to say, this is highly unsatisfactory in light of other dicta that costs in the Employment Tribunal should be exceptional. There is a real danger that people with genuine claims will be deterred at least as much as those with fraudulent ones. Even worse, authorities that appear to be widely applicable but which purport to establish no general principle are prone to result in inconsistency and uncertainty such that all parties could legitimately fear an award of costs against them without any confidence of recovering their own costs if they are successful, which is worse than the situation they would face if costs were automatically paid by the losing party. This cannot have been the intention of the drafters of the Rules of Procedure and undermines the purpose of the tribunal system.
3 Responses to “Costs in discrimination cases”
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1
Rad Kohanzad
May 11th, 2009 at 6:02 pm
I agree that it unusual and undesirable for the EAT to interfere with the findings of an employment tribunal in the way that the EAT has done here, however, from a logical perspective, Justice Wilkie has a point, the finding of the ET do seem perverse, given their findings of fact.
In terms of this setting a bad precedent, I think that you are over exaggerating the effect of its impact because (1) parties do not lie on crucial matters most of the time – I would estimate it at about 25%!, and (2) those lies are not invariably cynical and deliberate – I would estimate it at say 33.3%. If you multiply those percentages, you get 8%. Now, those lies will only get picked up, say 60% of the time (I think that’s pretty complementary to the ETS), that leaves costs in about 5% of cases (I realise this figure does not factor in the mistakes that tribunals will make in erroneously finding that someone has deliberately lied on a crucial matter).
I further think that this case will not have the impact suggested because Employment Judges are famously slow in changing their habits, unless really forced to do so, and it leaves them, in my view, enough wriggle room to resist any application from an over eager representative.
Personally, I don’t think that it is a bad thing if there were costs awarded in 5% of cases where parties have been found to have flagrantly lied. When advising your client about costs, you simply inform them that if they are found to have deliberately lied to the tribunal that they will have costs awarded against them. Those telling the truth will not be put off and many liars will be deterred from lying.
If you retort that some truth telling Claimants will be put off from bringing their Claim, I would beg to differ. What difference would a perspective litigant think between being told that (1) costs are only awarded where it is found that you have been unreasonable, vexatious or your Claim is misconceived, or (2) costs are only awarded where it is found that you have been unreasonable, vexatious or your Claim is misconceived, for example, where you have been found to have deliberately lied to the tribunal?
Furthermore, there would also be the knock on benefit of the fact that some lying Respondents would be more likely to settle before a hearing with the threat of costs hanging over them if they are caught lying.
2
PT
May 21st, 2009 at 1:24 am
It is a lawyer’s distinction; but the distinction is there between lying and the various shades of grey that separate a lie from the truth, such as being mistaken, or exaggerating, etc.
A deliberate and cynical lie under oath at Tribunal is, let us not forget, perjury and a serious criminal offence.
I don’t think there is any room for doubt that a deliberate and cynical lie is unreasonable conduct. Unreasonable conduct can be punished by a costs award. There really is nothing new here.
What is new is that someone has taken the time to spell this out, whereas normally it may get forgotten.
The bit of dark law, which makes the whole matter more stomachable on a day-to-day basis (and consistent with the authorities that say costs awards are exceptional) is this: Employment Judges don’t usually call a lie a lie, unless forced to do so. In fact, they avoid calling people liars whenever possible. Nor do they call unreasonable conduct as it is, unless forced to do so.
I would therefore suggest that, in order for a lie to: a) be called for what it is; and b) result in a costs award against the liar; it would generally take a pretty blatant, brazen and cynical lie – the kind of lie that, when seen in practice, you yourself would agree should have a costs award against it, no matter how rare costs awards are in Employment Tribunals, and no matter how much you would want to keep costs awards rare.
I therefore expect that, if Employment Judges are sensible in how they deal with this authority, no new legal principle will emerge and costs awards will remain rare.
3
James Medhurst
May 21st, 2009 at 12:53 pm
Thanks Peter,
The problem with this case is that the tribunal chose not to expressly say that the claimant had lied. The appeal was granted because it was said that it followed from the findings of fact that the claimant had lied, even though the tribunal had exercised its discretion not to award costs.
I agree that costs should be awarded in certain cases but I do not think that it is useful to distinguish between serious and non-serious forms of lying. As tribunal costs are arguably punitive, a better solution is to say that a higher standard of proof should apply and costs should only be awarded when the tribunal has a high level of confidence that there has been a lie and it feels costs are warranted.