Employment Judge GeorgeNot represented for claimantMr J Hillerby (instructed by solicitor) for respondentDate 25 March 2025
JUDGMENT
The claimant shall pay to the respondent £4,293.00 in respect of their legal costs.
REASONS
[1]The respondents applied on 9 September 2024 for an order that the claimant pay the legal costs of their defence of the claim which was presented by him on 4 July 2023.[2]A brief litigation chronology is that the claim was presented following a period of conciliation between 20 and 22 June 2023. By the claim form, presented at a time when the claimant was represented, he complained of unfair dismissal, claimed a redundancy payment and notice pay. He also stated that he had not received the wages that were owed to him. This was defended by a grounds of response received on 31 October 2023 in which the respondent denied that the claimant had ever been employed by them.[3]By this time, the claimant had changed representatives. His second representative wrote to the tribunal on 23 October 2023 acknowledging that the claimant did not have qualifying service for an unfair dismissal claim and withdrew that. They asserted that the claimant had been employed by the respondent between 8 July 2022 and 25 May 2023. It appears from the grounds of response that the claimant’s representative had provided advance disclosure of payslips to them purporting to cover the period July to November 2022. These were apparently relied on by the claimant to show an intention to pay wages to him on various occasions. His case was that he had not been paid his wages.[4]The respondent explained in detail in the grounds of response why they challenged the validity of those documents; they state that the documents are not genuine documents and that each contain basic errors which make it apparent that they are forgeries. This makes this an unusual case in that the defence was that the claim was based on a lie and that the claimant appeared to be seeking to rely on forgeries to evidence an untruthful account of his employment.[5]The claim was listed for a final hearing, which - following a postponement - was due to take place on 20 August 2024. On a 18 June 2024 the claimant appointed his third set of representatives. The respondents applied for specific disclosure of the digital files of particular emails which had been disclosed by the claimant in compliance with an order for relevant documents to be sent to the other side. The respondent explained in their application for specific discovery that they had asked for a particular email said to have been sent by their senior HR director to be sent in its original digital format because there were factors about the documents disclosed to them which were suspect. The third representative came off the record on 29 July 2024 and contact details were provided for the claimant.[6]The tribunal made an unless order which was sent to the parties on 6 August 2024 directing that, unless the claimant disclosed the original native emails in digital format including that said to have been sent by the senior HR director by 13 August 2024, the claim would stand dismissed without further order. There was no response from the claimant and the tribunal wrote to the parties on 19 August 2010 confirming dismissal of the claim. There has apparently been no attempt to comply with the order, nor has there been an application to set aside the unless order or to explain why the unless order was not complied.[7]The costs order application was made under what is now rule 74 Employment Tribunal Procedure Rules 2024 (hereafter the 2024 Rules) on the basis that for because the claimant to bring a claim based on forged documents and/or documents which could not be genuine was wholly improper. It was also argued that the refusal to provide the electronic documents in compliance with the tribunal order was wholly improper and deprived the tribunal of an opportunity to assess the validity of the claimant’s assertions and decide the case on its merits. This was argued to be vexatious, abusive, disruptive or otherwise unreasonable conduct in bringing and conducting the proceedings. In the alternative, the respondent argued that the claim was without foundation because it was based on an untruth and therefore had no reasonable prospects of success.[8]On 9 December 2024 the parties were sent directions for a costs hearing including a direction that by 6 January 2024 the claimant should send to the respondent and the tribunal his response to the cost application and a schedule of income and outgoings if he wished the tribunal to assess his ability to pay any costs order. The claimant has not complied with this order. Indeed no correspondence has been received by the employment tribunal from the claimant at all and certainly not since 9 December 2024.[9]Directions were also made for skeleton arguments to be exchanged. The respondent provided their skeleton argument together with an electronic hearing file of the relevant documents 7 days before the costs hearing. They copied these documents to the claimant.[10]When the claimant did not attend the in-person hearing in Reading Employment Tribunal, the administration telephoned the number which the tribunal has on the hearing file and which was that provided by his third representative when they came off the record. The call went through to voicemail. The hearing had been listed as a hybrid hearing so that the respondent’s representative could attend remotely in the interests of saving expense.[11]I was satisfied that the claimant had been sent notice of today’s hearing through a correctly spell the email address which was the one we had been notified was his chosen method of communication. I considered the provisions of rule 47 of the 2024 Rules. All enquiries which were practicable had been made and I did not have any information about the reason for the claimant’s non-attendance. In those circumstances, it was in accordance with the overriding objective of avoiding delay and expense that the hearing should proceed in the claimant’s absence.[12]The power to order that one party pay the legal costs of the other is found in rule 74 Rules 2024. So far as is relevant, rule 74 reads as follows: “(1) A Tribunal may make a costs order or a preparation time order (as appropriate) on its own initiative or on the application of a party or, in respect of a costs order under rule 73(1)(b), a witness who has attended or has been ordered to attend to give oral evidence at a hearing. (2) The Tribunal must consider making a costs order or a preparation time order where it considers that –(a) a party (or that party's representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or(b) any claim or response had no reasonable prospect of success; or(c) a hearing has been postponed or adjourned on the application of a party made less than seven days before the date on which the relevant hearing begins. (3) The tribunal may also make such an order where the party has been in breach of any order or practice direction or where a hearing has been postponed or adjourned on the application of party.”[13]By rule 76(1), the Tribunal may order the paying party to pay a specified amount not exceeding £20,000 or the whole or a specified part of the costs of the receiving party, to be determined by way of detailed assessment.[14]There are therefore two stages to determining a costs application. First the Tribunal must consider whether the grounds for making a costs order in rule 74(2) exist and secondly, if they do, then the Tribunal must consider whether or not to make one. In deciding whether or not to make a costs order, and if so, in what amount, the Tribunal may have regard to the paying party's ability to pay: rule 82 of the 2024 Rules. The Tribunal has an open discretion whether or not to take means into account but if it declines to do so, having been asked to consider the paying party’s financial circumstances, it should explain its decision: Herry v Dudley MBC [2017] I.C.R. 610 EAT.[15]When deciding whether or not the litigant’s conduct of the proceedings has been unreasonable, the words of the rule are the starting point, remembering that, in the employment tribunal, a costs award is the exception, rather than the rule. As Mummery LJ said in Barnsley MBC v Yerrakalva [2012] I.R.L.R. 78 CA at para.41, “The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had. The main thrust of the passages cited above [from Mummery LJ’s judgment in McPherson v BNP Paribas [2004] EWCA Civ 586] was to reject as erroneous the submission to the court that, in deciding whether to make a costs order, the ET had to determine whether or not there was a precise causal link between the unreasonable conduct in question and the specific costs being claimed. In rejecting that submission I had no intention of giving birth to erroneous notions, such as that causation was irrelevant or that the circumstances had to be separated into sections and each section to be analysed separately so as to lose sight of the totality of the relevant circumstances.”[16]It is relevant to the circumstances of the present case that he went on to say at para.43, “When, as here, the case has been withdrawn before it has run the full course to a final conclusion on the merits, difficulties on costs applications are bound to arise from the absence of findings of credibility, the absence of findings of disputed facts and the absence of findings on issues of liability. The tribunal or court has to do the best it can with such material as it has in a case that has never been fully tried.”[17]Further guidance about the correct approach to whether a litigant in person has acted vexatiously, abusively, disruptively or otherwise unreasonably in the conduct of the litigation is found in AQ plc v Holden [2012] IRLR 648, “The threshold tests in [what is now] rule 40(3) are the same whether a litigant is or is not professionally represented. The application of those tests may, however, must take into account whether a litigant is professionally represented. A tribunal cannot and should not judge a litigant in person by the standards of a professional representative. Lay people are entitled to represent themselves in tribunals; and, since legal aid is not available and they will not usually recover costs if they are successful, it is inevitable that many lay people will represent themselves. Justice requires that tribunals do not apply professional standards to lay people, who may be involved in legal proceedings for the only time in their life. As Mr Davies submitted, lay people are likely to lack the objectivity and knowledge of law and practice brought by a professional legal adviser. Tribunals must bear this in mind when assessing the threshold tests in [what is now rule 76(1)]. Further, even if the threshold tests for an order for costs are met, the tribunal has discretion whether to make an order. This discretion will be exercised having regard to all the circumstances. It is not irrelevant that a lay person may have brought proceedings with little or no access to specialist help and advice. This is not to say that lay people are immune from orders for costs: far from it, as the cases make clear. Some litigants in person are found to have behaved vexatiously or unreasonably even when proper allowance is made for their inexperience and lack of objectivity. But the tribunal was entitled to take into account that Mr Holden represented himself; we see no error in its doing so; and we do not accept that it misdirected itself in any way.”[18]There is no general principle that a lie, untruth or false allegation constitutes unreasonable conduct in presenting the claim. It is necessary to examine the context and to look at the nature, gravity and effect of the lie in determining the unreasonableness of the alleged conduct: HCA International Ltd v MayBheemal (EAT/0477/10) approved by the Court of Appeal in Arrowsmith v Nottingham Trent University [2012] ICR 159, CA.[19]In Mr Hillerby’s skeleton argument, he refers to 2 authorities on the question of a costs warning letter. Whether a costs warning letter has been sent is relevant to the question of whether an unrepresented litigant was likely reasonably to have realised that the merits of the case did not justify the expense of going forward with the hearing. There are circumstances (such as in Peat v Birmingham City Council UKEAT/0503/11) where a failure by the claimant to engage properly with points raised in a well-argued warning letter can amount to unreasonable conduct of the proceedings as can continuing with the claim despite knowledge of the arguments set out in it.[20]The respondent has put forward a number of pieces of correspondence between their solicitor and, in particular, the second and third representatives of the claimant. From the grounds of response onwards and consistently through the correspondence the respondent made their position clear. They warned the claimant, through his representatives, that their intention would be to seek an order that the claimant pay their costs if he was unsuccessful because they were confident of a finding that the claimant had never been their employee. There are multiple occasions in the months running up to the scheduled hearing in August 2024 in which the respondent’s solicitor repeats this point and informs the claimant’s representative and then the claimant directly of the amount of the total costs incurred. In particular the respondent wrote to the claimant on 30 July 2024 (page 58), after the third representative withdrew, warning that the costs were over £3,400 with disclosure they stated showed the origins of the incorrect domain name used by the sender of the suspect emails. That disclosure is explained in para.7.16 of the respondent’s skeleton argument.[21]In the circumstances of this case the facts have never been tested under crossexamination at a hearing. This was because the failure of the claimant to comply with an order for disclosure of documents meant that the claim was dismissed. There was never any detailed response to the arguments and explanations put forward by the respondent that was the basis on which they said it was obvious the payslips were forgeries. The claimant did not disclose the electronic versions of the emails which would have shown one way or the other whether the documents he relied on as communications from the respondent’s managers to him were genuine.[22]I am satisfied by of the respondent’s detailed argument and the absence of any engagement with it by the claimant that the probable explanation for this is that he was never employed by the respondent and that the payslips and emails provided through his representatives as evidence to substantiate his claim were not genuine documents.[23]I’m persuaded that this was conduct within rule 74(2)(a). In particular, it was vexatious and unreasonable conduct in bringing and conducting the litigation. I’m mindful that there is no general principle that a lie, untruth or false allegation constitutes unreasonable conduct in presenting the claim. However in the present case the untruth was the foundation of the entire claim. The entirety of the respondent’s costs of defence have been incurred in defending a claim which was based on an untruth.[24]I’m satisfied that this was vexatious conduct because for a litigant to act in this way is an abuse of the tribunal process. The Employment Tribunal Service has limited resources. There are many litigants with genuine grievances who have to wait for months for access to the administrative and judicial resources necessary for a determination of their claim. There is a public interest in showing there are consequences for someone who brings a claim based on an untruth which takes up not only the respondent’s resources but also those of the public service.[25]I am therefore of the view that it is proportionate to order the claimant to pay the respondent’s costs. That should be the whole of their costs since I am satisfied that that is the consequence for the respondent of the actions of the claimant.[26]I do not take his means into account. He was given an opportunity to send information to the tribunal and to make representations about his ability to pay and has not done so. I therefore decline to take his means into account because he has not put me in a position where I can do so.[27]I’ve considered the costs schedule (page 84 of the hearing file) and am satisfied that the amount claimed is reasonable taking into account the seniority of the individuals carrying out the work and the activities indicated by that schedule. Indeed much of that activity is evidenced by the correspondence on the hearing file.[28]The claimant is to pay the respondent £4,293 in respect of the legal costs. This is the VAT exclusive figure. The respondent is VAT registered and there is no claim for the VAT on those fees as the respondent can reclaim it.[29]Written reasons have been provided for this judgment on Judge George’s initiative, given that the claimant was present at the hearing. Approved by: