Hammond v The Secretary Of State For Work And Pensions (Practice and Procedure : Costs) [2014] UKEAT 0216_13_2807
EAT
Hammond v The Secretary Of State For Work And Pensions (Practice and Procedure : Costs)
[2014] UKEAT 0216_13_2807 · 2014-07-28
[44]“ Rule 41(2) gives to the Tribunal a discretion whether to take into account the paying party's ability to pay. If a Tribunal decides not to do so, it should say why. If it decides to take into account ability to pay, it should set out its findings about ability to pay, say what impact this has had on its decision whether to award costs or on the amount of costs, and explain why. Lengthy reasons are not required. A succinct statement of how the Tribunal has dealt with the matter and why it has done so is generally essential. ” 17. Although he went on to acknowledge that there was no absolute duty on a Tribunal to take ability to pay into account, HHJ Richardson also commented that it would be in many cases desirable for means to be taken into account before making an order, although he recognised that there may be good reason for not doing so. 18. The fact that a party’s ability to pay is limited would not, however, require a Tribunal to either make no award of costs or to assess a sum confined to an amount that the party could actually pay, Arrowsmith v Nottingham Trent University [2012] ICR 159 . There may be various reasons as to why it is appropriate to make an order for costs notwithstanding the fact that a party will be unable to meet that award immediately. 19. Further, there may be circumstances where there is an obligation on the part of the Employment Tribunal itself to raise the questions of means when considering making a costs order even if that question has not been raised by the potentially paying party, Doyle v North West London Hospitals NHS Trust UKEAT/0271/11 (20 April 2012, unreported). In Doyle , the EAT (HHJ Shanks) considered it relevant that the Tribunal was considering making an award for costs against the Claimant in the sum of nearly £100,000. There was nothing to indicate that the Claimant was going to be able to pay such an amount and there was a risk that the representative had overlooked the point. In those circumstances the EAT held that the failure by the Tribunal to raise the question of means amounted to an error of law, which may have led to a substantial injustice to the Claimant. HHJ Shanks held that, where a party is completely unrepresented and is faced with an application for costs, the Tribunal ought to raise the issue of means before making an order. Discussion and Conclusions 20. This court sees frequent appeals against costs orders in the Employment Tribunal. Putting to one side the question of possible entitlement to costs by way of repayment of fees, the Employment Tribunal essentially remains a no-costs jurisdiction; costs do not follow the event in the same way as in other civil courts. Even where the threshold is crossed - as the Employment Judge plainly found had occurred in this case - it is still a matter of judicial discretion as to whether such an award should be made. In exercising that discretion, Rule 41(2) expressly recognised that an Employment Judge may have regard to the paying party’s ability to pay. It was not just a matter recognised as potentially relevant to the amount but, prior to that stage, as a point that might properly be taken into account when deciding whether an award should be made. 21. Here there was no indication as to whether the Employment Judge considered the question of the Claimant’s means either at the stage of deciding that it was appropriate to make an award of costs or at the stage when he was considering the amount to be awarded. 22. It is quite possible that the Claimant himself failed to clearly raise the point. Does that make a difference? In certain circumstances, it may do. The process before an Employment Tribunal remains an adversarial one. It is not for an Employment Tribunal to take every possible point on behalf of a party even if that party is either unrepresented or badly represented. Moreover, there is no requirement on an Employment Tribunal to take into account a party’s means before making an award of costs. It is merely a potentially relevant matter. A Tribunal is not required to have regard to it, and there is no requirement that the amount of any award made should be restricted to what the paying party can actually pay. There may be broader considerations in issue than simply the Claimant’s means. 23. All that said, the means of the paying party still do amount to a potentially relevant matter. The difficulty in this case is in not knowing whether the Employment Judge turned his mind to the question of means - a relevant consideration - or not. If he did, but decided that the likely inability of the Claimant to immediately pay the award made would not dissuade him from making it in this case, he did not explain that, as he might have been expected to do. As HHJ Richardson observed in Jilley , this is not a particularly onerous requirement, simply to state why in a particular case the Judge did not consider it to be a relevant matter. 24. Where, as here, this court is concerned with reviewing an Employment Judge’s exercise of his or her judicial discretion, the EAT should not interfere unless that exercise was plainly wrong or where the Employment Judge took into account irrelevant matters or failed to take into account a relevant matter. I do not say that the award of costs in this case was plainly wrong. Equally, however, I cannot say that the Employment Judge took into account all relevant matters. The Claimant’s means were a potentially relevant matter. On the facts before the Employment Judge a question naturally arose as to whether the Claimant could begin to meet the award of costs that the Respondent was seeking. I cannot tell from the reasons given as to whether this potentially relevant matter was taken into account and, in my judgment (and in this regard I follow HHJ Richardson in Jilley ), that amounts to an error of law on the part of the Employment Judge. 25. For that reason, I allow this appeal and direct that this matter go back to the Employment Judge to be considered afresh. In so doing, he may well form the view that it is right to make the award in the same amount as before and it would be appropriate to do so notwithstanding any issues relating to the Claimant’s means. On the other hand, he might take the view that, although it is appropriate to make the award, he needs to revisit the amount in the light of the Claimant’s means. All possibilities are open for the Employment Judge. Equally, whether he feels it appropriate and proportionate to hold an oral hearing to determine this matter will be a matter for him and for such representations as the parties might make. At this stage the only order I make is that the matter needs to go back to the same Employment Judge for fresh consideration in the light of this Judgment.