Costs – Employment Tribunal, Kuwait Oil Co v Al-Tarkait

In dismissing the appellant company’s appeal against a costs order of the Employment Tribunal (ET), which had capped the costs that could have been awarded to the appellant following a detailed costs assessment to a maximum of the total sum of compensation and costs that had been awarded to the respondent as part of the proceedings, the Court of Appeal, Civil Division, upheld the ET’s costs order and found that rules 78(1)(b) and 84 of the ET Rules of Procedure contained in Sch 1 to the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013 (the Regulations), SI 2013/1237, read together had permitted a tribunal to order a detailed assessment of costs, while at the same time restricting the maximum sum of any such award by placing a cap on the final award by reference to the paying party’s ability to pay.

Background

The judgment is available at: [2020] EWCA Civ 1752

The respondent, A, commenced proceedings in the Employment Tribunal (ET) against the appellant company for wrongful and unfair dismissal and disability discrimination. While A’s claims for disability discrimination and wrongful dismissal failed, his unfair dismissal claim succeeded. The parties subsequently made costs applications against each other. An award of costs was made in favour of the appellant for costs it had spent in dealing with historic matters raised by A that were subsequently either withdrawn by consent or struck out by the ET. The costs order was made pursuant to rule 78(1)(b) of the ET Rules of Procedure contained in Sch 1 to the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013 (the Regulations), SI 2013/1237, which provided that the amount of costs would be determined by way of a detailed assessment. However, as a term of the costs order, the ET applied a cap to the amount of costs that could have been awarded to the appellant, limiting it to a maximum of the total sum of compensation and costs awarded to A as part of the proceedings. In placing such a cap on the potential award of costs to the appellant, the ET had taken into account A’s ability to pay any costs order pursuant to rule 84 of Sch 1 to the Regulations and had noted A’s very limited financial resources. The appellant appealed to the Employment Appeal Tribunal (EAT), contending that the ET did not have jurisdiction to set a cap on a costs order made pursuant to r 78(1)(b) of Sch 1 to the Regulations. The EAT and the Court of Appeal dismissed the appellant’s appeal.

Hearing Date: 21 December 2020

Court: Court of Appeal, Civil Division

Judge: Bean, Simler and Andrews LJJ

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