THE INDUSTRIAL TRIBUNALS

CASE REF:	59/14

CLAIMANT:			Mary Sarah McGuigan	

RESPONDENTS:		1.	Board of Governors of Wellington College
				2.	Belfast Education and Library Board

DECISION ON COSTS

The claimant is ordered to pay the respondent the sum of £9,000.00 in respect of costs.

Constitution of Tribunal:

Employment Judge:	Employment Judge McCaffrey

Members:	Mr A Crawford
	Mr H Stevenson
Appearances:

The claimant did not appear and did not attend the hearing.

The respondents were represented by Mr Martin McEvoy, Barrister-at-Law instructed by Education and Library Board Solicitors.

BACKGROUND

1.	This matter was listed for a hearing in relation to costs on the application of the respondent.  This followed a decision issued by the tribunal on 11 November 2014 after a hearing lasting three days from 23 - 25 September 2014.  Following that hearing the tribunal dismissed five out of six claims brought by the claimant.  Specifically her claims of automatically unfair dismissal contrary to Article 134A of the Employment Rights (Northern Ireland) Order 1996, a claim of having made public interest disclosures and having suffered detriment as a result, a claim of unlawful deduction of wages, a claim for notice pay and a claim for breach of contract, were all dismissed.  The only claim brought by the claimant in which she was successful was a claim for pay in respect of holiday accrued but not taken when employed by the first-named respondent.  She was awarded the sum of £276.77 in respect of that matter.

SUBMISSIONS

2.	The respondents’ representatives applied for costs against the claimant following the hearing by letter dated 3 December 2014.  Their letter indicated that they were applying for costs on the grounds that the claimant acted disruptively and unreasonably in the bringing and conducting of the proceedings.  The letter of 3 December also referred to a costs warning letter forwarded to the claimant on 15 September 2014, prior to the hearing.  In that letter the respondents had advised the claimant that they considered that her claims of unfair dismissal, whistleblowing, breach of contract, unauthorised deduction from wages and holiday pay were unreasonable and misconceived.  The letter also noted that these were issues of credibility and evidence and that the respondents considered that her case would fail “as you have initiated and persisted in pursuing baseless legal claims”.  The letter continued, 

“Further the respondents are mindful that three days of judicial time has been set aside to hear and consider the claims and that a large number of witnesses will need to be called to rebut the allegations made by you.  Further that the preparation and hearing of these unwarranted claims will result in the wasting of the respondent’s’ time and resources, judicial time and of unnecessary stress and anxiety to the individual respondents as a result of the serious and unfounded allegations made against them.  In all the circumstances we believe that your claims are misconceived and unreasonably pursued.

If your claims to the Tribunal are not withdrawn immediately we put you on notice should you proceed and be unsuccessful, the use of being made of this letter.  It will be appreciated that the tribunal can award costs up to £10,000.00 and our approximate costs to date are £8,000.00 ...”

3.	In the decision of the tribunal issued on 11 November 2014, the tribunal set out a number of comments in relation to the conduct of the hearing.  Mr McEvoy referred us to the comments made by the tribunal in particular at paragraphs 9-11 of the decision.  These matters related to the way that the claimant conducted herself during the hearing, including allegations and criticisms which she made of the respondents.  Paragraph 11 of the decision reads as follows:-

		“The claimant was combative, indeed aggressive, in her style of questioning witnesses and in her demeanour before the tribunal.  During the hearing and during the respondent’s closing submissions, she sighed, rolled her eyes and glared at the witnesses and the representatives on an ongoing basis.  We note this because we found it unhelpful and are aware that such behaviour can be off-putting to other parties and witnesses.  We found the claimant’s evidence to be contradictory on occasions. [There follow a number of examples] ...  We found her evidence therefore to be unreliable in a number of respects and her interpretation of some events and situations to be pejorative: at best, it was based on incomplete information and at worst, it was malicious”.

4.	Later in the decision the tribunal addressed allegations made by the claimant in respect of alleged public interest disclosures.  The finding of the tribunal was that a number of these allegations either did not occur at all or certainly did not occur prior to the termination of the claimant’s employment.  The tribunal reached the conclusion that certain allegations were made only by the claimant after the event.  Paragraph 64 of the decision reads:-

		“For completeness we would add that we were satisfied by the evidence given by Mr Pitts, Mrs Anderson and Mrs McMaster that these allegations were made by the claimant in the course of her claim to the industrial tribunal were not well-founded, that they constituted “allegations” rather than information and that they were not made in good faith, but rather as a result of a bad tempered outburst by the claimant when she realised she was being refused additional pay by Mr Pitts.  	Mr McEvoy suggested in his submissions that the evidence pointed to the claimant’s motivation as “anger, hostility and vindictiveness” towards Mr Pitts and the respondents in general.  The claimant’s demeanour at the hearing tends to support this view.  For all the above reasons, the claimant’s claim of automatically unfair dismissal contrary to Article 134A of the 1996 Order is dismissed.”

5.	In advance of this costs hearing, the claimant wrote to the Office of the Industrial Tribunals indicating that she did not intend to attend the hearing, but had sent a written submission.  Her submission states that she did not believe that any of her claims were unreasonable or that she acted unreasonably and disruptively in the bringing and conducting of proceedings.  She set out in her submissions that she was confident that she had a strong case and that she acted in good faith in bringing her claim to the tribunal.  In that letter the claimant made a number of points in relation to her learning disability, namely dyslexia.  She had not produced any evidence of suffering from dyslexia to the tribunal in advance of the original hearing, and the issue of her dyslexia was dealt with at paragraph 6 of the decision.  In particular, the Tribunal noted that the claimant was not rushed or pressured in any way in cross-examining the respondents’ witness, and that she appeared to have no difficulty in putting questions to witnesses or responding to their answers.  The claimant referred in her submission to the fact that she was partially successful in that one of her claims was granted and on that basis she felt it would be inappropriate for her to be ordered to pay costs.  On that specific point, Mr McEvoy commented that it was conceded the claimant had been successful in her holiday pay claim, but said that claim could have been dealt with in half a day, rather than the three days the case took at hearing.
  
	In relation to the claimant’s financial situation, she stated the following:-

	“I would also ask the tribunal to consider my financial situation and the ability to pay before making any costs orders.  I do not have any capital assets or savings and as the tribunal already knows, I am a substitute teacher and work on a day by day basis with no guaranteed work from one day to the next.  I have no steady income and as a substitute teacher received no work in July or August due to the school summer holidays, so I will need to set aside any money I earn to live on during these two months.  I am not therefore in a position to pay a cost orders if one is made.”

THE RELEVANT LAW

6.	The tribunal’s power to award legal costs is set out in the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 (“the 2005 Rules”).  The general power to make costs orders is set out in Schedule 1 of Rule 38.  Rule 40 provides as follows:-

	“(2)	A tribunal or chairman may consider making a costs order against a  paying party where in the opinion of the tribunal or [employment judge] (as the case may be) any of the circumstances in paragraph (3) apply.  Having so considered, the tribunal or [employment judge] may make a costs order against the paying party if it or he considers it appropriate to do so.  

	(3)	Circumstances referred to in paragraph (2) above are where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, disruptively or otherwise unreasonably or the bringing or conducting of proceedings by the paying party has been misconceived.”

	“Misconceived” is defined at Regulation 2 as including “no reasonable prospect of success.”  The maximum amount the tribunal can award in costs is £10,000.

7.	The tribunal’s jurisdiction in relation to costs is outlined in Harvey on Industrial Relations and Employment Law Division P1(Practice and Procedure) at paragraph 1044 and following.  Harvey emphasises that, despite changes which have extended the tribunal’s powers to make orders for costs considerably, the fundamental principle remains that costs are the exception rather than the rule and that costs do not automatically follow the event in Employment Tribunals (McPherson v DNP Paribas (London Branch) [2004] EWCA Civ 169 at paragraph 2; and Barnsley Metropolitan Borough Council v Yerrakalva [2011] EWCA Civ 1255 at paragraph 7) it is also important to note that the tribunal must apply a two stage test to an application for costs.  First of all it must consider whether the relevant parties’ behaviour falls within Rule 40(3).  Secondly the tribunal must consider whether it is an appropriate case in which for it to exercise its discretion to make a costs order.

UNREASONABLE CONDUCT

8.	Harvey (see paragraph 1064) indicates that unreasonable conduct includes conduct that is vexatious, abusive or disruptive.  The discretion of the tribunal is not fettered  by any requirement to link the award causally to the particular cost incurred as a result of specific conduct which has been identified as unreasonable.  In McPherson, Mummery LJ stated:-

	“The principle of relevance means that the tribunal must have regard to the nature, gravity and effect of the unreasonable conduct as factors relevant to the exercise of the discretion, but that is not the same as requiring [the receiving party] to prove that specific unreasonable conduct by [the  paying party] caused particular costs to be incurred.”

9.	Subsequently, in Yerrakalva he stressed that this passage in McPherson was not intended to be interpreted as meaning either that questions of causation are to be disregarded or that tribunals must dissect the case in detail and compartmentalise conduct.  As he observed:-

	“The vital point in exercising 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.”

10.	He also observed that, “A costs decision in one case will not in most cases predetermine the outcome of the costs application in another case: the facts of the cases will be different, as will be the interaction of the relevant factors with one another and the varying weight to be attached to them.”

THE SIGNIFICANCE OF A COSTS WARNING LETTER  

11.	The respondents’ representative pointed out to us that a costs warning letter had been sent to the claimant on 15 September 2014, approximately ten days before the hearing of the case.  That costs warning letter set out the respondents’ reservations about the claimant’s case and indicated that if the claimant was unsuccessful at tribunal, they reserved the right to draw the tribunal’s attention to this letter, presumably in support of a claim for costs.  

12.	We were referred to the case of Vaughan v London Borough of Lewisham and Others [2013] IRLR 713 where it was held that it was not essential for a costs warning letter to have been issued in order for the costs application to be successful.  In that case Underhill J noted that the failure of a respondent to seek a costs order or failure to warn the claimant of the hopelessness of her claims by way of a costs warning letter may not necessarily be fatal to an application for costs, if the order for costs was otherwise justified.

THE CLAIMANT’S MEANS

13.	One of the leading decisions in relation to the significance of the claimant’s means is Jilley v Birmingham and Solihull Mental Health Trust and Others (UKEAT/0584/06).  That decision makes it clear that the paying party’s means may, but need not, be taken into account but also that the lack of means is not a bar to a costs order being made.  Paragraph 53 of the judgment provides as follows:-

	“The first question is whether to take the ability to pay into account.  The tribunal has absolutely no duty to do so.  As we have seen, if it does not do so a County Court may do so at a later stage.  In any case it will be desirable to take means into account before making an order; ability to pay may affect the exercise of an overall discretion, and this course will encourage finality and may avoid lengthy enforcement proceedings.  But there may be cases where for good reason ability to pay should not be taken into account; for example if a paying party has not attended or has given unsatisfactory evidence about means.”

REASONS AND DECISION

14.	We have taken account of the claimant’s written submissions and also of the oral submissions made by Mr McEvoy on behalf of the respondents.  In support of his application that the claimant had behaved unreasonably in conducting the hearing, Mr McEvoy referred us to paragraphs of the decision where the tribunal summarised some of the challenges presented by this case.  We fully appreciate that the claimant was an unrepresented party and that she was on unfamiliar ground when she came to the Industrial Tribunal.  Nevertheless, this did not justify her aggression towards the respondents and the respondents’ witnesses,  nor did it justify her attacking the credibility of the respondents’ representatives in relation to documents which she alleged should have existed but did not.  She also accused the respondents’ representatives of changing documents, but on further questioning this turned out to be changes to the Index to the Bundle of documents which had been amended as more documents were added to the bundle.  We have quoted above the content of paragraph 11 and we endeavoured to put this in as neutral terms as possible, in the interests of fairness to both parties.  The claimant was however aggressive and argumentative, she interrupted during the hearing and she also persisted in asking questions even when she had been advised that they were irrelevant to the issues before the tribunal.  As Mr McEvoy observed, the case could have run on much longer than the three days allotted to it, had the tribunal not managed the conduct of proceedings quite firmly.

15.	Having considered the submissions that have been made by both parties, we are satisfied that the claimant acted unreasonably in the conduct of this hearing by her demeanour, her aggression towards witnesses and towards the representatives for the respondents.  Indeed on occasion her manner towards the tribunal was also aggressive in nature.  This addresses with the first stage of the test, in that before making an order for costs the tribunal must be satisfied that the paying party’s behaviour falls within one of the categories set out in Rule 40(3).  We are satisfied that the claimant’s behaviour was unreasonable and disruptive in terms of the conduct of proceedings.

16.	The question then remains as to whether it is appropriate for us to exercise our discretion to make an award of costs in this case.  The claimant pointed out to us the fact that she was successful in one of her claims.  She was however successful in only one out of six claims which she brought before the tribunal and as Mr McEvoy suggested, the claim in relation to holiday pay was very much a subsidiary claim and could have been dealt with quickly, as opposed to the three days the case actually took.  The main thrust of the claimant’s arguments were in relation to allegations of “whistle blowing” and a claim of automatically unfair dismissal, both of which were dismissed.  The other claims brought by the claimant in relation to notice pay and breach of contract were also dismissed.  Moreover as Mr McEvoy noted, success in a claim does not necessarily mean that the claimant did not act unreasonably in her conduct of it.  We have to take into account that although the claimant was successful in one (minor) aspect of her claim,  she was unsuccessful in her principal claims.  Secondly, we take into account the amount of the bill presented to us by the respondents’ representatives.  The solicitor’s costs element of this is approximately £17,000 (net of VAT) and counsel’s fee was £4,266 (including VAT).  Having considered those bills and the rates charged, we consider that those bills were fair and reasonable in all the circumstances.

17.	The other factor which we may consider, if appropriate, is the claimant’s ability to pay and the claimant urged us in writing not to make a costs order on the basis of her inability to pay.  However, she chose not to attend the costs hearing and therefore was not available to give further specific information in relation to her means or be questioned about her means.  For example she did not tell us how much she had earned in the previous six months or the number of days teaching which she had secured.  We do not know if she failed to attend the tribunal because she was working, or for some other reason.  We have only her assertion that she has no steady income, without any clear idea as to what her actual income is or what other work she might do, so the information given is unsatisfactory.  In those circumstances, and taking account of the decision of the EAT in Jilley, we consider it is reasonable for us not to take account of the claimant’s ability to pay in reaching our decision.  After balancing all the factors set out above, we consider it would be appropriate to make an award of £9,000 in respect of costs and we order the claimant to pay the sum of £9,000 to the first and second named respondents. 

Employment Judge:       

Date and place of hearing:  7 May 2015, Belfast.		

Date decision recorded in register and issued to parties: