COSTS

Sutton v The Ranch Ltd

EAT: Judge Burke QC: 30 March 2006

The claimant's employers failed to present a response to her complaints of unfair dismissal and sex discrimination, and a tribunal chairman issued a default judgement under rule 8 of the Employment Tribunals Rules of Procedure 2004. The employers contacted Acas but no settlement was reached, and at a subsequent remedies hearing the chairman awarded the claimant compensation and made an award of costs in her favour on the ground that the employers had conducted the proceedings unreasonably. On the employers' application to review, the decision on remedies was upheld but the costs order in respect of the remedies decision was revoked, the chairman deciding that, although rule 38(4) of the 2004 Rules allowed a tribunal to make a costs order against a respondent who had not had "a response accepted in the proceedings" in relation to "the conduct of any part which he has taken in the proceedings", since the employers had not presented a response and, by reason of rule 9, were not entitled to take part in the proceedings other than pursuant to one of the exceptions set out in rule 9 which did not apply, they had not taken any part in the proceedings up to and including the remedies hearing, in relation to which the costs order was made.

The claimant appealed.

JUDGE BURKE QC held:
Rule 38(4) of the Employment Tribunals Rules of Procedure 2004 was intended to include the cases both of a respondent had put in a response which was not accepted and a respondent who put in no response at all. In both cases the respondent was barred by rule 9 from taking part in the proceedings except under one of four exceptions set out in that rule. Rule 38(4) had the effect that an order for costs could be made against or in favour of a respondent only in relation to his conduct of a part which he had taken in the proceedings, which, in the case of a respondent barred by rule 9, was restricted to a part he was permitted to take by rule 9. Iin such a case, a costs order could not be made on the basis that, other than in relation to rule 9, the respondent had by some act or omission, such as thinking about putting in a response or seeking to conduct negotiations through Acas, acted in a way that could not be properly regarded as taking part in the proceedings.

The appeal was dismissed.

Appearances: Schona Jolly (Mayo & Perkins, Eastbourne) for the claimant; Frank Irons (Peninsula Business Services Ltd, Manchester) for the employers.