CLAIMANT’S CONDUCT

Yerrakalva v Barnsley Metropolitan Borough Council

There are a number of grounds on which tribunals can award costs against claimants, one of which is the claimant’s unreasonable conduct in the case. In Yerrakalva v Barnsley Metropolitan Borough Council, the Employment Appeal Tribunal (EAT) said that although there does not have to be a precise causal relationship between the unreasonable conduct and the costs claimed, any award of costs must broadly reflect the effect of the conduct.

Basic facts

In August 2005, Ms Yerrakalva brought a claim of disability discrimination following an accident at work in November 2003 resulting in pain and restricted movement in her neck and spine.

Due to a number of complications, it was August 2007 before a date for a pre-hearing review (PHR) could be arranged, which was adjourned part-heard. Due to the judge’s subsequent illness, it was then decided that the case would have to be completely reheard but before that happened, Ms Yerrakalva withdrew her claim.

Her former employer applied to the tribunal for an order for costs.

Tribunal decision

And the judge agreed, not because the claim was misconceived (it had not been heard, so the merits of the case were not clear), but because it transpired that Ms Yerrakalva had told two lies in the course of the abortive PHR in August 2007.

The first concerned an application for benefits in which she had claimed that, prior to the onset of her disability, she had led a very active life which included playing lots of sports, but that she could no longer do these activities as a result of her injuries.Yet at the PHR, she admitted she had barely played sport before the accident. She had also said she was not pursuing a personal injury claim when, in actual fact, she was.

The judge concluded that she was guilty of an “abuse of process” and ordered her to pay 100 per cent of her former employer’s reasonable costs which were to be assessed in the county court.

EAT decision

The EAT accepted that although Ms Yerrakalva’s conduct was unreasonable, the judge was still required to take into account "the nature, gravity and effect" of that conduct when deciding whether to make an award and if so, for how much.

Relying on the case of McPherson v BNP Paribas, the EAT said that “while there does not have to be a precise causal relationship between the unreasonable conduct and the costs claimed, any award of costs must, at least broadly, reflect the effect of the conduct in question. That indeed inevitably follows from the principle that the purpose of an award of costs ... is compensatory and not punitive”.

The EAT could not see how the lies told at the PHR caused any loss for which her former employers were entitled to be compensated, as the hearing was abortive. If the judge had therefore focused on the “effects” of the lies she told, he could not have concluded that she ought to pay 100 per cent of the costs.

The EAT also added, in passing, that there should be no general rule that withdrawal of a claim constitutes an acknowledgement that it was misconceived or that it automatically gave grounds for an award of costs.