McPherson v BNP Paribas, EAT/0916/02
It is two years since the new costs regime in Tribunals came into force. It widened the circumstances in which costs can be claimed and increased the amount that the Tribunal itself can order, without reference to a County Court taxing master. The statistics show that Employment Tribunals are using their powers to award costs. The Employment Appeal Tribunal seems reluctant to set out firm guidelines as to how Tribunals should exercise their discretion, but generally appears very hesitant to interfere with Employment Tribunals decisions on costs. McPherson v Bank Paribas demonstrates some of the factors likely to influence Tribunals in considering a costs application.
In this case the EAT upheld a Tribunal decision ordering an Applicant to pay the costs of the entire Tribunal proceedings when he withdrew his claim for unfair dismissal and breach of contract two weeks before the hearing.
The Applicant stated that the reason for withdrawing his complaint was due to his health. Even though there were doctors letters before the Tribunal about his medical condition and the effect of stress on his health, the Tribunal did not accept that his health was the real reason, but rather that the Applicant prolonged his case in the hope of obtaining an offer which in fact never was made. He withdrew the case, the Tribunal concluded, when he realised the Respondent would not settle.
It is a chilling decision which may leave Applicants' advisors quaking. How can a similar situation be avoided? There are a number of lessons to be learnt from the case. Any medical evidence produced to support a late withdrawal on health grounds must address all the issues and be reasonably recent. It should clearly state the diagnosis and state why the Applicant is unfit to attend the hearing, specifying the date of the hearing, and ideally what the likely effect of enduring the hearing would be. The report should state whether it is likely that the Applicant will be well enough to attend in the future. In a case of a withdrawal close to the hearing, the timing must be explained as well. In this case the EAT concluded that even though his medical condition was well documented there was no medical evidence to establish that Mr McPherson was unfit to attend the hearing, and so the Tribunal was entitled to reach the conclusion that his health was not the real reason for the withdrawal.
The manner of conducting the case up till the withdrawal may also be relevant. In this case there had been two interlocutory hearings and a previous postponement and a number of orders that had not been complied with, or inadequately dealt with, by the Applicant and his advisors. The way the Applicant had conducted his case meant that the Respondents had incurred considerable costs. The Tribunal concluded that the Applicant intended to withdraw from the case long before he actually did so, and yet gave every appearance to the Respondent that he would pursue all claims vigorously, which amounted to conduct which the Tribunal found to be unreasonable.
Finally, it may be useful for the Applicant to give evidence at the costs hearing to explain his actions, as this may carry more weight than either a written statement or a representative's submissions. Otherwise it may give an impression of indifference and disrespect, which can also lead to a conclusion of unreasonable conduct.