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Costs in ETs

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[Thanks to Rad Kohanzad, pupil at Old Square Chambers, for preparing this case summary]

The EAT (Underhill P) has handed down its decision in Yerrakalva v Barnsley MBC, which is authority for the proposition that while there does not have to be a precise causal relationship between unreasonable conduct and the costs claimed, any award of costs must, at least broadly, reflect the effect of the conduct in question.

Following a part-heard PHR the claimant withdrew her claim. The ET found that she had lied during the PHR on two occasions and on the basis of those lies awarded costs against her.

The EAT, allowing the appeal, held that although such behaviour was unreasonable conduct, it was necessary for the Judge to take into account "the nature, gravity and effect" of that conduct in deciding:

  1. whether to make an award; and if so
  2. what the amount should be (per Mummery LJ in McPherson v BNP Paribas [2004] ICR 1398), which the ET failed to do.

The EAT distinguished the line of cases that followed Daleside Nursing Home Ltd. v Matthew (UKEAT/0519/08) because the effect of the lies in this case had not been to establish that the claim was misconceived from the start.

Obiter: there should be no general rule to the effect that withdrawal of a claim constitutes, or is tantamount to, an acknowledgment that the claim was misconceived.