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Cheeky Argument of the Year 2011

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[Thanks to Ed McFarlane of EEF for preparing this case summary]

The EAT (Burton J) has handed down its decision in The University of the Arts London v Rule which is authority for the proposition that a Respondent cannot avoid a statutory uplift on an award by simply making an advance payment to a Claimant, applying Tim Arrow & Sons v Onley.

At a remedy hearing, the Respondent faced a large, six-figure award, with an oral Judgment covering some but not all claims. Counsel were left to agree quantum. Shortly before the remedy hearing concluded, the Respondent engaged – in essence – in electronic reverse mugging of the Claimant by transferring the agreed sum, less the uplift, into his bank account, without his knowledge or consent. The Respondent sought to avoid the 45% uplift, arguing that the uplift didn't apply, as nothing was left to award.

The Tribunal disagreed, and the EAT held that the uplift still applied, holding that Arrow v Onley applied where an interim payment is made before hearing, and that a Claimant may refuse payment, hoping to preserve any future uplift.

The EAT also made observations on the interaction between the uplift and grossing-up for tax purposes.