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Costs - Ability to Pay

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This is the first decided case that I am aware of dealing with a party's ability to pay costs.

Since 1st October 2004, tribunals (and the EAT) have been entitled to take into account the paying party's ability to pay when deciding what sum to award in costs. This reversed the pre-existing position, as stated by the Court of Appeal in Kovac v Queen Mary & Westfield College.

In a decision published today, Burton P. had to decide the issues of costs in the EAT. He states (at para. 38) that the following two factors are relevant when taking into account a Claimant's ability to pay costs:

- that the Claimant has recovered a sum of money as part of the proceedings (in this case, a basic award of £2,520); and,

- that any legal fees the Claimant is ordered to pay is likely to be met by the trade union which was funding his employment tribunal claim.

Also of interest is that the EAT made it very clear that the costs of adjournments should always, if possible, be decided at the time of the decision to adjourn and shoud not be reserved (para. 63) - although a caveat should be added that it may not always be possible to know what additional costs are incurred (particularly if Counsel will be acting on a refresher basis at the resumed hearing, and that fee still has to be negotiated).

Walker v Heathrow Refuelling Services Co Ltd