Appeal No. UKEAT/0203/15/RN
UKEAT/0204/15/RN
UKEAT/0205/15/RN

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

	Judgment handed down on 18 May 2016

BEFORE
THE HONOURABLE MRS JUSTICE SLADE DBE
(ON THE PAPERS)

UKEAT/0203/15/RN & UKEAT/0204/15/RN

MR C COLLETTI	APPELLANT

BOREALIS DRIVER SERVICES LMIITED	RESPONDENT

UKEAT/0205/15/RN

MR C COLLETTI	APPELLANT

(1) ALCALINE UK LTD
(2) BOREALIS DRIVER SERVICES LTD	RESPONDENTS

RULING ON COSTS APPLICATION

APPEARANCES

For the Appellant	Written submissions 	
For the Respondents	Written submissions	

SUMMARY
PRACTICE AND PROCEDURE - Costs

The Claimant succeeded in the majority although not all of his claims.  It was necessary for him to pursue his appeals.  Fees of £2,400 had been incurred.  Portnykh v Nomura International Plc UKEAT/0448/13 and Look Ahead Housing v Chetty [2015] ICR 375 considered.  The way in which the Claimant conducted proceeding before the Employment Judge was not relevant to the costs ordered under Employment Appeal Tribunal Rules 1993 Rule 34A(2A).  Costs in the sum of £1,800 subject to offset to be paid to the Claimant under Rule 34A(2A).  Basildon & Thurrock NHS Trust v Weerasinghe [2016] ICR 305 applied.  Claimant’s application for costs under Rule 34A(1) dismissed.  Claimant to pay the Respondents’ costs in the sum of £1,250 under Rule 34A(1) in respect of unreasonable conduct of proceedings in pursuing an unsustainable allegation of appearance of bias.  Respondents to pay the Claimant £550.

THE HONOURABLE MRS JUSTICE SLADE DBE

1.	Mr Colletti brought appeals against three judgments of Employment Judge MacInnes (“the EJ”).  Those which succeeded were the appeal from: 
1.	The refusal to reconsider the decision to strike out the claim of race discrimination; 
2.	The order to pay a deposit of £1,000 as a condition of continuing the claim for notice pay; 
3.	The order to pay a deposit of £1,000 as a condition of continuing the claim for 16 nights allowance; 
4.	The order striking out the complaints of failure to pay notice pay and nights out allowance. 

Those which failed were appeals from: 
5.	The striking out of the claim against the First Respondent; 
6.	The decision that there was a break in the Claimant’s service; 
7.	The refusal on 12 January 2015 of the application to amend the ET1 to add a claim in respect of Bank Holidays; 
8.	The refusal on 2 February 2015 to allow the Claimant to amend his ET1. 

2.	Mr Mitchell QC, counsel for Mr Colletti made an application for costs by email on 18 April 2016.  That application was particularised in written submissions on 27 April 2016.  The Claimant seeks a costs order under Employment Appeal Tribunal Rules 1993 (“the EAT Rules”) Rule 34A(2A) in respect of £2,400 fees.  These are a lodgement fee of £400 in respect of each of the three appeals and one hearing fee of £1,200.  The Claimant also seeks an award of costs in the EAT under Rule 34A(1) on the basis that the Respondents acted unreasonably in the conduct of the proceedings.  He resists the Respondents’ application for costs.  If a costs award is to be made against him he asks for his means to be taken into account and made a statement with exhibits in support. 

3.	Mr Solomon, counsel for the Respondents, in written submissions of 21 April 2016 seeks costs under Rule 34A(1) on the basis of unreasonable conduct of the proceedings by the Claimant.  The Respondents’ solicitor has produced a Note of Costs in the EAT and a response to the Claimant’s statement of means. 

4.	In accordance with paragraph 22.4 of the Employment Appeal Tribunal Practice Direction 2013 (“the Practice Direction”) I have considered the applications for costs on the basis of the parties’ written submissions. 

The Rules
5.	Rule 34A: 
“(1) Where it appears to the Appeal Tribunal that any proceedings brought by the paying party were unnecessary, improper, vexatious or misconceived or that there has been unreasonable delay or other unreasonable conduct in the bringing or conducting of proceedings by the paying party, the Appeal Tribunal may make a costs order against the paying party. 
…
(2A) If the Appeal Tribunal allows an appeal, in full or in part, it may make a costs order against the respondent specifying the respondent pay to the appellant an amount no greater than any fee paid by the appellant under a notice issued by the Lord Chancellor.”

EAT Practice Direction 
6.	Paragraph 13.6:

“13.6. Parties should note the following: 
…
13.6.3. Unsuccessful pursuit of an allegation of bias or improper conduct, particularly in respect of case management decisions, may put the party raising it at risk of an order for costs against them.”

The Claimant’s Application under Rule 34A(2A)
7.	The Claimant seeks an award of costs of £2,400, the amount of fees he had to pay to the Courts Service for pursuing his appeal.  It is submitted that the appeal obtained substantial practical success.  The claims in respect of race discrimination, for notice pay and nights out allowance which had been struck out were reinstated.  It is submitted that the grounds in respect of which the appeal did not succeed: the identity of the employer, and continuity of employment and refusal of amendments, had no practical effect on the overall outcome.  Nor did the failure of the arguments of bias and inequality of arms.  It was necessary for the Claimant to pursue the appeal as applications to the EJ for reconsideration had not succeeded. 

8.	In the response of 21 April 2016, counsel for the Respondents rightly points out that Mr Mitchell QC had not set out in his email of 18 April 2016 the basis for the costs application. 

9.	By the further particulars of the Claimant’s costs application in submissions on 27 April 2016, Mr Mitchell QC stated the basis for the costs application under Rule 34A(2A).  I agree with the submission made that the appeal was substantially successful.  Although the Claimant failed to establish his contentions that EJ MacInnes failed to address the inequality of arms between the Claimant who was acting in person and the Respondents who were represented by solicitors and counsel or his contention that the EJ gave the appearance of bias against him, the failure of these grounds of appeal did not adversely affect the outcome for the Claimant’s case for the dismissal of the appeals save for the striking out of the holiday pay claim and the refusal of the amendments to claim in respect of Bank Holidays.  If the allegations of improper conduct of the proceedings had stood alone and succeeded the outcome may have been less favourable to the Claimant.  It is likely that the claims would have been remitted to an Employment Tribunal for rehearing. 

10.	The precondition for making a costs order under Rule 34A(2A) is the EAT allowing an appeal in whole or part.  The principal consideration in exercising a discretion to award costs under Rule 34A(2A) is the extent to which the Appellant has succeeded in the appeal.  In Portnykh v Nomura International Plc UKEAT/0448/13 HH Judge Hand QC allowed an application under Rule 34A(2A) on the basis that: 
“… where a party has succeeded, the unsuccessful party … should pay the fees incurred by the successful party.” 

HHJ Hand QC further observed: 
“The issue should be looked at broadly and whether or not the appellant has succeeded on all points argued would be a relevant consideration but where, as here, there had been substantial success, payment of the equivalent of the full fee(s) should be the usual outcome.” 

11.	In Look Ahead Housing v Chetty [2015] ICR 375 upon which both parties rely, Langstaff P considered matters which might weigh against granting an application under Rule 34A(2A).  He held: 
“53. For the benefit of other cases which may follow, it seems to me that in a case in which an appeal is brought which is entirely rejected, there is no basis for any payment by the successful party to the Appellant. Where there is an appeal which is partly successful, all will depend upon the particular facts. The Rule does not permit the payment of the actual costs of litigation, apart from fees, from one party to another. What the court centrally has to asses is whether it was necessary to incur the expense in order to bring the appeal – this includes asking whether the appeal, as in the present case, could have been avoided by the Appellant taking reasonable steps, or was made more likely to proceed by the behaviour of the Respondent to it; it should then recognise the fact, if it be the case, that an appeal has largely failed or for that matter largely succeed in deciding, in its discretion, exercised reasonably, whether it should award the full extend of the payment made by way of fees, or whether it should moderate that amount to a reasonable extent. A reasonable extent includes making no award at all, though in circumstances in which an appeal has been partly successful this would have to be carefully justified and is likely to be rare.” 

As was explained by Langstaff P, in deciding whether to award a successful Appellant costs under Rule 32A(2A) in addition to taking into account the extent to which the appeal has succeeded, the EAT will also consider whether it was necessary for the Appellant to incur the fees for which they will be compensated by the costs order. 

12.	The Respondents contend that the conduct by the Claimant of the proceedings before the EJ was vexatious and that he had behaved badly to another EJ by approaching him in a car park.  Further it is said that the Claimant made unnecessary and hopeless appeals.  Mr Solomon invites the EAT to mark its displeasure at the Claimant’s conduct by not making an award of reimbursement of fees under Rule 34A(2A) in his favour. 

13.	The manner in which the Claimant conducted proceedings before the EJ is not to be taken into account in deciding whether to award costs under EAT Rule 34A(2A).  A claim for costs in respect of conduct of proceedings before the Employment Tribunal (“ET”) may be made under Rule 76(1) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 Schedule 1.  This is the equivalent provision in the ET to EAT Rule 34A(1) in the EAT.  Conduct of proceedings before the ET cannot be the subject of a claim for costs under the EAT Rules nor is it relevant to the decision whether and in what amount to award costs under EAT Rule 34A(2A). 

14.	The Claimant is seeking costs in the sum of fees he had to pay to pursue his appeal.  I have rejected the contention of the Respondents that the vast majority of the Claimant’s appeals failed.  However his appeal from some of the decisions of the EJ did not succeed.  This should be reflected in the amount of the award made under Regulation 32A(2A).  The limited extent to which the Claimant’s appeals failed will be reflected in the award made under Rule 34A(2A).  The Respondent is to pay the Claimant the sum of £1,800. 

The Claimant’s Application under Rule 34A(1) 
15.	In his written submissions Mr Mitchell QC seeks an award of costs against the Respondents under Rule 34A(1) on the basis that they acted unreasonably in the conduct of the proceedings 
“… to the extent that the Affidavit of Mr Mansfield went beyond the areas in respect of which the EAT ordered him to give evidence.” 

16.	Mr Mansfield made an affidavit setting out his evidence of the way the EJ conducted the proceedings in the ET and whether he exhibited the appearance of bias.  Such an affidavit was made in answer to allegations by the Claimant of apparent bias and failure by the EJ to ensure as far as possible that the parties were on an equal footing.  That the affidavit of the Respondents’ solicitor went beyond dealing with events at the hearing (it was 10 pages long and had 101 pages of exhibits) is not unreasonable conduct of the proceedings before the EAT.  It was entirely reasonable if not necessary for the solicitor for the Respondents to file an affidavit and give evidence of the conduct of the proceeding by the EJ as this was the subject of serious allegations which depended on inferences to be drawn from fact.  Whether conduct of proceedings is unreasonable is a question of fact and degree.  The matters complained of in support of the application by the Claimant for an award of costs under Rule 34A(1) fall far short of such conduct. 

17.	The application by the Claimant for costs under Rule 34A(1) is dismissed. 

The Respondents’ Application for Costs under Rule 34A(1) 
18.	The Respondents make an application for costs against the Claimant on the grounds that:
“… the appeals were unnecessary, improper, vexatious or misconceived and that there has been other unreasonable conduct in the bringing or conducting of proceedings by [the] Claimant.”

19.	Mr Solomon rightly points out in his written submissions that Mr Mitchell QC submitted that the core issue in the appeals was the failure of EJ MacInnes to address the inequality of arms of the parties.  The Claimant was unrepresented and the proceedings were not in his first language which is Italian.  The Respondents were represented by solicitors and counsel.  It was said by the Claimant that the failure of the EJ to consider relevant documents, such as the P45s and the timesheets which coupled with what the Claimant perceived as the EJ “smirking” gave an appearance of bias. 

20.	These allegations of improper conduct of the proceedings necessitated written and oral evidence from the Respondents’ solicitor.  Mr Solomon has contended in written submissions that the hearing in the EAT was listed for 1.5 days only because of the Claimant’s pursuit of allegations of procedural impropriety and bias.  He contends that without these allegations the hearing should have been set down for 2-3 hours.  The allegations necessitated wasted expense in preparation of affidavit evidence and the giving of oral evidence by the Respondents’ solicitor.  It was also said that the Claimant pursued unnecessary and costly applications and appeals of EAT case management decisions.  It is said that this was unreasonable conduct which should attract a costs order. 
21.	Mr Mitchell QC agrees that the Claimant had his attention drawn to paragraph 13.6.3 of the Practice Direction that unsuccessful pursuit of an allegation of bias may put the party raising it at risk of an order for costs against him.  Such allegations were made by the Claimant in respect of the conduct of the hearing before EJ MacInnes and his two reconsideration decisions.  Case management decisions in the ET were not the subject of this appeal. 

22.	The observation made by the Judge hearing a Rule 3(10) application to determine whether the grounds of appeal raise reasonable grounds are not determinative of the reasonableness of pursuing them.  Only the Appellant appears at such a hearing.  However in this case some weight is to be given to those observations.  They led to permission being granted to amend the grounds of appeal.  HH Judge Peter Clark held: 
“12. Whilst I may have reservations individually or collectively about those arguments in terms of standalone grounds of appeal, I see the force of Mitchell’s overall submission that the way in which those claims were dealt with feeds into the question of unequal treatment; that is, between a litigant in person for whom English is not his first language and a professionally represented Respondent. …” 

23.	The Claimant’s allegations of improper conduct of the proceedings and appearance of bias were in part based on the allegation that EJ MacInnes failed to consider important documents: two timesheets.  These have led to the success of the appeals from the deposit orders on the claims for nights’ out allowance and notice pay and the setting aside of the striking out of those claims.  Submissions on these issues would have been made even if allegations of improper conduct of proceedings and appearance of bias had not been pursued.  An appeal from failure to reconsider the decision in respect of these claims which was also relied upon as showing insufficient attention being paid to redressing inequality of arms and bias succeeded. 

24.	Whist I have found at paragraph 101 of the judgment that the failure of the EJ to understand the basis of the claim of race discrimination is not surprising as it was not put clearly until the reconsideration letter of 23 January 2015, the EJ did misunderstand the basis of the claim. 

25.	It is understandable if the Claimant felt at a disadvantage in pursuing his case if he was misunderstood in respect of an important claim and two key documents were not considered.  English was not the Claimant’s first language and he was unrepresented.  The Respondents were.  In my judgment it was not unreasonable for the Claimant to pursue an allegation that the EJ erred in failing to ensure as far as possible that the parties were on an equal footing.  That allegation failed on appeal.  In light of this conclusion any time and expense spent in dealing with this allegation is not recoverable by the Respondents. 

26.	It was submitted to the EAT by Mr Mitchell QC that the errors in approach to the Claimant’s evidence and what he saw as the EJ “smirking” at him gave rise to a perception that he was biased against him.  Having heard evidence from the Claimant and Mr Mansfield I was satisfied that EJ MacInnes did not smirk at the Claimant.  The EJ made errors in dealing with the evidence. However these could not reasonably have given rise to an appearance of bias.  What was advanced by Mr Mitchell QC that the perception on the part of the Claimant of bias by the EJ may have been the result of a cultural attitude that the judiciary may be corrupt, does not justify the serious allegation of bias. 

27.	In my judgment the allegation that EJ MacInnes conducted himself so as to give rise to a perception of bias was improper and unreasonable.  Whilst perception of bias is that of the informed and impartial observer, such an observer could not reasonably conclude from the conduct relied upon that EJ MacInnes was biased.  Accordingly I make an order under EAT Rule 34A(1) that the Claimant pay costs to the Respondents on the basis that the allegation of appearance of bias was improperly and unreasonably made. 

28.	In making an order for costs under EAT Rule 34A(1) I have regard to those unnecessarily incurred by the Respondents having to resist an allegation which should not have been made.  In Yerrakalva v Barnsley Metropolitan Borough Council [2012] IRLR 78 Mummery LJ said in respect of the amount of a costs award that the court should look at the effects of the unreasonable conduct of the paying party.  The costs awarded need not be precisely calculated to reflect the additional cost to the Respondent caused by the Claimant’s unreasonable conduct but should broadly reflect what has been caused by the erring party. 

29.	As I have found that the allegation of failure by the EJ to ensure as far as possible equality of arms although found not to be established was not unreasonably made, I consider the additional expense caused by the allegation of bias.  The additional allegation beyond those relied upon to support the allegation regarding the conduct of the proceedings was that EJ MacInnes smirked at the Claimant.  I dismissed that allegation.  The allegation necessitated the consideration by the parties of comments from EJ MacInnes and written and oral evidence from them.  There were also written and oral submissions by counsel on the issue of the appearance of bias.  Having regard to the amount of time and expense reasonably spent on resisting the allegation of appearance of bias and the Note of Costs produced by the Respondents, subject to the question of ability to pay which the Claimant asks me to consider, I would make an order that the Claimant pay the Respondents costs in the sum of £1,250. 
30.	Mr Mitchell QC on behalf of the Claimant submits that he lacks the means to pay any award of costs.  In support of this contention the Claimant on 30 April 2016 produced a witness statement, copy bank statements and pay slips.  He states that he has spent his savings on the appeals in this case and that as can be seen from his bank statements, pay slips and statement of his rent and bearing in mind that his wife does not work he just makes ends meet.  The Respondents’ solicitor commented in an email on 4 May 2016 on the evidence of means provided by the Claimant.  He observed that over the period between 22 December 2015 and 29 March 2016 the Claimant had a surplus of £1,044.35 shown from both his bank accounts.  If payments for his barrister were removed, the surplus would have been £3,894.35. 

31.	In deciding the amount of the costs order I take into account under EAT Rule 34B(2) the Claimant’s ability to pay.  It was reasonable for the Claimant to incur the cost of legal representation to pursue his appeal which succeeded in overturning the striking out of some of his claims.  I accept on the evidence that the Claimant barely makes ends meet and that he has savings of just over £1,000.  The Claimant will recover £1,800 from the Respondent in respect of fees paid to the Courts Service to pursue the appeal. 

32.	There will be an order that the Claimant pay the Respondents the sum of £1,250.  As in Basildon & Thurrock NHS Trust v Weerasinghe [2016] ICR 305, that sum is to be off set against that of £1,800 to be paid by the Respondents to the Claimant. 

33.	The Respondents are to pay the Claimant the sum of £550 within 14 days of the seal date of the Order made following this judgment on costs.