Employment Appeal Tribunal Rejects Costs Application in Wasted Costs Case
The Employment Appeal Tribunal has refused a costs application, stressing the narrow scope of the wasted costs jurisdiction.
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EAT Upholds Strict Criteria for Wasted Costs Awards
The Employment Appeal Tribunal (EAT) has dismissed a significant costs application, reinforcing that the threshold for awarding wasted costs remains high and is not automatically met even if an appeal ultimately fails.
Key Factors in Costs Decisions
In a judgment handed down on 12 January 2026, His Honour Judge James Tayler considered an application for costs made by a respondent following the dismissal of an appeal. The respondent argued that the appeals brought by Miss B Gurney, Merali’s Limited, and Fordover Services Limited were unnecessary and/or misconceived.
The EAT has the power to award costs if proceedings are found to be unnecessary, improper, vexatious, or misconceived, or if there has been unreasonable delay or conduct. However, as the tribunal noted, the jurisdiction is generally costs free, meaning a two-step process is required: firstly, has the threshold conduct occurred, and secondly, should the discretion to award costs be exercised?
Appeal Sift and Prospects of Success
A key consideration in the case was whether an appeal passing an initial "sift" or progressing to a full hearing protected an appellant from a costs award. The tribunal referred to established case law, including Iron and Steel Trades Confederation v ASW Ltd (in liq), which made it clear that simply because an appeal has been heard or considered does not mean it was arguable or that the appellant acted unreasonably in pursuing it.
While the fact that an appeal has passed the sift is a factor to be considered, it does not automatically grant immunity from costs. The tribunal emphasised that the prospects of an appeal can change significantly once respondents have had the opportunity to make submissions.
Threshold for Wasted Costs Not Met
The tribunal examined the grounds of appeal, which centred on allegations of improper, unreasonable, or negligent conduct by a legal representative. It was noted that for a wasted costs order to arise, there must be something more than mere negligence; it needs to be akin to an abuse of process.
In this instance, while certain aspects of the case, such as an unparticularised age discrimination complaint, came close to the threshold, the tribunal concluded that the threshold for making a costs award had not been surpassed. Even if the appeal had been deemed "misconceived" (meaning it had no reasonable prospect of success), it would have only just met the threshold, and the tribunal indicated it would still have refused the application for costs.
The judgment highlights the careful consideration required when assessing wasted costs applications, focusing on the conduct of the parties and the legal representatives involved.
Read the entire judgement here: Miss B Gurney and Others v Ms M Randall and Others, Merali’s Limited and Others, Fordover Services Limited and Others [2026] EAT 4
