Employment Appeal Tribunal Rules on Costs Application Following Dismissed Appeal
The Employment Appeal Tribunal has refused a costs application, emphasising that passing the sift is a factor in awarding costs.
• public
Costs Application Refused After Appeal Dismissal
The Employment Appeal Tribunal (EAT) has dismissed an application for costs following the unsuccessful appeal against an Employment Tribunal judgment. The case, involving Miss B Gurney and Merali’s Limited and Fordover Services Limited as appellants, and Ms M Randall and others as respondents, saw the EAT confirm that costs do not automatically follow the event in employment tribunals.
The respondent had sought costs after the appeal was dismissed, arguing that the proceedings were unnecessary and misconceived. However, His Honour Judge James Tayler stated that the threshold for awarding costs had not been met. He clarified that while the EAT has the power to make costs orders under Rule 34A of the Employment Appeal Tribunal Rules 1993, this power is discretionary. A two-step process is involved: firstly, identifying if a threshold condition, such as unnecessary or unreasonable conduct, has occurred, and secondly, deciding whether to exercise discretion to award costs.
Sift Decision is a Factor, Not a Shield
A key point addressed in the judgment was whether an appeal passing the sift stage protects an appellant from a costs award. The EAT affirmed that while the sift decision is a factor to be considered, it does not provide absolute protection. Judge Tayler referenced previous cases, including Iron and Steel Trades Confederation v ASW Ltd (in liq), to highlight that a case being argued for some time, or even passing a preliminary hearing or sift, does not automatically mean it was arguable or immune from costs.
The judgment noted that the appeals were dismissed comprehensively. However, the tribunal’s analysis focused on whether the proceedings were “misconceived” or conducted unreasonably. The appellants had argued, in part, that the Employment Tribunal misdirected itself on the correct test for wasted costs, particularly concerning allegations of negligence against Mr Sprack. While certain arguments, such as an unparticularised age discrimination complaint, came close to being considered akin to an abuse of process, the tribunal ultimately found that the threshold for costs had not been surpassed.
Wasted Costs Jurisdiction
The judgment also delved into the nature of wasted costs. It was noted that something akin to an abuse of process is generally required for a wasted costs order to arise, whether the conduct is alleged to be improper, unreasonable, or negligent. The tribunal determined that the Employment Tribunal’s finding of no such conduct in this instance was not perverse. Ultimately, the application for costs was rejected, with the judge indicating that even if the appeal had been considered “misconceived,” it would have only “just surpassed the threshold,” and the application would still have been refused.
Read the entire judgement here: Merali’s Limited v Ms M Randall and Others [2026] EAT 4
