|At the Tribunal|
THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)
(2) THE GOVERNING BODY OF DEARNE CARRFIELD PRIMARY SCHOOL
Transcript of Proceedings
|For the Appellant||ANTONY SENDALL
HLW Commercial Lawyers LLP
|For the Respondents||EDWARD LEGARD
Legal Services Division
Borough Secretary's Department
Barnsley Metropolitan Borough Council
PO Box 600
PRACTICE AND PROCEDURE – Costs
Discrimination claim withdrawn – Judge awards Rs 100% of their costs, not on the basis that the claim had been misconceived or unreasonably pursued from the start but because he held that C had lied in two specific respects in the course of the introductory processes prior to the withdrawal
Held, allowing the appeal, that in the absence of any reasons to suppose that the lies in question either caused any loss or demonstrated that the claim was misconceived no award was justified - McPherson v BNP Paribas discussed
THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)
"(2) A tribunal or Employment Judge shall consider making a costs order against a paying party where, in the opinion of the tribunal or Employment Judge (as the case may be), any of the circumstances in paragraph (3) apply. Having so considered the tribunal or Employment Judge may make a costs order against the paying party it or he considers it appropriate to do so.
(3) The circumstances referred to in paragraph (2) are where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived."
The Judge in his Reasons recorded the Respondents as putting their case on the basis that the Appellant had acted vexatiously, abusively, disruptively or otherwise unreasonably. Mr. Legard tells me that it was also submitted that the bringing of the case was misconceived; but in the event it does not matter precisely how it was put.
(a) The Judge expressly declined to attribute blame to the Appellant for the problems in what he described as a "the progress of the case". At para. 18 he said:
"I am frankly not prepared to cast the bulk or any particular proportion of the blame insofar as the progress of the case (or the lack of) is concerned on Mrs. Yerrakalva's shoulders. She has throughout, it seems to me, tried to oblige as best she could in that respect in often difficult circumstances for herself …. ."
Between paras. 23 and 27 he went on to record that the Respondents' in-house solicitor, Mr. Hirst, had been perceived by the Appellant and her representatives (when she had them) as having conducted the case in an unduly aggressive manner. Although he does not at that point associate himself in that perception, he does elsewhere express some, though muted, criticism of Mr. Hirst (see (c) below and his observations about the quantum of the costs claimed – para. 13 below).
(b) Para. 19 of the Reasons reads as follows:
"The Respondents suggest that she had brought all this upon herself by making false claims. That, of course, we do not know because the claim has been withdrawn and at no stage have we heard the whole of the evidence relating to the case itself."
(c) At para. 32 of the Reasons, effectively by way of summary of the above points, the Judge says this:
"I cannot conclude as the Respondents suggest that I should, that the Claimant's claim never had any merit from the outset or that she should bear all the blame for protracting it and delaying proceedings. I think the Respondents have not dealt with this as well as they might have done and have made rather more of a meal of it than reasonably or necessarily should have been the case."
It is worth emphasising, albeit in passing, that the Judge did not treat the fact that the Appellant had withdrawn as constituting, or tantamount to, an acknowledgment that her case was misconceived or otherwise as in itself giving grounds for an award of costs. While such a conclusion may well be appropriate in the circumstances of a particular case, it is important that there should be no general rule to this effect, not least because such a rule would be a powerful disincentive to parties in an appropriate case taking a sensible and responsible decision to withdraw.
(1) It was the Respondents' case in the substantive proceedings, as regards the disability discrimination claim, that the Appellant was not suffering from any disability and that the injuries which she alleged were exaggerated, if not positively fabricated. It appeared from documents obtained on disclosure that she had suffered, or claimed to have suffered, a number of accidents – mostly road traffic accidents – on either side of the incident of November 2003, and that she had made claims for personal injury arising out of one or more of those accidents. It also appeared that she had made a claim for Disability Living Allowance in May 2006. The associated paperwork, and her medical notes, showed some discrepancies; and it is clear that some of the doctors treating her had reservations as to the nature and extent of any physical injury suffered. In her claim for DLA the Appellant said, quite explicitly, that prior to the onset of her problems "I used to go to the gym, running, tennis, badminton"; but that "I now cannot do any of these things".
(2) At the PHR in August 2007 the truthfulness of that statement in the DLA application was challenged. It was the Respondents' case that the Appellant had not been an active sportswoman at any relevant time. The contention that she had lied in this regard was clearly material to the Respondents' case that she was exaggerating her symptoms. The Appellant fully accepted that she had never done any of the things claimed in the DLA application (beyond playing in the garden with her children), but she said that what appeared to be her claim that she had done so was a misunderstanding.
(3) It also appears to have been in issue at the PHR whether the Appellant had made any claims for personal injury arising out of the road traffic accidents referred to above. It was her case that she had not. Presumably the relevance of this question was to the possibility that she had a motive to exaggerate her injuries.
"Mrs. Yerrakalva certainly did say at one stage of the proceedings that she was not pursuing any personal injury claim when clearly she was accordingly to letters which were disclosed from two firms of solicitors who were at various stages acting for her. I find in this instance that Mrs. Yerrakalva was not being frank with the Tribunal"
Mr. Legard submitted that "not being frank" is a euphemism for lying. I agree. It is not clear at precisely what stage the false statement is said to have been made, though it was apparently in the course of the interlocutory processes; but it is unnecessary to resolve this since he made it clear (see below) that this was not the principal point on which he relied.
"At the Tribunal hearing in August 2007 she had said otherwise, i.e. that she could not swim or play sport, that she had never played tennis or badminton save with the children. She then went on to say "I've never played sport, I've not even played badminton with the children". She said she did not know how to play badminton and that, she said was the truth. Challenged about this subsequently Mrs. Yerrakalva had been at pains to suggest that this was a misunderstanding. She had not played any of the sports in any serious or competent way. What she had done was merely to play with her children, e.g. in the garden. This, she said, was what had possibly led to any misunderstanding. I have thought about this carefully and cannot in light of what is recorded as her evidence at the Pre Hearing Review on 16 August 2007 other than conclude that she had said one thing when testifying here and quite another when she was applying for benefit. I feel I have, inevitably, in light of what I have seen and heard to come to that conclusion."
The Judge said that it was "[this] matter which most concerned me".
"However, during the course of the proceedings, i.e. during the Pre Hearing Review in August 2007, she said things which I believe not to have been truthful."
He then gives some reasons why the Appellant's claim that she had been misunderstood could not be accepted. He continued:
"I am quite satisfied that she had understood what was being asked of her and that she has not been truthful with the Tribunal. That I regard as being an abuse of the process and that is why I have decided that it is appropriate to make a costs order. "
"the claimant has the means to meet a costs order though it may well be that she has obligations outside this country legal and/or moral to repay debts, the sums of which would, exceed the value of the properties she owns."
He then, finally, considered the quantum of the costs award. The Respondents had apparently quantified their costs at over £92,500. The Judge observed that that figure was "highly exorbitant" and that the PHR in August 2007 had been unnecessarily extended by "more than a slight element of overkill on the part of the Respondents". He described them as having acted "over vigorously" and as having run up a bill which was quite disproportionate to the issues at stake. Despite those observations, however, he was not able to say that the costs properly claimable fell below the limit of £10,000 identified at rule 41 (1) (a), and he accordingly directed a detailed assessment in the County Court.
"In my judgment, [rule 40] does not impose any such causal requirement in the exercise of the discretion. The principle of relevance means that the tribunal must have regard to the nature, gravity and effect of the unreasonable conduct as factors relevant to the exercise of the discretion, but that is not the same as requiring [the party claiming costs] to prove that specific unreasonable conduct by [the potential paying party] caused particular costs to be incurred [my emphases]."
Thus, while there does not have to be a precise causal relationship between the unreasonable conduct and the costs claimed, any award of costs must, at least broadly, reflect the effect of the conduct in question. That indeed inevitably follows from the principle that the purpose of an award of costs under rule 40 is compensatory and not punitive: see, e.g., Lodwick v London Borough of Southwark  ICR 884, per Pill LJ at para. 23 (p. 892B).