Thursday 12 April 2012

Costs Warnings

[Thanks to Ed McFarlane of Deminos HR for preparing this case summary]

Can it be unreasonable conduct for a party to fail to engage with a Costs warning letter?

Yes, says the EAT (Supperstone J presiding) in
Peat & ors v Birmingham City Council, dismissing an appeal by ten sample Claimants against a Costs Order.

The Claimants claimed Unfair Dismissal, having been dismissed and re-engaged following an extensive collective consultation over implementing a Single Status Agreement. During proceedings, the Council's solicitors sent the Claimants a detailed Costs warning letter. The Employment Tribunal awarded costs for unreasonably pursuing the cases, having found that the Claimant's solicitors had failed to engage with the points raised in that letter, including the nature and extent of the collective consultation.

The EAT noted that for a party to succeed in arguing for Costs on the basis of unreasonable conduct, it wasn't necessary to show that the other party had no reasonable prospects of success. Had the Claimant's solicitors engaged with the issues in the Costs warning, they would have been likely to have appreciated that the Claimants' reasonable prospects of success were so thin that it was not worth going to the hearing.

A further ground of appeal against Costs for raising post-dismissal matters in relation to fairness also failed.

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