On 10^th April 2012, the EAT handed down a decision on an appeal against a costs order made in the matter of Peat and Others v Birmingham City Council.

 

The Appellants were a group of test claimants in litigation arising from the implementation by the Respondent of the Single Status Agreement. They did not consent to the proposed changes to terms and conditions and accordingly, were dismissed and re-engaged with no loss of continuous employment. They brought claims of unfair dismissal. Following a judgment against them on liability, costs were awarded against the Appellants on two bases, both of which were the subject of the appeal to the EAT.

 

 

The first basis was that the ET found that continuing with the claims after receipt of a cost warning letter until the end of trial constituted unreasonable conduct of the case.

 

The Respondent had sent the Appellants a letter containing a costs warning stating in effect, that due to the extent of the collective consultation that had taken place, there was no need for individual consultation and so the Appellants’ claim was misconceived because it relied on a lack of individual consultation.

 

At around the same time as the costs warning letter, other groups of Claimants in the same litigation who were represented by different unions and solicitors had withdrawn or were in the process of withdrawing their claims and no costs were awarded against them. It was also relevant that this was a test case, the Appellants were represented by well respected solicitors and counsel and they faced a trial which was bound to be lengthy and costly.

 

The ET found that at the time of the costs warning letter, '[the Appellants] had the full evidential package for the trial, and were given what we have found to be an "apparent conclusive opposition" to their cases. In the face of that, they went on and lost, and they did so on substantially the grounds that had been identified in the warning letter. We have concluded that in so doing they acted unreasonably.'

 

In dismissing the appeal, the EAT agreed with the submissions made on behalf of the Respondent that the Appellants' solicitors failed to engage with the point made in the costs warning letter. The EAT was of the opinion that 'if they had engaged with that issue the Appellants, even if they considered they had a reasonable prospect of success, would have been likely to have appreciated that it was so thin, that it was not worth going on with the hearing'. Furthermore, the EAT held that it was not necessary for a party to satisfy the Tribunal that the other side had no reasonable prospect of success in order to succeed on an application for costs based on unreasonable conduct. In this case, the Respondent’s argument did not depend on establishing that the Appellants' cases had been doomed to failure.

 

 

The second basis for the costs award was that the claims were misconceived so far as they asserted that the events subsequent to the termination of the Appellants' employment were relevant. The Appellants' appeal on this issue rested essentially on two points: 1) that the Tribunal erred in law in concluding that all events after the date on which the dismissals took place were irrelevant to the issue of fairness of the dismissals and 2) even if the Appellants were wrong on that point, it was not misconceived to advance the point.