Claimant litigant in person ordered to pay £87,000 costs to respondent because her claims were completely without merit

Vaughan v London Borough of Lewisham & Ors [UKEAT/0533/12/SM] | 2013

Ms Vaughan was employed by London Borough of Lewisham (‘the Council’).

Ms Vaughan brought a total of nine claims at the employment tribunal against the Council and her former employer – from whom she had transferred under TUPE – and a number of former work colleagues (together ‘the Respondents’).

Ms Vaughan’s claims included discrimination and harassment on the grounds of her race and/or her disability and for detriment suffered for alleged whistleblowing. She also subsequently brought claims against her colleagues in the High Court for libel under the Protection from Harassment Act 1997. Prior to the employment tribunal hearing the Respondents made Ms Vaughan a number of offers, which resulted in a final offer of £95,000 to settle the employment tribunal claims. Ms Vaughan rejected the offer and the case went to a full hearing which lasted 20 days. During the hearing Ms Vaughan claimed that there was a mass conspiracy within the Council although she had no evidence to support this belief.

The employment tribunal rejected all of Ms Vaughan’s claims on the basis that they were ‘wholly misconceived’ and ordered that she pay one third of the Respondents’ costs which amounted to a staggering £87,000 (but may be reduced to £60,000 following assessment in the County Court).

Ms Vaughan appealed the decision to the Employment Appeal Tribunal (‘EAT’).

At the appeal hearing Ms Vaughan raised various arguments in support of her appeal against the costs order which included (amongst others) that:

• The Respondents’ had not sought a deposit order from her
• There had been no cost warning issued to her
• No account had been taken of the Respondents’ offers to settle her claims
• No account had been taken of the fact that she was unrepresented
• The decision was perverse (taking into account her limited means to pay any costs)

We should add for completeness that Ms Vaughan also appealed the tribunal’s decision not to allow her to submit 39 hours of covert recordings of meetings between her and the Council at the hearing. This appeal was rejected although she was permitted to submit five hours worth of the covert recordings.

The EAT rejected Ms Vaughan’s appeal against the costs order and agreed that her claims had been misconceived. The EAT pointed out that the decision to order her to pay costs was based on “her fundamental unreasonable appreciation of the behaviour of her employers and colleagues.”  It was not as a result of her lack of ability to represent herself.

The EAT commented that, even if the Respondents had written to Ms Vaughan warning her that she was at risk of costs and seeking a deposit order from her, she was so convinced that she was the victim of a conspiracy (albeit without any rational or evidential basis) that it would not have “caused the scales to fall from her eyes”. The fact that Ms Vaughan rejected an offer of £95,000 does suggest that she would have taken her case the whole way regardless of the cost or merits of her claim.

The EAT further commented that the fact that a substantial offer had been made to settle her claims, did not prevent the Respondents from subsequently trying to argue that the claim was misconceived.

This is a welcome decision for employers.

This case makes it clear that claimants who bring spurious or unmerited claims against their employers will not be immune from costs orders being made against them simply due to the fact that they are representing themselves.

Whilst this is good news for employers, you should bear in mind, however, that costs orders will not be made as a matter of course when claimants are unsuccessful. Judges remain sympathetic to unrepresented claimants and this case is an extreme example of a claimant who had no evidence to support the allegations she was making and was set on seeing it through to the bitter end no matter what cost.

This case highlights that it is not the responsibility of the employer to incur costs in advising claimants that their claims lack merit by issuing cost warnings and making applications for deposit orders. The outcome of an application for costs will not be dependent on the respondent having warned the claimant of the risk of a costs order being made against them. That said, making such a warning can help pressure the other side to think again about the merits of their claim.