Employment tribunal ordered to award costs against false claim: Solicitor Matthew Welch comments

The Employment Appeals Tribunal (EAT), last week, ordered an employment tribunal to award costs to an employer after a case where an employee falsely accused a manager of racial abuse.

The employment tribunal had not originally planned to award any costs against Ms C Mathew in the case in which she constructed a ‘deliberate and cynical’ lie about being called a ‘black bitch’ while at work at the Dalesdale Nursing Home.

However, thanks to intervention from the EAT, the employment tribunal was ordered to pay £25,000 in costs to the employer in a move that is likely to have repercussions in the wider employment law arena, with many employers likely to refer to the case when unreasonable claims are made against them.

Dalesdale Nursing Home’s lawyers said the case was indeed 'monumental'. Other suggest that the realistic threat of having to pay costs if a claim is found to be false or frivolous, will act as a huge deterrent to employees looking to take advantage of the legal system.

Warwick University’s industrial relations professor, Linda Dickens, said, “this case will reassure employers as it shows there is a penalty, and a significant one at that, for those bringing false cases.”

Matthew Welch, Employment Law Solicitor at Fisher Jones Greenwood LLP, Colchester, Essex, commented that: “the normal rule on costs in litigation is that the loser pays the winner’s costs. However, in employment tribunals the normal rule is that each side pays their own costs whether they win or lose. The tribunal can order up to £10,000 costs if they consider a claim has no merits or if a party has conducted the case unreasonably, but in practice costs orders are only made in a small minority of cases. As a result, employees do not have too much to lose by bringing a claim to a tribunal, particularly if they conduct the case themselves.

In this case the employment tribunal that first heard the case found that the allegation of race discrimination, which was the basis of the claim, had not occurred. However, the tribunal decided not to make a costs order. The employer appealed and the EAT found in their favour and ordered that the employee should pay costs. The EAT decided that the tribunal had found that the employee’s allegation was a lie and following on from this that the claimant had acted unreasonably and therefore a costs order should be made.

It will be of some concern to employers that the case had to be appealed but they should take comfort from the fact that as a result many tribunals may be more willing to make costs orders in similar cases. As a result, employees who try to make unfounded claims may be deterred”.

For more information about Employment Law please contact Matthew Welch on 01206 835230.