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Costs of £87,000 award upheld

In Vaughan v London Borough of Lewisham and others, the EAT upheld a tribunal’s decision to make a costs award, valued at around £87,000, against an unemployed, unrepresented claimant. The discrimination and whistleblowing claims brought by Vaughan were misconceived and she should have appreciated this, so at the end of the twenty day hearing, the tribunal ordered her to pay a third of the respondents' £260,000 costs, to be assessed in the county court, which came to around £87,000. Vaughan appealed on a number of points, but principally that there had been no costs warning and that in light of her limited means, the decision on costs was perverse.

The EAT rejected her appeal. There was no principle of law that costs could only be awarded where the party in question has been put on notice that they are at risk as to costs. Furthermore, the tribunal had approached the question of Vaughan’s ability to pay correctly. While Vaughan was not presently in a position to pay the costs awarded, since she was unemployed and suffering from depression, the tribunal had been entitled to form the view that there was a realistic prospect that she would be able to work in due course. The EAT recognised “it is a serious matter to saddle an unsuccessful claimant with a liability of this kind”, but there was no error of law.

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