One of the arguments for introducing employment tribunal fees was that they would discourage spurious claims. The EAT’s decision in Chadburn v Doncaster and Bassetlaw Hospital NHS Foundation Trust and anor, however, shows that making a high costs award against a claimant who based her claims on false allegations can act as a powerful deterrent by hitting the claimant ‘in the pocket’, even if he or she cannot currently afford to pay.

Chadburn (C) unsuccessfully pursued a number of claims of unlawful discrimination. Importantly, the employment tribunal (ET) found that she had invented race discrimination allegations as a means of giving the ET jurisdiction over her complaints of harassment. This was regarded as unreasonable conduct as this had increased the Trust’s cost of defending C’s claims by approximately £35,000, out of a total of £72,500. The ET made a costs award of £10,000 against C. Although C argued she was currently unable to pay, as she was £600 in debt, the ET took into account that she was 39, could work-on for a number of years and therefore her financial position was likely to improve.

The EAT rejected C’s appeal. The ET had been entitled to reach the conclusion that C’s financial situation was expected to improve in the future as she was just 39 years of age and likely to earn sufficient in the rest of her working life to pay the £10,000.  Furthermore, there is no reason why the question of affordability has to be decided by reference to the party’s means when the order is made. The ET found there was a realistic prospect that in the future C would be in a position to pay the costs. Given that affordability is not the only criterion and that nothing in the Rules requires a precise estimate of what can be afforded, the ET had taken all the relevant circumstances into account.

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