Costs

Employment tribunals - adverse costs warning given by tribunal to claimant - undue pressure on claimant to withdraw claim

Gee v Shell (UK) Ltd: CA (Lords Justice Simon Brown, Sedley and Scott Baker): 24 October 2002

The claimant's services in connection with the operation of the company's service station were terminated by the company.

The claimant filed an application for compensation for unfair dismissal on the basis that she had been employed in her job by the company for two years.

The company contended that she had not been an employee but had been engaged under a franchise agreement for less than two years.

In a similar case, another employment tribunal had held that the claimant had not been an employee.

As a result of a warning by the tribunal that the claimant was at real risk of a substantial costs order, the claimant withdrew the claim, whereupon the tribunal dismissed the application.

The Employment Appeal Tribunal allowed the claimant's appeal and remitted the case for rehearing by a differently constituted employment tribunal.

The company appealed.

Andrew Hochhauser QC (instructed by Mace & Jones, Liverpool) for the company; John Kelly, solicitor-advocate (instructed by Ferdinand Kelly, Birmingham) for the claimant.

Held, dismissing the appeal, that an employment tribunal should only give a costs warning where there was a real risk that an order for costs would be made against an unsuccessful claimant at the end of the hearing; that the critical question was whether the risk of a costs order being made against the claimant was sufficiently high to justify the pressure that was placed upon her; that, on the facts, the pressure had been disproportionate; and that, accordingly, the appeal tribunal was correct to remit the case for rehearing.