The claimant, who was disabled, won her claim for constructive unfair dismissal and was awarded a basic award, past loss of earnings, future loss of earnings and injury to feelings. The period from dismissal to retirement was 7 ½ years but the Tribunal calculated future loss as 5 ½ years to reflect the small possibility that the claimant’s employment would not have lasted until retirement. This deduction amounted to a discount of 26.6%. The claimant was also awarded costs against the respondent to reflect the unreasonable conduct of the respondent both in respect of the liability hearing and the remedy hearing. The respondent appealed both decisions where it was argued that the ET had failed to take into account the risks that the claimant would have been made redundant if not dismissed or would not have been able to cope with the respondent’s changed working methods and should have applied a lower multiplier.

The EAT dismissed the appeal. The ET had made no error of principle; they had made findings as to those risks which were not said to be perverse.  It was accepted that the ET had to look into the future; it had done so in a manner which did not disclose any error of law.  There had also been no error of principle with the order for costs.

___________

Appeal No. UKEAT/0164/12/SM

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

At the Tribunal

On 16 January 2013

Judgment handed down on 3 June 2013

Before

HIS HONOUR JEFFREY BURKE QC, MR D BLEIMAN, MR I EZEKIEL

ARAMARK LTD (APPELLANT)

GRAHAM (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant
MR SIMON GORTON (One of Her Majesty's Counsel)

Instructed by:
SAS Daniels LLP
30 Greek Street
Stockport
Cheshire
SK3 8AD

For the Respondent
MR LACHLAN WILSON (of Counsel) & MR MARK GREEN (of Counsel)

Instructed by:
BTMK Commercial & Personal Law
19 Clifftown Road
Southend-on-Sea
Essex
SS1 1AB

**SUMMARY**

DISABILITY DISCRIMINATION - Compensation

PRACTICE AND PROCEDURE – Costs

The Claimant was found to have been the victim of disability discrimination and harassment and to have been constructively unfairly dismissed. At a subsequent remedies hearing she was awarded compensation for injury to feelings, and past loss of earnings. She was awarded compensation for future loss on the basis of that she would not find work before her 65th birthday, in 2019; the Employment Tribunal assessed future loss using a 5½ year multiplier. The ET also awarded her £7,500 costs.

On appeal it was argued that the ET had failed to take into account the risks that the Claimant would have been made redundant if not dismissed or would not have been able to cope with the Respondent's changed working methods and should have applied a lower multiplier.

**Held**: that the ET had made no error of principle; they had made findings as to those risks which were not said to be perverse. It was accepted that the ET had to look into the future; it had done so in a manner which did not disclose any error of law. There had also been no error of principle with the order for costs.**HIS HONOUR JEFFREY BURKE QC** **Introduction**

1. In this appeal the Respondents before the Appeal Tribunal, Aramark Ltd, challenge two aspects of a remedies judgment of the Employment Tribunal, sitting at the East London Hearing Centre and presided over by Employment Judge Goodrich, sent to the parties on 15 December 2011. Those two aspects are the Tribunal's conclusions, 1) as to future loss of earnings and; 2) as to costs.

1. The Claimant was, from 1995 to January 2008, employed by the Salvation Army at a care home for elderly people called Bradbury House Home in Southend-on-Sea. She was employed as an assistant in the members dining room. She suffers from two disabilities; she was born with cerebral palsy which affects the right side of her body; she has very limited use of her right hand and arm; and she walked with a slight limp. She also suffers from learning difficulties; the precise degree of those difficulties was not determined by the Tribunal; but their effect was sufficient to amount to a disability within the meaning of the Disability Discrimination Act 1995 (which applied at the relevant time). The Tribunal found that the Claimant struggled to understand questions put to her, appeared anxious to please to an unusual degree (we have paraphrased their description) and was guileless. The job which she did for the Salvation Army was created for her in the context of these difficulties.

1. In 2008 the Salvation Army contracted out their catering functions at Bradbury House Home to the Respondents, who introduced a chef manager, Mr McCorriston. The Tribunal found that the main and perhaps only focus in his job lay in improving the productivity of the catering service while making no allowance for the limitations caused by the Claimant's disabilities. We need not go into details of what followed from his approach. By May 2009 - in less 18 months - the treatment to which the Claimant was subjected by the Respondents was such that she resigned from a job which, before the contracting out, she had carried out for the Salvation Army for 13 years without, the Tribunal found, significant problems. Mr McCorriston imposed additional duties on the Claimant which she could not perform. When she complained about them she was told that, "Disability is no excuse". The Tribunal found that Mr McCorriston's evidence was unsatisfactory and, in several respects, disingenuous. Where it differed from the evidence of or for the Claimant, they did not accept it. They found that in several respects the Respondents were guilty of disability discrimination harassment, that in several respects the Respondent failed to make reasonable adjustments for the Claimant's disabilities and that those extensive failures constituted a fundamental breach of contract which caused the Claimant to lose trust and confidence in her employers and to feel stressed and inadequate. They found that she had been constructively dismissed and that there was no potentially fair reason for that dismissal. Thus, she succeeded in full on liability.

1. Some months later the Tribunal met again to assess compensation. They awarded compensation of £4,080.77 as the basic award, £350 for loss of statutory rights and £18,000 for injury to feelings. Those awards are not now challenged. There was an issue as to whether the Claimant had properly mitigated her loss which the Tribunal determined in her favour; that too is not challenged. As to loss of earnings, they awarded £17,115.18 in respect of past loss up to 31 October 2011, approximately the date of the first remedies hearing.

1. As to future loss of earnings, the Tribunal found, at paragraph 99, that it was very unlikely that she would find paid employment prior to her 65th birthday in May 2019; that conclusion was challenged by the Notice of Appeal; but that challenge was not pursued beyond the preliminary hearing in the Employment Appeal Tribunal of this appeal.

1. As to future loss, for reasons to which we will come, the Tribunal awarded the Claimant compensation up to 30 April 2017, i.e. 5 ½ years from the date of the hearing but two years less than the period claimed, up to retirement date. They did not have sufficient information as to benefits and tax to enable them to calculate such future loss and invited the parties, after the judgment, to agree the outstanding figures.

1. Thereafter, in contrast to what happened between the liability hearing and the first remedies hearing to which we will come in more detail, the parties undertook negotiations; they did not reach full agreement; but the negotiations made progress; there was agreement on the weekly rate to be used for the assessment of future loss, on the correct, "Ogden Table" from which the Tribunal should choose the appropriate discount for advancement and on other matters, thus no doubt shortening the length of a second remedy hearing at which, by a judgment sent to the parties on 6 July 2012, the Tribunal assessed future loss of earnings and of pension, after applying a 4% reduction, at £44,703.36 and £15,219.45 respectively. The weekly rate which the Tribunal used by agreement represented the Claimant's original working hours of 33 hours per week rather than the 16.5 hours per week to which her job had been reduced by agreement between herself and the Respondents in December 2008. The Tribunal at the first remedy hearing appear to have approached the question of what would have happened to the Claimant if she had not been treated as she had been by the Respondents on the basis that she would have continued to work on the reduced hours, i.e. part-time; but the approach to weekly rate of the December remedy hearing was a common approach.

1. The Tribunal further ordered that the Respondents, at the first remedies hearing, to pay £7,500 towards the Claimant's costs.

**Future loss**

1. The dispute as to future loss of earnings, once the mitigation of loss point had been resolved, centred upon the Respondent's contention that the Claimant would have been made redundant in any event if she had not been unfairly dismissed and the victim of discrimination of the nature described; see the accurate summary of this issue in the Tribunal's judgment at paragraph 18 of the first remedies decision. That contention was primarily based on the fact that, in April 2011 (whether to any extent as a result of the Respondent's treatment of the Claimant we do not know) the Salvation Army took the catering services at Bradbury House Home back from Aramark. The Respondent's witness at the remedy hearing, Mrs Chambers, agreed in evidence that, if the Claimant had been still employed in April 2011, she would have transferred back to the employ of the Salvation Army under the TUPE regulations.

1. However the Salvation Army, on the Tribunal's findings, did not carry on the catering services as they had before; instead of cooking and preparing fresh food on the premises, under the new system, what they provided to the residents was a frozen product called "Apertito" which was delivered to the premises from outside and then heated and served. Thus, the need for staff to provide catering services was reduced.

1. The Respondents also argued that the nature of the changes made was such that the Claimant would still, if in her job, have had to handle teapots and use the dishwasher, tasks which in 2008/2009 it had been shown that she could not adequately or safely perform because of disabilities.

1. The Employment Tribunal specifically considered the reduction in the workforce which occurred as a result of those changes. At paragraph 28 they found that, when the Claimant's employment ended, there were four employees operating the catering services provided by the Respondents. They consisted of two chefs - Mr McCorriston and Manuel - and two part-time assistants, the Claimant and Tara. By the time of the handover to the Salvation Army in April 2011 the Claimant had gone, of course; and so had Tara. Instead of those two part-time assistants the Respondents had engaged a full-time assistant, Mr Halliwell, who was transferred to the Salvation Army; and his role was expanded to include a requirement to heat the food, check the temperature and dispense the food to be provided to residents under the new system. See paragraph 33 of the Tribunal's judgment. The two chefs were made redundant.

1. At paragraph 34 the Tribunal said:

"Had the Claimant continued to be employed by the Respondent, therefore, and no disability discrimination or constructive unfair dismissal taken place, it is likely that there would have needed to be only an additional part-time food service assistant, rather than the full-time employment of Mr Halliwell. There is no reason to suppose, however, that part-time employment could not have been offered by recruiting a part-time employee to manage the departure of Tara as a food service assistant, and the subsequent redundancies of the two chefs."

1. Thus the Tribunal found that it was likely that, if the Claimant had not been constructively dismissed, she would have continued to work as a part-time food assistant with another part-time employee.

1. Having made these findings of fact, the Tribunal set out their assessment of future loss of earnings at paragraphs 92 to 100. They addressed, first, the question whether the Claimant would have remained in the Respondent's employment and subsequently in the Salvation Army's employment up to retirement or whether her employment would have ended at an earlier date. Their answers to that question appear at paragraphs 95 to 98, as follows:

"95. As to the first issue, the Claimant was a long serving employee of the Salvation Army before her transfer to the Respondent. She was employed by them from 13 February 1995 until January 2008, when her employment transferred to the Respondent. She was happy in her job and well liked. There is no reason to doubt that, in view of limitations and her family's strong connections with the Salvation Army, she would not have wanted to remain in employment in that job until retirement had the events that gave rise to her successful claim against the Respondent for disability discrimination and constructive unfair dismissal not taken place. Our judgment at the liability Hearing show that the Claimant was subjected to a very large number of acts of disability discrimination by the Respondent, which led to her resignation. We need to consider what the position would have been had they not behaved unlawfully to her; for example, by making reasonable adjustments in response to her disability.

96. Although there have been changes in the provision of the service, there remain to this day, so far as we were made aware, requirements for the work carried out by the Claimant to be performed. The redundancies lay elsewhere in that the work performed by the chefs was no longer needed after a decision was made not to prepare meals on the premises.

97. It is true that the role of the food service assistant expanded during the Claimant's employment with the Respondent, as the assistant was required to undertake additional tasks to those that the Claimant had previously performed whilst employed by the Salvation Army; and subsequently, after her employment with the Respondent ended, the food service assistant was required to undertake some tasks in respect of the heating and serving of meals provided to them by an external caterer. The Claimant was, however, working part-time, and the food service assistant that was appointed after the Claimant's employment with the Respondent ended, had increased his hours to full-time. It is highly likely, therefore, that the Claimant would have continued to work for the Respondent and then the Salvation Army after the Catering Services reverted to them; and another part-time food service assistant would have been appointed. By this and other means the employer would have been able to ensure being able to overcome any limitations in the work the Claimant was able to perform.

98. We accept, therefore, that there is a possibility that the Claimant's employment would have ended by this remedy Hearing; but a very strong probability that it would have continued. Although the Salvation Army is a very well established organisation there remains a small possibility that, for a variety of reasons, the Claimant's employment in her job, or suitable alternative, would not have lasted until retirement."

1. Having concluded that there was a small possibility that, for a variety of reasons, the Claimant's employment would not have lasted until retirement, they then, at paragraph 100, reflected that small possibility by reducing the period over which future loss should be calculated from that of 7 ½ years, i.e. from November 2011 to May 2019 to 5 ½ years, i.e. to May 2017. They said:

"We have assessed the possibilities of any of the ways in which loss of earnings should be limited occurring and have reached our conclusion on a 'broad brush' basis."

1. The deduction of two years from the total period amounts to a discount of 26.66%. Mr Gorton QC on behalf of the Respondents pointed to the guidance given in the judgment of the Court of Appeal in Chagger v Abbey National Plc [2010] IRLR 47 paragraph 57, which is in these terms:

"We are satisfied that the analysis of the EAT reproduced in paragraph 43 above was entirely correct on this point. It is necessary to ask what would have occurred had there been no unlawful discrimination. If there were a chance the dismissal would have occurred in any event, even had there been no discrimination, then in the normal way that must be factored into the calculation of loss."

1. He also referred to the guidance given by Elias P in Software 2000 v Andrews [2007] IRLR 568 at paragraph 54:

"54. The following principles emerge from these cases:

(1) In assessing compensation the task of the Tribunal is to assess the loss flowing from the dismissal, using its common sense, experience and sense of justice. In the normal case that requires it to assess for how long the employee would have been employed but for the dismissal.

(2) If the employer seeks to contend that the employee would or might have ceased to be employed in any event had fair procedures been followed, or alternatively would not have continued in employment indefinitely, it is for him to adduce any relevant evidence on which he wishes to rely. However, the Tribunal must have regard to all the evidence when making that assessment, including any evidence from the employee himself. (He might, for example, have given evidence that he had intended to retire in the near future).

(3) However, there will be circumstances where the nature of the evidence which the employer wishes to adduce, or on which he seeks to rely, is so unreliable that the tribunal may take the view that the whole exercise of seeking to reconstruct what might have been is so riddled with uncertainty that no sensible prediction based on that evidence can properly be made.

(4) Whether that is the position is a matter of impression and judgment for the Tribunal. But in reaching that decision the Tribunal must direct itself properly. It must recognise that it should have regard to any material and reliable evidence which might assist it in fixing just compensation, even if there are limits to the extent to which it can confidently predict what might have been; and it must appreciate that a degree of uncertainty is an inevitable feature of the exercise. The mere fact that an element of speculation is involved is not a reason for refusing to have regard to the evidence.

(5) An appellate court must be wary about interfering with the Tribunal's assessment that the exercise is too speculative. However, it must interfere if the Tribunal has not directed itself properly and has taken too narrow a view of its role.

(6) The s.98A(2) and Polkey exercises run in parallel and will often involve consideration of the same evidence, but they must not be conflated. It follows that even if a Tribunal considers that some of the evidence or potential evidence to be too speculative to form any sensible view as to whether dismissal would have occurred on the balance of probabilities, it must nevertheless take into account any evidence on which it considers it can properly rely and from which it could in principle conclude that the employment may have come to an end when it did, or alternatively would not have continued indefinitely.

(7) Having considered the evidence, the Tribunal may determine

(a) That if fair procedures had been complied with, the employer has satisfied it - the onus being firmly on the employer - that on the balance of probabilities the dismissal would have occurred when it did in any event. The dismissal is then fair by virtue of s.98A(2).

(b) That there was a chance of dismissal but less than 50%, in which case compensation should be reduced accordingly.

(c) That employment would have continued but only for a limited fixed period. The evidence demonstrating that may be wholly unrelated to the circumstances relating to the dismissal itself, as in the O'Donoghue case.

(d) Employment would have continued indefinitely.

However, this last finding should be reached only where the evidence that it might have been terminated earlier is so scant that it can effectively be ignored."

1. Mr Gorton reminded us that, in ascertaining the appropriate discount, a court or Tribunal must take into account what are known to lawyers in the fields of employment law and personal injury law as "the vicissitudes of life". See, as the most recent authority, [Wardle v Credit Agricole]() [2011] ICR 1296.

1. In the context of these principles, Mr Gorton submitted that the Employment Tribunal, in paragraphs 95 to 100 of their judgment, had failed to engage with the evidence firstly that, because of the changes when the catering service was taken back in house, the Claimant would or might have been made redundant, secondly with the prospects that she would not have been able to fulfil the requirements of the new service because of her disabilities and thirdly with the vicissitudes of life. Had the Tribunal properly understood or applied the evidence they could not have decided on so small a discount, he submitted.

1. As to the first of these points, the Tribunal expressly found at paragraph 96 that the redundancies arising from the changes made by the Salvation Army in 2011 did not lie with the kitchen assistants but with the chefs. The work of the kitchen assistant or assistants was not decreased but expanded, on the Tribunal's findings. Although in his skeleton argument Mr Gorton suggested that, in the new service, the performance of that work was a one-man role, the Tribunal found that Mr Halliwell was taken on, on a full-time basis, after the Claimant (and whoever replaced her) and Tara had left; see paragraph 31. The Tribunal found at paragraph 32 that, had the Claimant continued in employment, she would have transferred back to the Salvation Army. In paragraph 97 they found that the Claimant would have continued to work for the Salvation Army after the service reverted to them, together with another part-time food service assistant. On the basis of these findings the Tribunal were entitled to regard the risk of redundancy as small indeed.

1. The Tribunal also plainly considered the arguments as to the effect of the Claimant's disabilities. They found, at the end of paragraph 97, that by employing another part-time food service assistant and by other means, the Salvation Army would have been able to ensure that any limitations in the work which the Claimant was able to perform were overcome.

1. Although the familiar authorities on perversity were included in our papers, that word does not find a place in Mr Gorton's Notice of Appeal or his skeleton argument and was not referred to orally either. The factual conclusions to which we have referred stand. We should say, however, that in his skeleton argument Mr Gorton sought to rely on what, according to his instructing solicitors note, the Claimant said and her mother said about the Claimant's physical difficulties. That note differs from the Claimant's solicitor's note. No agreed note had been achieved; and the Employment Judge's notes have not been sought. In the circumstances Mr Gorton, entirely properly, did not press us to have regard to those notes; and we have not done so.

1. We can detect no error of principle on the part of the Tribunal in relation to their assessment of future loss. They considered the issues as to whether the Claimant would have continued to be employed in the Salvation Army's new service and found that she would have done; they considered her difficulties and found that the Salvation Army would have been able to ensure that they would be overcome. That is hardly surprising considering the Claimant's history and the fact that the job, as the Tribunal found, had been created for her originally in the context of those difficulties. Mr Gorton accepted that the Tribunal had to carry out an exercise which involved speculation; on the basis of their findings of fact in the two areas to which we have referred a considerably smaller discount than that made could not have been said to have been perverse.

1. It is correct that the Tribunal did not expressly refer to the vicissitudes of life; but in paragraph 98 they referred to there being a variety of reasons which gave rise to the small possibility that the Claimant's employment would not have lasted until retirement and in the last sentence of paragraph 100 they said that they had assessed the possibilities of any of the ways in which loss of earnings should be limited; it was, in our judgment, not necessary for them to spell out that they had taken the vicissitudes of life into consideration; those vicissitudes would have reflected only a very small proportion of the total discount which the Tribunal made.

1. For these reasons the appeal in respect of the future loss award fails.

**Costs**

1. At the first remedies hearing the Claimant sought an order for costs against the Respondents on two bases. To take them in the order adopted by the Tribunal, the first basis was the Respondent's failure even to attempt to negotiate any form of agreement between the liability judgment and the first remedies hearing. The Tribunal found at paragraph 64 to 70, and Mr Gorton accepted, that the Claimant's solicitors had tried on five occasions in that period to obtain some response to the detailed settlement proposals, with reasons, which they put forward; but no effective response was ever received. The Tribunal found, at paragraph 71, that that was unreasonable conduct particularly in view of the indications which the Tribunal had given in their liability judgment as to possible views of quantum and of the encouragement which the Tribunal had given to the parties in that judgment to resolve remedies issues. The Claimant's solicitors put forward a bill for the first remedy hearing of £2,935.80.

1. Secondly, the Claimant submitted that the Respondent should pay the costs of the liability hearing, which were put at a total of £14,246.

1. The Tribunal found that the Respondent behaved unreasonably in their conduct of preparation for the first remedies hearing by their failure to negotiate, for which no reasonable explanation had been given. They found that the Respondents had acted unreasonably in resisting the Claimant's claims. It was, they concluded, abundantly obvious, at least by the exchange of witness statements, that the Respondents had no reasonable prospects of successfully defending the case. They decided that it was appropriate to make an award of costs in respect of the Respondent's defence of the claim and to award the majority of the sum claimed in respect of the first remedies hearing.

1. At paragraph 120 they said:

"120. We have concluded that it would be appropriate to order legal costs of the Claimant's solicitors for the grand total sum of £7500 (this includes both the costs awarded in respect of this remedy Hearing and the additional sum awarded for part of the costs of preparing for last years Hearing at which the Tribunal decided that the Claimant's claims had been successful)."

1. Mr Gorton did not criticise the Tribunal's findings that the Respondents had acted unreasonably in the two respects identified. Nor did he criticise the award of costs, insofar as it related to the Respondent's resistance of the claim. His attack on the award of costs for the unreasonable conduct of the Respondent's solicitors between the liability hearing and the first remedies hearing was, in summary, based on the absence of a finding that, had the Respondent's solicitors reacted in a reasonable way to the overtures made by the Claimant's solicitors, the cost of remedy hearing would have been saved; therefore no causative link between that unreasonable conduct and the costs of the remedies hearing had been established.

1. In *[Barnsley Metropolitan Borough Council v Yerrakalva]() *[2012] IRLR 78 Mummery LJ with whom Patten LJ and Sir Henry Brooke agreed, said this:

"7. As costs are in the discretion of the ET, appeals on costs alone rarely succeed in the EAT or in this court. The ET's power to order costs is more sparingly exercised and is more circumscribed by the ET's rules than that of the ordinary courts. There the general rule is that costs follow the event and the unsuccessful litigant normally has to foot the legal bill for the litigation. In the ET costs orders are the exception rather than the rule. In most cases the ET does not make any order for costs. If it does, it must act within rules that expressly confine the ET's power to specified circumstances, notably unreasonableness in the bringing or conduct of the proceedings. The ET manages, hears and decides the case and is normally the best judge of how to exercise its discretion.

8. There is therefore a strong, soundly based disinclination in the appellate tribunals and courts to upset any exercise of discretion at first instance. In this court permission is rarely given to appeal against costs orders. I have noticed a recent tendency to seek permission more frequently. That trend is probably a consequence of the comparatively large amounts of legal costs now incurred in the ETs.

9. An appeal against a costs order is doomed to failure, unless it is established that the order is vitiated by an error of legal principle, or that the order was not based on the relevant circumstances. An appeal will succeed if the order was obviously wrong. As a general rule it is recognised that a first instance decision-maker is better placed than an appellate body to make a balanced assessment of the interaction of the range of factors affecting the court's discretion. This is especially so when the power to order costs is expressly dependent on the unreasonable bringing or conduct of the proceedings. The ET spends more time overseeing the progress of the case through its preparatory stages and trying it than an appellate body will ever spend on an appeal limited to errors of law. The ET is familiar with the unfolding of the case over time. It has good opportunities for gaining insight into how those involved are conducting the proceedings. An appellate body's concern is principally with particular points of legal or procedural error in tribunal proceedings, which do not require immersion in all the details that may relate to the conduct of the parties."

1. It is fundamental that the EAT should bear in mind that guidance when considering a costs appeal.

1. In McPherson v BNP Paribas [2004] IRLR 558 Mummery LJ, with whom Thorpe LJ and Bennett J agreed, in response to an argument, that costs could only be awarded if attributable to a specific instance or instances of unreasonable conduct, said, at paragraph 4:

"4. As the key question is whether Mr McPherson conducted the proceedings unreasonably, it is necessary to examine in detail the course of the proceedings. Mr McPherson presented his complaint to the employment tribunal on 17 October 2000. It was originally listed for hearing from 24 to 28 September 2001. On 21 August 2001 Mr McPherson's solicitors (Taylor Joynson Garrett,) now Taylor Wessing wrote to the solicitors for BNP Paribas (Clyde & Co) to notify them that their client was receiving specialist medical advice regarding a potentially serious heart complaint and that he had been advised that he might require heart surgery, but they did not intend at that stage to apply for an adjournment. A late application by Mr McPherson to postpone the hearing was in fact made and granted a month later. By an order dated 4 October 2001 the tribunal informed the parties that the case had been re-listed for hearing from 27 to 31 May 2002.

[…]

40. In my judgement, rule 14 (1) does not impose any such causal requirement in the exercise of the discretion. The principle of relevance means that the tribunal must have regard to the nature, gravity and effect of the unreasonable conduct as factors relevant to the exercise of the discretion, but that is not the same as requiring BNP Paribas to prove that specific unreasonable conduct by Mr McPherson caused particular costs to be incurred."

1. In Barnsley v Yerrakalva Mummery LJ sought to clarify the picture further at paragraphs 39 to 42 in these words:

"39. I begin with some words of caution, first about the citation and value of authorities on costs questions and, secondly, about the dangers of adopting an over-analytical approach to the exercise of a broad discretion.

40. The actual words of Rule 40 are clear enough to be applied without the need to add layers of interpretation, which may themselves be open to differing interpretations. Unfortunately, the leading judgment in McPherson delivered by me has created some confusion in the ET, EAT and in this court. I say "unfortunately" because it was never my intention to re-write the rule, or to add a gloss to it, either by disregarding questions of causation or by requiring the ET to dissect a case in detail and compartmentalise the relevant conduct under separate headings, such as "nature" "gravity" and "effect." Perhaps I should have said less and simply kept to the actual words of the rule.

41. The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had. The main thrust of the passages cited above from my judgment in Mc Pherson was to reject as erroneous the submission to the court that, in deciding whether to make a costs order, the ET had to determine whether or not there was a precise causal link between the unreasonable conduct in question and the specific costs being claimed. In rejecting that submission I had no intention of giving birth to erroneous notions, such as that causation was irrelevant or that the circumstances had to be separated into sections and each section to be analysed separately so as to lose sight of the totality of the relevant circumstances.

42. On matters of discretion an earlier case only stands as authority for what are, or what are not, the principles governing the discretion and serving only as a broad steer on the factors covered by the paramount principle of relevance. A costs decision in one case will not in most cases pre-determine the outcome of a costs application in another case: the facts of the cases will be different, as will be the interaction of the relevant factors with one another and the varying weight to be attached to them."

1. Having regard to what was said in those two judgments, we have no doubt that no error of principle on the part of the Tribunal in their award of costs can be detected in this case. There was no requirement in law that the award of costs arising from the Respondent's unreasonable conduct in relation to settlement could only be made if a causative link could be established between that unreasonable conduct and the award of costs. The Tribunal were entitled to look at the whole picture and to exercise their discretion broadly, as they did. This part of the appeal also fails.

**Conclusion**

1. For these reasons this appeal is dismissed.