The Claimant brought various claims to the ET, all of which were dismissed except for his claim of unfair dismissal. A costs award was made against the Claimant on two bases: first, there was an award of 80% of the costs incurred by the Respondent in connection with a strike out application under Rule 37 of the Employment Tribunal Rules; and secondly, 60% of the costs incurred by the Respondent in connection with the substantive liability hearing. There were two grounds of appeal pursued by the Claimant. First, he argued that the Tribunal made an error of law when it placed the burden of proof on him to establish why the discretion to order costs should not be exercised by the Tribunal. Secondly, and separately, he argued that the award of costs in respect of the strike out application was in error of law because it did not, at least broadly, reflect the effect of the unreasonable conduct found by the Employment Tribunal.

The EAT allowed the appeal. The ET erred in law by erroneously placing the burden on the Claimant to satisfy it that costs should not be ordered under Rule 76, and dealt with this question before considering whether the Respondent had satisfied it that there was unreasonable conduct of some kind within Rule 76 to trigger the costs jurisdiction. The case was remitted to the same Tribunal to consider the whole picture and exercise its broad discretion as to whether a costs order is appropriate in all the circumstances of the case, and having regard to all relevant factors to be weighed fairly in the balance.