The Claimant, who had been employed by the Respondents for more than four years, was dismissed by reason of "fundamental and irretrievable breakdown of the working relationship and a breakdown of trust". She brought a number of complaints including unlawful discrimination, victimisation, harassment and unfair dismissal, but the ET, by its liability judgment, rejected the complaints, apart from finding that the dismissal had been procedurally unfair, in respect of which it made a basic award but no compensatory award. On an application for costs brought by the Respondents, the ET, by its costs judgment, ordered the Claimant to pay £20,000 towards the Respondents' costs. The Claimant appealed against the liability judgment on a number of grounds, and against the costs judgment on the ground that the ET had erred in failing to take account of all relevant matters in the exercise of its broad discretion in respect of costs decisions.

The EAT held that the ET had not erred in law in its liability judgment, and the appeal against that judgment would be dismissed; however, the ET had not correctly applied the law in determining the costs appeal, as it had approached the matter on the basis of its own view, without first considering the position of the Claimant and then applying the range of reasonable responses test; accordingly, the appeal against the costs judgment would be allowed, and the Respondents' application would be remitted for re-hearing.