EAT clarifies costs rules in discrimination claims brought by litigants in person

Background

In Madu v Loughborough College, the Employment Appeal Tribunal (EAT) overturned a costs order made against a claimant who had brought an unsuccessful race discrimination claim. The decision offers important guidance on the approach to costs in discrimination cases, particularly where the claimant was unrepresented for part of the proceedings.

The claimant, a Black British man of African descent, applied for a role at Loughborough College alongside two white candidates. He came second in the interview process and was not appointed. In March 2019, he brought a race discrimination claim against the college as a litigant in person. He obtained legal representation in September 2020, and the case was eventually heard in November 2021 and May 2022.

Following the dismissal of the claim, the college applied for costs, arguing that the claim had no reasonable prospect of success. The employment tribunal granted the application and ordered the claimant to pay £20,000. A significant component of its reasoning was the assumption that, once legally represented, the claimant would have been advised that his claim lacked merit but had chosen to proceed regardless. The claimant appealed to the EAT.

EAT decision

The EAT allowed the appeal, holding that the tribunal had erred in law in making assumptions about what advice the claimant had received from his solicitors. Such advice is protected by legal professional privilege, and it was wrong to infer that competent legal advice must have included advice to discontinue. The tribunal’s reliance on that assumption materially affected its decision and undermined the fairness of the outcome.

While the tribunal also found that the claim had no reasonable prospects of success, the EAT was not satisfied that the costs award would have been made independently of the flawed reasoning. The tribunal had also failed to properly consider the difficulties claimants often face in assessing the prospects of discrimination claims - particularly when acting in person. Such cases often turn on the motivations of decision-makers and may only be clarified through cross-examination at a final hearing.

The EAT emphasised that discrimination claims are often complex, and it can be difficult for a claimant, especially a litigant in person, to assess the prospects of success before the hearing. The tribunal had not considered these challenges. The EAT also criticised the tribunal for not taking into account that the respondent had not sought a strike-out application, despite similar legal tests being involved.

Finally, the EAT found that the tribunal had failed to assess the nature, gravity and effect of other alleged unreasonable conduct by the claimant. Expressions of personal belief about wider racism, for example, were not in themselves a proper basis for a costs award. The matter was remitted to a differently constituted tribunal for reconsideration.

Learning points for employers

This decision reinforces that costs awards in discrimination claims remain the exception rather than the rule. Tribunals are expected to take particular care where a claimant was unrepresented for part of the proceedings, recognising the challenges of assessing the merits of such claims before a full hearing.

Employers seeking a costs order should avoid relying on assumptions about what legal advice a claimant may have received. Legal advice is privileged, and any speculation about its content is likely to undermine the fairness of the tribunal’s decision.

The judgment also highlights that tribunals must avoid using hindsight when assessing whether a claim should have been withdrawn earlier. The fact that a claim ultimately fails does not necessarily mean it was unreasonable to pursue it; particularly where the outcome turns on disputed witness evidence.

Finally, the EAT indicated that a respondent’s decision not to apply for strike-out or a deposit order may be relevant. If an employer later seeks costs, it will help if they can show they raised concerns about the claim’s prospects at an earlier stage. Employers should seek legal advice before making a costs application, particularly in complex or sensitive cases.

For more information or advice, please contact Michael Halsey in our Employment team on 07554 432 829, or complete the form below.