Iyieke v Bearing Point Ltd (COSTS) -[2025] EAT 25- (04 February 2025)

Key Facts

Issues

• The second issue concerned the tribunal's decision to award £10,000 in costs. The claimant argued the tribunal failed to evaluate whether this amount was reasonable and proportionate, particularly given the high number of hours (47.6 hours by an associate) and the fact the respondent sought the maximum amount. The tribunal did not address whether the costs incurred (over £20,000) were justified or if the £10,000 award was fair. The court noted the tribunal's reasoning was insufficient, as it merely accepted the respondent's requested amount without scrutiny, despite the potential for a more proportionate assessment. This led to the conclusion that the costs application should be dismissed.
• The first issue addressed whether the claimant acted unreasonably by continuing his race discrimination claim to trial after 9 December 2021, when he had received the respondent's disclosure and witness statements. The tribunal concluded he should have realized his claim had no reasonable prospect of success due to material differences between him and the comparators (S and P) in salary, role, and performance. However, the appeal argued that the tribunal erred by not considering the claimant's potential to challenge the respondent's explanation through cross-examination at trial, particularly regarding the role similarities with P and the later capping of P's furloughed salary. The court found the tribunal applied an overly high standard and did not account for the complexities of proving discrimination based on subjective employer motivations.

Holdings

• The tribunal erred in the first costs decision by concluding the claimant acted unreasonably in pursuing his claim to trial after 9 December 2021. The court substituted this decision, finding the costs threshold was not crossed, as the claimant had a reasonable basis to continue his claim based on comparator roles and furlough salary discrepancies.
• The tribunal also erred in the second costs decision by awarding £10,000 without assessing its reasonableness or proportionality, particularly regarding the 47.6 hours of associate work and the claimant's financial means. The court dismissed the costs application on this basis.
• Both appeals were allowed, and the tribunal's costs application was dismissed. The court found the tribunal's adverse inference about the claimant's financial credibility was unjustified and that the £10,000 award lacked proper scrutiny.

Remedies

Legal Principles

• The EAT highlighted the tribunal's error in not recognizing the claimant's reasonable basis to contest the respondent's case, particularly regarding the difficulty of proving discrimination claims that depend on the employer's state of mind. The tribunal's focus on actual comparators under section 23 of the Equality Act 2010 neglected the claimant's potential to rely on a hypothetical comparator and the evidential relevance of P's furloughed salary being capped later, which could have tested the respondent's explanation for refusing the claimant's offer.
• The Employment Appeal Tribunal (EAT) substituted the costs decision, finding the tribunal erred in concluding the claimant's conduct was unreasonable. The tribunal failed to adequately consider the claimant's reasonable basis to pursue the claim, including the potential for a hypothetical comparator and the importance of testing the respondent's explanation through cross-examination. Additionally, the tribunal did not address whether the awarded £10,000 was reasonable and proportionate, despite it being significantly lower than the £20,000+ incurred by the respondent.

Precedent Name

• Ayoola v St Christophers Fellowship
• Balamoody v UK Central Council for Nursing, Midwifery and Health Visiting
• Oko-Jaja v London Borough of Lewisham
• Yerrakalva v Barnsley MBC
• Abaya v Leeds Teaching Hospital NHS Trust
• Madarassy
• Saka v Fitzroy Robinson Ltd
• Watt v Ahsan

Cited Statute

• Employment Tribunals Rules of Procedure 2013
• Equality Act 2010

Judge Name

Passage Text

• 52. I turn to whether the tribunal erred in relation to its assessment of the costs incurred by the respondent and hence the costs awarded... 57. For all of these reasons, both appeals are allowed; and for the tribunal's decisions awarding costs, I substitute a decision dismissing the costs application.
• 45. For the decision of the tribunal, I will therefore substitute a decision that the threshold condition in rule 76(1)(a) relied upon was not satisfied and that the costs application is dismissed.
• 40. Also of some concern is the fact that [42], as do other parts of the liability decision, focusses specifically on the section 23 provisions in relation to actual comparators, although, reading the decision as a whole I note that the tribunal did come to positive findings about the non-discriminatory explanation for the treatment complained of. Nevertheless, in the first costs decision the tribunal focussed specifically on the question of whether the claimant ought to have realised that there was no reasonable prospect of P and S being found to be actual comparators without giving any further express consideration to whether he might nevertheless have had a reasonable basis for considering that he still had an arguable case by reference to a hypothetical comparator and/or relying on features relating to either or both of P and S as evidentially of assistance.