Costs in the Court of Appeal

The Court of Appeal has handed down a short decision in St Albans’ Girl School v Neary declining to award costs against a claimant who lost in the employment tribunal, won in the EAT, and then lost when his employer appealed to the Court of Appeal.

The decision is a bit surprising, because the normal rule in the Court of Appeal is that costs ‘follow the event’ – that is, if you lose, you pay the other side’s costs. But in Neary Lady Justice Smith said:

Mr Neary began proceedings in a cost-free jurisdiction. He lost. On the state of authority in the EAT, he was justified in bringing an appeal. Again, he was in a cost-free jurisdiction. He won. Because St Albans (reasonably) wished to overturn that line of authority, the case came to the Court of Appeal. There Mr Neary was pitched against his will into a cost-bearing jurisdiction. It would have been very hard on him if he had had to cave in so as to avoid the risk of costs. In the event he lost but only because St Albans was able to persuade us that the line of EAT authority had developed wrongly.

If you have won in the EAT, and you then face an appeal by your employer, you can take some comfort from this. Even if you lose in the Court of Appeal, you may not have to pay your employer’s costs.

But note that it is still only only ‘may not.’ Just because the Court of Appeal has refused to award costs in favour of the successful party in one case, it doesn’t follow that you can’t be made to pay your employer’s costs if you lose. The risk that you will have to is still real, so you will have to think hard about whether you can afford to take it. Mr Neary was lucky: he didn’t in fact have to pay costs. But on the information available to him when his employer appealed, he was taking a serious risk. Many people in those circumstances would indeed have caved in.