Wasted costs

Mr McDonald brought claim of unfair dismissal but the employer argued he did not have a year’s length of service. McDonald said he had evidence that he had been an “employee” during his time as an independent contractor prior to the start of his employment and this gave him the necessary length of service. However, he failed to produce the evidence. A tribunal ordered that his solicitor pay “wasted costs”.

The EAT held that the employment judge had applied the wrong test. Whereas a “preparation time order” can be made where the party has acted unreasonably or where their case has no reasonable prospect of success, a “wasted costs order” can only be made where the legal representative has acted “improperly, unreasonably, or negligently” and caused the applicant to incur unnecessary costs and it is just that they be awarded costs.

This was not the case here and there was no suggestion that there was an abuse of process. Even if the solicitor should have inferred that the case was hopeless — and the claimant was maintaining to the end that he had relevant evidence — it does not follow that he could have convinced his client to drop his case.