In Piepenbrock v London School of Economics and Political Science [2026] EAT 173, the Employment Appeal Tribunal dismissed a bankrupt claimant’s appeal against an employment tribunal costs order, holding that his discharge from bankruptcy had released him from the order and that he lacked standing to appeal in any event. A receiving party holding a costs order made before the paying party’s bankruptcy cannot pursue it against them personally once discharge takes effect.
Background
The claimant brought employment tribunal complaints of unfair dismissal, discrimination arising from disability and victimisation following his dismissal. The tribunal dismissed all of them in June 2022 [3]. On the respondent’s costs application, the tribunal decided in September 2023 that the claimant should pay the respondent’s costs of defending the claim, subject to detailed assessment by the County Court on the indemnity basis [4].
The claimant appealed from that costs decision. The appeal was considered on paper not to be arguable, and he requested a rule 3(10) hearing [4]. He was made bankrupt on 22 April 2024 [6]. In March 2025 the rule 3(10) hearing was postponed and the costs appeal stayed [7]. The bankruptcy was automatically discharged on 22 April 2025 [9]. The Official Receiver (OR), as trustee, declined to assign the rights of action vested in it back to him [10], [12].
Costs Issues Before the Court
At an all-parties preliminary hearing on 2 September 2026, followed by further written submissions [11], the Employment Appeal Tribunal had to decide whether the costs appeal could continue. That turned on two questions. The first was whether, following discharge from bankruptcy, the respondent could still pursue the costs order against the claimant personally, so that the appeal retained any purpose. The second was whether the claimant had standing to pursue the appeal at all.
The Parties’ Positions
For the respondent, Mr Michell raised sections 281(1) and 382(1)(a) and (3) of the Insolvency Act 1986 in oral submissions [21]. He recognised that it would appear to follow that the respondent could not now pursue the costs order against the claimant personally, but he lacked instructions to concede the point [22]. By email of 1 October 2026 the respondent’s solicitors confirmed that position, submitted that the appeal had become academic, and reserved any claim against funds in the bankruptcy estate [22].
Mr Michell also relied on Heath v Tang [1993] 1 WLR 1421, submitting that a bankrupt does not have locus to pursue an appeal in respect of a debt provable in the bankruptcy, even the petition debt [23]. For the claimant, Garry Piepenbrock, his son and lay representative, submitted that the claimant still wished to pursue the appeal to challenge the criticisms of his conduct of the litigation made in the costs decision [24].
The Court’s Decision
The statutory framework was set out at [21]. Section 281(1) of the Insolvency Act 1986 provides that, subject as provided, discharge releases the bankrupt from all the bankruptcy debts. Under section 382(1)(a) and (3), a bankruptcy debt includes any debt or liability to which the bankrupt is subject at the start of the bankruptcy, including one whose amount has not yet crystallised or been determined.
The respondent’s confirmed position was that, upon discharge, the claimant had been “released from any present or future obligation in respect of the costs order” [22]. That acceptance followed Mr Michell’s recognition in oral argument that the result would appear to follow, after which the judge directed the respondent to confirm its position once instructions had been taken [22].
His Honour Judge Auerbach agreed with the respondent’s analysis of the position in relation to the costs appeal [24]. He held: “Following the claimant’s discharge the respondent is unable to pursue the costs order, so his appeal against it is now otiose.” The release on discharge from bankruptcy was the first of two reasons for bringing the costs appeal to an end.
The claimant’s wish to challenge the criticisms of his conduct of the litigation in the costs decision did not change that. The judge did not consider that would be sufficient reason to warrant the appeal’s continuance [24]. A paying party’s interest in answering findings about conduct did not keep alive an appeal against an order that could no longer be pursued against him.
The second reason was independent of the first. Mr Michell had submitted that Heath v Tang holds that a bankrupt does not have locus to pursue an appeal in respect of a debt provable in the bankruptcy, even the debt on which the petition is founded, and that Heath has not been affected by Mulkerrins v PriceWaterhouse Coopers [23]. The judge held that, in any event, Heath v Tang meant the claimant did not have standing to pursue the costs appeal at all [24].
The bankruptcy petition had in fact been brought by the respondent on a High Court costs order, not on the tribunal’s order [23]. On Mr Michell’s submission, which the judge accepted, the rule in Heath is not confined to the petition debt [23], [24]. All of that being so, the costs appeal was dismissed [25], [47].
The release has limits. Section 281(1) does not affect the functions of the trustee, nor the right of any creditor to prove in the bankruptcy for any bankruptcy debt [21]. The respondent expressly did not relinquish any claim it might have against funds in the bankruptcy estate, submitting that this was a separate matter [22]. The judgment made no ruling on that claim.
A related costs point arose on the separate liability appeal. The judge accepted, in light of the majority in Khan v Trident Safeguards Limited, that an amendment confining the Equality Act complaints to personal remedies would not require the OR’s involvement [45]. Part of the reasoning was that, if the claimant amended successfully, the bankrupt estate could not be affected by any costs award made against him following his continued pursuit of the limited appeals [45].
Practical Implications
For receiving parties, a costs order made before the paying party’s bankruptcy falls within the release on discharge, and the statutory definition of bankruptcy debt extends to liabilities whose amount has not yet been determined, such as costs subject to detailed assessment [21], [22]. Once discharge from bankruptcy takes effect, the receiving party cannot pursue the order against the paying party personally [24]. Practitioners should establish whether, and when, the paying party was made bankrupt before incurring the cost of assessment or enforcement.
The route that remains is the bankruptcy itself. Section 281(1) preserves a creditor’s right to prove for a bankruptcy debt [21], and the respondent here reserved its position against funds in the estate [22]. A receiving party should consider proving in the bankruptcy rather than relying on personal enforcement of the costs order.
For paying parties, an appeal against such an order is likely to be treated as academic once they are discharged, and a wish to answer criticisms of their conduct will not keep it alive [24]. They will also face the standing objection under Heath v Tang [24]. Respondents facing a bankrupt claimant who continues with personal remedies only should note that costs awarded for those continued steps would not affect the bankrupt estate [45]. This was a decision of the EAT at a preliminary hearing.
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