Employment Tribunal Properly Considered Ability To Pay When Awarding Costs Despite Family Impact

WILLIS V GWB HARTHILLS LLP & OTHERS [2025] EAT 79

In Willis v GWB Harthills LLP & Others [2025] EAT 79, the Employment Appeal Tribunal upheld the Employment Tribunal’s costs order against the claimant, dismissing his appeal on three grounds. The Employment Tribunal had found the claimant’s conduct in bringing and pursuing claims to be unreasonable, including dishonest evidence, justifying a costs order under Rule 76 of the Employment Tribunal Rules 2013. The Tribunal considered the claimant’s ability to pay under Rule 84, rejecting his undervaluation of his half-share in the family home (£475,000–£1.1 million) and factoring in an estimated £340,000 profit share, despite his disputed entitlement. The Tribunal capped costs at £210,000, to be assessed on a standard basis, noting alternative payment methods like equity release. The EAT found no error in the Tribunal’s broad assessment of ability to pay, including its failure to detail the impact on the claimant’s family or debts, as the capital assets sufficed. The appeal was dismissed, with the respondent having already recouped costs from the profit share.

The claimant's evidence that the value of his house has not risen substantially for 20 years was implausible. The claimant had purchased his for £850,000 20 years ago and is suggesting a realistic value for the property if sold is £950,000 giving him a share of £475,000. The valuation he has provided shows the property has increased by £100,000 in 20 years. The claimant could not explain how that valuation could be correct and we do not accept it is realistic or reliable. We preferred Mr Burns more realistic estimate based on Zoopla valuation showing a value of £1.47 million - £2.2 million based on the House Price Index which does factor increases over time in a more realistic way. This was another blatant attempt by the claimant to 'hoodwink' the tribunal about the true value of his half share of the capital asset to try to avoid a costs order. His conduct in attempting to rely on an estimate he knows is not truly representative of the value goes against the claimant and in favour of the making a costs order.

Citations

Jilley v Birmingham and Solihull Mental Health NHS Trust UKEAT/0584/06: An Employment Tribunal may have regard to ability to pay but is not required to; if it chooses not to do so, it should give a succinct explanation. Shields Automotive Ltd v Greig UKEATS/0024/10: Capital assets, even if not immediately realisable, may be a relevant factor in assessing a party’s ability to pay a costs award. Howman v The Queen Elizabeth Hospital Kings Lynn UKEAT/0509/12/JOJ: Where assets such as a family home are jointly owned, the Employment Tribunal may consider the individual share held by the paying party and the impact of a sale on the co-owner. Arrowsmith v Nottingham Trent University [2012] ICR 159: An Employment Tribunal is not obliged to confine a costs order to what a party can currently afford if broader circumstances justify a higher award. Doyle v North West London Hospitals NHS Trust UKEAT/0271/11: In some cases, an Employment Tribunal may have a duty to raise the issue of ability to pay even if the party potentially subject to a costs order has not done so. Vaughan v London Borough of Lewisham (No 2) [2013] IRLR 713: An Employment Tribunal may take a reasonably optimistic view of a party’s future ability to pay, considering payment over a reasonable period.

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Key Points

A tribunal is not required to explicitly reference a party’s ability to pay at the discretionary stage of a costs decision if it has already done so at the quantum stage, provided the conclusions at each stage are logically compatible. [8]
When having regard to a party’s ability to pay under Rule 84, a tribunal may adopt a broad-brush approach and take a reasonably optimistic view of future financial circumstances, particularly where a detailed County Court assessment may follow. [9, 12, 17]
Even where a party’s ability to pay is limited, an Employment Tribunal is not legally obliged to refrain from making a costs order or to restrict it to a sum the party can immediately meet. [10]
The value of jointly owned capital assets, such as a family home, may be relevant in assessing a party’s ability to pay, and consideration of the impact on the co-owner may be appropriate but is not mandatorily required. [9, 18]
A party’s failure to provide reliable evidence about their means may justify a tribunal in either disregarding their ability to pay or applying a conservative or alternative valuation methodology. [9, 17]

“The capital value of the home and the claimant's half share provides him with sufficient means to pay a costs award. The claimant is not intending to sell his home to repay his other debts of loans from family and friends where there is no time scale for repayment or his outstanding legal costs of £50,000 which he will have to settle soon. He will use his unpaid profit share to settle his own legal costs. The value of his unpaid profit share is yet to be agreed. In March 2021 the respondents had estimated the value based on the LLP's projected profits at just under £340,000. We were satisfied the claimant has the means in his capital asset (1/2 share of home) and unpaid profit costs to pay a costs award."

Key Findings In The Case

The Employment Tribunal made a clear finding that the claimant had engaged in “extreme” and “egregious” unreasonable conduct by attempting to mislead the tribunal through dishonest evidence, particularly serious given his status as a solicitor [60]–[62].
The Tribunal found that the claimant’s claims about the current value of his family home were implausible and an attempted deception; it preferred a significantly higher valuation provided by the respondents based on market data, confirming this asset as a substantial capital resource [64].
It was accepted by the Tribunal that the claimant’s half-share in the family home and future entitlement to a profit share payment (estimated at £340,000) constituted sufficient resources to justify the imposition of a significant costs order [65].
The claimant’s assertion that his behaviour was attributable to poor mental health was explicitly rejected by the Tribunal, which maintained confidence in its previous findings of dishonesty and declined to rely on post-hearing witness statements aiming to revise factual determinations [61].
The Tribunal decided that the impact of the costs award on the claimant’s wife and daughter did not preclude the award, implicitly finding that potential consequences such as a home sale or equity release did not outweigh the justification for the order given the scale of available capital [64]–[66].

“In deciding the amount of costs, we know the claimant has paid his own costs of £195,000 which he has agreed are reasonable and proportionate in relation to the first claim which settled before a liability hearing. Mr Cordrey invited the tribunal to cap any costs awarded at the amount awarded to the claimant in respect of his costs application in relation to Claim 1 but as that application has failed the cap must be set in a different way. Mr Burns suggests a cap of £210,000 even though the actual costs incurred by the respondents exceed £277,000. We have decided a reasonable and proportionate sum to cap the respondents' costs is £210,000. The costs should be assessed on the standard basis by way of a detailed assessment in the County Court. The costs are not immediately payable as there may be some delay while the unpaid profit costs value is decided, and we suggest no earlier than March 2023 which will hopefully give enough time after the LLP accounts for 2020/2021 to be approved in January 2023. The claimant also has alternative means that will not involve the sale of his home given his equity share in his home whether he does so by way of equity release or a charge on the property."

Background

The case involved Mr M Willis, the former managing partner of GWB Harthills LLP, a firm of solicitors. In 2018, the claimant was diagnosed with cancer and went on sick leave, receiving payments from a permanent health insurance (PHI) scheme. A dispute arose regarding whether the claimant was entitled to profit share payments into his pension alongside PHI benefits. The claimant submitted his first claim to the Employment Tribunal on 16 April 2020, which was partially admitted by the respondent in November 2020. A consent judgment on liability was entered on 6 January 2021. A second claim was lodged on 7 June 2021 and heard between 19 and 26 June 2021, resulting in dismissal on 3 May 2022. A remedy hearing for the first claim took place from 3-6 October 2022, with deliberations concluding on 21 December 2022. The Tribunal made no award in the claimant’s favour and was highly critical of his conduct, particularly his dishonesty in giving evidence. Both parties applied for costs, and the Tribunal ordered the claimant to pay the respondents’ costs, capped at £210,000, to be assessed by the County Court on a standard basis.

Costs Issues Before the Court

The key costs issues before the Employment Appeal Tribunal (EAT) were whether the Employment Tribunal had properly exercised its discretion in awarding costs, specifically in relation to the claimant’s ability to pay. The appeal focused on three grounds:

(1) whether the Tribunal failed to properly consider the claimant’s ability to pay when deciding to award costs;

(2) whether it failed to account for the impact of the costs order on the claimant’s wife and children; and

(3) whether it wrongly included an estimated £340,000 profit share in assessing the claimant’s ability to pay.

The Parties’ Positions

The claimant argued that the Tribunal erred by not adequately considering his financial circumstances, including his limited liquidity, substantial debts, and the potential impact on his family if forced to sell the family home. He also contended that the Tribunal wrongly relied on an uncertain profit share entitlement, which had not been paid due to ongoing disputes. The respondents maintained that the Tribunal had correctly assessed the claimant’s ability to pay, noting his substantial equity in the family home and the likelihood of future profit share payments. They emphasised the claimant’s unreasonable conduct, including dishonesty, which justified the costs order.

The Court’s Decision

The EAT dismissed the appeal, upholding the Tribunal’s costs order. It found that the Tribunal had properly considered the claimant’s ability to pay at both the discretionary and quantum stages. The Tribunal’s broad assessment of the claimant’s means, including his half-share in the family home and potential profit share, was deemed sufficient. The EAT rejected the argument that the Tribunal should have explicitly addressed the impact on the claimant’s family, noting the significant capital value of the property. It also held that the Tribunal was entitled to consider the estimated profit share, despite its uncertain realisation, as part of a forward-looking assessment of the claimant’s financial position. The EAT concluded that the Tribunal’s approach was lawful and within its discretion under Rule 84 of the Employment Tribunal Rules 2013.

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