Racial abuse lie leaves claimant facing costs bill after ‘monumental’ ruling

A tribunal claimant faces a bill for costs after the Employment Appeal Tribunal (EAT) found recently that she had lied about a claim that she had been racially abused by her manager, a ruling described as “monumental” by the defendant’s lawyer.

The EAT ruled, in Daleside Nursing Home v Mrs C Mathew, that because the latter had fabricated a “deliberate and cynical lie” the Employment Tribunal had the power to award costs against her, and referred the matter back to it. Originally the Liverpool ET had declined to exercise that power.

The original case centred on two claims made by Mathew: that she had been called “a black bitch” by her manager, and that she had been underpaid after a change of management at the Birkenhead care home.

Even though the ET found that the “allegation of explicit and offensive racial abuse was false”, it refused to order Mathew to pay costs as she “did have a genuine belief that the claim had some merit”.

But, said the EAT, “where there is such a clear-cut finding that the central allegation of racial abuse was a lie, it is perverse for the ET to fail to conclude that the making of such a false allegation at the heart of the claim does not constitute a person acting unreasonably.

“This was plainly a case where some order for costs ought to have been made. How much that order for costs ought to have been is not a matter which we are in a position to judge.”

Daleside Nursing Home’s lawyer, Paul Dumbleton, senior partner at Beech Jones de Lloyd, said: “I am delighted with the outcome of this case. Although I am not an employment lawyer, it was obvious to me that if the costs were not awarded in a case brought upon fabricated allegations then they would never be awarded.

“There are very few reported cases involving legal cost issues in situations such as this, and it is very rare indeed for the EAT to intervene. This is a monumental result and a case which can and will be referred to by many other employers when similar cases are brought against them.”

According to the EAT report the costs may be about £25,000.

As for the underpayment allegation, the ET ruled that since the claimant had accepted it for 14 months it was reasonable for Daleside to assume it was the right rate of pay. Mathew had been paid £11.50 per hour by the old management and £11 by Daleside.

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