False claims: gather the evidence from the outset

A recent case shows that it pays employers to collect evidence to combat cheating claimants.

Recently, the Employment Appeal Tribunal (EAT) ruled that it was perverse for a tribunal not to award costs against an employee whose discrimination claim was based on a “deliberate and cynical lie”. This was the case of Daleside Nursing Home v Cinlet Mathew). While this decision is a welcome victory for common sense, it is hardly the revolutionary decision portrayed by some commentators.

Readers may remember that Mathew brought a discrimination case in which she claimed that her manager had called her a “black bitch”. She also claimed that she had been underpaid. The employment tribunal found that the central allegation was a lie that she deliberately fabricated to support a weak claim. Bizarrely, the tribunal did not order her to pay costs because she had “a genuine belief that the claim had some merit”. The employer appealed this.

Misconceived

What is worrying is that a claim that was so obviously misconceived and vexatious even had to be referred to the EAT for a decision on costs. This may explain why the EAT was keen to damp down expectations regarding the importance of its decision. The judge emphasised that his decision was based on the particular clear-cut facts of the case and that he did not intend to set out any statement of legal principle.

It should have been abundantly clear to the original tribunal that a costs order was appropriate. Where an explicit and calculated lie lay at the very heart of the claim, then it was open to them to make a finding that the claim was at least misconceived and, quite possibly, vexatious and abusive. Having determined this, the tribunal would then be able to award the employers costs. It was for precisely this scenario that the cost provisions were designed.

New age

This decision, therefore, very much stands on its own and does not herald a new age where tribunals will more readily order costs against claimants. In my experience, getting costs out of a claimant is akin to getting blood out of a stone and one should expect tribunals to continue to display reluctance when it comes to costs. However, the case does provide good ammunition where an employer can show that a claim is based on a deliberate lie.

It also emphasises the importance of cross-checking facts, dates and witnesses to establish whether or not a claimant is lying. Creating a paper trail at the outset, before any matter gets to a tribunal, is essential. Tribunals are greatly swayed by contemporaneous documents and letters that will trump unreliable and uncorroborated oral testimony. While tribunals sometimes appear to want to give the claimant the benefit of the doubt, they cannot do so in the face of overwhelming documentary evidence to the contrary.

Such evidence can also be used to dissuade an apparently untruthful claimant from going ahead with a claim on the basis that the employer will be pressing for costs.

Costs awarded

What if an employer is awarded costs? What can an employer reasonably request? Not necessarily much. The tribunal can only award up to £10,000. If more is required, the matter has to be referred to a County Court costs judge. Tribunals will also usually have regard to an employee’s ability to pay when ordering costs, and employees are often impecunious. This means employers may still pick up the lion’s share of the tab.

Employers should not put too much emphasis on the importance of the Daleside case. The decision is helpful and it can be referred to in hearings or to claimants to support a threat of costs. But it will only assist where you can prove that a claim is founded on a deliberate and calculated lie. Otherwise, it’s likely to be business as usual.

Key points

  • Check dates and facts in the claimant’s evidence
  • Start a coherent paper trail from the outset of the case
  • Keep all contemporaneous letters and documents
  • Be prepared to present your evidence before the false claim goes ahead.

David Malamatenios, senior associate, Colman Coyle

Comments are closed.