Case No: A2/2010/2289

Neutral Citation Number: [2011] EWCA Civ 797
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
(HIS HONOUR JUDGE McMULLEN QC)
UKEATPA/1708/09/CEA

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Friday, 10th June 2011

Before:

LORD JUSTICE LAWS
LORD JUSTICE RICHARDS
and
LORD JUSTICE RIMER

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	DONNA MARIE ARROWSMITH	
Appellant	
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NOTTINGHAM TRENT UNIVERSITY	

Respondent	
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(DAR Transcript of 
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The Appellant appeared in person.

Mr Akash Nawbatt (instructed by Pinsent Masons LLP) appeared on behalf of the Respondent.

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Judgment

Lord Justice Rimer: 

1.	This appeal, brought with the permission of Sedley LJ, is confined to what is in substance a challenge to a judgment dated 17 November 2009 made by the Nottingham employment tribunal (Employment Judge Blackwell presiding) ordering the claimant/appellant, Ms Donna Arrowsmith, to pay costs of £3,000 to the respondent, Nottingham Trent University (“Nottingham”).  In form, however, the appeal is against the order of HHJ McMullen QC in the Employment Appeal Tribunal (“the EAT”) dated 12 July 2010 refusing Ms Arrowsmith’s application that her appeal against, amongst other things, that costs order should proceed to a full hearing before the EAT on notice to Nottingham.
2.	The appeal turns, ultimately, on what I would regard as quite narrow issues. But in order to understand how they arise, I must explain the background and summarise the relevant findings of fact made by the employment tribunal (“the ET”).
The original employment tribunal decision  
3.	Ms Arrowsmith joined Nottingham as an agency worker in September 2007.  Her role was that of an administrative worker for the Head of Commercial Activities, Ms Holstein.  She was so engaged on a temporary basis and declined a permanent post on 30 October 2007. Ms Holstein nevertheless persuaded her to stay on as a temporary member of staff by, with proper authority, agreeing to pay her a higher rate than other members of staff performing a similar role. Whether she also promised her a future appointment to the new office to which I now turn was in fundamental dispute in the proceedings.
4.	Ms Holstein had earlier in 2007 conceived the idea of there being established a new office of Business Development Officer (“BDO”), her plan being that four BDOs should be appointed.  The purpose of the new office was broadly to facilitate or generate new business and relationships with Nottingham Business School. The first BDO post was advertised in May 2008 and Ms Crichton, the only applicant interviewed, was appointed to it. There was budgetary approval for two more BDO posts and they were advertised in July 2008. There were six applicants, one of whom withdrew, and the remaining five included two internal applicants, Ms Arrowsmith and Mr Albano. All five were interviewed on 7 August 2008 by a panel comprising Ms Holstein, Dr Dawn Albery and Ms Bosworth, who was from the human resources department. It was the same panel that had appointed Ms Crichton.
5.	Although there were two vacancies, the panel decided that only candidate D met Nottingham’s requirements and only that candidate was appointed to the post of BDO. Nottingham’s decision not also to appoint Ms Arrowsmith led to her claim in the ET for compensation on the ground of sex discrimination. She claimed that she was refused the post on the ground that she was pregnant. Her claim, in which at all stages she represented herself, was heard over three days in June 2009 and was dismissed by a judgment sent with written reasons to the parties on 17 July 2009.
6.	The issues before the ET required the resolution of factual disputes.  Ms Arrowsmith’s case was that she had, in effect, been guaranteed appointment as a BDO by Ms Holstein. She said she was first given that guarantee on 29 October 2007 as an inducement to stay on as a temporary staff member. The guarantee was, she said, then frequently repeated. She was told not to apply for the post advertised in May 2008 because that had been earmarked for Ms Crichton. At a meeting on 14 July 2009 with Ms Holstein and Dr Albery, she was, she said, guaranteed her appointment to one of the posts advertised in July. She claimed that the post of BDO had been tailor-made to meet her own abilities. Ms Holstein and Dr Albery, for their part, denied that any such guarantees had ever been given, whilst admitting that they did provide assistance to Ms Arrowsmith on 14 July in relation to the forthcoming interview process, as they also did to Mr Albano, the other internal applicant. They also denied that the role of BDO was tailor-made for Ms Arrowsmith.
7.	The ET explained, in paragraph 3.20 and following, the interviewing panel’s methodology and that Ms Arrowsmith brought her presentation to the interview on a memory stick, which the panel retained. One item on the memory stick referred to her appointment on 28 July 2008 for “my second dating scan”.  Her case was that, by the time of the interview, both Ms Holstein and Dr Albery already knew or suspected that she was pregnant. It was, however, also part of her case that, before reaching their decision, they saw this confirmatory appointment on the memory stick. Ms Holstein and Dr Albery, by contrast, both denied having seen the scan document or having any knowledge of Ms Arrowsmith’s pregnancy until after the decision was made. Ms Holstein claimed that she first learned of it on 2 September 2008, when told by Professor Yazdani, the head of the Business School to whom she reported.  
8.	The ET explained its conclusions in paragraphs 4.1 to 4.14.  It gave, in paragraphs 4.2 and 4.3, its reasons for rejecting the “tailor-made” point. It explained in paragraph 4.4 that “on balance” it accepted the evidence of Ms Holstein and Dr Albery that no guarantee was ever given, and that all that was ever given to Ms Arrowsmith was encouragement. It gave in paragraph 4.5 its reasons for rejecting her case that she was already carrying out much of the role of BDO, finding that her role was predominantly that of an administrator and that there was no evidence that she carried out the major part of the role, the work winning process. The ET found her to be “plainly lacking” experience in the business development area that was essential to the role.
9.	In paragraph 4.6 the ET reviewed the selection and interview process. It found that candidate D was “plainly head and shoulders above the other candidates” and that Ms Arrowsmith’s CV did not meet the job description in a number of ways.  It found that it was “clear why candidate D was selected and why no others were appointed, notwithstanding that there was still a vacancy”. It considered two anomalies in relation to Ms Arrowsmith’s interviewing process, but rejected the claimed suspicions about both and accepted Ms Holstein’s explanations of them. It rejected Ms Arrowsmith’s criticisms of the questions that had been asked at the interviews, finding that each candidate was asked the same questions, which it found to be good practice.
10.	The important part of the findings for present purposes is in paragraph 4.7 and following, in which the ET turned to Ms Arrowsmith’s claim that Ms Holstein and/or Dr Albery knew of her pregnancy before the final decision was made. The ET said that that was central to Ms Arrowsmith’s case, namely that, at the time that it was making the decision, the panel was aware or suspected that she was pregnant, because otherwise there could have been no less favourable treatment of her on the grounds of pregnancy.
11.	Ms Arrowsmith claimed that Ms Holstein first learned of her pregnancy in June 2008. Ms Arrowsmith was feeling unwell and Ms Holstein was said to have asked her whether she was pregnant. The ET does not record whether or how Ms Arrowsmith answered the question, but her pleaded case (which put this conversation in July rather than June) was that she replied that she was not pregnant, which I presume was also her evidence, her pleaded case also being that she had been advised not to tell anyone she was pregnant for at least 12 weeks, which would not have been until towards the end of August. Ms Arrowsmith also said that Ms Holstein made several jokes about pregnancy that were aimed at her. Again, Ms Holstein denied that there were any such conversations about pregnancy.
12.	As for Dr Albery, Ms Arrowsmith claimed that she too knew of the pregnancy before the interview and learned of it as follows. First, Ms Arrowsmith claimed that, some time before 26 July 2008, she had a discussion with Dr Albery about a dress that would conceal her “bump”, an allegation that the ET noted that Ms Arrowsmith had not included in her witness statement but had raised for the first time in her oral evidence and which, if true, it is also to be noted, was inconsistent with her wish to keep silent about her pregnancy. Dr Albery denied any such conversation.
13.	Second, following Ms Arrowsmith’s second scan on 28 July 2008, which disclosed a foetus with an estimated age of eight weeks and one day, she claimed that her partner broadcast the news of the pregnancy to his football team. The team was one that was managed by his brother, Dr Albery’s husband. Thus, it was asserted, Dr Albery learned of the pregnancy from her husband who had learned it from Ms Arrowsmith’s partner. This was, however, the close season for football, during which the team engaged only in weekly practice sessions. There was apparently only one such session between the scan and the interviews in early August; and the evidence was that Ms Arrowsmith’s partner did not attend any of the practice sessions held during the 2008 close season. Furthermore, Dr Albery denied that she knew anything about the pregnancy until after the interviews. The inference from the papers, which Ms Arrowsmith confirmed in her oral address to us, is that her partner gave no oral evidence to the ET, nor was there any witness statement from him.
14.	Finally, Ms Arrowsmith based her claim as to knowledge of her pregnancy on the interviewing panel’s access to the memory stick on which could be found her scan appointment for 28 July. The ET explained in paragraph 4.11 why, whilst it was theoretically possible for the panel to have seen that appointment before reaching a decision on whom to appoint, it regarded it as highly unlikely.
15.	The final piece of relevant evidence to which the panel referred was that of Professor Yazdani, who said that, on or about 14 August 2008, which was after the interviews, Ms Arrowsmith told him that she was pregnant, adding that, apart from her partner, he was the only person who had been told of it and asking him not to divulge it to anyone else.
16.	The ET summarised as follows its conclusions for rejecting Ms Arrowsmith’s case and accepting Nottingham’s:
“4.13  Plainly, there are conflicts of evidence to resolve and therefore credibility of witnesses is relevant. We found Ms Holstein, Dr Albery and Professor Yazdani to be credible witnesses, their evidence was consistent under cross examination and questions from the Tribunal. Their evidence was also consistent with such documentary evidence as is relevant. On the other hand, Ms Arrowsmith’s evidence was not always consistent.  She maintained on the one hand that she did not wish Ms Holstein and Dr Albery to know of the pregnancy because she did not wish it to affect the interview, yet on the other hand she asserted in cross-examination that her pregnancy was common knowledge.  She also initially asserted that she did not wish knowledge of her pregnancy to become common until the initial 12 week period during which miscarriage is much more likely had elapsed. At the very earliest, therefore, she would not wish to have the fact of pregnancy known until the very end of July 2008, at a time when both Ms Holstein and [Dr] Albery were on holiday.
4.14  On balance, we prefer the evidence of Ms Holstein and [Dr] Albery. We accept that they were not aware, nor did they have suspicions, that Ms Arrowsmith was pregnant at the time of the interview.  Accordingly, the decision not to appoint Ms Arrowsmith cannot have been taken on the grounds of her pregnancy and therefore her claim must fail.”
I comment that, in the reference in paragraph 4.13 to the “very end of July”, I think it probable that the tribunal intended to refer to the “very end of August.”
The employment tribunal’s review of that decision 
17.	On 4 November 2009, the ET heard two applications. The first was Ms Arrowsmith’s application for a review of its judgment of 17 July; the second was Nottingham’s application for an order for costs of the tribunal proceedings against Ms Arrowsmith. By a judgment sent to the parties with written reasons on 17 November 2009, the ET affirmed its judgment of 17 July and ordered Miss Arrowsmith to pay costs of £3,000.
18.	The rules relating to a review of an ET’s judgments and decisions are in rules 33 to 37 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004. The grounds for a review are in rule 34(3) and the only ones relied upon by Ms Arrowsmith were the two grounds contained in subparagraph (d) and (e). The ET dealt in paragraphs 3.3 to 12 of its reasons with each head of argument that Ms Arrowsmith advanced and then summarised in paragraph 13 its reasons for refusing her application for a review.
19.	The ET then turned to Nottingham’s costs application, which was in respect both of the original three day hearing and the review hearing. The rules relating to an employment tribunal’s power to award costs are, so far as relevant to the present case, in the following provisions of rules 40 and 41 of the 2004 Regulations:
“40.  When a costs or expenses order may be made
…
(2) A tribunal or Employment Judge shall consider making a costs order against a paying party where, in the opinion of the tribunal or Employment Judge (as the case may be), any of the circumstances in paragraph (3) apply. Having so considered, the tribunal or Employment Judge may make a costs order against the paying party if it or he considers it appropriate to do so.
(3) The circumstances referred to in paragraph (2) are where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived.
...
41.  The amount of a costs or expenses order
(1) The amount of a costs order against the paying party shall be determined in any of the following ways —
(a) the tribunal may specify the sum which the paying party must pay to the receiving party, provided that sum does not exceed £10,000 ….
(2) The tribunal or Employment Judge may have regard to the paying party’s ability to pay when considering whether it or he shall make a costs order or how much that order should be. …”

20.	Nottingham’s application for costs was based on the proposition that Ms Arrowsmith had acted unreasonably in bringing the proceedings because they were based upon what was said to be a series of untruths. In support of the approach that it might adopt, Mr Coley, the solicitor representing Nottingham, referred the ET to the decision of the EAT in Daleside Nursing Home Limited v Mrs C Mathew UKEAT/0519/08/RN, 18 February 2009. The ET’s decision on the application was expressed shortly and I shall therefore set it out almost in full.
21.	The ET first, in paragraph 14, set out what it called the head note from Daleside.  It must therefore have been shown a report of that case differing from the one shown to us, which does not have a head note. It was as follows:
“Where at the heart of a claim is an explicit lie alleging racial abuse, the employment tribunal was in error in failing to find that the claimant acted unreasonably in bringing or conducting her claim and should have made an order for costs against her.”
22.	Having read that, the ET continued:
“15.  The EAT, as Mr Coley rightly points out, are not seeking to suggest that that head note is a rule of law to be followed in all circumstances, and that each case will depend on its own facts. The respondent relies upon paragraphs 40(2) and (3) of the 2004 Regulations and, in particular, submits that Ms Arrowsmith has behaved unreasonably in basing her claim upon a series of untruths. In particular, these matters are set out at paragraphs 4.8, 4.9 and 4.12 of the decision. As to the first matter, Ms Arrowsmith contended that she had had a discussion with Dr Albery prior to 26 July 2008 in relation to the selection of a dress which would conceal her ‘bump’. Dr Albery denied that there was any such conversation and we accepted her evidence. In paragraph 4.9 Ms Arrowsmith contended that during June 2008 Ms Holstein asked her directly if she was pregnant. Ms Arrowsmith also contended that Ms Holstein made a number of jokes about pregnancy which were aimed at Ms Arrowsmith. Again Ms Holstein denies that any such conversations took place and asserted that the first she knew of the pregnancy was when she was told by Professor Yazdani on or about 2 September 2008.  Again we preferred Ms Holstein’s evidence. Professor Yazdani, as we have noted, confirms that he informed Ms Holstein of Ms Arrowsmith’s pregnancy on or about that date and he further contended that on or around 14 August Ms Arrowsmith informed him that she was pregnant. Ms Arrowsmith, of course, denied that conversation but we preferred Professor Yazdani’s evidence.
16.  Based upon the above matters and the authority we have cited above, it seems to us that Ms Arrowsmith’s conduct has been unreasonable within the meaning of the Regulations. Her core case has been that both Ms Holstein and Dr Albery were well aware of her pregnancy and she has made statements as set out above in support of that core contention. We found those statements to be untrue and therefore, it seems to us, it is open to us to make an award of costs. We recognise that we have a discretion to do so and in exercising that discretion we have taken into account the length of these proceedings and the costs to which the respondent has been put. In deciding not whether to make an award but as to the amount of the award, we have taken into account Ms Arrowsmith’s means. She has recently ceased drawing statutory maternity benefit, is currently unemployed and is about to make application for further benefits such as she would be entitled to. In those circumstances it seems to us it would be pointless to make an award to have costs assessed because plainly those costs will well exceed £10,000. In those circumstances, doing the best we can, we think it would be appropriate to make an award of costs of £3,000 and we accordingly order the Claimant to pay that sum to the Respondent.”
23.	Ms Arrowsmith sought to appeal against the ET’s original and review judgments to the EAT. Her appeal against the former on the ground that the decision was perverse was rejected by HHJ Peter Clark on the paper sift under rule 3(7) of the Employment Appeal Tribunal Rules 1993 (as amended) on the grounds that the argument was unsustainable. Her oral application under rule 3(10) challenging that conclusion was refused by Underhill J, the President, on 20 January 2010. That was the end of Ms Arrowsmith’s attempt to overturn the original judgment.
24.	Ms Arrowsmith also sought to appeal to the appeal tribunal against the ET’s review and costs decision.  Judge Clark rejected it under rule 3(7) on the paper sift on the ground that the appeal as framed could not possibly succeed.  Ms Arrowsmith tried again, by submitting fresh grounds of appeal under rule 3(8), but they were also rejected by Judge Clark on the paper sift under rule 3(7). Ms Arrowsmith then exercised her right to an oral hearing under rule 3(10) and that came before Judge McMullen on 12 July 2010. He refused her application, dismissed her appeal and refused permission to appeal.
25.	Sedley LJ, on the papers on 26 January 2011, refused permission to Ms Arrowsmith to appeal on the perversity ground -- and also refused her permission to renew her application for such permission at an oral hearing -- but did give her permission to appeal against both the making and the amount of the costs order.  In the EAT, Judge McMullen had focused primarily on the perversity case and rejected it. He did not deal extensively with the issue of the costs order, which does not appear to have been at the forefront of Ms Arrowsmith’s case before him, although he did say this about it:
“15.  In the application for costs, the tribunal directed itself in accordance with Daleside Nursing Home Ltd v Mrs Mathew UKEAT/5019/08/RN in the following terms: where at the heart of a claim is an explicit lie alleging racial abuse, the Tribunal errs in failing to find that the Claimant acted unreasonably in bringing or conducting the claim and should have made an order for costs. The Respondent alleged that that was what occurred in this case. The Tribunal accepted that the conduct had been unreasonable, as her allegations were untrue, and so acceded to the application made by the Respondent to have a costs order made against her.  The Tribunal noted that the costs well exceeded £10,000, but decided appropriately to cap it at £3,000.  The Claimant contends that no reasonable Tribunal would have made this order. …
“17.  The central finding which is uncomfortable for the Claimant is that she did not tell the truth.  That is a question of fact for Employment Tribunals. Parliament set them up in order to determine disputes such as this.  The Claimant has been assiduous in asserting that she was truthful.  She has caused complaints to be made to the Regional Employment Judge through the Office of Judicial Complaints; she has written to the present and former Prime Minister, the Ministry of Justice and the Home Secretary, all without any result in her favour.”
The appeal
26.	Ms Arrowsmith’s grounds of appeal, as set out in an amended appellant’s notice, are brief and are confined to the assertion that the ET’s decision on the sex discrimination claim was perverse. If that is wrong, and of course an appeal on perversity grounds has been refused, no separate grounds were advanced as to why the costs decision was said to be wrong.
27.	Sedley LJ, in giving permission to appeal on the costs order, was concerned that, whilst finding the facts against Ms Arrowsmith, the ET had made no finding that she had lied to it or had otherwise “sought to manipulate the legal process.”  He regarded this as rendering it extremely doubtful whether there was enough to justify a finding of unreasonable conduct within rule 40(3). He was also concerned as to how, given that Ms Arrowsmith was unemployed and temporarily without maternity benefit, the ET arrived at its £3,000 figure.
28.	Ms Arrowsmith addressed us briefly but eloquently and clearly. She did not focus her address on the issue of costs, with which we are directly concerned, but advanced her arguments more broadly, and they were in effect that she feels she has suffered a serious miscarriage of justice in the decision made by the ET on both the original decision and the review of that decision. She plainly feels that the wrong findings of fact were made and that a great injustice has been done to her and she also asserts that Nottingham’s costs application was made, in her word, “maliciously”. She believes she has been seriously wronged by Nottingham and that the adverse decisions against her, including that on costs, were wrong. Her argument as to the costs decision was not focused more specifically than that.
29.	Mr Nawbatt, counsel for Nottingham, provided the court with a helpful skeleton argument and was also asked to assist it with two particular issues, and he did so. In defending the decision of the ET in relation to costs, Mr Nawbatt referred us to Daleside. In that case, the ET had dismissed the claimant’s direct race discrimination claim, one based on three alleged incidents which the claimant had failed to prove. Two of the incidents were based on inferences that the ET was invited to draw from what were apparently neutral incidents. The third, which was at the heart of the claim, was an allegation of explicit racial abuse made by the claimant’s manager in a telephone conversation. The allegation was hotly denied.  The ET’s findings were that the offending statement was not made and its explanation for its conclusion in that respect was in effect that, if it had been made, it was incomprehensible that the complaint about it had not been made much sooner.
30.	The ET did not say expressly that the claimant had been lying in asserting, as she did, that this offensive piece of racial abuse had been made. The EAT, in a judgment delivered by Wilkie J, said however of the ET’s findings:
“10.  In our judgment that is a clear finding by the Tribunal that the allegation of explicit and offensive racial abuse was false, and that it had been made up some weeks later in a context whereby the making of the allegation was a method of deflecting attention from disciplinary matters which the Claimant was anticipating.  It necessarily involves in our judgment a finding by the Tribunal that it was a deliberate, and, to an extent, cynical lie. It was that particular allegation, of course, which lay at the heart of the claim for direct race discrimination, as it was that allegation which, had it been accepted as true, would plainly have influenced the way in which the Tribunal looked at the other two incidents which were otherwise neutral.”
31.	Building on that, the EAT concluded that the ET had been wrong to reject the employer’s claim for costs on the ground of unreasonable conduct by the claimant.  It expressed itself as follows:
“20.  In our judgment, in a case such as this, where there is such a clear-cut finding that the central allegation of racial abuse was a lie, it is perverse for the Tribunal 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.  Whatever may be their genuine feelings about the other matters on which a complaint is made, on the particular facts of this case it was the fact that the lie was explicit and so much at the heart of the case that, in our judgment, it is appropriate for us to conclude that this was an overwhelming case where the Tribunal has failed properly to address the point, and as a result has come to a perverse conclusion.”
32.	It is important to note, as the ET did, that paragraph 3 of the EAT’s judgment in that case made it clear that the EAT had approached the case on the basis of its particular facts, and that nothing it said was intended to set out any more general statement of legal principle.  In the recent decision of the EAT in HCA International Ltd v May-Bheemul UKEAT/0477/10/ZT, 23 March 2011, Cox J, who delivered the judgment of the EAT, made the same point. She said:
“39.  Thus a lie on its own will not necessarily be sufficient to found an award of costs. It will always be necessary for the tribunal to examine the context and to look at the nature, gravity and affect of the lie in determining the unreasonableness of the alleged conduct.
40.  As this last case makes abundantly clear, no point of principle of general application is established in any of the cases being relied upon by Mr Beyzade [and they included Daleside]. In our judgment the Employment Tribunal’s reasoning in the present case, at para 12 of their judgment, is unimpeachable. Where, in some cases, a central allegation is found to be a lie, that may support an application for costs, but it does not mean that, on every occasion that a claimant fails to establish a central plank of the claim, an award of costs must follow.”
33.	I would respectfully endorse that approach. The question for the ET when considering whether or not the making of an order for costs is justified will always be whether, on the particular facts of the case, any of the circumstances referred to in rule 40(3) of the 2004 Regulations have been satisfied.  It will therefore be a fact-sensitive exercise and a decision in another case, in what might superficially appear to be circumstances similar to those of the instant case, will not dictate the decision in it.
34.	In the present case, the ET was well aware that Daleside did not establish a principle that in some way dictated the outcome of Nottingham’s costs application. Mr Coley for Nottingham had properly disclaimed a bearing by Daleside of any such weight and the ET correctly recognised that.  I do, however, well understand why Mr Coley cited Daleside, since it was Nottingham’s case that there was at least a parallel between that case and the present one and Nottingham was inviting the ET to regard the present case as one that had similarly been brought unreasonably or conducted unreasonably.
35.	That was, I consider, a proper way to put Nottingham’s case, and the ET, as I read its reasoning, accepted that, on the particular facts of the case before it, there was a sound justification for the conclusion that Ms Arrowsmith’s conduct had been relevantly unreasonable. Success in her case was necessarily dependent upon her proving that, before the appointment decision was made, Ms Holstein and/or Dr Albery knew or suspected that she was pregnant. The ET found that Ms Arrowsmith had sought to make good that case by advancing assertions that, as the ET said in paragraph 16, it had found to be untrue. Whilst the ET had not in its earlier set of reasons stated that it had found Ms Arrowsmith to be lying when she advanced those assertions, I find that that is the sense of what it was saying in paragraph 16. It was finding that Ms Arrowsmith had made a case that was materially dependent on the advancing by her of assertions that were untruthful.  That is how Judge McMullen, in the EAT, interpreted the reasoning; and that is what Mr Nawbatt submits to us is the proper interpretation of paragraph 16 of the ET’s judgment. In my judgment, that is its correct interpretation.  Unless the ET was making such a finding, it is inconceivable that it would have regarded Ms Arrowsmith’s conduct as unreasonable within the meaning of the Regulations; and the fact that it did make such a finding is supported by the fact that it plainly regarded Daleside as at least assisting it to its conclusion, Daleside being a case based on a finding by the EAT that the ET had found that the claimant had based her case on a lie.
36.	This was therefore a case where, in my judgment, the ET made an assessment as to the unreasonableness of Ms Arrowsmith’s conduct based on the particular facts of the case. It was an assessment that it was entitled to make and one against which an appeal to the appeal tribunal had no prospect of success. The ET was, I consider, properly entitled to conclude that it ought to make an order for costs against Ms Arrowsmith.
37.	There remains the subsidiary question as to the quantum of the award it made, which was £3,000. In arriving at that figure, the ET had regard to Ms Arrowsmith’s means, although under rule 41(2) it was not in fact obliged to do so. Its consideration of those means revealed that Ms Arrowsmith’s ability to pay was apparently extremely limited, as the ET explained, and the ET had regard to that by making an order for the payment of a sum that, in comparison with the likely amount of Nottingham’s costs that it would recover on an assessment, was probably little more than a token contribution, albeit that Ms Arrowsmith may not see it like that. The fact that her ability to pay was so limited did not, however, require the ET to assess a sum that was confined to an amount that she could pay. Her circumstances may well improve and no doubt she hopes that they will.
38.	In my judgment, there is no basis for any challenge to the amount of the costs that the ET ordered her to pay.  It took account of her means; and it reflected those means in its assessment of what sum it should order her to pay. In my judgment that decision was one that was properly within its discretion. I would accordingly dismiss Ms Arrowsmith’s appeal.
Lord Justice Richards:
39.	I agree.
Lord Justice Laws:
40.	So do I.
Order:	Appeal dismissed