Sud v London Borough of Ealing [2013] EWCA Civ 949

Subjects: Definition of Disability – errors in law – costs awards

C was dismissed by reason of redundancy. She made unfair dismissal, discrimination claims and a whistle- blowing claim. The ET held that C was physically disabled but did not have a disabling mental impairment. C's reasonable adjustments claims arising out of her mental impairment were rejected. The ET awarded the R half of its costs. C appealed. The EAT dismissed the appeal and C appealed to the CofA.


C worked as a Contracts and Review Manager for R from 1986. In 2004 C submitted a grievance against two senior officials in the council. In 2005, she injured her right shoulder. She had several periods of absence for this and also for work-related stress. Eventually, C presented her discrimination claims. The ET held R had failed to make reasonable adjustments for her shoulder but did not accept that C's mental impairment amounted was a disability. The ET awarded R 50% of its costs because, amongst other things, C had unreasonably rejected offers ranging from £10,000 to £40,000 out of hand. On appeal the EAT accepted that the C's mental impairment (clinical depression and anxiety) was a disability for the purposes of Schedule 1 of the Disability Discrimination Act 1995. The ET had not taken into account what C's disability would have been like but for her treatment. The expert had not considered what C's disability would have been like without her medication and without the counselling that she had been receiving. The EAT held that the ET should have considered these points even though the expert was not asked to consider them and C's representatives had not raised them. Despite these errors the EAT refused to remit the case. On the facts, C had failed to demonstrate that she had been placed at a substantial disadvantage as a result of any practice, provision or criterion applied by R. The claim therefore would have failed in any event. The EAT upheld the costs award.


The CofA affirmed the general principle that whenever the EAT identifies an error of law, the case should be remitted for a rehearing in the Tribunal. The exception, applying Dobie v Burns International Security Services (UK) Ltd [1984] ICR 812, is that where the Tribunal’s overall conclusion is plainly and unarguably correct, notwithstanding a mis-direction. In those circumstances the EAT is not obliged to remit the case. The CofA also upheld the costs award. C had rejected offers from £10,000 to £40,000 out of hand and indicated that she was looking for compensation in the unrealistic sum of £360,000. C was not prepared to accept any reasonable and appropriate sum in settlement of her claims. The argument that C was entitled to seek declarations in her favour or reinstatement was not credible given that her response to the offers focussed on an exorbitant sum by way of suggested compensation.


Perhaps the most interesting aspect of this case is the CofA’s and EAT’s approach to costs. How often have reasonable offers been met with exorbitant demands? This case provides a helpful authority for respondent lawyers. The reasonableness of rejecting an offer can be gauged by the claimant's response. A claimant who insists on demanding an exorbitant amount in settlement may open himself/herself up to an argument that he was not prepared to settle for any reasonable sum and that his conduct has therefore been unreasonable.