Banker's £1m sex case bill

A City banker at the centre of Britain's biggest sex discrimination case has lost her claim for nearly £600,000 legal costs.

Stephanie Villalba, the former head of European private banking at Merrill Lynch, now faces a total bill estimated at up to £1million.

It is the latest setback for 43-year-old Ms Villalba, who last year brought a £7.5 million action against the US bank. She was the most senior woman banker to sue for alleged sex bias.

Ms Villalba went on to lose her sex discrimination claim in a tribunal ruling seen as a turning-point in the tide of "sexism in the City" cases. However, she is bringing an appeal against the sex discrimination verdict that is likely to be heard in the autumn.

Last month she returned to the tribunal to demand that Merrill pay ?568,000 of her legal costs because of the "unreasonable" way it had conducted its defence. She said four senior executives had lied under oath and had made her rack up huge extra legal costs because of their " deliberate obstruction".

In a five-page ruling today, the Croydon employment tribunal threw out Ms Villalba's claim.

The ruling concluded that the behaviour of the four did not "amount to unreasonable behaviour in the conduct of the proceedings".

It went on to criticise the conduct of both sides for their "aggressive and confrontational" tactics and also rejected Merrill's claim for costs.

Last year's hearing was one of the most bitterly fought discrimination cases ever to come to a public hearing in Britain. At the 50-day hearing, the ?1 million-a-year executive alleged that she was "bullied and belittled" and told to serve drinks to clients on a plane.

Merrill dismissed the claims as "preposterous" and successfully argued that she had been moved from her job in 2002 solely because of her performance.

Ms Villalba won a separate claim for "unfair dismissal" for which she was awarded about £65,000.

A spokeswoman for Ms Villalba said: "Obviously she's disappointed that the tribunal did not find in her favour but the real event is the appeal. That's when the significant decisions will be taken."

A spokesman for Merrill Lynch said: "Stephanie Villalba lost her sex discrimination claim and has now lost her £568,000 costs claim."