A former council head has failed to persuade the Court of Appeal that she should not have to pay any of her legal costs in a case against her employer.
In June, Cheltenham Borough Council lost its civil claim that Christine Laird, 52, had to disclose health problems which affected her work.
The council was ordered to pay 65% of Mrs Laird's estimated £540,000 legal costs and its own legal bill.
Mrs Laird was later given limited leave to appeal against the cost judgment.
She will now have to pay 35% of the total cost bill put at £800,000.
In June, the council's case of fraudulent and negligent misrepresentation over her job application was dismissed by Mr Justice Hamblen at the High Court.
'Thrown kitchen sink'
The council had alleged that she had claimed she was fit to take on the job when she was suffering from mental health problems.
In making the costs order, the judge said Mrs Laird had "thrown the kitchen sink" at the council, with more than 30 allegations of breaches of duty, only one of which had been upheld.
The High Court found that after being offered the job in January 2002, Mrs Laird had not made false statements on a medical questionnaire.
The judge also found that Mrs Laird's allegations of bullying and intimidation against the council were not true.
John Dagnall, representing Mrs Laird at the Court of Appeal, argued that a charge of fraud was so serious that someone defending themselves must be able to raise any reasonable point without having their costs reduced when they were successful.
He said Mr Justice Hamblen had accepted "the drastic nature of the fraud claim" but had left Mrs Laird having to fund 35% of her costs.
Lord Justice Moses said he had "considerable sympathy" for Mrs Laird, who had to defend herself against a serious allegation of fraud, but that did not justify her taking all the points she did which the trial judge had found disproportionate.
Lord Justice Thomas said: "The fact that the party succeeds overall is not sufficient to entitle them to recover all their costs."
He said was a rule that in awarding costs a judge must exercise discretion, taking into account the conduct of the parties and success or failure of the issues raised.
Mrs Laird and her husband Hugh said they were "disappointed" with the result in a statement after Thursday's hearing.
"We felt the original finding which left us facing a huge bill was unjust," they said. "We also feel that today's outcome is unfair."