England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

		Royal Courts of Justice Strand London WC2 Monday, 25th February 2002

1. LORD JUSTICE SEDLEY: This is an unusual application for permission to appeal. It is made by Mr. Puplampu in person, but he has the assistance of the Eureka Law Centre and of Mr. Robert Eweka, a well qualified lawyer in every respect except that he does not have at present a right of audience. I have, however, heard him willingly today, and he has been of assistance to me.
2. Mr. Puplampu was dismissed by the Pathfinder Mental Health Service NHS Trust for sexual harassment of a colleague. He denied it then and he denies it now. He went to a company called Direct Legal Limited in order that they might represent him in employment tribunal proceedings. He made it clear to them, he says, that he was not simply after compensation. Above all, he wanted his name cleared. Direct Legal Limited negotiated through ACAS with the Trust. They themselves put forward an offer to settle the case for £1,750. Unsurprisingly, the Trust accepted with alacrity. Direct Legal already had Mr. Puplampu's signature to an agreement which put the entire conduct and any settlement of the proceedings into their hands.
3. The day after the settlement was reached Direct Legal was made the subject of a winding up petition by the Secretary of State under section 124A of the Insolvency Act 1986, which permits such a step to be taken on grounds of public interest. The public interest in the present case was that the arrangement which Direct Legal were entering into pro forma with all their clients was champertous and therefore contrary to public policy.
4. The Employment Tribunal, when the matter came before it, held that it had no power to proceed, a binding agreement having been reached in a situation which escaped the restriction on contracting out contained in section 203 of the Employment Rights Act 1996. The Employment Appeal Tribunal on appeal took the same view. It gave reasons which, in principle, are undoubtedly right - essentially that an innocent third party (such as the Trust) is not affected, even where there has been fraud such as to vitiate the contract of agency between principal and agent on the other side, so long as there was, as undoubtedly there was in this case, continuing ostensible authority in the agent.
5. What is sought to be said here is this. Public policy is not necessarily the same as fraud for these purposes. Public policy intervenes in the present situation precisely because the champertous arrangement between agent and client is such that the client's interest can be, and in this case arguably was, sacrificed to the agent's interest. It is because this is occurring not in some commercial transaction but within the system of justice that the objection of champerty arises.
6. There is the further but I suspect minor point in this context that, in the light of their instructions, Direct Legal exceeded their actual authority. The major point, however, which it is sought to argue is that, if public policy is to be given its proper effect in this situation, it has to be prepared to unravel not only the arrangement between client and agent but any agreement entered into by the agent to settle proceedings in the exercise of its ostensible authority. Otherwise, it is said, the very vice against which the public policy objection to champerty is directed becomes enshrined in the court's own order and allows an agreement which has very probably been arrived at in the agent's interest and not in the client's to be enforced.
7. Against this, of course, there remains the strong objection that an innocent third party is going to be made to suffer if the deal is unravelled.
8. So far as my limited research goes and so far as Mr. Eweka's research has gone, there is no authority directly on the point. The Employment Appeal Tribunal worked by analogy rather than by direct authority. Mr. Eweka, who is a generalist and not a specialist in this field, has accepted my suggestion that he and Mr. Puplampu would benefit from specialist advice. It is my hope that the Bar Pro Bono Unit will be able and willing to provide such advice. The advice may be that this one will not run. If so, I am certain that Mr. Puplampu will be advised by Mr. Eweka that he simply has to draw a line under this distressing episode and rely upon the fact that he was, by agreement, paid compensation as some vindication of his situation. If the advice is that there is a viable appeal, then the matter will come back before this court and a two-judge court will hear the application for permission to appeal. On that basis I propose to adjourn the present application.
Order: Application adjourned as per judgment.