England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(COMMISSIONER HOWELL QC PRESIDING)

		Royal Courts of Justice Strand, London WC2 Thursday, 30th April 2002

1. LORD JUSTICE PILL: This is an application for permission to appeal against a decision of the Employment Appeal Tribunal, Mr Commissioner Howell QC presiding, judgment being delivered on 27th April 2001. Insofar as is material to the present application, the EAT dismissed an appeal from an Employment Tribunal made on 16th May 2000. It was made by a chairman alone, and his decision was that the applicant (who is the applicant now for permission to appeal) "shall pay the whole of the Respondent's costs to be taxed in the County Court in accordance with the rules relating to a fastrack case proceeding in that Court". Mummery LJ has referred the application to a court of three.
2. The applicant, Ms C K Kaur, had brought against her employers, John L Brierley Ltd, the proposed respondent, a claim that there had been unlawful deductions from her wages. That claim was withdrawn before it came before the tribunal for resolution. The order complained of is an order that the applicant should pay the costs of the proceedings.
3. Costs in Employment Tribunals are not governed by the CPR, but by Rule 12(1) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993:

"Where in the opinion of the tribunal a party has in bringing or conducting the proceedings acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably, the tribunal may make -

(a) an order containing an award against that party in respect of the costs incurred by another party."

4. The rule goes on to provide the manner in which that jurisdiction is to be exercised.
5. It follows, and indeed accords with the very long practice of Employment Tribunals, that costs are not routinely awarded against an unsuccessful party, which would include a party who withdraws a claim. Conduct of a kind set out in Rule 12(1) must be established by the party seeking costs.
6. On behalf of the applicant, Mr Juss submits that in the circumstances of the present case, the order made by the Chairman of the Tribunal sitting at Leeds was plainly wrong and that this court should intervene. That argument was not accepted by the Employment Appeal Tribunal.
7. The first point which was taken, though not pursued when points were put to Mr Juss, is that the Chairman had no jurisdiction to make the order he did because the Tribunal had completed its function. The applicant's representative, Mr Francis R Neckles, on notepaper of the PTSC Union, wrote to the Tribunal, stating that the applicant "has now decided to withdraw her claim for breach of contract (Unlawful deductions) against the respondent company". The letter continued:

"The reason being is that as of 6th March 2000 the respondent company has reinstated the original terms to her contract of employment (A Creeler and Beamer to one machine). Copy of the respondent notice to employees enclosed.

The above case is listed for hearing on 28 March 2000."

8. That letter is dated 13th March. On hearing not from the applicant's representatives but from the Tribunal itself that the claim was being withdrawn, the respondent's solicitors notified the Tribunal that it wished to make an application for costs. Mr Simpson, Chairman of the Tribunal, issued a proforma decision which stated: "The application [that is the application of there having been an unlawful deduction] is dismissed on withdrawal by the applicant." Accompanying that letter was a letter to the representatives of both parties stating: "The Respondent's application for costs is currently waiting to be listed for hearing".
9. Mr Juss did, at first, submit that the case having been dismissed there was no jurisdiction in the Tribunal to conduct a costs hearing. That submission was not pursued. In my submission, it would have been a hopeless one. It was rejected by the Employment Tribunal itself upon the costs application. The notification of the dismissal was sent out at the same time, on the same date, as the letter referring to a costs hearing following an application by the respondent. In my judgment, in the circumstances the Tribunal plainly had jurisdiction to consider the respondent's application for costs.
10. As to the merits of the decision of the Employment Tribunal, the grounds are stated at paragraph 18 of the Chairman's (Mr Sneath's) decision:

"Turning to the merits of the application, I find that the Applicant has acted unreasonably in conducting these proceedings. In particular, she has failed throughout to identify her loss. Furthermore, she tried to make a significant amendment to her claim without explaining to the Tribunal or to the Respondent what it meant in terms of that claim. Finally, she gave a reason for withdrawing the application which I do not find convincing. The document upon which she relies in that connection does not support the reason, as I have indicated in paragraph 11 above."

11. Mr Juss' first submission on behalf of the applicant is that Mr Sneath himself should not have conducted the costs hearing because he had conducted an earlier hearing on 27th January, when an adjournment had been requested on behalf of the applicant on the basis that her representative, Mr Ibekwe, had been taken ill that morning. Mr Neckles of the PTSC Union appeared before the Chairman to make that application, which was granted.
12. The respondent stated at that hearing that it wished to make an application for costs in respect of that abortive hearing. Mr Sneath stated, paragraph 6:

"Whilst I find the situation on the applicant's side unsatisfactory, I feel bound to respect the applicant's wish that she should have the representative of her choice, not least since that person represented her only yesterday in the EAT. In making the decision to postpone the case, I am mindful of the powers of the tribunal to order a party to pay costs to the other party in the event of unreasonable conduct. Furthermore, I bear in mind that, if an order for costs is ultimately made, then it is proper for the tribunal to take into account not only the resources of the applicant but also those of the union that has been representing her. I observe that the applicant remains in the employment of the respondent and therefore has some means out of which to satisfy any order for costs which might ultimately be made."

13. Mr Juss submits that the Chairman has expressed himself so forcefully in his decision on the adjournment that he could not, without apparent bias, conduct the hearing into the general order for costs. I see no merit in that submission. It is a very common procedure for judges to conduct interlocutory hearings at which they have to assess the conduct of the parties and nevertheless go on to consider the question of costs at the end of the case. I see no objection whatsoever to that procedure; the more a judge knows about a case, the better he is placed to consider applications for costs at the end of it. There is nothing in the decision of 2nd February which indicates any animus against the applicant which made it inappropriate for Mr Sneath to conduct the hearing when costs were sought.
14. If there is a criticism to be made, without having heard fuller argument on the point and not having heard Mr Brown, who is here for the proposed respondent, it seems to me that it was in the failure of Mr Sneath to grasp the nettle and make an order on 27th January as to the costs of that day. If, as Mr Juss submits, Mr Sneath was plainly of the view that the conduct on that day was unreasonable conduct or vexatious conduct within the relevant rule, it would probably have been better had he done so at that stage. It is not easy much later to recall the circumstances of an earlier hearing and to consider whether the conditions of the rule had been met at that stage. However, it is not a mischief in this particular case. It was the same judge who heard it. This point was not expressly taken on behalf of the applicant, and still is not taken. It is a different point that is taken, namely that there was bias on the part of Mr Sneath in conducting the later hearing at all. As I have said, I see no merit whatever in that submission.
15. As to the order itself, Mr Juss has submitted that the reasons given by the Chairman are irrational reasons. He submits that upon a consideration of the material before the Tribunal no chairman could reasonably have held that the conduct on behalf of the applicant came within the Rule 12(1) definition. This question has been considered in much detail in the decision of the Employment Appeal Tribunal. Mr Commissioner Howell, for the Tribunal, has set out the considerations and the relevant parts of the judgment of the Chairman. I find his reasoning entirely satisfactory. He refers to a letter written by Mr Neckles, which appears at page 3 of the EAT decision. Particulars had been sought by the respondent, and reasonably and routinely so, in my judgment, of the basis upon which the claim that there had been an unlawful deduction from wages was being made. In response, Mr Neckles wrote:

"We are however unable to calculate or provide the applicant's full particulars of loss. The reason being is because of your client's refusal to confirm the applicant ever being on a 48-hour week, and that your client refused to confirm there ever being a contracted 48-hour week, which is now reduced officially on the 1st October 1999. We will be relying upon the evidence at the main hearing by your client before we can calculate or submit an accurate remedy total."

16. I have to say, in agreement with the Employment Appeal Tribunal, that I find that approach to this claim wholly unsatisfactory. A claimant is expected, if not to be at risk of falling foul of Rule 12(1) upon losing a case, to provide particulars of the claim put forward. In this court today the members of the court have endeavoured to obtain a precise statement of what claim was being put. I have to say that matters are still in doubt; whether the claim is by virtue of an alleged reduction from a 48-hour week to a 40-hour week, whether it was believed that because the amount of work had increased upon a change of job description that the applicant was entitled to extra wages so that having the same wage was an unlawful deduction, or other reason.
17. A claimant must be expected, if not to fall foul of Rule 12(1), ordinarily to provide such particulars as he or she can of the claim put forward. A claimant will normally have pay slips. A claimant will have a clear idea in most cases of any deduction which has occurred. It is not satisfactory simply to say that the claimant will rely upon evidence called by an employer at the main hearing. If this was a case where the claimant had attempted to put forward some basis for her claim by way of particulars and it emerged that the claim should be put in a different way or could not be justified at all, then, until the moment that was discovered, a good case could be made for there not being an order for costs on withdrawal, but when on behalf of a claimant it is stated that no particulars are to be given and the claimant is going to rely on material which may emerge from the respondent at the hearing, it can be no surprise that a chairman of an Industrial Tribunal will make the order which this Chairman did.
18. Mr Juss has submitted that the withdrawal of unmeritorious claims should not be discouraged, and I see the force of that, and that costs would plainly have been greater had an unmeritorious claim, if that is what it was, been proceeded with. In my judgment, the Employment Tribunal Chairman was justified, and fully justified, upon the absence of any particularisation of a claim for unlawful deduction of wages, to say that it was unreasonable to have proceeded without such particulars and that the employers are entitled to their costs while the proceedings were extant. It is now accepted on behalf of the respondent that the further costs incurred before the Employment Appeal Tribunal could not properly be ordered by the Chairman.
19. The further point is made that the Chairman's third ground, namely that the reason for withdrawing the application was not convincing, is unsound. I see the force of the point that, in itself, a failure to give a good reason for withdrawing a claim is not a freestanding ground for awarding costs. What has to be judged is the reasonableness of what has gone before. However, what the Chairman was saying, in my view, was that notwithstanding the earlier points he had made, if there had been some explanation as to why the claimant had proceeded with the claim, that would have been a factor relevant to a consideration of whether costs should be ordered. The absence of any such explanation leaves the claimant vulnerable in the manner I have described to a finding that she has been unreasonable, or those acting on her behalf have been unreasonable, (it is not for this court to assess which) in pursuing the claim.
20. There is, I add, a reason in the letter of withdrawal which I have read. The Chairman was entitled not to regard that as a reason which should affect his decision. This court, as I have said, has not been informed as to precisely on what basis the claim was put, and the reference to reinstatement can have no bearing. The Chairman was entitled to find it could have no bearing on the issue which he had to determine.
21. A final point made by Mr Juss is that the respondent gave no prior notice of the basis on which it was claiming costs. It did write a letter to the Tribunal, referring to earlier letters in which it had plainly asked for the particulars, which, equally plainly, were not provided or attempted to be provided. That was all that was required of it in the circumstances of this case and there is no merit in that point.
22. I would add that the application was first considered on paper by my Lord, Chadwick LJ, who refused permission to appeal. He sits as a member of the court, as is customary upon renewed applications. Sometimes they go before the Lord Justice who has refused permission on the papers; sometimes before a two or three judge court, and that is what happened here. I did indicate at the outset that had we granted permission we would not have considered it appropriate to proceed with the hearing of the appeal when one member of the court had expressed the view he had in the way he had.
23. For the reasons I have given, I would refuse this application.
24. LORD JUSTICE CHADWICK: I agree.
25. LORD JUSTICE CLARKE: I also agree.
Order: Application for permission to appeal refused. Costs awarded to the respondent of £3,966.