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
HIS HONOUR JUDGE PETER CLARKE

		Royal Courts of Justice Strand, London, WC2A 2LL
		18th March 2004

Lord Justice Pill:

1. This is an appeal against a decision of the Employment Appeal Tribunal (His Honour Judge Peter Clarke) dated 7 March 2003 and sent to the parties on 5 June 2003. Acting under Rule 3(10) of the Employment Appeal Tribunal Rules 1993, as amended, ("the 1993 Rules") the judge held that the Appeal Tribunal had no jurisdiction to entertain an appeal by Rodrigo Patrick Lodwick ("the Appellant") against a decision of an Employment Tribunal held at London South and sent to the parties on 16 August 2002.
2. The Appellant had been employed by the London Borough of Southwark ("the Respondents") as a residential care officer. He began that work in April 1992 and, in circumstances which do not need to be set out for present purposes, left at the end of 2000. On the substance of the matter, the Employment Tribunal held unanimously that the Appellant had not been unfairly dismissed and that his breach of contract complaint was not well founded. A complaint as to parental leave was dismissed on its withdrawal by the Appellant.
3. The present appeal related to other parts of the decision: first, the Employment Tribunal confirmed its decision that the request for its Chairman, Mr R Peters, to stand down had been refused and, secondly, the Appellant was ordered to pay to the Respondents costs of £4000.
4. The request for the Chairman to recuse himself was made on the basis that the Chairman had been Chairman of a tribunal which had heard a case four years previously in which the Appellant had represented one of the parties. The Appellant, who appeared in person before the Tribunal, submitted that in the written decision in the earlier case, adverse comments had been made about the Appellant's conduct of the hearing and costs were also awarded against the party whom he represented. No copy of the decision was available. The application was opposed by the Respondents, who were represented by counsel, Mr Uduje, who also appears in this court.
5. We have no record of the submissions made upon the application or of the oral ruling given. Mr Uduje tells us, and we accept, that the reasons given by the Chairman were substantially those later set out in the decision of 16 August 2002. These were:

"The reasons for that were that the Chairman was only one of three members of the Tribunal all with an equal vote. Although the Chairman recognised the Applicant he had no recollection of his conduct of four years earlier or of any comments made in the decision in that case. The case was listed for five days, there was not another Chairman to hear the case and if it had to be postponed it would have to be postponed until February/March 2003. The Tribunal was satisfied that a fair hearing of the case was possible and that accordingly the Tribunal should proceed to hear the case. "

6. The hearing proceeded and lasted five days. The Respondents applied for costs. The Tribunal held that the hearing had been considerably extended by the Appellant's conduct and ordered him to pay to the Respondents costs of £4000.
7. In the earlier case, the Appellant had appeared, as Union Representative, for an applicant in a claim which was also against the Respondents. The decision of the earlier Tribunal on costs was sent to the parties on 6 January 1999. It was not before the 2002 Tribunal but has been obtained by the Respondents. The earlier Tribunal stated that it was "satisfied that the applicant and his representative acted unreasonably in the presentation of the complaints and pursuing those complaints at the Tribunal hearing". Particulars are given, which include criticism of the Appellant as representative on that occasion. The Tribunal concluded:

"The Tribunal considers that the appropriate costs order is for an award against the Applicant of one-third of the Respondent's total costs to include the conduct of the proceedings, preparation for the Tribunal hearing, attendance and presentation of the Respondent's case at the Tribunal hearing in June 1998 and the preparation and submission of written submissions following the hearing but excluding the costs of the application for costs. In coming to that decision the Tribunal considered that the case could and should have been considerably shortened had the Applicant and his representative come to the Tribunal hearing having identified the issues as set out in paragraph 13 of the reasons accompanying the Tribunal's First Decision and having considered the evidence in support of those complaints the Tribunal considered how long the case should reasonably have taken and the proportion of costs was fixed accordingly."

We do not know in what sum costs was ordered but the main hearing had lasted seven days and the Respondents were represented by Counsel.

8. Under Rule 13 of the Employment Tribunals Rules of Procedure (Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001) ("the 2001 Regulations"), the Appellant on 30 August 2002 requested a review of the decision on the ground that he was not given a fair hearing. Rejecting the application on the ground that it had no reasonable prospect of success, the Regional Chairman, in a decision sent to the parties on 19 September 2002, stated, at paragraph 6(b):

"The question whether a fair hearing had been accorded to the parties has to be examined in light of the issues before the Tribunal, the evidence heard and the decisions made in accordance with that evidence and the law. It is clear to me that this very experienced Tribunal gave full and proper consideration to all matters that were put forward by the Applicant. In a very carefully constructed decision the Tribunal dealt with each of the different heads of claim and arrived at decisions which explain the factual and legal bases of their conclusions."

9. The Appellant submitted, on 27 September 2002, grounds of appeal to the Employment Appeal Tribunal. These included an allegation that the Tribunal "breached the principle of natural justice" and also complaints about the merits of the Tribunal's decision.
10. Acting under Rule 3(7) of the 1993 Rules, the Registrar of the Employment Appeal Tribunal, in a decision dated 29 November 2002, stated that the notice of appeal did not identify an error or law and did not give the Appeal Tribunal jurisdiction to entertain the appeal. Fresh grounds of appeal were submitted on 24 December 2002 and these maintained the allegation of bias, referring to the written submission upon the earlier request for a review of the decision of the Employment Tribunal. Other complaints were made including a complaint that the awarding of any costs against the Appellant was "wholly unfair and unjustified".
11. The Appellant had maintained that he had been given no prior notification that Mr Peters would be hearing the claim. He claimed that he had been able to disclose to the Tribunal, at the start of the hearing, sufficient initial information "giving rise to concerns about the right to a fair hearing being in jeopardy". It was submitted that the Tribunal had dealt with the application for recusal in "a hasty manner".
12. The Appellant had made these written submissions to the Employment Appeal Tribunal:

"5. The Applicant's concerns arose from the circumstances relating to a prior case heard by Mr Peters in 1998: Mr M Aslam v London Borough of Southwark (2304197/97, 2305834/97, 2300053/97 & 2300603/98). The Applicant had represented Mr Aslam in his capacity as a Trade Union representative. During the course of that hearing, Mr Peters had deliberately chosen to question Mr Lodwick's motives and conduct in a hostile manner. For example, he asked Mr Lodwick: Why are you (really) here? He intimated that Mr Lodwick's intention was to cause trouble without any justification. Mr Peters showed bias against Trade Union activists and activism. Therefore, the Respondent was effectively encouraged by Mr Peters to make a subsequent costs application, which attempted to incur liability for costs not only upon the Applicant but also on his Trade Union. In the Tribunal's written decision on costs, it was stated that not only had Mr Aslam acted unreasonably in the presentation of the complaints and pursuing those complaints at the Tribunal hearing but so had Mr Lodwick. Furthermore, it was stated that Mr Aslam and his representative (Mr Lodwick) acted frivolously and/or unreasonably in presenting many complaints in the first instance pursuing those complaints and in the presentation of the case during the tribunal hearing. One third of the Respondent's costs were awarded against Mr Aslam. However, the Tribunal restrained itself and did not impose any direct liability upon the Trade Union. (It should be noted that the actual amount paid following the lodging of an appeal to the EAT and subsequent negotiations between Mr Lodwick/ Unison and London Borough of Southwark, represented less than 10% of the costs).

6. Mr Peters claimed in a rather unconvincing fashion that he did not remember Mr Lodwick or Mr Aslam's case against the same Respondent. It became apparent quite soon during the hearing that Mr Peters did recognise Mr Lodwick. He should have again paused to consider whether it would be fair and in the interests of justice to stand down. Yet Mr Peters chose not to deliberate any further or seek direction from a higher authority. Moreover, the Tribunal made no reference at any stage to Article 6. This was a serious omission."

The Appellant put the word "really" in brackets in the first paragraph because he was not sure whether the word had been used, though he thought it had.

13. Holding that no error of law was raised in the Notice of Appeal, the judge stated:

"12. I begin with his complaint of bias against the Tribunal and in particular, first, Mr Peters sitting on the substantive hearing. As I understand the Court of Appeal's decision in Locabail, the fact that a Court or Tribunal has earlier sat on a case involving the same parties does not, of itself, give rise to an appearance of bias. Here what is said is that Mr Peters took against the Appellant when he appeared as an advocate on an occasion four years earlier. The Chairman appears to have had little recollection of that incident. It does not seem to me that this case has the beginnings of a bias appeal.

13. Other less significant complaints are made about the conduct of the hearing, which I have considered, but which again in my view raise no real argument that the Tribunal, the Chairman in particular, was biased. In particular, the fact that the Tribunal ordered costs at the end of the day seems to me to reflect a judgment after hearing the whole of the case, not a pre-judgment, which is what bias means."

The judge dealt with other purported grounds of appeal which are not now pursued. I understand the last sentence of paragraph 13 to involve a finding that the judgment on costs was a reasoned judgment.

14. When granting permission to appeal to this Court, following an oral hearing, Mummery LJ stated that "there are unusual features in relation to the bias objection and to the costs order which, in my view, Mr Lodwick is entitled to have considered in detail by the full Court ".
15. That there was a right of appeal to the Employment Appeal Tribunal is not in dispute. However, an appeal lies to the Appeal Tribunal only on a question of law arising from a decision of or arising in proceedings before the Employment Tribunal (Section 21 Employment Tribunals Act 1996). In this case, the Employment Tribunal ruled that for the Chairman to continue with the hearing did not render the hearing unfair on the ground of apparent bias. The allegation is that the hearing before the Employment Tribunal was unfair. While there may be cases in which, upon findings of fact by the Tribunal, the allegation of bias disappears, the appeal against the ruling of the Employment Tribunal was in my judgment an appeal on a question of law arising from a decision of the Tribunal. The Employment Appeal Tribunal had jurisdiction unless the allegation of bias was on its face so lacking in substance that it could not be said to amount to a real challenge to the decision. In stating that it did not seem to him that the case had "the beginnings of a bias appeal" the judge apparently took that view.
16. Having considered the material before the Employment Appeal Tribunal, I am unable to agree. The judge was in my view not entitled to hold that the allegation was so flawed or lacking in substance that, as a matter of jurisdiction, the Employment Appeal Tribunal could not consider it. Moreover, the reasons, to one of which I will refer, the Employment Tribunal had given for the decision that the Chairman need not recuse himself in my view do raise a question of law upon the test to be applied when bias is alleged. The Employment Appeal Tribunal should have accepted jurisdiction.
17. Had jurisdiction been accepted, Practice Direction (Employment Appeal Tribunal Procedure) (2002) (2003 IRLR 65), provides, at paragraph 11, a procedure which could have been followed. This includes provision for the obtaining of affidavits and witness statements and for comments upon them by the Chairman and lay members of the Employment Tribunal.
18. The test as to bias was stated by Lord Hope of Craighead in Porter v Magill [2002] 2 AC 357. Lord Hope stated, at paragraph 103:

"The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the Tribunal was biased."

That is the test which the Employment Tribunal were required to apply when deciding whether the Chairman should recuse himself. Before the Employment Appeal Tribunal, it was necessary first to test the Employment Tribunal's decision as to recusal in that way but also to consider the proceedings before the Employment Tribunal as a whole and decide whether a perception of bias had arisen.

19. This Court is at the disadvantage of not knowing what was said at the hearing when the Chairman decided not to recuse himself. It would in my view be likely to be unfair to one or other of the parties, and to the Chairman and members of the Tribunal, to resolve that question without knowing what was said. I would invite the Employment Appeal Tribunal to exercise its powers in the manner contemplated in the Practice Direction before reaching its decision, thus giving the Appellant, the Respondents and the Chairman and members of the Tribunal the opportunity to say what happened. The question may then arise as to what, if any, enquiries should have been made by the Employment Tribunal before taking its decision as to recusal. It appears that the copy of the earlier Tribunal decision has been obtained by the Respondents from Tribunal records.
20. I do, however, state at this stage that I do not consider the first of the reasons stated by the Employment Tribunal as to why the Chairman need not stand down, that the Chairman "was only one of three members of Tribunal all with equal vote," to be as a good one. Particularly as the legally qualified and presiding member of a Tribunal of three, his position was an important one and any apparent bias on his part is not nullified by the presence of two lay members who might outvote him. In present circumstances, if grounds are found to be present which would lead the appropriate observer to conclude that there was a real possibility that the Chairman was biased, it could not properly be held that the requirement of a fair hearing was satisfied by the presence of the lay members. Whether reliance on that reason by the Tribunal in itself affects the overall position will be for the Employment Appeal Tribunal to consider.
21. Detailed guidance is given in Locabail (UK) Ltd v Bayfield Properties Limited & Anr [2000] IRLR 96, mentioned by the judge in his ruling, as to how the question should be approached. In the present context, I would specifically draw attention to the statement of this court, presided over by the Lord Chief Justice, at paragraph 25:

"The mere fact that a judge, earlier in the same case or in a previous case, had commented adversely on a party or witness, or found the evidence of a party of witness to be unreliable, would not without more found a sustainable objection".

I consider that principle to be an important one in the administration of justice and one which applies with at least as much force to previous adverse comments upon a representative as upon a party or witness. A party cannot normally expect a judge to recuse himself because the judge has previously made adverse comments about him, in the course of a case or cases, though the circumstances of each situation will need specific consideration. Neither can parties assume or expect that findings adverse to a party in one case entitle that party to a different judge or tribunal in a later case. Something more must be and, it is claimed in this case, is shown. As to the relevance of the result of cases in this context, it must be borne in mind that it is at least possible that a litigant or representative who has behaved unreasonably, or worse, in one case will do so in a later case in which he or she appears.

22. I would allow the appeal against the Employment Appeal Tribunal's declining jurisdiction and remit the case to them to determine the issue of bias. Save as to costs, other grounds of appeal are not pursued. The circumstances in which the need for recusal will arise from what has been said by a Chairman in a previous case are likely to be rare. This case does, however, illustrate the need, at each stage, to give allegations of bias careful consideration. That will enable unmeritorious claims to be rejected and, where they exist, meritorious claims to be identified and appropriate action taken.

Costs

23. Notwithstanding the reference back to the Employment Appeal Tribunal I have proposed, I would allow the appeal against the costs order at this stage. Costs are rarely awarded in proceedings before an Employment Tribunal. Under Rule 14 of Schedule 1 to the 2001 Regulations, costs may be ordered "where, in the opinion of the Tribunal, a party has in bringing the proceedings, or a party or party's representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by a party has been misconceived …." Under Regulation 14(3)(a), the sum awarded may not exceed £10,000. Costs remain exceptional (Gee v Shell UK Ltd [2002] EWCA Civ 1479) and the aim is compensation of the party which has incurred expense in winning the case, not punishment of the losing party (Davidson v John Calder (Publishers) Ltd & Anr [1985] ICR 143).
24. The Tribunal set out the submissions of the parties as to costs and noted that the Respondents "accordingly applied for costs limited to £10,000". In ordering the Appellant to pay costs of £4000, the Tribunal referred to the limitations in the Appellant's witness statement, to his having raised numerous matters "which appeared to be designed to obfuscate the issues and cause delay" and to his maintaining an argument the Tribunal did not consider had merit. It was stated that the Appellant's complaints were weak and only one complaint could be said to "have any merit, in the sense that it needed to be tested". Finally, reference was made to a remark of the Appellant at a disciplinary hearing held by the Respondents that "he would take the Respondent to an Employment Tribunal and even if he didn't win he would put the Respondent to expense". The Tribunal concluded "that the hearing had been considerably extended by the Applicant's conduct and the Tribunal noted that it had a discretion to award costs".
25. It is not clear whether Counsel for the Respondents mentioned a specific figure as the total costs incurred by the Respondents, although we accept he said it was in excess of £10,000. If a sum was mentioned, it was not recorded by the Tribunal. In their conclusion, they have put the order for costs on the basis that the hearing had been "considerably extended" but, unlike in the earlier case, they have not quantified the extent to which the hearing had been extended, nor can that question be answered from the contents of the decision.
26. While referring to the weakness of the claims, the Tribunal did not find that the proceedings were misconceived within the meaning of the Rule. Moreover, as Sir Hugh Griffiths stated in E T Marler Limited v Robertson [1974] ICR 72: "Ordinary experience of life frequently teaches us that that which is plain for all to see once the dust of battle has subsided was far from clear to the contestants when they took up arms". To order costs in the Employment Tribunal is an exceptional course of action and the reason for, and the basis of, an order should be specified clearly, especially when a sum as substantial as £4000 is involved.
27. In the absence of such clarity, I am left with a real concern that a correct test has not been applied. I would quash the order for costs at this stage and allow the appeal to that extent. I acknowledge the broad discretion of Tribunals in matters of costs but that discretion has not in my view been correctly exercised in this case. Having reached that conclusion, I do not find it necessary to decide whether the absence of a specific warning as to costs would have prevented the making of an order, though I am inclined to the view that in present circumstances it did not. Nothing in this judgment may be taken as encouraging, or permitting a toleration of, the slack or unbusinesslike conduct of cases before Employment Tribunals.

Lord Justice Latham:

28. I agree.

Mr Justice Eady:

29. I also agree.