England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE BLAKE)

		Royal Courts of Justice Strand London, WC2A 2LL
		19 May 2015

1. LORD JUSTICE DAVIS: I will now give my judgment on this renewed application for permission to appeal. It will be understood that it is not the practice of the court on applications of this kind to give very lengthy or detailed judgments. I make clear that I have had full regard to all that has been set out in the folder of papers placed before me and all that has been said by Mr Monaco to me this morning.
2. I should add that the company has appeared by Mr Monaco. He is not himself counsel but he is a non-practising solicitor, as he tells me. He has put his case extremely clearly and well both orally and in writing.
3. The challenge by way of judicial review proceedings is to the Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2013 that came into effect on 29 July 2013. Putting it shortly, that order had the effect of limiting the amount of a compensatory award in the case of unfair dismissal to the lower of £74,200 or one years' pay, although it is to be recalled that under section 124 of the Employment Rights Act 1996, there already had been in place a statutory cap of a fixed amount.
4. The rationale for this order was stated by the Department of Business as being, first, to promote certainty and, secondly, to encourage a more realistic understanding and expectation of the likely financial consequences of any successful claim.
5. The challenge itself is now based on the provisions of section 149 of the Equality Act 2010. Another version of the challenge by reference to Article 1 Protocol 1 is not now pursued.
6. Permission was refused on the papers in the court below by Eder J and then at an oral hearing by Blake J on 13 May 2014. The Claimant applied to this court for permission to appeal, but that application was refused by Sir David Keene on the papers on 28 January 2015. The Claimant now, as is its right, pursues its application at an oral hearing.
7. The first point to note is that the application for permission had been refused by Blake J on the grounds of delay. Proceedings were commenced on 24 October 2013, just within the three month time limit set by the Rules, that three months running from the date on which the statutory instrument actually came into force. But as it seems to me and as it seemed to Blake J, the context was important.
8. The entire matter had been put out to consultation by the Department on 14 September 2012. A significant number of bodies responded to that consultation, including bodies raising issues as to the impact on older employees and others with protected characteristics. There were, therefore, wide-ranging replies to the consultation to which the Department in due course responded in its turn in January 2013. The draft order was then published and publicised on 12 June 2013 and as I have said, the order itself was signed off on 28 July 2013.
9. Mr Monaco has said that his company only became aware of these proposed changes in the early part of 2013. I have to say I find that somewhat surprising given that it is a company that specialises in employment claims before tribunals in particular, but that is what he says.
10. He further goes on to say that when his company learned about this proposed order, it made inquiries of various organisations to see if they would raise challenges to the Department's proposal which otherwise could provide support to the Claimant in raising its own challenge. For various reasons, those approaches to other organisations did not come to fruition. Furthermore, the Claimant itself had understandable funding difficulties in pursuing the matter on its own.
11. At all events, eventually the claim form materialised in October 2014, it being issued without any prior pre-action protocol letter being served on the Department.
12. Blake J took the view that whilst accepting that as a point of actuality the claim form had been issued within three months of the date on which the order came into effect, it had not been issued sufficiently promptly and he thought that it was contrary to the good administration of justice to allow the claim to proceed.
13. What he said at paragraph 16 of his judgment was this:

"I accept of course that the failure to challenge a consultation is not fatal to bringing a challenge to the order eventually adopted by reason of a failure of a public sector equality duty. In this case, the evidential sufficiency of the inquiry featured high in the claim. The basis of criticisms was known in January after the response to the consultation was published and that is something which one could have expected to have been seen being brought earlier and not just until after the order in question has been promulgated. In any event, I take this earlier period of absence of activity in considering whether the claim lodged in October was made promptly. Second, I take the delay in taking what is essentially a procedural challenge that would require the process started in September 2012 to begin again, significantly delaying the time when a further order could be brought into effect, is relevant when considering whether there has been prejudice to good administration. That the subject matter effects the financial consequence of a successful claim must have some impact on businesses."

14. Mr Monaco complains that that passage does not sufficiently reflect the difficulties which the Claimant found itself in and he also claims that there is insufficient reasoning to justify the conclusion that to allow the claim to be brought in these circumstances would be prejudicial to good administration.
15. I am afraid I cannot agree with that. I do think the judge's reasoning, albeit concisely expressed, does explain why he reached the view that he did. It was undoubtedly, in my view, a conclusion he could properly reach and I do not think it arguable that his discretion may have been exercised on a wrong basis or is otherwise flawed. In any event, I do not think that the judge's further assessment as to the prospective merits of the proposed claim can be successfully impeached.
16. In this regard, as I have said, the only point now pursued is whether or not there was a failure on the part of the Department to have "due regard" to the public sector equality duty for the purposes of section 149 of the Equality Act 2010. But quite plainly regard had been had to that duty because that is made absolutely explicit in the consultation paper sent out. The attack now has to be, as it is, on the whether the regard had been "due": which involves considering all the circumstances.
17. In the event, having fielded all the various answers to the consultation paper, a final impact assessment was published in January 2013. It is said under the question of wider impacts:

"We are unable to determine whether a reduction of the cap or the introduction of a limit linked to earnings would have a disparate impact on any particular group which shares a protected characteristic. An Equalities Impact Assessment is included at Annex A."

18. The Equalities Impact Assessment so annexed sets out the position fully. It sets out, amongst other things, the background, saying this in part:

"However, it is not possible to identify and assess the characteristics of those claimants who received compensatory awards above their annual earnings or above the illustrative levels of cap used in the economic impact assessment. The sample sizes in SETA are too small for this breakdown to be reliable and there is no other data which records the protected characteristics of those receiving compensatory awards (or the value of those awards) in unfair dismissal cases."

19. It then goes on, to put matters in context, that there are about 50,000 unfair dismissal claims per year working out, for this kind of claim, at about 0.2 per cent of all those in employment, and then gives details about successful unfair dismissal claims. The matter is then dealt with further under the headings of gender, ethnicity, disability, age, religion and belief.
20. Then by way of summary in the assessment this is said, amongst other things:

"However, the data does not tell us the protected characteristics of those claimants who were successful at the Employment Tribunal...

Several responses, from trade unions and legal representatives, to the consultation highlighted that certain groups, including older and younger workers and the disabled, may be systematically more likely to take longer than 12 months to find a new job following an unfair dismissal, in which case a 12 months' salary cap may have a disproportionate negative impact. However, it should be stressed that awards can often be much lower than lost earnings, and that therefore the cap may not come into play even where a claimant has not been in employment for over 12 months. We have no evidence on whether certain groups are systematically more likely to receive an award higher than 12 months' salary. However, we do know that the majority of awards currently amount to significantly less than 12 months' earnings, with the median award less than a fifth of median earnings."

21. Elsewhere it is said that of the successful claims hereto, the percentage of those recovering sums in access of one years' salary amounted to 0.25 per cent of all claims for unfair dismissal issued in the Tribunal, although Mr Monaco suggests, albeit without there being formal evidence to this effect, that this does not include settled claims.
22. Mr Monaco says that there is no reference specifically to the position of pregnant women or young mothers; and overall he suggests that the impact assessment is woefully deficient in the regard which it has had to the position of those with protected characteristics, not least (but not only) young mothers and pregnant women.
23. Indeed, in his written argument he says that the Defendant had said that the reason pregnant women were not mentioned is that there were no statistics available. He asserts "this is just an assumption unsupported by evidence" and indeed goes so far as to suggest that the Defendant may simply have forgotten the position of pregnant women.
24. In my view, with all respect to Mr Monaco, this in the circumstances of this case puts the matter the wrong way round. It seems to me the position was indeed assessed and he has not produced evidence to the contrary effect.
25. This is something which Blake J did deal with. I think it can properly be said that there was no justification for the Department to do more than it did by way of having "due regard" to the position of people with protected characteristics. What Blake J said in this context was this:

"In the context of this case, the DT seems to me to be procedural and at highest, its challenge was about the sufficiency of the evidential investigation before policy was formed. For the reasons I have given, first, that seems to be linked to when this challenge was now made. Secondly, such data as there is is extremely inconclusive and the suggestion that the data is to be found in a manual examination of the 50,000 ET1 [that is to say the claim forms] lodged by applicants alongside a manual examination of the decisions of Employment Tribunals which could be found to see whether those who obtained compensation over the 12 months were disproportionately people with a protected characteristic seems to me to be unrealistic, speculative and not something which is likely to have yielded any significant data that would be effecting this decision. Therefore, taking the case now pleaded at its highest, it is not sufficiently strong to suggest that a reasonable prospect of success in any event or such reasonable prospects of success that would justify now granting permission, despite the lack of promptness to which I have now referred."

26. It seems to me on the materials before the judge and indeed before this court that was a proper and justified conclusion. There was an insufficient statistical basis available to the Department, it is said, and evidence has not been produced to the contrary.
27. While of course "due regard" must be had, the authorities are quite clear that public bodies in this context are not required to undertake a minute examination of every possible impact or ramifications: see the case of MA. In other words, consideration of reasonableness and proportionality relating to public bodies in this context are relevant and appropriate concepts to bear in mind. That is precisely what Blake J was alluding to.
28. Finally, I deal with Mr Monaco's elegant submission that this is an important matter and that there are compelling reasons for granting permission to appeal even if there was some element of unacceptable delay. I have considered that point, but I am not persuaded by it.
29. First, as the evidence shows, potentially a very small class of persons stands to be affected by this order in circumstances where the statistics simply are not there. Secondly, I simply do not think the prospective merits of the case are strong enough to justify giving permission on the compelling reason ground. It seems to me it will create uncertainty where certainty is now needed. Putting it another way, I do not think the wider interests of justice justify give giving permission to appeal in this particular case.
30. Accordingly, I refuse this application.
31. I should just add this. Mr Monaco said, and forcefully said, that what he is advancing is a "good cause". But it is not for this court to comment on whether or not this order is, as it were, a good idea or a bad idea. The point is that the matter has been considered. Parliament has made its decision and that decision, in the absence of any viable attack under section 149, must therefore stand.