Fair Employment Tribunal Northern Ireland Decisions

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FAIR EMPLOYMENT TRIBUNAL

CASE REFS: 146/10 FET

147/10 FET

148/10 FET

CLAIMANTS: Damien Cassidy

Liam Garland

William Magee

RESPONDENT: Belfast City Council

DECISION ON COSTS

The decision of the Tribunal is as follows:-

(1) The first and second claimants and/or their representatives each conducted the proceedings otherwise reasonably and/or the claims of the first and second claimants were misconceived.

(2) The Tribunal orders:-

(a) The first claimant to pay to the respondent the sum of £2,600.00 (together with any Value Added Tax properly payable by the first claimant to the respondent) in respect of the respondent’s costs.

(b) The second claimant to pay to the respondent the sum of £2,600.00 (together with any Value Added Tax properly payable by the first claimant to the respondent) in respect of the respondent’s costs.

(3) The respondent’s application for an Order for Costs against the third claimant is refused.

Constitution of Tribunal:

Chairman (sitting alone): Mr N Drennan QC

Appearances:

The claimants were represented by Mr R McNamee, Barrister-at-Law, instructed by McGuinness & Canavan, Solicitors.

The respondent was represented by Mr P Ferrity, Barrister-at-Law, instructed by Director of Legal Services, Belfast City Council.

Reasons

1.1 In a decision recorded in the Register and issued to the parties on 27 February 2012, the Tribunal made the following decision:-

“(1) The first and second claimants each failed to set out their grievance in respect of their claim of discrimination by way of victimisation occurring after 5 December 2009, pursuant to the Fair Employment and Treatment (Northern Ireland) Order 1998, in writing and send a copy of it to the respondent, pursuant to Article 20 of the Employment (Northern Ireland) Order 2003 and the Tribunal therefore does not have jurisdiction to hear the claims of each claimant. The claims are therefore dismissed, the first and second claimants having withdrawn their claims of discrimination, pursuant to the 1998 Order, in relation to acts occurring before 5 December 2009.

(2) The claim of the third claimant did not include a claim of disability discrimination. The Tribunal refuses the application of the third claimant for an order for leave to amend his claim to include a claim of disability discrimination. The claim of the third claimant is therefore dismissed, the third claimant having withdrawn his claim of discrimination, pursuant to the Fair Employment and Treatment (Northern Ireland) Order 1998.”

2.1 By letter dated 23 March 2012, the respondent’s representative made an application to the Tribunal for an Order for Costs under the Fair Employment Tribunal Rules of Procedure contained in Schedule 1 of the Fair Employment Tribunal (Rules of Procedure) Regulations (Northern Ireland) 2005 (‘the Rules of Procedure’). In the letter the respondent’s representative stated:-

“It is the view of the respondent that the claimants have, in bringing the proceedings, or they or their representatives have in conducting the proceedings, acted vexatiously and/or otherwise unreasonably and the respondent further believes that the bringing and/or continuing and/or conducting of the proceedings by the claimants has been misconceived.”

3.1 Rule 35 of the Rules of Procedure, insofar as relevant and material, provides:-

“ …

(2) The Tribunal or Chairman shall consider making a Costs Order against a paying party where, in the opinion of the Tribunal or Chairman (as the case maybe), any of the circumstances in Paragraph (3) apply. Having so considered, the Tribunal or Chairman may make a Costs Order against the paying party if it or he considers it appropriate to do so.

(3) The circumstances referred to in Paragraph (2) are where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived.

… .”

3.2 Rule 36 of the Rules of Procedure, insofar as relevant and material, provides:-

“(1) The amounts of a Costs Order against the paying party shall be determined in any of the following ways:

(a) the Tribunal may specify the sum which the paying party must pay to the receiving party, provided that sum does not exceed £10,000.00;

(b) the parties may agree on a sum to be paid by the paying party to the receiving party and if they do so the Costs Order shall be for the sum so agreed;

(c) the Tribunal may order the paying party to pay the receiving party the whole or a specified part of the costs of the receiving party with the amount to be paid being determined by way of detailed assessment in a County Court in accordance with such of the scales prescribed by County Court Rules for proceedings in the County Court as shall be directed by the Order.

(2) The Tribunal or Chairman may have regard to the paying party’s ability to pay when considering whether it or he shall make a Costs Order or how much that Order should be.

(3) For the avoidance of doubt, the amount of a Costs Order made under Paragraph (1)(b) or (c) may exceed £10,000.00.”

3.3 In connection with the said application for an Order for Costs, the respondent’s representative prepared a schedule of the costs claimed by the respondent which comprised a solicitor’s professional fee of £8,515.10, counsel’s fees of £3,300.00 and Value Added Tax in the sum of £1,703.02 giving a total of £13,518.12. It will be necessary, elsewhere in this decision, to refer in more detail, to the said schedule of costs claimed by the respondent.

Although these claims were the subject of an Order made by the Tribunal on 6 January 2011, pursuant to Rule 9 of the Rules of Procedure, that the said claims be considered together (‘Consolidation Order’), the Tribunal had to consider and make a decision in respect of the claims made by each of the said claimants and, in relation to this application for costs, similar considerations apply. However, it has to be noted that, in light of the said Consolidation Order, there was considerable overlap between the claims of the claimants, the manner in which the claims proceeded and were determined by the Tribunal, which is also relevant to this application for an Order for Costs.

3.4 Both representatives were agreed that the cap of £10,000.00 on the amount of costs which can be awarded, pursuant to Rule 36(a) of the Rules of Procedure, included any sum properly payable by way of Value Added Tax.

3.5 The respondent’s representative confirmed that, in making his application for costs, he was doing so, pursuant to Rule 36(1)(a) of the Rules of Procedure; and that he was not, in any event, making an application for assessment, pursuant to Rule 36(c) of the Rules of Procedure. In this context, it has to be noted that the power to seek an assessment of costs by way of detailed assessment in the County Court in accordance with such of the scales prescribed by County Court Rules for proceedings in the County Court, is of limited assistance, if any, to many parties despite the provision in Rule 36(3) that such a Costs Order following such an assessment may exceed £10,000.00. This is because none of the relevant County Court scales would allow for an Order for Costs in excess of the cap of £10,000.00, provided in Rule 36(1)(a) of the Rules of Procedure. Increasingly, the Tribunals are faced with applications for Order for Costs in excess of £10,000.00; but parties are unable to recover same because of the said cap and the absence of any relevant scale in the County Court, which would allow for a detailed assessment of costs in excess of £10,000.00. In my judgment, this is an issue which should be urgently addressed by the relevant Rule-making Authorities so that, in an appropriate case, a party can make an application for costs in excess of £10,000.00 and the Tribunal can so order if it is appropriate to do so. In the event, for the reasons set out in this decision, the said cap was not relevant to this application for costs.

3.6 In the letter of application for an Order for Costs the respondent’s representative had made the application on the grounds, inter alia, that the claimants, or they or their representatives, had in conducting the proceedings acted vexatiously. The classic definition for vexatious claims is found in the case of ET Marler Ltd v Robertson [1974] ICR 72, which stated:-

“ … an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some other improper motive, he acts vexatiously.”

The Court made clear that this was a high hurdle for a party to show, stating:-

“ … it is a serious finding to make against an applicant, for it will generally involve bad faith on his part and one would expect that discretion to be sparingly exercised … .”

In the recent decision of the Employment Appeal Tribunal, in the case of HM Attorney General v Bentley [2002] (UKEAT/0556/11) the Tribunal referred to the judgment of Bingham CJ, as he then was, in the case of HM Attorney General v Barker [2002] SCR 1, when he stated:-

“The hallmark of vexatious proceeding is in my judgment that it has little or no basis in law (or at least no discernible basis); that, whatever the intention of the proceedings may be, its effect is to subject the defendant to inconvenience, harassment and expense out of all proportion to any gain likely to accrue to the claimant, and that it involves an abuse of the process of the Court, meaning by that a use of the Court process for the purpose or in a way which is significantly different from the ordinary and proper use of the Court process.”

The Employment Appeal Tribunal also referred to the judgment of Rimer J, as he then was, in the case of HM Attorney General v Roberts [2005] AER (D) 138, when at Paragraph 6 of his judgment he said as follows:-

“Most cases of allegedly vexatious litigants, as Lord Bingham there points out (in a reference to Barker), concern repeated claims or applications in respect of one particular matter by which the litigant has become obsessed, commonly involving the same defendant or defendants. In the employment law field this is a less common feature. Instead, what is commonly seen in the making of repeated applications of a like time to Employment Tribunals, usually against different respondents but founded on the like-basis … .”

Properly, in my view, the respondent’s representative withdrew, at the commencement of the hearing, his application for costs on this vexatious ground.

3.7 In the circumstances, it was therefore necessary for me to consider this application by the respondent on the grounds that each of the claimants and/or their representative conducted the proceedings otherwise unreasonably and/or the bringing or conducting of the proceedings by each of the claimants had been misconceived. Under Regulation 2 of the Fair Employment Tribunal (Rules of Procedure) Regulations (Northern Ireland) 2005, misconceived includes having no reasonable prospect of success. There was no dispute that the application for costs made by the respondent had been made in time in accordance with Rule 34(7) of the Rules of Procedure.

3.8 The claimants each presented their claims to the Tribunal on 28 October 2010. At that time they were all represented by Mr K McKinney, an experienced full-time trade union official, in which each made claims of discrimination on the grounds of religious belief and/or political opinion, pursuant to the Fair Employment and Treatment (Northern Ireland) Order 1998. Following acceptance of the claims and the respondent’s response to each claim, in which the respondent denied liability for each of the said claims, a Case Management Discussion was then, in accordance with the Tribunal’s normal practice, arranged to consider, inter alia, the identification of the relevant issues and to make case-management directions/orders to enable the claims to be determined by the Tribunal.

At the Case Management Discussion on 23 February 2011, as set in Paragraph 2 of the Record of Proceedings, a Chairman raised various matters of concern about the claims of the claimant:-

“Having considered draft legal and factual issues received on 22 February 2011, and further amended on 23 February 2011, I was not at all satisfied that they adequately and precisely encapsulated all of the issues in the cases. In particular, issues had been added [Tribunal’s emphasis] relating to alleged less favourable treatment since the claimants lodged grievances. In addition, allegations of victimisation [Tribunal’s emphasis] were added to the issues, as originally drafted. Furthermore, the claimants had not identified comparators. I therefore order the claimants to identify all comparators being relied on by not later than 9 March 2011 … .”

At the Case Management Discussion on 12 April 2011, as set out in the Record of Proceedings dated 12 April 2011, the Chairman identified the following legal and main factual issues:-

“Legal Issues :

(1) Were the claimants discriminated against in being afforded less favourable treatment on the grounds of their religious belief contrary to Article 3 of the Fair Employment and Treatment (Northern Ireland) Order 1998, as amended?

(2) Did the respondent take all such steps as were reasonably practicable to present the alleged acts in accordance with Article 36(4) of the Fair Employment and Treatment (Northern Ireland) Order 1998, as amended?

(3) What was the detriment if any suffered by each of the claimants?

(4) Have the claims been lodged with the Tribunal within time, or if not, should time be extended?

(5) Have the claimants been victimised?

(6) Should incidents of less favourable treatment that took place after the lodging of the FET be considered?

Factual :

(1) Were the claimants treated less favourably by their managers, Jim Ferguson and Mark Louden, in and around 9 December 2009?

(2) Were the claimants moved from a more favourable position to a less favourable one within the respondent organisation?

(3) Was this move related to the Claimants’ religion?

(4) Have the claimants been treated less favourably since lodging their grievance?.”

No interlocutory orders were sought or made at that Case Management Discussion. However it would appear that certain interlocutory matters were still outstanding but it was hoped that these would be resolved by representatives in correspondence and without the necessity for further order. In addition, Notices of Hearing were issued on 19 April 2011 for a substantive hearing on 5 – 16 September 2012.

On 31 May 2011, the Tribunal was informed that Mr M Canavan, Solicitor, of McGuinness & Canavan, Solicitors, had came on record for the claimants. At that time, as set out in a letter dated 2 June 2011, the respondent’s representative pointed out to Mr Canavan that the claimants had not yet provided witness statements to the respondent’s representative, which had been ordered to be provided by 24 May 2011 and that this was causing difficulties for the respondent’s representative who had been ordered to provide their witness statements by 8 July 2011. In the circumstances, it was agreed that the respondent would grant a further week to the claimants for preparation of witness statements until 10 June 2011. In addition, at the conclusion of the letter dated 2 June 2011, the respondent’s solicitor made it clear to the claimants’ solicitor:-

“For the avoidance of doubt I wish to make it clear that under no circumstances will the respondent consider settlement of these claims and my instructions are to proceed to hearing.”

3.9 By letter dated 24 June 2011, received by the tribunal on 27 June 2011, the claimants’ solicitor wrote a detailed letter to the Tribunal in which he stated, inter alia, that there were three aspects to this case, namely:-

(1) allegations in respect of all three claimants re: religious discrimination (all being Catholic);

(2) allegations of victimisation following a protected act;

(3) disability discrimination in respect of William Magee.

After setting out what he stated to be the main factual issues in these claims, and after consideration of the papers in this matter which he stated ran to many hundreds of pages and which had taken time to assimilate, and after taking instructions from his client, he significantly narrowed the matters that would require to be determined by the Tribunal. He acknowledged that, in respect of those matters which his clients no longer wished to proceed with, they did not ‘enjoy’ a reasonable prospect of success, albeit the complaints were made in good faith. Having narrowed the said issues to be determined, Mr Canavan then proceeded to make an application to the Tribunal for a pre-hearing review to determine various preliminary issues, in light of the above decisions of his clients, as referred to above.

3.10 At a further Case Management Discussion on 4 August 2011, as set out in the Record of Proceedings dated 5 August 2011, the Chairman, having heard representations by Mr Canavan and Mr Ferrity, on behalf of the respondent, and after taking account of the relevant Court of Appeal decisions in relation to pre-hearing reviews, was satisfied that it was in accordance with the Tribunal’s overriding objective to vacate the original hearing dates and to hold a pre-hearing review on these issues. As a consequence, a pre-hearing review was heard, which is the subject-matter of the decision recorded in the Register and issued to the parties on 27 February 2012. I made the decisions on the said preliminary issues set out therein and referred to in Paragraph 1.1 of this decision.

It is to be noted no application was made, at that time or subsequently, by the respondent’s representative requiring the claimants to pay a deposit in order to continue with the proceedings, pursuant to Rule 17 and 19 of the Rules of Procedure.

3.11 Following Mr Canavan’s letter dated 24 June 2011, (by letter dated 29 July 2011, the solicitor for the respondent wrote to the claimants’ representative stating, inter alia:-

“Having considered the evidence in these matters, the respondent is of the view that the claimants have in bringing proceedings acted vexatiously and/or otherwise unreasonably and/or that the bringing of the proceedings by the claimants has been misconceived. I therefore write to invite your clients to withdraw their claims against the Council failing which use will be made of this letter in any application for costs by the respondent.”

Following the Case Management Discussion on 4 August 2011, as referred to above, the respondent’s representative again wrote to the representative of the claimants by letter dated 22 August 2011, in which it was stated, inter alia:-

“I write to reiterate that it is the Council’s case that the claimants having bringing the proceedings acted vexatiously and/or otherwise unreasonably and/or the bringing of the proceedings by the claimants has been misconceived and for the avoidance of doubt I confirm that in the event that the Council is successful in relation to the pre-hearing review due to take place on 5 – 9 September 2011 an application for costs will be made in respect of the legal costs incurred by the respondent.”

Further, by letter dated 30 August 2011, the respondent’s representative wrote to the claimants’ representative stating, inter alia:-

“Furthermore, I would remind you that the statutory grievance procedure requires that an employee must set out the grievance in writing and send a statement of a copy of it to the employer (see also Canary Wharf Management Ltd v Edebi [2006] IRLR 416). My clients believe that the claims being made by your clients are, in any event, completely without merit and I would again invite your clients to withdraw their claims against the Council. … .”

In the event, the pre-hearing review did not proceed in September 2011 but was subsequently heard on 12 – 13 December 2011.

3.12 The representatives agreed, for the purposes of this application and, in particular, for the purposes of Rule 36(2) of the Rules of Procedure, that each of the claimants continue to be employed by the respondent and the first claimant earns approximately £329.00 net per week, the second claimant approximately £307.00 net per week and the third claimant approximately £366.00 net per week. The Tribunal was not provided with any other information in relation to the ability of the claimant to pay any Costs Order made by the Tribunal.

3.13 In relation to the schedule of costs prepared by the respondent’s representative, the respondent’s solicitor sought a professional fee of £8,515.10 in respect of all work done by her in connection with this matter from 9 November 2010 to 13 December 2011. In relation to counsel’s fee, that was made up of a brief fee in respect of the pre-hearing review of £1,500.00 and a refresher of £750.00, together with fees for attendance at three Case Management Discussions at £250.00 each and drafting of six Notices for Additional Information/Discovery and Inspection at £50.00 each. The claimants’ representative did not dispute the method of calculation, or the amount of them, in respect of counsel’s fees. In relation to the solicitors’ fees, again there was no dispute about the method of calculation, or the amount of them, which was calculated on an hourly basis, for the solicitor, in the sum of approximately £120.00 per hour. It has to be noted that these fees related to all three claims, and there was therefore considerable overlap in all work carried out by the respondent’s representatives in connection with the said claims. However, as set out later in this decision, there were relevant differences between the issues to be determined, at the pre-hearing review, in relation to the third claimant and the issues to be determined in relation to the claims of the first and second claimants.

4.1 Under Rule 35(2)(3) of the Rules of Procedure, it has long been recognised that it is necessary for a Tribunal, when considering an application for costs under the said Rules of Procedure to embark on a two-stage process. Firstly, the Tribunal has to consider whether it has been established that the relevant party has satisfied the terms of Rule 35(3) – for example a finding of otherwise unreasonable conduct and/or bringing or conducting of proceedings which are misconceived. The Tribunal then has to consider, secondly and separately, whether to exercise its discretion to make an Order for Costs (see further Criddle v Epcot Ltd [UKEAT/0275/05]). Mummery LJ in Khan v Kirklees BC [2007] EWCA Civ 1342, in the course of his judgment, stated that it was not possible to list exhaustively what all the circumstances at the second stage might be. However, he indicated (see Paragraph 8 of the judgment) potentially relevant considerations might include conduct, proportionality and the merits of the case and also whether a person is represented or unrepresented. However, he emphasised, this was not an exhaustive list and each case would depend on its own particular facts.

Unlike the Rules, which normally apply to proceedings in, for example, High Court/ County Court, costs do not follow the event. In addition, the Rules of Procedure do not replicate the general Rules, applicable in those Courts, which provide, where a plaintiff discontinues proceedings, he is normally liable for the costs which a defendant has incurred before a Notice of Discontinuance is served on him. In the case of Lodwick v London Borough of Suffolk [2004] IRLR 554, a case of unfair dismissal/breach of contract, Lord Justice Pill made it clear, when considering whether an Order for Costs should be made under the said Rule:-

“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 where a sum as substantial as £4,000.00 is involved.”

There is nothing in the Rules of Procedure which expressly states that an Order for Costs should be considered the exception rather than the rule. Certainly, however, that has been the view taken in relation to the exercise of the power under the said Rule, which governs claims, such as unfair dismissal/unlawful discrimination (see further the case of Gee v Shell UK Ltd [2003] IRLR 82).

But, as Burton P in the case of Salinas v Bear Stearns International Holdings [2005] ICR 1117, stated:-

“The reason why Costs Orders are not made in the substantial majority of cases is that the Tribunal Rules contain a high hurdle to be surmounted, before such an Order can be considered.”

Those Rules, to which Burton P was referring, were the pre-conditions which require to be considered before the issue of the discretion arises, as set out above. In the case of Benyon v Scadden [1999] IRLR 700, it was emphasised that the Costs Rules are discretionary and, as such, cannot be restricted by case law. Matters to be derived from the case law can only be factors that may or may not be given weight by the Tribunal. In any event, an Order for Costs must be compensatory and not punitive (see further Lodwick v London Borough of Suffolk [2004] IRLR 554). (See further the recent decision of the Employment Appeal Tribunal in the case of Baker v Tote Bookmakers Ltd T/A Totes Sport [UKEAT/0538/11] where HH Judge Clarke again emphasised that Costs Orders in the Tribunal are exceptional.)

4.2 However, in my judgment, when exercising its discretion, the Tribunal also has to have regard to the judgment of Girvan LJ, in the case of Peifer v Castlederg High School and Western Education & Library Board & Another [2008] NICA 49, where he confirmed that a Tribunal is required to give effect to the terms of the overriding objective, when it exercises any power given to it under the Rules of Procedure, which would include the power to order costs; and he stressed that these objectives were intended to be exactly what they were described as being, namely overriding objectives. Indeed, he went on to state that:-

“Tribunals should be encouraged to use their increased costs powers set out in the Rules of Procedure to penalise time-wasting or the pursuit of cases in a way which unduly and unfairly increases the costs falling on opponents.”

4.3 In the well-known case of McPherson v BNP Paribas [2004] IRLR 558, the Court of Appeal emphasised that withdrawal on its own is not necessarily unreasonable behaviour for the purposes of the said Rules of Procedure.

In that case the claimant withdrew his case several weeks before the hearing so there was no decision on the substantive merits, but the Tribunal nevertheless made an Order for Costs in favour of the respondent. Mummery LJ set out the conflicting considerations. He stated, on the one hand, it was important for claimants not to be deterred from making a sensible litigation decision by dropping a claim because of the prospect of an Order for Costs on withdrawal, which may not be made against them if they fought on to a full hearing and failed. He acknowledged that in most cases the withdrawal will result in a saving of costs. On the other hand, he also recognised that the practice of never making Costs Orders on withdrawal might encourage speculative claims, by allowing claimants to start cases and to pursue them down to the last week or two before the hearing in the hope of receiving an offer to settle, and then, failing an offer, dropping the case without any risk of a costs sanction. He concluded:-

“The solution lay in the proper construction and sensible application of the Rule. The crucial question is whether, in all the circumstances of the case, the claimant withdrawing the claim has conducted the proceedings unreasonably. It is not whether the withdrawal of the claim is in itself unreasonable.”

On the facts of the McPherson case, the Court found that the Tribunal was entitled to conclude that there was unreasonable conduct of the proceedings on the part of the claimant.

In relation to this issue of costs, it is also necessary to recall Sir Hugh Griffin’s observation in the case of ET Marler Ltd v Robertson [1974] ICR 72, namely:-

“The ordinary experience of life frequently teaches us that what is plain for all to see once the dust of battle has subsided. It is far from clear to the combatants when they took up arms.”

4.4 In a recent decision of the Court of Appeal, in the case of Barnsley Metropolitan Borough Council v Yerrakalva [2011] EWCA Civ 1255, Mummery LJ took the opportunity to review the authorities in relation to the issue of costs under the Rules of Procedure applying in the Employment Tribunals in Great Britain, which are in similar terms to the Fair Employment Tribunal Rules of Procedure applying in Northern Ireland.

In particular, in the course of his judgment he stated:-

“39. I begin with some words of caution, first about the citation and value of authority on costs questions and, secondly, about the dangers of adopting an over-analytical approach to the exercise of a broad discretion.

40. The official words of [Rule 40] are clear enough to be applied without the need to add layers of interpretation, which may themselves be open to differing interpretations. Unfortunately, the leading judgment in McPherson delivered by me has created some confusion in the ET, EAT and in this Court. I say ‘unfortunately’ because it was never my intention to re-write the Rule, or to add a gloss to it, either by disregarding questions of causation or by requiring the ET to dissect the case in detail and compartmentalise the relevant conduct under separate headings, such as ‘nature’, ‘gravity’ and ‘effect’. Perhaps I should have said less and simply kept to the actual words of the Rule.

41. The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by a claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had. The main thrust of the passages cited above from my judgment in McPherson was to reject as erroneous the submission to the Court that, in deciding whether to make a Costs Order, the ET had to determine whether or not there was a precise causal link between the unreasonable conduct in question and the specific cost being claimed. In rejecting that submission, I had no intention of giving birth to erroneous notions, such as that causation was a relevant or that the circumstances had to be separated into sections and each section to be analysed separately so as to lose sight of the totality of the relevant circumstances.

42. In the matters of discretion an earlier case only stands as authority for what are, or what are not, the principles governing the discretion and serving only as a broad steer on the factors covered by the paramount principle of relevance … .”

In addition, Mummery LJ, in the course of his judgment (see in particular Paragraphs 7 – 9) repeated that costs are in the discretion of the Employment Tribunal and the Employment Tribunal’s powers to order costs are more sparingly exercised and are more circumscribed by the Rules of Procedure than those of the ordinary Courts; and that an Employment Tribunal Costs Order is the exception rather than rule.

4.5 In the case of AQ Limited v Holden [UKEAT/0021/12], the Employment Appeal Tribunal confirmed that the threshold test in Rule [35(3)] are the same whether a litigant is or is not professionally represented; but, in the application of those tests, whether a litigant is professionally represented may well required to be taken into account. It held that a Tribunal cannot and should not judge a litigant in person by the standards of a professional representative. It suggested that, since lay people are entitled to represent themselves in Tribunals and since Legal Aid is not available and will not usually recover costs if they are successful, it is inevitable that many lay people will represent themselves. His Honour Judge Richardson stated:-

“Justice requires that Tribunals do not apply professional standards to lay people, who may be involved in legal proceedings for the only time in their life. … Lay people are likely to lack the objectivity and knowledge of law and practice brought by a professional legal adviser. Tribunals must bear this in mind when assessing the threshold test in Rule [35(3)]. Further, even if the threshold test for an Order for Costs are met, the Tribunal has discretion whether to make an Order. This discretion will be exercised having regard to all the circumstances. It is not irrelevant that a lay person may have brought proceedings with little or no access to specialist help and advice. This is not to say that lay people are immune from Order for Costs: far from it as the case has made clear. Some litigants in person are found to have behaved vexatiously or unreasonably even when proper allowance is made for their inexperience and lack of objectivity …”

In this context, it is also relevant to consider the judgment of Girvan LJ in Peifer when he stated:-

“When parties before the Tribunal appear in person, without the benefit of legal representation, the lack of legal experience on the part of an unrepresented party may lead to the pursuit of irrelevancies and unnecessary lengthy proceedings. Whilst Tribunals must give some latitude to personal litigants who may be struggling in a complex field they must also be aware that the other parties will suffer from delay, incur increased costs, be exposed to unstructured and at times irrelevant cross-examination. While we must have sympathy for a Tribunal faced with such a situation the Tribunal remains under the same duty to ensure that the overriding objectives and Regulation 3 are pursued.”

4.6 In AQ case, the Employment Appeal Tribunal also noted the importance, in relation to issue of costs, of an application to strike-out or a Deposit Order, where a claim is said to be misconceived; but it also recognised that although the failure to do so was not in any sense decisive of any application for costs, it was not irrelevant (see Paragraph 34 of the judgment).

4.7 In a recent decision of the Employment Appeal Tribunal in the case Peat & Others v Birmingham City Council [UKEAT/0503/11], Mr Justice Supperston noted that for a party to succeed in arguing for costs on the basis of unreasonable conduct, it was not necessary to show that the other party had no reasonable prospect of success. In his judgment he held, on the facts of the case, if the claimant’s solicitors had engaged with the issues and the costs warning letters they would have been likely to have appreciated that the claimant’s reasonable prospect of success was so thin that it was not worth going to the hearing.

As set out in Harvey on Industrial Relations and Employment Law, Paragraph 1047, Section P1:-

“When considering whether to award costs in respect of a party’s conduct in bringing or pursuing a case that is subsequently held to have lacked merit, the type of conduct that will be considered unreasonable by a Tribunal will obviously depend on the facts of the individual case, and there can be no hard and fast principle applicable to every situation. In general, however, it would seem that the party must at least know or to be taken to have known that his case is unmeritorious (see Cartiers Superfoods Ltd v Laws [1978] IRLR 315).”

4.8 Although in the case of Jilley v Birmingham and Solihull Mental Health NHS Trust [UKEAT/0584/06], HH Judge Richardson confirmed that there is no ‘absolute duty’ on a Tribunal to take ability into account, he commented that it would in many cases be desirable to take means into account before making an Order, as the ability of a party to pay may affect the exercise of an overall discretion’. In Royal v North West & London Hospitals NHS Trust [UKEAT/0271/11], the Employment Appeal Tribunal commented that Tribunals should always be cautious before making a very large costs award, given the very serious potential consequence to a claimant of a such Order because such Orders may act as a disincentive to those bringing legitimate claims. It was suggested that, in such a case, it would normally be necessary for a Tribunal to raise the issue of the potential paying party’s ability to pay costs, even if the issue was not raised by on or behalf of that party.

5.1 Applying the case law referred to in the previous paragraph of his decision, I reached the conclusions set out in the following sub-paragraphs.

5.2 At the commencement of these proceedings, all the claimants were bringing claims of direct religious discrimination, pursuant to the 1998 Order; and indeed, it was not until the initial Discrimination Case Management Discussion on 23 February 2011, that it became apparent the claimants were also making claims of victimisation. Further, at that stage, comparators had not been properly identified by the claimants in respect of their said claims. However, at the further Case Management Discussion on 12 April 2011, it would appear that the issues relating to the claimants’ claims under the 1998 Order had been identified, following a detailed interlocutory process which included Notices for Additional Information and/or Discovery and Inspection exchanged between the parties, albeit even at that late stage this had not been fully completed. Throughout this period all the claimants were represented by Mr K McKinney; and it was not until on or about 31 May 2011, as set out previously, that Mr Canavan, Solicitor, came on record. Following his perusal of the detailed papers, which were then available, following the interlocutory process, and after taking instructions he wrote the letter dated 24 June 2011, to the Tribunal and the respondent’s representatives, withdrawing, in essence, the claimants’ claims of direct discrimination pursuant to the 1998 Order and the pre-December 2009 victimisation claims of the first and second claimants together with all the victimisation claims of the third claimant. As he set out in his letter, he did not consider these claims enjoyed, following his review of the papers, a reasonable prospect of success; albeit they had been made in good faith.

5.3 I am satisfied, in the circumstances, that the conclusion reached by Mr Canavan was correct in the circumstances and that he properly advised his clients, who accepted his advice, to withdraw those claims at that stage. Indeed, I think these claims, from the outset, probably had a limited prospect of success; but, until the interlocutory process had been completed, I am not satisfied such a definitive conclusion, as subsequently reached by Mr Canavan, could have been made with the necessary degree of certainty. I am satisfied such a task would have been even more difficult for Mr McKinney; who was not a legal representative; albeit he was an experienced trade union representative.

Even if I had concluded, which I do not in the above circumstances, that those claims were misconceived, having no reasonable prospect of success, up until in or about June 2011, or to have continued with those claims up until that date was otherwise unreasonable conduct, I am not satisfied, in any event, in the exercise of my discretion, that an Order for Costs would have been appropriate, as the said claims were properly withdrawn, in or about June 20122, following the intervention of Mr Canavan. In the light of the above authorities, I think that the claimants were entitled to review their position following the said Case Management Discussions and the conclusion of the interlocutory process. However, if, at that stage, the claimants had continued to pursue those claims and had not withdrawn them, my conclusions would have been very different. However, by May/June 2011, the interlocutory process was concluded and the prospect of success could be properly considered and appropriate decisions were reached, as set out in Mr Canavan’s letter, dated 24 June 2011.

5.4 However, that is not the end of the matter and it was therefore necessary for me to consider whether the claimants and/or their representatives, in deciding, following the intervention of Mr Canavan in or about June 2011, to continue to pursue the claims, the subject-matter of the pre-hearing review, had conducted themselves otherwise unreasonably and/or those claims were misconceived, having no reasonable prospect of success. Thus, I drew a distinction between what took place pre-June 2011 and what took place pos t-June 2011, following Mr Canavan coming on record for the claimants. Further, I think a distinction has to be drawn between the claims, which were continued to be made by the first and second claimants and the application made by the third claimant, all of which were the subject of the pre-hearing review.

5.5 In essence, in relation to the first and second claimants wished to pursue their claims of victimisation post- December 2009; but to do so, as acknowledged by Mr Canavan dated 24 June 2011, required them to show that each had sent, in writing, to the respondent a grievance pursuant to Article 20 of the Employment (Northern Ireland) Order 2003 (‘the 2003 Order’). If this could not be established, it was accepted the Tribunal did not have any jurisdiction to hear these claims of post-December 2009 victimisation.

5.6 By June 2011, the case law in relation to statutory grievances, pursuant to the 2003 Order and its equivalent in Great Britain, was well-established in the Employment Appeal Tribunal and the Court of Appeal in England and Wales and the Court of Session in Scotland and, in the absence of any relevant authorities in the Court of Appeal in Northern Ireland, this case law was followed in this jurisdiction in the Fair Employment Tribunal (see further, in particular, the case law referred to in the decision on the pre-hearing review in this matter –

Paragraph 2.6 – 2.10).

Indeed, it appears from my decision on the pre-hearing review, the first and second claimants, in attempting to show a statutory grievance had been made to the respondent in accordance with the provisions of the 2003 Order, sought to rely on the decision in Kennedy Scott Ltd v Francis [2007] UKEAT/0204, which for the reasons set out in Paragraphs 2.10 – 2.11 of that decision, had, in my judgment, no reasonable prospect of success and was therefore misconceived. Even if the first and second claimants could have relied upon the said decision in Kennedy Scott Ltd to establish the making of a statutory grievance, the reliance on the extracts from the minutes of the various hearings would not, as set out in the decision on the pre-hearing review, have satisfied the requirements for a statutory grievance under the 2003 Order. To have continued to pursue these claims, in these circumstances, was, in my judgment, otherwise unreasonable conduct by the first and second claimants and/or their representatives. As set out above, the case law in relation to statutory grievances was well-established and nothing emerged during the course of the pre-hearing review, which was not known in June 2011. In deciding to pursue these claims of the first and second claimants, there was also, in my judgment, a failure to properly consider and take into account the cost warning letters of the respondent’s representatives (see Paragraph 3.11 of this decision). As set out in the decision in Peat, the claimants and/or their representatives should have appreciated the prospects of success were so thin that it was not worth going to the hearing. Thus, in my view, these claims by the first and second claimants should also have been withdrawn in or about June 2011 and, in the circumstances, an Order for Costs on the grounds that the said claims were misconceived and/or that in pursuing them the first and second claimant and/or their representatives conducted themselves otherwise unreasonably, is therefore appropriate. Although I am surprised no application for a deposit order was made by the respondent’s representatives, at any stage of the proceedings, I am not satisfied the failure to do so should prevent, in the circumstances, the making of this Order.

5.7 By way of contrast, in relation to the third claimant’s claim of disability discrimination, I do not ignore that this potential claim was only raised for the first time, when Mr Canavan wrote his letter of 24 June 2011; albeit, prior to the issuing of proceedings, by the third claimant, which were issued by Mr McKinney, a statutory grievance had been made by him on this matter, as was properly acknowledged by the respondent. It was not seriously contested by the third claimant’s representative, during the course of the pre-hearing review, that the claim form presented by the third claimant to the Tribunal included a claim of disability discrimination. The major focus during the course of the pre-hearing review related to whether the Tribunal should make an order for leave to amend, allowing the third claimant to proceed with his claim of disability discrimination. As appears from my decision on this issue, in the decision on the pre-hearing review, the third claimant’s application for such leave had considerable difficulties; but, insofar as relevant to this application for an Order for Costs, a major finding of fact made by me, in that decision, related to the fact that the third claimant’s former representative, Mr McKinney, had made an admitted error in failing, at any case management discussion, when he was representing the third claimant, to point out that he had failed to include the claim of disability discrimination in the third claimant’s claim form and wished to apply for leave to amend the third claimant’s claim. A relevant issue for me to determine in the pre-hearing review was, whether in such circumstances, a claimant should be ‘punished’ for such an error by his representative if the Tribunal refused to make an order amending the claim to overcome any such error (see further Evershed v New Star Asset Management [2009] UKEAT/02049. As set out in the pre-hearing review decision, central to my decision when refusing to grant leave were the particular facts relating to Mr McKinney and his conduct in the proceedings (see further Paragraph 4.11 of the pre-hearing review decision). This meant that, in my judgment, his failures could not be excused and that, in exercising my discretion, the order for leave could not be granted. I have concluded, not without some hesitation, that until the particular circumstances relating to the conduct of that representative, who had made the said errors, was considered by a Tribunal, after hearing his oral evidence and cross-examination by the respondent’s representative about what had taken place, it could not be said, with the necessary degree of certainty, that the application for leave was misconceived and/or it was unreasonable conduct to allow the issue to be ‘tested by a Tribunal’ at a pre-hearing review. It had to be taken into account that, if the application for leave was refused, the claim was at an end, not due to the failure of the claimant but his lay representative. Different considerations might have applied if the error had been made by a legal representative (see Paragraph 4.5 above of this decision and the case law referred to). Even if I am wrong, I think that, in the exercise of my discretion, it would not have been appropriate, in such circumstances, to make an Order for Costs against the third claimant.

5.8 For obvious reasons, not least the manner in which these claims have proceeded, there was no breakdown in the schedule of costs provided to the Tribunal between each of the said claimants and their respective claims. Clearly, there was considerable overlap between the claims of the first and second claimants and, in my judgment, any Order for Costs against the first and second claimants, required to be made equally. It was also not possible to show, with any certainty, how much of the costs claimed in the schedule of costs related to the third claimant’s claim, which, for the reasons set out above, is not to be the subject of an Order for Costs. Further, in relation to the solicitor’s costs, in particular, I had some difficulty in establishing how much of the costs claimed related to pre and post-June 2011, following the intervention of Mr Canavan in his letter of 24 June 2011; but, having heard submissions by both representatives, I was satisfied that a larger part of the work carried out by the respondent’s representatives related to work post-June 2011. I was also satisfied the majority of the fees claimed in relation to the respondent’s counsel related to work done post-June 2011; but again this related to work carried out in respect of all three claimants.

5.9 Taking the above uncertainties into account, but also after taking into account the present earnings of the first and second claimants, as referred to previously, I concluded, and I so ordered, that the first and second claimants should each pay to the respondent the sum of £2,600.00 (made up of £1,850.00 in respect of solicitors fees and £750.00 in respect of counsel’s fees), together with any Value Added Tax properly payable by each claimant to the respondent.

Chairman:

Date and place of hearing: 11 June 2012, Belfast

Date decision recorded in register and issued to parties: