Industrial Tribunals Northern Ireland Decisions

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Cite as: [2005] NIIT 9409_03, [2005] NIIT 9409_3

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THE INDUSTRIAL TRIBUNALS

CASE REF: 9409/03

CLAIMANT: Francis McGranaghan

RESPONDENTS: 1. Western Education & Library Board

2. St Eugene's High School

DECISION

The claimant is ordered to pay £1,500.00 of the respondents' costs, owing to his unreasonable conduct of the proceedings.

Appearances:

The claimant was represented by Mr M McDonnell, of Counsel, instructed by John Fahy & Company, Solicitors.

The respondents were represented by Ms A Finnegan, of Counsel, instructed by the Education & Library Boards' Solicitors.

The contentions of the parties

The claim was listed for hearing on Monday 16 May 2005. The claimant withdrew his claim at lunchtime on 13 May 2005. The respondents sought an Order for Costs owing to the claimant's conduct of the proceedings. The respondents sought an Order for Costs in the amount of £1,250.00 counsel's fees and £250.00 photocopying costs for a bundle of documents of 363 pages = £1,500.00. The claimant contended that the reason for the late withdrawal of his claim was his state of health.

The sources of evidence

The Tribunal received in evidence an affidavit sworn by the claimant on 30 June 2005, and exhibiting a medical from the claimant's doctor. Otherwise, no other direct evidence was heard. The parties made representations through their counsel.

The tribunal found the following facts

By his claim, presented on 19 November 2003, the claimant claimed he had been unfairly dismissed on 24 October 2003 from his employment as a technician at St. Eugene's High School, Castlederg. By a response presented on 9 December 2003, the respondents denied there had been an unfair dismissal.

The claim was listed for hearing on Monday 16 May 2005 for one day. Notice of Hearing was issued to the parties on 23 February 2005.

By 29 April 2005, in the course of their resistance of the claim, Mr Brown, Solicitor to the Education & Library Boards, wrote to Messrs J Fahy, Solicitors for the claimant. In this letter of 29 April 2005, Mr Brown stated that if the claimant were to proceed with the claim, the respondents would seek their costs owing to the 'frivolous and vexatious' conduct of the claim. By that stage of the proceedings, no consultation had taken place, and no bundles of documentation had been compiled. No response was received from this correspondence. Mr Brown wrote again on 4 May 2005. No response was received from this second correspondence. After that date, Mr Brown's Department instructed counsel and compiled bundles of documentation.

On Thursday 12 May 2005, a Conciliation Officer of the Labour Relations Agency contacted Mr Brown. Mr Brown advised this officer that there was absolutely no prospect of settlement of the claim, and that the respondents would seek their costs, owing to the unreasonable conduct of the claim by the claimant.

By faxed letter from the claimant's solicitor dated Friday 13 May 2005 to Mr Brown, the claimant indicated that he would not proceed with his claim before the Industrial Tribunal, and indicating that the claimant would oppose the application for the respondents' costs. The letter stated that:-

"…the reason why the application is being withdrawn late in the day is that our client was hopeful that the matter could have been resolved with the input of the Labour Relations Office. We understand that you are not agreeable to any form of arbitration".

The claimant withdrew his claim by faxed letter to the Industrial Tribunal at 13.19 hours on 13 May 2005. The claim was dismissed following its withdrawal by a decision of the tribunal dated 2 June 2005. By letter dated 13 May 2005 to the Industrial Tribunal, Mr Brown indicated that the respondents considered it "entirely unreasonable that [the claimant should withdraw] at this late stage with the case listed on Monday. I had indicated to the applicant's solicitor that I considered the applicant's application to be frivolous, vexatious and without hope of success and had indicated to him that I would be seeking costs against him in relation to the application. Counsel has been briefed to represent the respondent on Monday and considerable preparation costs have been incurred. I would therefore wish to apply to the tribunal for an Order for Costs against the applicant on the basis that a withdrawal of the claim at this stage is unreasonable".

By his affidavit, the claimant sought to oppose the claim for costs. His evidence stated that his dismissal had adversely affected his health, and he was receiving medication from his GP. As 16 May 2005 approached, the claimant "realised that my depression and anxiety increased and I needed more medication. Just before the hearing, I realised that because of my illness I could not go through with the tribunal hearing … I still clung to the belief that the Labour Relations Agency could reach a settlement with the respondent which would be favourable to me … My income comes from Incapacity Benefit of £54.40 per week". The medical from the claimant's GP , Doctor W Stewart, states;

"I can confirm that the above patient has been attending the surgery for severe anxiety and depression. He has trouble with sleep and difficulty with social interaction. This has become worse in recent months. This has required a further referral back to the Psychiatrist for their opinion. He has also required an increase in his medication. He has been unfit recently to undergo the stress of attendance of a tribunal…"

The issue to be decided

The issue before the tribunal is whether the claimant should be required to pay the respondents' costs owing to his conduct of the proceedings and in particular the late abandonment of his claim one working day before the case was listed for hearing.

Applicable law

The applicable law is to be found in Rule 14 of Schedule 1 to the Industrial Tribunals (Constitution & Rules of Procedure) Regulations (Northern Ireland) 2004 [SR 2004 No 165] ['the 2004 Rules'].

The claim was presented on 19 November 2003. At the date of presentation, the Industrial Tribunals (Constitution & Rules of Procedure) Regulations (Northern Ireland) 1996 ['the 1996 Rules'] applied. The 1996 Rules were revoked in their entirety by Schedule 7 of the 2004 Rules, which continue to apply to claims presented until 3 April 2005, on which date the Industrial Tribunals (Constitution & Rules of Procedure) Regulations (Northern Ireland) 2005 [SR 2005 No 150] ['the 2005 Rules'] came into effect.

It is to be noted that whereas by Rule 41(2) of the 2005 Rules, "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", Rule 14 of Schedule 1 to the 2004 Rules contains no such provision.

Rule 14(1) of Schedule 1 to the 2004 Rules provides that:-

14(1) Where, in the opinion of the tribunal, a party has in bringing the proceedings, or a party or a party's representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably … the tribunal shall consider making, and if it so decides, may make –

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

Rule 14(3) of Schedule 1 to the 2004 Rules provides that the amount ordered by a tribunal under Rule 14(1) shall not exceed £10,000.00.

In Kovacs v Queen Mary & Westfield College & Another [2002] IRLR 414, the Court of Appeal held the employment tribunal at first instance had not erred in failing to take the applicant's means into account when deciding to make an Order for Costs against her under the applicable and comparable Rules pertaining to costs. The Court of Appeal held that once the threshold of unreasonable behaviour has been crossed, there is no reason why the misbehaving party should not be required to compensate his opponent for costs which he should plainly not have had to incur. Where it was intended that an employment tribunal should take ability to pay into account, an express provision was made. In ordinary litigation, where Parliament has intended that an amount of costs ordered against an individual should be limited to the amount which it is reasonable for him to pay, it has done so in express terms.

The decision of the tribunal

Mr McDonnell asserted before me that the reason for the approach to the Labour Relations Agency by the claimant on 12 May 2005, and the subsequent withdrawal of his claim on 13 May 2005, was the claimant's health. I do not accept this argument because:-

(i) the claimant's affidavit states that although his health was a reason that led him to conclude he could not go through with the tribunal hearing, he "still clung to the belief that the Labour Relations Agency could reach a settlement with the respondent that would be favourable to me"; and

(ii) the letter from the claimant's solicitor to Mr Brown (dated 13 May 2005) clearly states that "the reason for why the application is being withdrawn late in the day is that our client was hopeful that the matter could have been resolved with the input of the Labour Relations Office". Doctor Stewart's medical indicates that the claimant's state of health was poor for some months, and although it deteriorated somewhat in the run-up to 16 May 2005, on balance of probabilities, I have come to the conclusion that the principal reason for the late withdrawal was the fact that it became clear to the claimant that there would be no settlement of the matter that was favourable to him.

In McPherson v. BNP Paribas (London Branch) [2004] IRLR 558, the Court of Appeal held that in deciding whether to award costs against a claimant who has withdrawn his claim, the crucial question is not whether the withdrawal of the claim is in itself unreasonable but whether, in all the circumstances of the case, the claimant has conducted the proceedings unreasonably. The court held that it would be legally erroneous if tribunals took the line that it was unreasonable conduct for litigants before the Industrial Tribunal to withdraw claims and that they should accordingly be made to pay all the costs of the proceedings, since withdrawal can lead to a saving of costs. Thus it would be unfortunate if claimants were deterred from dropping claims by an Order for Costs on withdrawal, which might well not have been made if they fought on to a full hearing and then failed. Tribunals should not adopt a practice on costs which would deter claimants from making sensible litigation decisions. On the other hand, tribunals should not follow a practice on costs which 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 such an offer – dropping the case without any risk of a costs sanction.

Since I have determined that the principal reason for withdrawing the claim one working day before the hearing was the claimant's hope of attaining a favourable settlement, I conclude that the claimant falls into the second scenario set out by the Court of Appeal above. Since the claimant's health was badly affected by the circumstances leading to the dismissal, it was foreseeable that the listing of the case would exacerbate that condition. The key date was 29 April 2005, when Mr Brown put the claimant on notice that the respondents would seek an Order for Costs. The claimant's solicitors did not respond to this correspondence, or that of 4 May 2005. No reason was advanced before me as to why the claimant could not have made the approach to the Labour Relations Agency in late April, or the first few days of May 2005. Had such an approach been made, the response evinced on 12 May 2005 would have been clear, and he could have withdrawn his claim on or before 4 May 2005. He did not, preferring to leave it to 12 May 2005 to make the approach to the Labour Relations Agency. That, to my mind, is clearly unreasonable conduct of the proceedings pursuant to Rule 14(1) of Schedule 1 to the 2004 Rules, which the Court of Appeal counselled against in McPherson v BNP Paribas (London Branch).

Rule 14 of Schedule 1 to the 2004 Rules gives me no discretion to consider the claimant's ability to pay. That discretion arises by virtue of Rule 41(2) of Schedule 1 to the 2005 Rules, and applies to claims presented after 3 April 2005. Accordingly, pursuant to Rules 14(1) – (3) of the 2004 Rules, I order the claimant to pay the respondents' costs which total £1,500.00.

No further or other Order is made.

Chairman:

Date and place of hearing: 1 July 2005, Belfast

Date decision recorded in register and issued to parties: