Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF:   403/09

 

 

 

CLAIMANT:                      Kevin McElhinney

 

 

RESPONDENT:                Carella Laminate Systems Limited

 

 

 

DECISION

The decision of the tribunal is that the respondent’s application for costs is refused.

 

Constitution of Tribunal:

Chairman (sitting alone):           Mr P Kinney

 

Appearances:

The claimant was represented by Mr Richards, Barrister-at-Law, instructed by Brendan Kearney & Company, Solicitors.

The respondent was represented by Mr Sefton, Barrister-at-Law, instructed by Murphys, Solicitors.

 

The facts

 

1.               The claimant presented a claim of unfair dismissal to the industrial tribunals on 12 February 2009.  The respondent presented their response on 3 April 2009.  The case was listed for hearing on 21 August 2009. 

 

2.               On 30 June 2009 a Case Management Discussion was held to consider the respondent’s request to postpone the hearing as an essential witness for the respondent was not available.  The case was re-listed for 24 September 2009.  On 22 September 2009 the claimant withdrew his claim.  The respondent sought costs under Regulation 40(2) and (3) of the Industrial Tribunals Rules of Procedure as it contended the claimant had acted vexatiously, abusively, disruptively and unreasonably in the bringing and conducting of the proceedings.  The costs application came before me for hearing on 12 March 2010. 

 

3.               Mr Sefton provided a chronology of events but concentrated his submissions mostly in the period from July 2009 to the date of withdrawal.  At the Case Management Discussion on 30 June 2009, Mr Richards gave an undertaking to provide replies to the respondent’s Notices for Discovery and Inspection and for Additional Information.  These were provided, in accordance with his undertaking, by 14 July 2009.  The respondent took the view that some of the responses were inadequate and sought further information.  There then followed, on Mr Sefton’s submission, a period in which it was impossible to contact the claimant’s solicitor.  Mr Sefton submitted that the Labour Relations Agency also attempted to speak to the solicitor but could not make any contact.  Mr Sefton identified 9 September 2009 as a date on which ‘a critical mass’ had gathered.  There had been silence from the claimant and further attempts were made to speak to the solicitor.  Mr Sefton submitted that it would appear that the claimant had taken a view that the application was not a serious application.  He consulted days before the hearing date and withdrew his case.  Mr Sefton contended that from the outset the claimant’s case had no merit and this was confirmed by his withdrawal at the last minute.  Mr Sefton said that the respondent considered the claimant’s claim misconceived.  It appeared that this was accepted by the claimant at the last minute.  Mr Sefton contended that the claimant acted unreasonably in not responding to the respondent or the Labour Relations Agency.  Mr Sefton’s instructing solicitor sought the total sum of £6,729.70 by way of costs and Mr Sefton also sought counsel’s fees in the sum of £750 plus VAT.  There was no breakdown provided of how those costs were arrived at.  Mr Sefton contended that the respondent could not know whether the unreasonable behaviour lay at the door of the claimant or his solicitor but there was silence for a considerable time.

 

4.               Mr Richards, in his submission, referred the tribunal to the case of McPherson  v  BNP Paribas [2004] EWCA Civ 569.  The crucial question is whether the claimant has acted unreasonably in the conduct of proceedings, not whether the withdrawal of the claim is itself unreasonable.  The mere act of withdrawal is not in itself to be equated with unreasonableness.  Mr Richards contended that the Court of Appeal identified two different types of case where withdrawals take place.  These were first, speculative claims which were made in the hope that they would produce an offer of settlement and withdrawal was made to avoid the risk of a cost sanction.  Alternatively, there were other cases where it would be wrong for the tribunal to adopt practices which had the effect of deterring claimants from sensible litigation decisions for fear of having a Costs Order made against them. 

 

5.               Before an Order for Costs can be made it must be shown in an individual case that the claimant’s conduct of the proceedings has been unreasonable.  Mr Richards contended that this was a case which fell into the category of a sensible litigation decision.  The claimant had waived privilege and Mr Richards produced a letter of counsel’s advice given on 21 September 2009.  This was sent after receipt of replies to the claimant’s Notice for Additional Information sent by the claimant’s solicitor to the respondent on 21 July 2009 and received on 23 July 2009.  The replies to those queries were only made by the respondent on 9 September 2009.  Thereafter the claimant’s solicitor sent them to counsel on 14 September 2009 and counsel provided his advices on 21 September 2009.  I quote from the advices given by Mr Richards:-

 

“

·       The respondent’s replies and discovery are quite comprehensive.  The advantage of this is that, unlike in many tribunal cases, we know largely what to expect at hearing. 

 

·       Unfortunately, in my view, the additional information does not assist Kevin’s case.  In fact, my advice in light of the replies is that Kevin may face significant difficulties in advancing his claim.”

 

On foot of this advice the claimant reassessed his position, and withdrew his claim.  Mr Richards submitted this was the earliest stage he could possibly have done so.  Mr Richards said that the claimant’s claim was not a hopeless case.  He characterised the decision as ‘a sensible litigation decision’.  The claimant weighed the merits of the case against the likely evidence to be called and decided, for economic reasons, it was not worthwhile continuing.  The claimant withdrew before the case started and saved all the parties costs.  He could only do that at the stage he did because up until that point the claimant did not have the information or the advice to properly form a view. 

 

6.               The claimant gave evidence to the tribunal.  On the basis of that evidence I found the following facts.

 

6.1     The claimant’s average monthly income is less than his average monthly outgoings leading to an average monthly shortfall of £72.00.  A handwritten schedule was provided showing how the outgoings were broken down.  The claimant was not working at the time this case was listed for hearing and only obtained work in December 2009.  He is currently working with a small overdraft and is also working with credit control agencies.  He deals with the shortfall each month by cutting from his budget certain matters.  For example, a figure for children’s activities for the month is provided in the sum of £40.00.  The claimant said that sometimes he simply could not provide money to the children for activities.  He could not recall any contact with the solicitor over the summer period and did not see Mr Richards on foot of the letter that he provided with his advices on 21 September 2009. 

 

6.2     On the basis of the submissions made and the evidence heard from the claimant, the claimant’s case at its height was that there was an unfair selection for redundancy by the respondent.  The claimant contended that the redundancy was not the true reason for his dismissal.  In essence, he claimed that the foreman bullied him from a particular date and this led to his selection for redundancy.  The claimant gave evidence and I accept that the information provided by the respondent in replies to the Notice on 9 September 2009 contained new information not previously known to him.  These were matters considered by Mr Richards in his opinion and advices on 21 September 2009.

 

The tribunal’s conclusions

 

7.               The respondent seeks costs under Rule 40(2) and (3) of the Industrial Tribunals Rules of Procedure 2005 these are:-

 

“40(2)       A 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 may be), 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.”

 

8.               In considering an application for costs, I must first be satisfied as to the grounds for making such an Order and then whether it is appropriate to exercise my discretion to award costs.  When making a Costs Order on the grounds of unreasonable conduct, any costs awarded need not be causally linked to the costs incurred as a result of the conduct that has been identified as unreasonable.  The question of whether or not a party behaved unreasonably is dependent on the facts of an individual case.  There is no hard and fast principle applicable to every situation.  Reasonableness is to be given its ordinary meaning.  In Cartiers Superfoods Ltd  v  Laws [1978] IRLR 315, the EAT considered whether the party had acted frivolously under the Rules then in force.  Phillips J said that to determine whether a party acted frivolously it was necessary to:-

 

“Look and see what that party knew or ought to have known if he had gone about the matter sensibly.”

 

I am also mindful of the caution that should be exercised in examining a case with the benefit of hindsight. 

 

9.               In Paribas, Lord Justice Mummery said:-

 

“In my view, it would be legally erroneous if, acting on a misconceived analogy with the CPR, tribunals took the line that it was unreasonable conduct for employment tribunal claimants to withdraw claims and that they should accordingly be made liable to pay all the costs of the proceedings.  It would be unfortunate if claimants were deterred from dropping claims by the prospect for an Order for Costs on withdrawal, which may well not be made against them if they fought on to a full hearing and failed.  As Ms McCaffrey appearing for Mr McPherson, pointed out, withdrawal could lead to a saving of costs.  Also, as Thorpe LJ observed during argument, notice of withdrawal might in some cases be the dawn of sanity and the tribunals should not adopt a practice on costs, which would deter applicants from making sensible litigation decisions.

 

On the other side, I agree with Mr Tatton-Brown, appearing for BNP Paribas, that tribunals should not follow a practice on costs which might encourage speculative claims, by allowing applicants to start cases and to pursue them down to the last day 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.

 

The solution lies in the proper construction and sensible application of Rule 14.  The crucial question is whether, in all the circumstances of the case, the claimant withdrawing the claim has conducted the proceedings unreasonably.”

 

10.           The claimant waived his right to privilege so that the advice provided by Mr Richards on 21 September 2009 is available to the tribunal.  That advice was directly related to the provision of the respondent’s replies and discovery on 9 September 2009.  These replies were forwarded by the claimant’s solicitor on 14 September 2009, which was a Monday following receipt of the documents on the previous Wednesday.  Mr Richards provided his advice on the following Monday.  The claimant withdrew his case the following day.  The focus of the respondent’s submissions were on the period from July 2009 to the date of withdrawal of the case.  However, the decision to withdraw was made on receipt of counsel’s advice which in turn was based on information only received from the respondent on

           9 September 2009, on foot of a request for information made by the claimant’s solicitor on 21 July 2009.  Those Notices were dated 20 July 2009 and required replies within 14 days.  There was no explanation before the tribunal why the information was not provided until 9 September 2009.  I am satisfied that the claimant acted promptly on the basis of advices received from his lawyers and they, in turn, acted promptly and reasonably following receipt of information from the respondent on 9 September 2009 which was pivotal to the decision to withdraw the claimant’s case.  I consider that on the information before me today the claimant’s case taken at its height was properly and reasonably brought by the claimant.  He withdrew his case at the first reasonable opportunity on the basis of advice received.  I therefore determine that there has been no unreasonable conduct. 

 

11.     Even if I had determined that there had been unreasonable conduct, I do not consider that an Order for Costs in these circumstances is appropriate taking into account the difficult financial situation the claimant is in.  The application for costs by the respondent is refused.

 

 

 

 

 

 

 

Chairman:

 

 

Date and place of hearing:  12 March 2010, Belfast

 

 

Date decision recorded in register and issued to parties: