Industrial Tribunals Northern Ireland Decisions

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Cite as: [2013] NIIT 1048_12IT

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THE INDUSTRIAL TRIBUNALS

CASE REF: 1048/12

CLAIMANT: Alison Bennington

RESPONDENT: Newtownabbey Borough Council

DECISION ON COSTS

The decision of the tribunal is that costs amounting to £8,196.50 are awarded against the claimant and ordered to be paid to the respondent.

Constitution of Tribunal:

Vice President (sitting alone): Mr N Kelly

Appearances:

The claimant appeared in person and was not represented.

The respondent was represented by Ms S Bradley, Barrister-at-Law, instructed by Jones Cassidy Jones, Solicitors.

Relevant facts

1. The present claim for costs by the respondent followed an oral decision given by me at a pre-hearing review in Case Reference No: 1048/12. That oral decision was delivered at the end of that pre-hearing review, on 30 May 2013. That pre-hearing review concerned only the age discrimination part of that claim. The remainder of that claim had been struck-out in a different pre-hearing review decision dated 9 November 2012 following a hearing on 16 October 2012.

2. It is important for me to bear in the mind that this costs application concerns solely the age discrimination part of Case Reference No: 1048/12 and that it must be considered only on that basis. However, Case Reference No: 1048/12 is just one of many claims brought to the tribunal by the claimant, all of which essentially arise out of the same facts and which pursue the same grievance held by the claimant against the respondent. The background to the present pre-hearing review is relevant when considering the conduct of the claimant.

3. The saga started in the following way. Case Reference No: 736/11 and 35/11 FET were lodged on 20 December 2010. Those cases, as with the present case, related to a restructuring process within the respondent Council in or about 2009/2010. The cases alleged age discrimination and religious/political discrimination. The core of the claim was that the claimant had not been given a temporary acting-up in relation to a particular post and that another person had been temporarily acted-up in preference to her.

4. There followed Case Reference No: 380/11 and Case Reference No: 12/11 FET which were lodged on 26 January 2011. The cases again related to the same restructuring process and alleged, again, age discrimination and religious/political discrimination.

5. Those four cases (comprising two individual claim forms) were dismissed on 6 July 2011 following their withdrawal by the claimant on 24 June 2011.

6. The next case in this series was the present case, Case Reference No: 1048/12. It was lodged on 11 June 2012. It again referred to the same restructuring process and alleged age discrimination and equal pay.

7. There followed Case Reference No: 1219/12 and Case Reference No: 77/12 FET. These cases again alleged age discrimination and religious/political discrimination in relation to the same restructuring process and were lodged on 2 July 2012.

8. The tribunal, in a separate pre-hearing review decision dated 9 November 2012, dismissed all of Case Reference No: 1048/12 (present case) except for the age discrimination part of that claim which concerns the present decision. That followed a concession from the respondent’s solicitor that, pending replies to Notices, she was not in a position to argue that that part of the claim was covered by res judicata or issue estopped.

9. In the same decision, on 9 November 2012, Case Reference No: 1219/12 and Case Reference No: 77/12 FET were dismissed in their entirety on the ground of res judicata.

10. The next step was that, at a Case Management Discussion on 8 May 2013, the tribunal directed that a pre-hearing review should take place to determine certain preliminary issues.

11. The preliminary issues were:-

“(1) Whether the claimant’s case should be struck-out on grounds that the claim is vexatious and/or misconceived under Rule 18(7) of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005?

(2) Whether the claimant’s allegations of age discrimination have been presented outside the statutory time-limits and, if so, whether the tribunal should exercise its discretion to extend the time-limit on the ground that is just and equitable to do so?

(3) Whether the entire claim is issue estopped and should be struck-out under Rule 18(7)(a) – (d) of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005?

(4) Whether the entire claim is an abuse of process, in that any ‘new claims’ could have been raised in the earlier proceedings (1219/12 IT and 77/12 FET lodged on 2 July 2012) and should be struck-out under Rule 18(7)(a) – (d) of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005?”

12. I heard that pre-hearing review on 30 May 2013 and struck-out all the remaining age discrimination claims in Case Reference No: 1048/12 on the ground that they were misconceived, or out of time, or had no reasonable prospect of success.

13. As the Chairman hearing that particular pre-hearing review, I had no knowledge of any application for a Deposit Order pre-hearing review or of the outcome of any such application. The current procedure in this jurisdiction is that, should such an application be made, all relevant papers are kept separately from the tribunal file by the Secretary of the Tribunals and are only brought to the attention of the Chairman, or panel hearing the substantive pre-hearing review or the substantive hearing, at the later stage of a costs application, should such an application arise.

14. The application for costs disclosed that a Deposit Order pre-hearing review had been held in this matter on 26 March 2013 and that a different Chairman had ordered that a deposit of £500.00 should be made by the claimant before she were to be permitted to proceed further with the age discrimination claim on the ground that that claim had little reasonable prospect of success. The claimant paid that deposit and elected to continue with her claim of age discrimination.

Pre-hearing review decision

15. At the hearing on 30 May 2013 the claimant had been asked to explain, in detail, her remaining claim against the respondent of age discrimination.

16. Her first head of complaint and, apparently, the major head of complaint, was that a Ms Ursula Fay was appointed to a temporary acting-up role in or about 2008 and that approximately one and a half years later her pay was in some way ‘categorised’ and therefore made permanent. The claimant also argued that Ms Fay had then applied for and been appointed to the permanent role in that particular post in January 2013. I ruled that all matters relating to the acting-up and the categorisation of pay were already determined in previous litigation which had been withdrawn and dismissed. They could not be resurrected. They were, in any event, massively out of time and no explanation had been put forward for any necessary extension of time.

The claimant sought to argue that this was an act of continuing discrimination, in that she continued to suffer effects in terms of pay, and on retirement, would continue, hopefully far into the future, to suffer effects in terms of pension pay. The claimant refused to understand that there was a distinction between continuing acts of discrimination and one-off acts of alleged discrimination which had ongoing effects. It was specifically put to her that her argument would mean that an individual who had not been appointed to a particular post and who alleged unlawful discrimination in that regard could, decades later, lodge a claim of unlawful discrimination simply on the basis that he still suffered a reduction in pay/pension. The claimant accepted that that was her argument.

I ruled that any and all claims of age discrimination in relation to the appointment of Ms Fay to the temporary upgrading or in relation to the categorisation of her pay had no prospect whatsoever of success and were entirely misconceived. They were therefore struck out.

17. In relation to her allegation that she had not been appointed on unlawfully discriminatory grounds to a permanent appointment in January 2013, this was a matter which post-dated the claim form and in respect of which the tribunal would have had no jurisdiction. It was therefore struck out.

18. When asked again specifically whether there was anything else in respect of which she wished to claim as unlawful acts of age discrimination, she referred to an alleged statement by her then line manager, Mr Stephen Montgomery, to the effect that “all workers over 55 should apply for the voluntary severance scheme”. That was an alleged statement which was given in the context of an explanation to the team, the claimant included, of the voluntary severance package put forward by the respondent Council. No detriment to the claimant was apparent in this matter. The claimant could not put forward any convincing argument as to why that could or should be construed as an unlawful act of discrimination. In any event, it was massively out of time and no reason had been put forward for any extension of time in that regard. It was, at its height, an alleged one-off act and was not part of an act of continuing discrimination. The claim in this regard had no prospect of any success and was again entirely misconceived. It was therefore struck out.

19. When again asked if she wished to put forward anything else, the claimant alleged that a conversation in or about July 2011 between herself and Mr Hugh Kelly, who was then her line manager, was part of an act of continuing unlawful discrimination. The background to that alleged conversation was that, some two days earlier, the claimant had had a conversation with the Chief Executive of the Council. The Chief Executive had asked her if she was interested in the voluntary severance scheme. The claimant had stated that she was not ready to retire for at least two years. Following that conversation, Mr Hugh Kelly met her and said that the respondent Council would keep her on as an employee with no detriment and that it would hold open the voluntary severance scheme for her. That would permit her to accrue additional service and would not force her into going for a voluntary severance before the timeframe in which she had expressly stated she might be prepared to go. The claimant appeared to be unable to understand that no detriment was apparent in this allegation, even if were to be upheld. There was therefore no prospect whatsoever of any successful discrimination claim. It was entirely misconceived and was struck out on that ground.

20. The claimant also alleged that there was a failure to hold a recruitment process up to January 2013. There was no evidence to support the allegation of unlawful discrimination in this regard. In any event, this was an allegation which appeared nowhere on the claim form. This was unsurprising since it post dated the claim form. A statutory tribunal cannot assume jurisdiction other than in respect of a properly made claim within the context of a relevant statutory power. The claim advanced by the claimant was therefore not before the tribunal and even if it had been before the tribunal there was absolutely no evidence to support it. It was therefore entirely misconceived and was struck out on that ground.

Relevant law

21. Rule 40(2) and (3) of the Schedule to the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 (‘the 2005 Regulations) provides:-

“(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 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 (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.”

22. Rule 41(1)(a) of the tribunal’s Rules provides that:-

“(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.”

23. Rule 41(2) of the tribunal’s Rules provides:-

“(2) The tribunal or Chairman may have regard to the paying party’s ability to pay when considering whether or not it shall make a Costs Order or how much that Order should be.”

24. Regulation 2 of the 2005 Regulations provides that:-

“Misconceived includes having no reasonable prospect of success.”

25. There is therefore a two-stage process. First of all the tribunal or Chairman must consider whether any of the circumstances set out in Rule 40(3) apply and, secondly, the tribunal or Chairman must then decide whether it should exercise its or his discretion to make a costs award, taking into account the means of the claimant and other matters as appropriate.

26. The Court of Appeal in Lodwick v London Borough of Southwark [2004] IRLR 554, stated that:-

“Costs are rarely awarded in proceedings before an employment tribunal – costs remain exceptional (Gee v Shell UK Ltd [2003] IRLR 82) and the aim is compensation of the party which has incurred expense in winning in the case, not punishment of the losing party.”

27. In assessing whether a party has acted unreasonably, the tribunal has to be careful to acknowledge that the merit, or lack of merit, of some cases may not become apparent until after the conclusion of the hearing. In ET Marler Ltd v Roberts [1974] ICR 72, the Court held:-

“Ordinary experience in life frequently teaches us that which is plain for all to see once the dust of battle has subsided was far from clear to the contestants when they first took up arms.”

28. The tribunal need not attribute costs to any specific unreasonable conduct on the part of the paying party. The Court of Appeal in McPherson v BMP Paribas [2004] ICR 1398 stated:-

“Ms McCaffrey submitted that her client’s liability for the costs was limited, as a matter of construction of [equivalent GB provision], by a requirement that the costs and issue were ‘attributable to’ specific instances of unreasonable conduct by him. She argued that the tribunal had misconstrued the Rule and wrongly ordered payment of all the costs, irrespective of whether they were ‘attributable to’ the unreasonable conduct in question or not. The costs awarded should be caused by, or at least proportionate to, a particular conduct which has been identified as unreasonable.

(40) In my judgment Rule 14(1) does not impose any such cause or requirement in the exercise of discretion the principle of relevance means the tribunal must have regard to the nature, gravity and affect of the unreasonable conduct as factors relevant to the exercise of the discretion but that is not the same as requiring BMP Paribas to prove that specific unreasonable conduct by Mr McPherson caused particular costs to be incurred. As Mr Tatton-Brown pointed out there is a significant contrast between the language of Rule 14(1) which deals with costs generally and the language of 14(4) which deals with an Order in respect of the costs incurred ‘as a result of the postponement or adjournment’. Further the passages in the cases as relied on by Ms McCaffrey are not authority for the proposition that Rule 14(1) limits the tribunal’s discretion to those costs that are caused by or attributable to the unreasonable conduct of the applicant.

(41) In a related submission, Ms McCaffrey argued that the discretion could not properly be exercised to punish Mr McPherson for unreasonable conduct that is undoubtedly correct, if it means that the indemnity principle must apply to the award of costs. It is not, however, punitive and impermissible for a tribunal to order costs without confining them to the costs attributable to the unreasonable conduct. As I have explained, the unreasonable conduct is a pre-condition of the existence of the power to order costs and it is also a relevant factor to be taken into account in deciding whether to make an Order for Costs in the form of the Order.”

29. In Raggett v John Lewis PLC [UKEAT/0082/12/RN], the Employment Appeal Tribunal determined that VAT should not be included in costs ordered to be paid under Rule 40 if the receiving party is able to re-claim VAT as input tax. It followed the principles set out in the White Book in relation to such awards in mainstream civil litigation. It stressed that costs are meant to be compensatory and not punitive.

30. In the decision of AQ Ltd v JA Holden [UKEAT/0021/12/CA], the Employment Appeal Tribunal held at Paragraphs 32 – 33 that:-

“(32) The threshold tests in Rule 40(3) are the same whether a litigant is or is not professionally represented. The application of those tests may however take into account whether a litigant is professionally represented. A tribunal cannot and should not judge a litigant-in-person by the standards of a professional representative. Lay people are entitled to represent themselves in tribunals; and, since legal aid is not available and they will not use recover costs if they are successful, it is inevitable that many lay people will represent themselves. Justice requires that tribunals do not apply professional standards to laypeople, who may be involved in legal proceedings for the only time in their life. As Mr Davies submitted, 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 40(3). Further, even if the threshold for an Order for Costs is 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 layperson may have brought proceedings with little or no access to specialist help and advice.

(33) This is not to say that laypeople are immune from an Order for Costs : far from it, as the cases make 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. But the tribunal was entitled to take into account that Mr Holden represented himself; we see no error in it doing so; and we do not accept that it misdirected itself in any way.”

Decision

31. The respondent produced evidence that the claimant’s net monthly earnings were approximately £2,473.00 and that she owned her own home, a holiday home in France and a motor home. None of this evidence was challenged by the claimant and is accepted as accurate.

32. The respondent sought to argue that the claimant had acted vexatiously in this matter. That would involve an examination of different case law to determine whether or not the claimant’s conduct, as a litigant-in-person, reached the relatively high hurdle of ‘vexatious behaviour’. In my view, this case is considerably simpler than that.

33. The application for costs concerns only the conduct of the claimant in relation to that part of the present case which concerns age discrimination. No other such application has been made in respect of the claimant’s other cases or in relation to the other parts of the present case, Case Reference No: 1048/12. The claimant had already received a clear and unequivocal judicial finding in the Deposit Order pre-hearing review on 26 March 2013. That stated the remaining parts of the claim had little reasonable prospect of success. She had received also a clear warning, in both the response and in the subsequent correspondence from the respondent, to the effect that she was at risk of a costs application if she chose to go further and that her claims were groundless. Despite these warnings and despite the Deposit Order, the claimant chose to go ahead with her claim and chose to pay the maximum deposit of £500.00 as ordered by the tribunal. She failed to take advice from any source before doing so even though she clearly could have afforded to do so. She could produce no valid explanation of why she made that decision. In particular, she ignored the clearly expressed views of the Chairman in the Deposit Order pre-hearing review.

34. Her status as a litigant-in-person must be taken into account. However, that status does not provide any form of immunity against costs. It had to be judged against the clear warnings of costs which she had received from the respondent and, in particular, against the Deposit Order application and the eventual Order itself.

35. I am satisfied that, in relation to the first stage of the two-stage process, the claimant’s action in pursing the claim after the Deposit Order had been made, was misconceived within the meaning of the 2005 Regulations. For the reasons carefully rehearsed in the oral decision given at the present pre-hearing review, her claims of age discrimination never had any real prospect of success.

36. In relation to the second stage, I have to consider all the circumstances of the case, including the claimant’s status as a litigant-in-person and, as appropriate, her means, in deciding whether or not to award costs and, if so, of what amount.

37. I am satisfied that the amounts shown for counsel fees and for solicitor costs were reasonable and appropriate and that they refer to matters which post-dated the Deposit Order and which were therefore caused by the claimant’s misconceived action in pursuing her claim beyond that point.

38. I bear in mind that Costs Orders are not meant to be punitive and are meant to be compensatory. I have concluded that the full amount of the costs incurred by the respondent, after the making of the Deposit Order, should be awarded against the claimant. For the reasons set out above, her actions in continuing to pursue this claim were entirely misconceived and it would be equally entirely inappropriate for the respondent to have to bear the financial costs of that action. The respondent had done its best, by giving plain warnings and by pursuing the Deposit Order, to make the position clear to the claimant.

39. However, for the reasons set out above, I am not satisfied that VAT should be awarded in this case. This is not a Costs Order which allows for direct payment by the claimant to either Ms Bradley, Barrister-at-Law, or to Ms Cassidy, Solicitor, of Jones Cassidy Jones. This is a Costs Order sought by the respondent who will presumably already have paid both solicitors’ costs and counsel fees. The respondent Council is registered for VAT and therefore, in my view, and I heard no contradictory argument, would be entitled to recoup the VAT as an input tax.

40. I therefore award costs in total of £8,196.50, comprising £5,975.00 counsel fees and £2,221.50 solicitor costs. There is no additional award for VAT. In addition, the deposit of £500.00 is forfeit to the respondent in part payment of this costs award under Rule 47.

Vice President:

Date and place of hearing: 7 August 2013, Belfast

Date decision recorded in register and issued to parties: