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You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Boomer v Northern Ireland Public Servic... Brian Campfield Alison Millar Kevin McCabe [2013] NIFET 00057_11FET (28 June 2013)
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FAIR EMPLOYMENT TRIBUNAL
CASE REF: 57/11 FET
CLAIMANT: Philip Boomer
RESPONDENTS: 1. Northern Ireland Public Alliance
2. Brian Campfield
3. Alison Millar
4. Kevin McCabe
Certificate of Correction
In the decision issued on 28 June 2013, the title of the first respondent should read:-
1. Northern Ireland Public Service Alliance
Chairman:
Date: 3 July 2013
FAIR EMPLOYMENT TRIBUNAL
CASE REF: 57/11 FET
CLAIMANT: Philip Boomer
RESPONDENTS: 1. Northern Ireland Public Alliance
2. Brian Campfield
3. Alison Millar
4. Kevin McCabe
DECISION ON COSTS
The unanimous decision of the Tribunal is as follows:-
The Tribunal orders the claimant to pay to the respondents the sum of £4,500.00 (inclusive of any Value Added Tax properly payable by the claimant to the respondents) in respect of the respondents’ costs.
Constitution of Tribunal:
Chairman: Mr N Drennan QC
Members: Mr R Hanna
Mr H Stevenson
Appearances:
The claimant was represented by Mr M Potter, Barrister-at-Law, instructed by Donnelly & Kinder, Solicitors.
The respondents were represented by Mr B Mulqueen, Barrister-at-Law, instructed by McCartan Turkington Breen, Solicitors.
Reasons
1.1 The Tribunal in a decision recorded in the Register and issued to the parties on 28 February 2013 decided that:-
“(i) The Tribunal does have jurisdiction to determine the claims of the claimant against the first respondent as the claimant failed to set out his grievance in respect of his claims against the first respondent, pursuant to Article 20 of the Employment (Northern Ireland) Order 2003. The claims of the claimant against the first respondent are therefore dismissed.
(ii) The claimant was not discriminated against and/or harassed on the grounds of his political opinion, pursuant to the Fair Employment and Treatment (Northern Ireland) Order 1998 and/or was not discriminated against by way of victimisation, pursuant to the Sex Discrimination (Northern Ireland) Order 1976 and/or pursuant to the Employment Equality (Age) Regulations (Northern Ireland) 2006 by the second, third and fourth respondents. The claimant’s claims against the second, third and fourth respondents are therefore dismissed.”
The said decision by the Tribunal followed a 13 day hearing between 30 April 2012 and 8 June 2012.
1.2 By letter dated 12 March 2013, the solicitors for the respondents made application for costs in accordance with Article 40 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005. By letter dated 20 March 2013, the solicitors for the claimant objected to the application but stated:-
“ … We cannot expand further as we have no idea why this is being made due to the failure of the respondents’ representative to either articulate the reason why it is sought or indeed make the application in the form prescribed by Rule 11(4).”
By letter dated 22 March 2013, the solicitors for the respondents wrote to the Tribunal, enclosing a copy of a letter sent by them to the solicitors for the claimant, in which it was stated, inter alia:-
“The respondents, and each of them, are entitled, in accordance with Article 40 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (NI) 2005, to make an application for costs where they of the belief that a party (in this instance the claimant) has acted, in the bringing and/or conducting of these proceedings, vexatiously, abusively, disruptively or otherwise unreasonably and/or where in the bringing/conducting of the said proceedings by the claimant such proceedings were misconceived.
It is obvious from the findings of the Tribunal that the claimant was or should have been aware that the said Tribunal did not have jurisdiction to hear the claim as against the first-named respondent. Further, and/or in the alternative the findings of fact as made by the Tribunal clearly establish that there was no factual and/or legal basis to present claims of discrimination and/or victimisation against the respondents, and each of them. In support of this assertion the claimant is referred to Paragraphs 2.2, 2.5, 2.6, 2.11, 2.12, 2.13, 2.27, 2.32, 2.34, 2.35, 2.36, 5.2 and 5.4 of the Tribunal’s findings. It is the respondents’ belief that the findings of this Tribunal clearly establish that the claimant’s evidence was not credible and was untruthful. In such circumstances the respondents are entitled to seek the costs of this lengthy hearing. … .”
By letter dated 9 April 2013, the Chairman directed that the following letter be sent to the representatives of the parties:-
“Further to previous correspondence in the above matter, the Chairman, at his own initiative has ordered that, subject to any objection by either party, the respondents’ representative must serve on the claimant’s representative together with copy to the Tribunal, a schedule of all costs claimed by the respondents and how each sum is made up including all relevant dates/times as appropriate … ”
There was no objection to the said Order.
1.3 The respondents’ representative on 19 April 2013 sent to the Tribunal and the claimant’s a Bill of Costs made up as follows:-
COSTS DISBS VAT
PROFESSIONAL SERVICES:
Professional fee for all work done
in connection with this matter –
150 hours @ £200 - £30,000, say, £7,500.00 £1,500.00
BARRY MULQUEEN BL
Brief fee £10,000
Refreshers (12 days @ £750) £ 9,000
Consultations (3 hours @ £125) £ 375
Drafting Notice for
Additional Information £ 100
Case-management Hearing £ 350
Written submissions £ 1,250
Total £21,705
VAT £ 4,215
Total £25,290 £25,290 £ 0.00
Sub-totals £ 7,500 £25,290 £1,500.00
Disbursements £25,290
VAT @ 20% £ 1,500
Invoice total £34,290
Less paid/held on account £25,290
BALANCE DUE £90,000
The claimant’s representative indicated that the said fees, set out in the said Bill of Costs, were not agreed; but he had nothing further to say about them and, in particular, in relation to the method of calculation or the amount of same.
1.4 As set out above, the respondents’ written application for costs was made pursuant to the Rules of Procedure set out in Schedule 1 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005. The claimant’s claims were brought in the Fair Employment Tribunal and therefore the application for costs should properly have been made, pursuant to the Rules of Procedure, set out in Schedule 1 of the Fair Employment Tribunal (Rules of Procedure) Regulations (Northern Ireland) 2005. These are in similar terms to the Rules of Procedure, in relation to the issue of costs, contained in Schedule 1 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005. The Tribunal therefore has relied upon the Fair Employment Tribunal Rules of Procedure (‘the Rules of Procedure’).
2.1 Rule 35 of the Rules of Procedure, insofar as relevant and material, 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 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 considered it appropriate to do so.
(3) Circumstances referred to in Paragraph (2) are where the paying party has in bringing the proceedings where he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting by the paying party has been misconceived.
… .”
2.2 Rule 36 of the Rules of Procedure, insofar as relevant and material, provides:-
“(i) The amount 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.
(ii) The Tribunal or Chairman may have regard to the paying party’s ability to pay when considering whether it or he make a Costs Order or how much that Order should be.
(iii) For the avoidance of doubt, the amount of a Costs Order made under Paragraph (i)(b) or (c) may exceed £10,000.00.”
2.3 In Article 2(1) of the Fair Employment Tribunal (Rules of Procedures) Regulations (Northern Ireland) 2005 ‘misconceived’ is defined as including having no reasonable prospect of success.
2.4 In Raggett v John Lewis PLc [2012] UKEAT/0082/12 the Employment Appeal Tribunal held that Value Added Tax should not be included in costs ordered to be paid (under Rule 36) if the receiving party is able to re-claim Value Added Tax as input tax.
2.5 The Tribunal is satisfied 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, includes any sum properly payable by way of Value Added Tax.
2.6 The respondents’ representative confirmed that, in making his application for costs, he was doing so, pursuant to Rule 36(1)(a) of the Rules of Procedure (with the said cap of £10,000.00); as he was not able to make an application for assessment, pursuant to Rule 36(1)(c) of the Rules of Procedure by reason of the matters set out below. 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 for in Rule 36(1)(a) of the Rules of Procedure. Increasingly, the Tribunals are faced with applications for Orders 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 the Tribunal’s 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 make such an Order for Assessment if it is appropriate to do so.
2.7 In the letter of application for an Order for Costs, the respondents’ representative had made the application on the grounds, inter alia, that the claimant had in conducting the proceedings acted vexatiously. The classic definition for vexatious claims is found in the case of ET Marler Ltd v Robinson [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 over some other improper motive, he acts vexatiously.”
The Court made clear 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 sparingly exercised … ”
In the recent decision of the Employment Appeal Tribunal, in the case of HM Attorney General v Bentley [2012] 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 likely gain 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 on 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 type to Employment Tribunals, usually against different respondents but founded on the like-basis … ”
Properly, in my view, the respondents’ representative, at the commencement of the hearing, withdrew his application for costs on this vexatious ground, confirming that his application for costs was confined to the grounds as set out in Rule 35(3) of the Rules of Procedure, namely:-
“The claimant conducted the proceedings otherwise unreasonably or the bringing or conducting of the proceedings by the claimant was misconceived.”
3.1 Under Rule 35(2) and (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 has been misconceived. A 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]. Vaughan v London Borough of Lewisham & Others [2013] UKEAT/0533/12. 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 Southwark [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 required 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 Southwark [2004] IRLR 554). (See further the recent decision of the Employment Appeal Tribunal in the case of Baker v Toal Bookmakers Ltd t/a Totes Sport [UKEAT/0538/11] Unreported, where HH Judge Clark again emphasised that Costs Orders in the Tribunal are exceptional.)
3.2 However, in the judgment of this Tribunal, 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 and Another [2008] NICA 49, where he confirmed that a Tribunal is required to give effect to the terms of the overriding objective, when it exercised 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.”
3.3 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 a 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 at the proceedings on the part of the claimant.
In relation to this issue of costs it is also necessary to recall Sir Hugh Griffith’s classic observation in the case of ET Marler Ltd v Robinson [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.”
3.4 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 to costs under the Rules of Procedure applying in the Employment Tribunals in Great Britain, which are in similar terms to the Fair Employment Tribunals 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 exercise.
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 for 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 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 costs being claimed. In rejecting that submission, I had no intention of giving birth to erroneous notions, such as that causation was irrelevant 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 On 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 on the paramount principles 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 in the ordinary Courts; and that an Employment Tribunal Costs Order is the exception rather than the Rule.
3.5 In the case of A Q Ltd 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 require 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 for an Order for Costs; far from it as the case has made clear. Some litigant-in-persons 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 cost, 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.”
In the context of the present case, it is also relevant to note the judgment of the Employment Appeal Tribunal in the case of Jackson v Walsall Metropolitan Borough Council [UKEATPA/1247/10], when the Employment Appeal Tribunal decided that it would not interfere with the Employment Tribunal’s discretion to award costs against a claimant whose five claims had been dismissed, noting the claimant was a barrister with special experience in employment law and sure she was a barrister meant that she should be alert to weaknesses in her case. It also confirmed that a barrister specialising in employment law and asserting her knowledge is particularly open to scrutiny.
3.6 In the case of Peat & Others v Birmingham City Council [UKEAT/0503/11], Mr Justice Supperstone 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 warnings letters, they would have likely 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:-
“Considering whether to award costs in respect of a party’s conduct in bringing or pursuing a case which is subsequently held to lack 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) … .”
In Harvey on Industrial Relations and Employment Law, Paragraph 1052.01 it is stated:-
“The Court of Appeal has emphasised that a lie will not necessarily, of itself, be sufficient to find an Order for Costs (nor, conversely, will the absence of a lie necessarily mean that there cannot be a finding that the proceedings have been brought or conducted unreasonably or are misconceived … .”
In Arrowsmith v Nottingham Trent University [2011] EWCA Civ 797 …, at Paragraph 33, Rimer LJ giving the only recent judgment of the Court endorsed the statement of Cox J in the case of HCA International Ltd v May-Bheemul [UKEAT/0477/10] that neither the case of Daleside nor any other case established a point of principle of general application that lying, even in respect of a central allegation in the case, must inevitably result in an award of costs, and that “it will always be necessary for the Tribunal to examine the context and to look at the nature, gravity and effect of the lie in determining the unreasonableness of the alleged conduct”. … Rimer LJ added that the consideration of whether the elements of Rule 40(3) are satisfied in a particular case is ‘a fact-sensitive exercise’ and a decision in another case, in what might superficially appear to be circumstances similar to those in the instant case, will not dictate the decision in it. (Paragraph 33). The Employment Tribunal in Arrowsmith was held to have applied the test correctly and to have reached a conclusion that was open to it when awarding costs against the claimant in circumstances where she ‘had a made a case that was materially dependent on the advance by her of assertions that were untruthful’.
In a recent decision of the Employment Appeal Tribunal, Langstaff P in the case of Ladrick Lemonious v Church Commissioners [UKEAT/0253/12] endorsed the analysis and conclusion in the case of HCA International Ltd but also the judgment of the Court of Appeal in Arrowsmith v Nottingham Trent University [2011] EWCA Civ 797 where Rimer LJ had endorsed the words of Cox J in HCA International Ltd where she stated:-
“ … in some cases, a central allegation is found to be a lie. That may support an application for costs, but does not mean that on every occasion that a claimant fails to establish the central point of the claim, an award of costs must follow.” [Tribunal’s emphasis]
(See also Topic v Hollyland Pitta Bakery Company [2012] UKEAT/0523/11.)
3.7 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 such an 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 on behalf of that party. Interestingly, in the case of Vaughan, Underhill J approved the decision in Jilley and went on to hold that it was not wrong in principle to make an award where a claimant could not in her present financial circumstances afford to pay and the Tribunal had formed the view that she might be able to meet it in due course.
3.8 In proceedings in the Civil Courts if a winning party fails to do better than an offer made to him by the losing party it will usually expect to pay the losing party’s costs from the date of the offer. The use of ‘Calderbank letters’ is common in the Civil Courts – an offer to settle without prejudice, save as to costs. Such a letter is not revealed to the Court until the end of the trial. In Kopel v Safeway Stores PLc [2003] IRLR 753, it was held that a failure by a party to beat a Calderbank offer will not, by itself, result in an award of costs against him. What must be shown is ‘that the conduct of the party in rejecting the offer was unreasonable before the rejection becomes a relevant factor in the exercise of the Tribunal’s discretion of the Rules of Procedure’.
As stated in Harvey on Industrial Relations and Employment Law, Paragraph 1052.07:-
“A costs warning letter will not of course necessary result in an Order for Costs being made where the party giving the warning is ultimately successful in obtaining a judgment in his favour. Whether it will do so will depend on the facts. But if a well-argued warning letter is sent, failure by the claimant to engage properly with the points raised in it can amount to unreasonable conduct and if a case proceeds to a hearing and the respondents are successful for substantially the reasons that were contained in the letter. A good example of this is Peat v Birmingham City Council [UKEAT/0503/11].”
In Raggett v John Lewis PLc [UKEAT/0082/12], Mrs Justice Slade referred, with approval, to the judgment of the EAT in Copel where it made clear at Paragraph 16 that whilst the Rule in Calderbank v Calderbank does not apply to Tribunals an offer of a Calderbank-type is a factor which the ET can take into account in assessing the amount of costs.
In the Employment Appeal Tribunal, in the case of Rogers v Dorothy Barley School [2012] UKEAT/0013/12 the Employment Tribunal recently emphasised the importance of issuing a written costs warning as early as possible, setting out reasons. This is to enable the other party to be put on clear notice that it is intended to pursue this course of action if the case proceeds in a certain way.
3.9 In Jilley it was held that once the Tribunal has decided that it will have regard to the paying party’s ability to pay then, as set out in the judgment of the Employment Appeal Tribunal:-
“ … it should set out its findings about ability to pay, save what impact this has on its decision whether to award costs or on the amount of costs, and explain why. Lengthy reasons are not required. A succinct statement of how the Tribunal has dealt with the matter and why it has done so is generally essential.
Therefore if the Tribunal has decided that it will have regard to the paying party’s ability to pay, it has to take into account what is has found to be the paying party’s ability to pay.”
In Jilley the Employment Appeal Tribunal held that the Rules are wide enough … to allow a Tribunal to take account of ability to pay by placing a cap on an award of costs even where it orders a detailed assessment.”
In the recent case of Howman v The Queen Elizabeth Hospital Kings Lynn [2013] UKEAT/0509/12, the Employment Appeal Tribunal held that, if the Tribunal decides to have regard to someone’s ability to pay when deciding what Order for Costs it should make, it requires to balance the need to compensate the claimant who has unreasonably been put to expense against the other litigant’s ability to pay. It held ‘the latter does not necessarily trump the former, but it may do so’.
In Shields Automotive Ltd v Grieg [UKEATS/0024/10], the Employment Appeal Tribunal held that assessing a person’s ability to pay involves considering their whole means, which can include reference to a person’s capital, represented by property or other investments.
4.1 The Tribunal, having regard to the provisions of Rule 36(2) of the Rules of Procedure, referred to previously, sought details from the claimant’s representative of the claimant’s ability to pay. He confirmed that the claimant was still employed by the first respondent and referred the Tribunal to the salary figures set out in the claimant’s claim form presented to the Tribunal on 6 May 2011. At Paragraph 5.4 of the said claim form, it was stated:-
Pay before tax £2,489.25 per month (under review)
Normal take home pay
(including overtime, commission,
bonuses, etc) £1,883.48 per month (under review)
The Tribunal was not provided with any up-to-date figures following the said review; but it was agreed by the representatives that the Tribunal, if it decided it was appropriate to consider the claimant’s ability to pay, should conclude he was presently earning from the first respondent approximately £2,000.00 net. It was further agreed that the claimant would have ‘normal expenditure’ out of this said income, albeit no details were provided. The Tribunal was not provided with any details of any savings and/or capital of the claimant.
4.2 Neither the claimant nor the respondents called any oral evidence in relation to this application for costs but made oral submissions with particular reference to the terms of the Tribunal’s decision.
5.1 Having carefully considered the submissions by the representatives of the parties in light of the legislative provisions and the case law referred to in the previous paragraphs of this decision, the Tribunal reached the following conclusions, as set out in the following sub-paragraphs.
5.2 In relation to the jurisdictional issues relating to whether the claimant had properly raised a grievance regarding his claims, in accordance with the statutory requirements contained in Article 20 of the Employment (Northern Ireland) Order 2003 (‘the 2003 Order’), it has to be noted that the issues were discussed at the Case Management Discussion on 26 January 2012, albeit the Vice President refused an application for a pre-hearing review to determine the said issues, for the reasons set out in the Record of Proceedings of that hearing. Firstly, the Tribunal is satisfied that the claimant had no reasonable prospect of success, and it was therefore misconceived, of establishing that the statutory grievance procedures did not apply to his claims against the first respondent, having regard to the dates of the acts, the subject-matter of his claims, the terms of the 2003 Order and the translational provisions contained in the Employment (Northern Ireland) Act 2011 (Commencement No 1 Transitional Provisions and Savings) Order (Northern Ireland) 2011. Further, given the statutory procedures applied to the claimant’s claims against the first respondent, the Tribunal is satisfied that the claimant had no reasonable prospect of success in establishing that the statutory grievance procedures had been complied with by him, where the claimant merely referred, in the relevant correspondence relied upon by him, to his grievances of discrimination and/or victimisation without more; and, in particular, he made no reference to the fact his claim of discrimination by way of victimisation related to his political opinion/Broad Left and/or the basis of his claim of discrimination by way of victimisation related to his representation of union members. In this context, it has to be remembered the claimant, when writing this correspondence, the subject-matter of his said grievances, was a person with considerable experience in employment matters and representing union members in such matters, arising from his role in the first respondent. It is correct the statutory grievance procedures were the subject of considerable case law following their commencement. However, by the date of the matters, the subject-matter of these proceedings, the principles were well-established, as set out in the case law referred to in the decision of the Tribunal and would have been well-known to the claimant and/or his legal advisers. However, despite the fact the claims were, in the judgment of the Tribunal, misconceived, the claimant continued to pursue the claims against the first respondent throughout the substantive hearing, albeit they were doomed to failure. Although it is correct the actions of the second, third and fourth respondents were, in essence, the same actions, the subject-matter of the claimant’s claims against the first respondent, giving rise to a degree of overlap, the Tribunal still required to hear oral evidence in relation to the detailed wording of the grievance correspondence and/or detailed submissions by the representatives on these jurisdictional issues, which, in the Tribunal’s view, could and should have been avoided by the claimant by him recognising his inability to establish his claims against the first respondent. By doing so, this was also, in the alternative, an example of unreasonable conduct on the part of the claimant. All of this added to the length of the hearing. However, the Tribunal accepted the fact of some overlap, referred to above, was a relevant factor in the Tribunal’s consideration of the exercise of its discretion, under the two-stage process required to be carried out by the Tribunal in determining this application for costs (see further Paragraph 5.8 of this decision).
5.3 The claimant brought a claim of unlawful discrimination on the grounds of political opinion against the second and/or third and/or fourth respondents in relation to his suspension and/or the investigation of the allegations set out in the Extern letter. Whilst the Tribunal concluded that the claimant had not been unlawfully discriminated against on the grounds of his political opinion in relation to these matters it was not prepared to conclude that the claimant’s claim was misconceived, given the high test that is required to be satisfied to show that a claim has no reasonable prospect of success. However, the Tribunal was satisfied that the claimant conducted the proceedings unreasonably in that he alleged that the second respondent and/or the third respondent and/or the fourth respondent colluded and/or conspired and/or worked together in order to unlawfully discriminate against the claimant in relation to his suspension and/or the carrying out of the investigation of the allegations set out in the Extern letter. The claimant knew full well that there was no such evidence and indeed, during the course of his cross-examination, he accepted that the evidence he relied upon in making such an allegation was merely his ‘belief and suspicion’ and nothing more. Further, the claimant produced no evidence that the fourth respondent had played any part in relation to the said suspension and investigation. The Tribunal had to spend considerable time, during the course of the hearing, dealing with this allegation, which was not necessary as the claimant knew, at all times, that there was no proper evidence to support it.
5.4 In relation to the claimant’s claim by way of victimisation under the Age Regulations, in relation to his representation of Ms Sally Greene, in her complaint of age discrimination against her employer, the first respondent, the Tribunal accepts that, in support of this claim, the claimant intended to rely on the evidence of Ms Greene in support of this claim. She had prepared witness statements in accordance with the Tribunal’s case-management directions. As set out in the Tribunal’s decision, the claimant decided, at the commencement of the hearing, not to call Ms Greene ‘primarily for health reasons’ and it was not disputed she was suffering from ill-health at that time. Following application, by the claimant’s representative, the Tribunal admitted her witness statements, without formal proof; but when it did so, it emphasised to the claimant the weight to which it could attach to such statements, in circumstances where the respondents’ representative was unable to cross-examine Ms Greene. Despite this, but also the deliberate failure of the claimant’s representatives, on instruction, to cross-examine the respondents on these issues, the claimant at no time during the course of the hearing agreed to formally withdraw this claim of discrimination by way of victimisation. The claimant knew this claim had no reasonable prospect of success, from when it was decided Ms Greene was unable to be called as a witness and he had no issues to put to the respondents’ witnesses in relation to same. Further, to fail to withdraw the claim in such circumstances was, in the judgment of the Tribunal, unreasonable conduct. The respondents still required to deal with the issues during their evidence, as did the Tribunal in its decision. In the opinion of the Tribunal this failure to withdraw the claim could not be excused by the failure to cross-examine the respondents. The claimant should have faced up to the reality situation in which he found himself, due to the unavailability of Ms Greene, but he decided not to do so. This failure by the claimant again contributed to the length of the hearing.
5.5 In relation to the claimant’s claim of discrimination by way of victimisation, under the sex discrimination legislation, arising out of the claimant’s representation of Ms Sinead Gorman in relation to her grievance and her Tribunal claim in respect of a sexual harassment complaint made by her against her employer, the Tribunal was not prepared to conclude the claimant’s claim was misconceived. It accepted that, given the nature of the various allegations made by the claimant in relation to this claim, as set out in the Tribunal’s decision, these matters could only be properly determined at a substantive hearing, at which all relevant evidence was given by the parties and the Tribunal reached conclusions based on that evidence. In so holding, the Tribunal does not underestimate some of the weaknesses in the claimant’s evidence in support of this claim or the criticisms of the claimant’s evidence, as made by the Tribunal in its decision; but it is not prepared to hold that his conduct, in pursuing this particular claim, could be said to have been unreasonable.
5.6 Having regard to the Tribunal’s conclusions, as set out in the previous sub-paragraph of this decision, in relation to those claims of the claimant which the Tribunal found to be misconceived and/or where it found the claimant’s conduct was unreasonable, pursuant to Rule 35(3) of the Rules of Procedure, it was then necessary for the Tribunal to consider, as part of the said two-stage process, whether to exercise its discretion and to make an Order for Costs.
5.7 For the reasons set out below, the Tribunal decided that it was an appropriate exercise of its discretion to make such an Order for Costs against the claimant. In particular, the Tribunal was satisfied that, if the claimant had not pursued these claims, which the Tribunal has found to be misconceived and/or he had not conducted himself unreasonably, the length of this substantive hearing in this matter would have been considerably reduced, with the consequential saving of time and expense, which was contrary to the terms of the overriding objective (see further Peifer v Castlederg High School and Others and Barnsley MBC v Yerrakalva).
Whilst it is difficult to be precise, the Tribunal is confident this matter should have been able to be concluded in or about five days, rather than the 13 days it required. Further, the Tribunal considered it was a relevant factor, in the exercise of its discretion, that the claimant had received from the respondents’ representatives a detailed costs letter dated 12 April 2012, which was before the substantive hearing had commenced on 30 April 2012. The said letter stated, inter alia:-
“Without prejudice save as to costs
We refer to the above matter and wish to advise you that we have fully reviewed all the evidence in this case including all the witness statements and are of the opinion that your client’s claim stands no reasonable prospect of success. We maintain this view as it is clear that your client has not been treated less favourably on the grounds of political opinion. It is also clear that the claimant has not been harassed or victimised …
…
We therefore will allow the claimant until Friday 20th April next to withdraw his claim with both sides bearing their own costs. If the time-limit is not met this offer will be withdrawn and if the respondents are successful, as we anticipate, we intend seeking an award against the claimant … .”
The claimant effectively ignored this letter and continued to pursue all of his claims, without regard to the terms of the letter. It has to be remembered, in this context, the claimant was legally represented, but he was also a person with experience in employment matters and, in particular, representing union members and therefore he knew well the legal issues, the subject-matter of his claim, and the evidence which would be required in order to establish those claims (see further Paragraph 3.5 of this decision and the case law referred to therein).
5.8 The fees set out by the respondents in the Schedule of Costs were not the subject of challenge by the claimant’s representative and the Tribunal is satisfied, in the circumstances, the said schedule is an appropriate basis for calculation, in the absence of any other evidence. It is apparent from the said schedule the respondent’s representatives have incurred costs from this 13 day hearing well in excess of the £10,000.00 cap, as set out in Rule 36(3) of the Rules of Procedure. Taking into account the degree of overlap referred to in Paragraph 5.2 of this decision, the Tribunal, subject to what is set out below, would have been prepared to make an Order for Costs against the claimant limited to the sum of £10,000.00. However, the Tribunal was satisfied, in view of the size of the said sum (see Paragraph 3.7 of this decision) it was appropriate to take into account the claimant’s ability to pay. The Tribunal was provided, by the claimant’s representative, with little information other than he continues to be employed by the first respondent and is in receipt of net earnings of approximately £2,000.00 per month. ‘Balancing the need to compensate a litigant who has unreasonably been put to expense against the other litigant’s ability to pay (see Howman v The Queen Elizabeth Hospital Kings Lynn) the Tribunal decided it was appropriate to make an Order for Costs against the claimant in the sum of £4,500.00.
5.9 The Tribunal therefore orders the claimant to pay to the respondents the sum of £4,500.00 (inclusive of any Value Added Tax properly payable by the claimant to the respondents) in respect of the respondents’ costs.
Chairman:
Date and place of hearing: 31 May 2013, Belfast
Date decision recorded in register and issued to parties: