Industrial Tribunals Northern Ireland Decisions

You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> McKinstry v Moy Park Ltd Gary Maxwell Brian Johnstone [2014] NIIT 1725_13IT (30 June 2014)
URL: http://www.bailii.org/nie/cases/NIIT/2014/1725_13IT.html
Cite as: [2014] NIIT 1725_13IT

[New search] [Printable RTF version] [Help]

THE INDUSTRIAL TRIBUNALS

CASE REF: 1725/13

CLAIMANT: Philip McKinstry

RESPONDENTS: 1. Moy Park Ltd

2. Gary Maxwell

3. Brian Johnstone

DECISION ON A PRE-HEARING REVIEW

The decision of the tribunal is that:-

(1) It is ordered that reference to the details of the discussions, which took place between the parties at the meeting on 25 June 2013, should be redacted/amended and not form part of the claim and response form contained in the ‘trial bundle’, for use by the tribunal and the parties at the substantive hearing; and further the details of the said discussions must be excluded from the witness statements of the parties, on the basis that the said discussions were ‘without prejudice’ and evidence of same must therefore be excluded.

If there is any issue between the parties in relation to compliance with the said order, referred to above, then a further hearing will be arranged to consider same, as appropriate and necessary in the circumstances.

(2) The applications made by each of the parties for an Order for Costs against each other, in respect of the adjourned hearing on 7 April 2014, are refused.

(3) Following the orders made by the tribunal, as set out in Paragraph 1 herein, the case-management directions/orders previously made by the tribunal for the substantive hearing, commencing on 1 September 2014, are amended in the following respects:-

(1) Witness statements

(a) The claimant and any witness he wishes to call must provide a signed and dated witness statement to the respondents’ representative by 5.00 pm on 11 July 2014.

(b) The respondents and any witnesses they wish to call must provide a signed and dated witness statement to the claimant’s representative by 5.00 pm on 1 August 2014.

(2) Bundles

‘Trial bundles’ as previously ordered, must be lodged in the Office of the Tribunals by 26 August 2014.

All previous case-management directions/orders made by the tribunal remain in force, save insofar as they may have been amended, as set out above and/or by further order/direction of the tribunal.

Constitution of Tribunal:

Employment Judge (sitting alone): Employment Judge Drennan QC

Appearances:

The claimant was represented by Ms M-C Campbell, Barrister-at-Law, instructed by Patrick Park, Solicitors.

The respondents were represented by Ms R Best, Barrister-at-Law, instructed by Ms K Fraser, In-house Solicitor, of the first-named respondent.

1.1 At a Case Management Discussion on 13 February 2014, as set out in the Record of Proceedings dated 13 February 2014, the Vice President, with the consent of the representatives made the following direction, namely:-

“4. There is a preliminary issue in relation to a meeting between the parties on 25 June 2013. The claimant argues that the discussion in that meeting should form part of his claim. The respondents argued that this was a ‘without prejudice’ meeting and that the discussions should therefore be excluded. This appears to be an issue which would be best dealt with at an early stage. If it not dealt with at an early stage it will be difficult to proceed by way of a witness statement procedure which would necessarily have to deal in full with the discussions on 25 June 2013. The pre-hearing review is therefore listed for:-

7 April 2014 at 10.00 am;

to determine:-

“Whether or not the discussions, which took place at the meeting on 25 June 2014, should form part of the claim and the response or whether they should be excluded on the basis that the discussions were ‘without prejudice’?”

The parties shall agree and the claimant shall lodge, no later than 5.00 pm on 28 March 2014, an agreed factual background giving all the facts necessary for the determination of the preliminary issue.”

1.2 The pre-hearing review came on for hearing before Employment Judge Greene on 7 April 2014. As set out in the Record of Proceedings on 7 April 2014, dated 9 April 2014, Employment Judge Greene, having referred to the previous direction of the Vice President stated as follows:-

“ ...

3. The agreed factual background was not submitted until 4 April 2014 by reason of ongoing discussions between the parties with a view to agreeing the document ... .”

As set out in the Record of Proceedings, it became apparent that there was still not agreement, by the date of the hearing, between the representatives, despite the previous discussions. Accordingly the Employment Judge recorded as follows:-

“12. The parties were of the view that it would not be possible to reach agreement on that today but that further discussion might result in an agreement in relation to the statement of agreed facts or at least a delineation of what is agreed and what is not agreed and may require oral evidence.

13. Accordingly, with the consent of the parties, I directed:-

(1) That the parties agree a statement of facts insofar as that is possible, before the next hearing.

(2) That in the areas where there was not agreement that the parties should particularise, as far as possible, the nature of the other evidence having regard to dates or issues that were discussed or witnesses that were involved.

(3) I expressed my concern that unless the matter was carefully delineated that the Pre-Hearing Review had the potential to take on a dimension comparable to the full hearing of this matter which was not desirable and similarly that there was a danger that the tribunal might be drawn into making factual findings which might impinge on the full hearing of this matter.

... .”

At the conclusion of the hearing, the claimant’s representative made an application for costs of the hearing on 7 April 2014, which will require to be addressed further in this decision.

Subsequently by letter dated 10 April 2014, the respondents’ representative also made an application for costs against the claimant in respect of the costs of the hearing on 7 April 2014. Again, it will be necessary to refer later in this decision to this application for costs by the respondents’ representative.

1.3 By Notice of Hearing dated 15 May 104 the pre-hearing review was arranged for 9 June 2014. Again, it became apparent that there was not agreement, by the date of the hearing, between the parties in relation to the statement of facts. Although there was considerable agreement in many areas, as shall become clear elsewhere in this decision, there remained disputes between the parties, in particular, in relation to what happened and/or the nature of various meetings that had taken place, prior to the meeting on 25 June 2013, including meetings on 5 March 2013; 8 and 9 May 2013. Indeed, it appeared from the submissions of both representatives that the particular area of factual dispute, for the purposes of this application, related to the meeting on 9 May 2013. As previously indicated by Employment Judge Greene, as set out in the Record of Proceedings dated 9 April 2014, of the hearing on 7 April 2014. I indicated to the representatives that, if these events on 5 March 2013, 8 and 9 May 2013, were to be relied upon by either party, in order to determine the preliminary issue referred to above, then I could not proceed to determine the preliminary issue at this pre-hearing review. It was apparent to me that these disputed factual issues, could only be determined at a substantive hearing and not at a pre-hearing review. In this context, I reminded the representatives of the guidance of the House of Lords in the case of SCA Packaging Ltd v Boyle [2009] UKHL 37, and, in particular, the judgment of Lord Hope when he stated:-

“9. It has often been said that the power that tribunals have to deal with issues separately at a preliminary hearing should be exercised with caution and resorted to only sparingly. This is in keeping with the overriding aim of the tribunal system. It was set up to take issues away from the ordinary courts so that they could be dealt with by a specialist tribunal as quickly and simply as possible. As Lord Scarman said in Tilling v Whiteman [1980] AC 1, 25, preliminary points of law are too often treacherous short cuts. Even more so where the points to be decided are a mixture of fact and law. That the power to hold a pre-hearing exists is not in doubt: Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 (SR 2005/150), Schedule 1, Rule 18. There are, however, dangers in taking what looks at first sight to be a short cut but turns out to be productive of more delay and costs than if the dispute had been tried in its entirety, as Mummery J said in National Union of Teachers v Governing Body of St Mary’s Church of England (Aided) Junior School [1995] ICR 317, 323. The essential criterion for deciding whether or not to hold a pre-hearing is whether, as it was put by Lindsay J in CJ O'Shea Construction Ltd v Bassi [1998] ICR 1130, 1140, there is a succinct, knockout point which is capable of being decided after only a relatively short hearing. This is unlikely to be the case where a preliminary issue cannot be entirely divorced from the merits of the case, or the issue will require the consideration of a substantial body of evidence. In such a case it is preferable that there should be only one hearing to determine all the matters in dispute.

10. In Chris Ryder v Northern Ireland Policing Board [2007] NICA 43, Kerr LCJ said:

“A number of recent appeals from decisions of the Fair Employment/Industrial tribunals have involved challenges to conclusions reached on preliminary points - see, for instance, Bombardier Aerospace v McConnell and Cunningham v Ballylaw Foods. While I do not suggest that the hearing of a preliminary issue will never be appropriate for determination by a tribunal, I consider that the power to determine a preliminary point should be sparingly exercised. It is, I believe, often difficult to segregate in a wholly compartmentalised way a single issue in this field from other material that may have relevance to the matter to be decided.”

I would respectfully endorse those observations. The problem in this case is not so obviously one of overlap or inappropriate compartmentalisation. Mrs Boyle’s complaint that she was subjected to harassment and aggressive and hostile treatment is a distinct issue, although it seems likely that the effects that this may have had on her, if established, will not be capable of being determined without the leading of more medical evidence. It is rather the cost and delay that has been caused by separating out those aspects of the case from the question whether she was a disabled person within the meaning of the Act. The separation of these two fundamental issues, which are likely to be present in many disputed disability discrimination cases, will rarely be appropriate even if the parties are in favour of it. Furthermore the decision to hold a pre-hearing review must not be regarded as the end of the process of case management. If separation is resorted to, every effort must be made to ensure that pre-hearing reviews are dealt with the least possible delay, bearing in mind that the merits cannot be addressed until the preliminary issues have been resolved in the claimant’s favour.”

1.4 It was apparent that the representatives, despite their continuing disagreement in relation to the factual issues relating to the meetings on 5 March 2013 and 8 and 9 May 2013, had prepared and were in agreement in relation to a statement of facts relating to the meeting on 25 June 2013. I could well see the merits of holding the pre-hearing review, as directed by the Vice President, and which the representatives had agreed, provided to do so did not conflict with the guidance in SCA Packaging Ltd. However, I made it clear to the representatives that I was only prepared to proceed to commence the pre-hearing review to determine the said preliminary issue on the basis of the agreed statement of facts relating to the meeting on 25 June 2013, together with the oral and written submissions of the representatives, which had been the agreed way to determine the preliminary issue, as set out in the Records of Proceedings of the previous hearings, referred to above. I also made it clear that if, during the course of the said submissions, it became clear to me that the said preliminary issue could not be determined at a pre-hearing review, in accordance with the guidance set out in SCA Packaging Ltd and that the disputed facts would require to be determined in order to determine the said preliminary issue, then I would not proceed to determine the preliminary issue at this pre-hearing review. I fully appreciated that not to determine this issue at the pre-hearing review would add difficulties for the tribunal at the substantive hearing, not least in relation to the contents of the witness statements which would be prepared and exchanged by the parties for the substantive hearing. These would inevitably include references to what took place at the said meeting on 25 June 2013. However, as seen in SCA Packaging, such difficulties sometimes have to be faced at a substantive hearing rather than taking the ‘unhelpful shortcut’ at a pre-hearing review.

Issues, in relation to the stage in proceedings when it is appropriate to determine such a preliminary issue, have been, in many cases, the subject of considerable debate, not least having regard to the issues raised in SCA Packaging, as referred to previously. Indeed, in Foskett on Compromise, Paragraphs 19 - 68 - 19 - 70, it is recognised that, if such a preliminary issue is not able to be determined before the substantive hearing, a Judge/Tribunal may require to do what has been described as ‘mental gymnastics’ in order to ensure exclusion of the material, if that is appropriate, from the final evaluation of the case. It is recognised that there are cases where it has been regarded as desirable to determine the issue of admissibility prior to the trial, since it can save a considerable amount of time and expense both in preparation for, and at, trial if inadmissible evidence is identified and exorcised early. Foskett also indicates that it may serve to pre-empt those rare cases where a party is, by having the issue determined by the Trial Judge, endeavouring to influence the judicial mind. Indeed, it is recognised that an application to exclude evidence of ‘without prejudice’ material, referred to in a witness statement or witness statements put forward by an opposing party, could give rise to situations where, if it is appropriate to do so, it may be helpful to make a determination on the admissibility of ‘without prejudice’ material, in such witness statements, prior to a substantive hearing. This is because, once determined, it will enable the parties to concentrate on deployment of the admissible evidence at the trial. However, it is also recognised that a decision to exclude evidence at an interim stage should only be made if the evidence is ‘plainly and obviously inadmissible’. Thus, I was confirmed in the view, which I expressed during the hearing, that taking into account the guidance in SCA Packaging but also the matters set out above, that I could only determine this preliminary issue at this pre-hearing review on the basis of the agreed statement of facts, as referred to elsewhere in this decision; and not if it involved any determination of the facts relating to the meetings in March and May 2013, the details of which were not agreed.

In the event, as set out below, I was able to resolve and determine the preliminary issue on the basis of the agreed statement of facts relating to the meeting on 25 June 2013 and after considering the oral and written submissions of the representatives and the various relevant extracts from the case law/text books to which I was referred by the representatives.

2.1 The following facts were agreed between the representatives in relation to the meeting between the parties on 25 June 2013:-

(i) On 25 June 2013, the claimant was called by the second respondent and invited to attend a meeting with him.

(ii) The claimant was not aware of the agenda or nature of the meeting in advance of attending.

(iii) The claimant drove to the front office and met Mr Cromie, he waited with Mr Cromie until the second respondent arrived. The parties engaged in general conversation.

(iv) In the presence of the second respondent, Mr Cromie explained to the claimant that they sought to engage in a ‘without prejudice’ meeting with him.

(v) Mr Cromie asked the claimant if he understood the meaning of this principle. The claimant sought clarification on the meaning of this term. Mr Cromie explained the meaning of ‘without prejudice’ to the claimant.

(vi) The claimant confirmed his understanding of the principle and agreed to continue.

(vii) The second respondent informed the claimant that he did not see a future for the claimant in the company and alleged that there were issues with the claimant’s conduct within the workplace. The second respondent informed the claimant of an example of the claimant’s conduct in question.

(viii) The claimant did not accept these allegations and proceeded to brand the second respondent a liar.

(ix) It was outlined to the claimant that as a result of the alleged issues with the claimant’s conduct, the respondent would proceed to commence the disciplinary process against the claimant. The respondent also outlined that a possible outcome to the disciplinary process would be dismissal, during the course of the meeting.

(x) As a result of the issues with the claimant’s conduct a number of options were discussed between the parties the first of which was the commencement of the disciplinary process which could result in the claimant being dismissed.

(xi) The respondent proceeded to offer the claimant a compromise agreement to terminate his employment with the company. The claimant was given two large brown envelopes which he was informed contained a generous offer for him to leave the company.

(xii) The claimant was informed of the timescales and implications of the agreement and was informed that he should seek independent legal advice in relation to the agreement.

(xiii) Mr Cromie informed the claimant that if the parties failed to reach an agreement and if the offer to terminate his contract of employment was not accepted, then the respondent would commence the disciplinary procedure in relation to the claimant’s conduct which could result in the claimant being dismissed.

(xiv) The claimant questioned the respondent’s actions on the basis that he had never received any prior warnings or been spoken to about any aspect of his work during his time with the company.

(xv) At the conclusion of the meeting the claimant was placed on paid extended leave effective immediately and was asked if there were any belongings he would like to take from his desk before the first respondent’s site. At the conclusion of the meeting, the claimant was informed that he should not speak to anyone in the company about the nature and contents of the meeting.

(xvi) The claimant did not accept the offer of the compromise agreement. The claimant lodged a grievance and subsequently commenced tribunal proceedings against the respondents, complaining of disability discrimination, detriment for asserting a statutory right, failure to provide written particulars of employment and breach of the Working Time Regulations 1998.

3.1 This is a difficult area of law, in which there has been much legal authority; but with the added difficulty that each reported case inevitably depends very much on its own facts.

In Privilege, 3^rd Edition by Colin Passmore, the learned author in his introduction to ‘Without Prejudice Communications’ (10-001), states:-

“This privilege enjoys similarities with legal profession privilege in terms of its effect in the communications made on a without prejudice basis are inadmissible in evidence before the English Courts. However, although its juridical basis, like that of legal professional privilege, is routed in public policy considerations, the without prejudice privilege differs from legal professional privilege in several respects. Not only is it not a fundamental right that is therefore immune from statutory powers of information gathering, but there are also several recognised exceptions to this privilege. Furthermore, and perhaps more strikingly, the without prejudice privilege arises in respect of communications between parties who are in dispute - and therefore the privilege can be waived with the consent of both parties to the protected communications. Herein lies the essence of the without prejudice privilege, which broadly operates so as to exclude evidence of all negotiations - whether oral or written - genuinely aimed at the settlement of a dispute between the parties to those negotiations from being given in evidence, whether in proceedings between those parties or in proceedings involving others, at least where the same or related issues arise.”

In the recent Employment Appeal Tribunal case of Dr Vladimir Portnykh v Nomura International PLc [2013] UKEAT/048/13, HH Judge Hand QC provided a useful summary of the law on this issue of ‘without prejudice’ communication:-

“16 In Unilever PLc v The Proctor & Gamble Company [2000] 1 WLR 2436 at 2441H to 2448G, there is, as one might expect of Robert Walker LJ, a fair analysis of the authorities on ‘without prejudice’ communications leading to a summary of the essential points. The ‘general approach’ in his judgment was described by Lord Hope at Paragraph 7 of his judgment in Ofulue v Brossert [2009] I AC 990 as providing valuable guidance and Lord Neuberger at Paragraph 89 of the same case described the judgment was invaluable. Whilst it would be wearisome for the reader to set it out in full a number of points can usefully be made by way of synopsis.

17 Firstly, the concept that ‘without prejudice’ negotiations are not inadmissible is an exception to the rule that admissions against interest are admissible and the exception rests on the public policy ‘ ... of encouraging litigants to settle their differences rather litigate them to the finish’ per Lord Griffiths in Rush and Thompkins Ltd v Greater London Council [1989] AC 1280 at 1299. In the same passage Robert Walker LJ quotes from the judgment of Clauson J in Scott Paper Company v Drayton Paperworks Ltd [1927] 44 RPC 151 at Page 156, where he said:-

‘The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations or settlement being brought before the Court of Trial as admissions on the question of liability.’

18 Secondly, in some circumstances the exception may rest on ‘the express or implied agreement of the parties themselves that communications in the course of their negotiations should not be admissible in evidence if, despite the negotiations, a contested hearing ensues. (See 2442D). Thirdly, the exclusion may not operate where it might lead to ‘some more powerful principle ... such as the need to prevent a litigant deceiving the court with perjured evidence’ (see 2442E) or where the exclusion would ‘act as a cloak for perjury’, blackmail or ‘other ambiguous impropriety’ (expression used by Hoffman LJ in Forster v Friedland) (see 2444G). Fourthly, the ‘rule’ has a ‘wide and compelling effect (see 2443H to 2444A)

Fifthly, in a number of other situations the ‘without prejudice’ label will not be effective to exclude the evidence (see 2444D to 2445H). Sixthly, the ‘without prejudice’ label cannot be ‘used indiscriminately so as to immunise an act from its normal legal consequences where there is no genuine dispute or negotiation (see 24448B)

19 Robert Walker LJ’s conclusion is at 2448H to 2449B:-

‘In those circumstances I consider this court should, in determining this appeal give effect to the principles stated in the modern cases ... whatever difficulties there are in a complete reconciliation of those cases, they make clear that the without prejudice rule in found at partly public policy and partly in the agreement of the parties. They show that the protection of admissions against interest is the most important practical effect of the rule. But to dissect out identifiable admissions and with whole protection from the rest of without prejudice communications (except for a special reason) would not only create huge practical difficulties that would be contrary to underlining objective of giving protection to the parties, in the words of Lord Griffiths in the Rush and Thompkins case ... ‘to speak freely about all issues of the litigation both factual and legal when seeking compromise and, for the purpose of establishing a basis of compromise, admitting certain facts’. Parties cannot speak freely at a without prejudice meeting if they must consistently monitor every sentence, with lawyers or patent agents sitting on their shoulders as minders.

20 The phrase ‘unambiguous impropriety’ appears to have been ‘coined by Hoffman LJ in Forster v Friedland [unreported - transcript number 1052 of 1992], according to Rix LJ in Savings & Investment Bank Ltd (in liquidation) v Finken [2004] 1 WLR 667 (see 669H). But, as the head note makes clear, in that case the Court of Appeal was at pains to point out that this exception should not be applied too readily. At Paragraph 57 to 63 of the judgment of Rix LJ (see Pages 864C to 868B) is another relatively long passage, which whilst better studied in full, can be summarised, for the purpose of this judgment, by saying that no matter how important the admission might be for the potential litigation, unless it can be said to arise out of an abuse of the privilege occasion, such as where it is made to utter ‘a blackmailing threat of perjury’ (see 684E) its significance alone cannot result in the admission being released from the cocoon of the ‘without prejudice’ exclusion and into the glare of the forensic arena.

... .”

In Framlington Group Ltd v Barnetson [2007] IRLR 598 it was held that for the ‘without prejudice’ exclusion to be effective there does not need to be extant litigation there only needs to be an extant dispute where the parties are conscious of the potential for litigation. Auld LJ stated at Paragraph 34:-

“However, the claim to privilege cannot, in my view, turn on purely temporal considerations. The critical feature of proximity for this purpose, it seems to me, is one of the subject-matter of the dispute rather than how long before the threat, or start, of litigation it was aired in the negotiations between the parties. Would they have respectively lowered their guards at that time and in the circumstances if they had not thought or hoped or contemplated that, by doing so, they could avoid the need to go to court over the very same dispute? On that approach, which I would commend, the crucial consideration will be whether in the course of negotiations the parties contemplated on might have reasonably have contemplated litigation if they could not agree. Confining the operation of the rule, as the Judge did, to negotiations of a dispute in the course of, or after the threat of litigation on it, or by reference to some time-limit set close before litigation, does not, with respect, fully serve the public policy interest underlining it of discouraging recourse to litigation and encouraging genuine attempts to settle whenever made.”

Auld LJ in Farmlington also noted that a particular area of caution in applying the privilege is in the context of employment law, where “vulnerable employees should not be subjected to a regime under which an employee’s protest against dismissal and all subsequent communications about it becomes immediately checked by the ‘without prejudice’ rule. This appears to be a reference to the Employment Appeal Tribunal’s ruling in BNP Paribas v Mezzotero where it was held that the mere raising of a grievance as discrimination by an employee did not put the parties ‘in dispute’.” It will be necessary to consider the decision in Mezzotero in more detail later in this decision.

In the further decision of the Employment Appeal Tribunal in the case of A v B and C [2013] UKEAT/0092/13, Mr Justice Keith stated:-

“9. The law about communications which are expressed to be ‘without prejudice’ or ‘off the record’ is tolerably clear. Communications which are made for the purpose of a genuine attempt to compromise an existing dispute and to avoid litigation arising from it will, generally speaking, not be admissible in evidence. The underlying policy behind the rule was expressed by Oliver LJ (as he then was) in Cutts v Head [1984] 1 Ch 290 at Pages 306C - G:

‘It is that parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of such negotiations … may be used to their prejudice in the course of the proceedings. They should … be encouraged fully and frankly to put their cards on the table … The public policy justification … essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability.’

10. It is important to note that calling your communications ‘without prejudice’ or ‘off the record’ is not necessarily decisive. The absence of words of that kind does not automatically mean that your communications will be admissible. If it is clear from all the circumstances that you are genuinely trying to compromise the dispute without resort to litigation, the normal rule will apply. Similarly, there are some circumstances in which the words ‘without prejudice’ or ‘off the record’ are used, but where the communications are nevertheless admissible. That commonly occurs where the communications set out the parties' respective cases but not for the purpose of attempting to settle the dispute without resort to litigation.

...

15. In my opinion, it was reasonably open to the employment judge to find that A thought that litigation was at least a possibility if a compromise could not be reached. I am less convinced that it was reasonably open to the employment judge to find that B and C thought that as well. Unlike A, they knew that A was not going to be dismissed, but that he would only be getting a final written warning. What were the ‘possible Employment Tribunal proceedings’ which they were seeking to avoid? The employment judge did not spell that out, but that does not matter, because the employment judge found in Paragraph 13 of his reasons that for the ‘without prejudice’ rule to apply, it was sufficient for just one of the parties to the negotiations [tribunal’s emphasis] to have been negotiating because they might reasonably have contemplated litigation if a compromise could not be reached. There has been no suggestion that such a view was erroneous in law.”

3.2 It was not disputed by the representatives that, if the details of the meeting are ‘without prejudice’, the fact that ‘without prejudice’ discussions have taken place on 25 June 2013 can be referred to but no more. As Foskett confirms, in Paragraph 19 - 12:-

“The question has arisen from time to time as whether an ‘opening shot’ or an intimation of a willingness to negotiate is similarly privileged. It is, perhaps, axiomatic that discussions cannot be treated as being ‘aimed at settlement’ if at the time they take place there is no dispute (or no extant dispute) to settle. The dividing line between that situation and one where the first tentative steps towards negotiations are taken may not always be that easy to determine ... .”

3.3 During the course of submissions by the representatives of both parties, reference was made to the decision of the Employment Appeal Tribunal in the case of BNP Paribas v Mezzotero [2004] UKEAT/0218/04, referred to previously in this decision. In that case, an employee initiated her employer’s grievance procedure shortly after her return from maternity leave, complaining that she had been demoted in her absence. She was told by her superiors to stay at home while the grievance was processed. Upon being invited back to work, she was asked to attend a meeting with two BNP representatives with whom she agreed to talk, at their request, on a ‘without prejudice’ basis. One of the issues the BNP representatives raised - but refused to express in writing - was a mutual termination of her employment, albeit on terms that the grievance procedure would continue to be followed.

In the event, her employment was not terminated but it became an issue as to whether she could refer to the proposal to terminate her employment made at this meeting in support of her sex discrimination claim that arose out of her grievance. At a directions hearing on this issue, the Employment Tribunal Chairman ruled that she could refer to it. This issue was then appealed to Mrs Justice Cox, who ruled on whether there existed a dispute to which the ‘without prejudice’ rule could attach. The employee’s employment had not been terminated at this stage and Cox J held that the act of raising a grievance did not by itself mean that parties, although in an employment relationship, were necessarily in dispute. She suggested that grievance procedures:-

“Are well recognised and well used in the workplace. They provide a mechanism whereby an employee who is aggrieved about a particular matter can raise it through appropriate internal channels. It may be upheld, or alternatively dismissed for reasons which the employee finds acceptable, so that the parties never reach the stage where they could properly be said to ‘in dispute’. ... Thus, in my judgment it can legitimately be concluded on the material before the Chairman, that the grievance did not raise any complaint that a decision had been taken to terminate her employment; rather than a move from the DCM Department; that the complaint was not that she had no job at all to return to, rather than she did not have her old job; that at the meeting on 7 January it was made clear the grievance was going to continue and was independent of any termination and there was no walk away package being offered ... .”

Dismissing BNP’s application for leave to appeal, Pill LJ though it arguable there was not an extant dispute in relation to the termination of the applicant’s employment by the time of the meeting. Preferring to see the circumstances as a whole and to adopt a general approach as to whether BNP could invoke the privilege, Pill LJ focused on the employer’s refusal to put into writing details of the termination package put to the employee at the meeting:-

“I simply do not understand how, if this was a genuine attempt at a ‘without prejudice’ discussion with a view to settling the case, BNP could refuse, as they did, to put the suggestion in writing. Indeed, their case would have been stronger had a properly worded letter been sent to her under a ‘without prejudice’ heading.” [2004] EWCA Civ 477

In reviewing the authorities, including the Mezzotero, HH Judge Hand QC in Nomura International PLc case, referred to previously, stated as follows:-

“22 At Paragraph 24 of her judgment Cox J says:

‘It is clear that for the rule to have any application at all, there must be a dispute between the parties and the written or oral communications to which the rule is said to attach must be made for the purpose of a genuine attempt to compromise.’.

Cox J concluded that it was open to the Employment Tribunal on the factual material to conclude that the act of raising a grievance meant there was no dispute about the termination of employment between the parties at the time of the meeting. In other words, she decided the case on the basis that whether or not there was a dispute raised no question of law on the facts of that case, [tribunal’s emphasis] and that it was open to the Employment Tribunal to decide the case in the way that it had done. The fact that the employment was not terminated but continued after the meeting may have been an influential factor. Also there is at least a hint at Paragraph 30 of the judgment that there was no real agreement between the parties as to the meeting being ‘without prejudice’ and concluding there was no agreement might have provided an alternative base for deciding the case. Plainly, whatever the basis for deciding the case (and it seems to me that the decision was really made on the basis that there was no dispute) that decision made it unnecessary to consider whether this might be a case where the exclusory rule might be subject to an exception ... .”

In the recent decision of the Employment Appeal Tribunal in the case of Woodward v Santander UK PLc (formerly Abbey National PLc) [2010] UKEAT/0250/09, HH Judge Richardson expresses similar views to those of HH Judge Hand QC in the case of Nomura International PLc, as expressed above and, in essence, that the BNP Paribas case in finding that there was no dispute/ extant dispute was a case on its own particular facts [tribunal’s emphasis].

3.4 As previously indicated, the ‘without prejudice’ privilege differs from legal professional privilege in that, as Lord Griffiths noted in Rush and Thompkins Ltd, it is possible to make use of ‘‘without prejudice’ material “for a variety of reasons when the justice of the case requires it”. However, this does not mean there exists a general discretion to admit evidence which would otherwise be excluded as being ‘without prejudice’ - rather there are a number of recognised exceptions. These, as Lord Griffiths said:-

“All illustrate the underlying purpose of the rule which is to protect a litigant from being embarrassed by any admission made purely in an attempt to achieve settlement.”

Passmore on Privilege (10-094 - 10-095) states:-

“These exceptions are more apparent than real, since - save on rare occasions - it is the fact of the negotiations, rather than their content, which is of interest to the Court.

Although the Court recognise these exceptions, and although the House of Lords has said that the categories of exceptions are closed (see Lord Rodger and Neuberger in Ofulue v Bossert), it also made clear that any new exception must be scrutinised with care and only be recognised if justice clearly demands.”

As previously referred to, in the Unilever decision, Robert Walker LJ said that:-

“One party may be allowed to give evidence of what the other said or wrote in ‘without prejudice’ negotiations if the exclusion of the evidence would act a cloak for perjury, blackmail or other ‘unambiguous impropriety’.”

This expression ‘unambiguous impropriety’ was first coined by Hoffmann LJ in Forster v Freeland [1992 - Unreported], in which he said that:-

“The value of the ‘without prejudice’ rule would be seriously impaired if its protection could be removed from anything less than unambiguous impropriety.”

The type of behaviour that falls within this exception is not always easy to discern; but in SIB Ltd v Fincken [2003] EWCA Civ 1630 it was made clear that the unambiguous impropriety exception is not ‘a broad and flexible rule’ and that therefore a high hurdle has to be overcome to set aside the privilege on this ground. However, it has to be recognised that, in the BNP Paribas v Mezzotero decision, Cox J in part of her judgment, which was clearly obiter since she had decided the matter on the issue of whether there was an extant dispute or not, also referred to this exception in terms which might be thought to have widened the exception, as previously interpreted in decisions such as SIB Ltd. Indeed, in the decision in the case of Woodward, HH Judge Richardson was of the opinion as set out in Paragraphs 58 - 63:-

“Reading the judgment in Mezzotero as a whole, we do not think that it establishes any new exception to the ‘without prejudice’ rule. In Paragraph 38 Cox J expressly stated that she would regard the employer’s alleged conduct as an exception to the ‘without prejudice’ rule ‘within the abuse of principle’ ... we doubt whether Cox J intended to say that it was unnecessary, in a discrimination case to find unambiguous impropriety. We appreciate that Paragraph 38 of her reasons, in which she refers to ‘the unattractive task of attaching different levels of impropriety, to fact-sensitive allegations of discrimination’ can be read in that way. But Cox J went onto say that she regarded the employer’s alleged conduct as ‘within the abuse principle’. We would observe that the policy underlying the ‘without prejudice’ rule applies with as much force to cases where discrimination has been alleged as applies to any form of dispute. Indeed the policy may be said to apply with particular force in those cases where the parties are seeking to settle a discrimination claim. Discrimination claims often place heavy emotional and financial burdens on claimants and respondents alike. It is important that parties should be able to settle their differences (whether by negotiation or mediation) in conditions where they can speak freely. The claimant must be free to concede a point for the purposes of settlement without the fear that if negotiations are unsuccessful he or she will be accused for that reason of pursuing the point dishonestly. A respondent must be free to adhere to and explain the position, or to refuse a particular settlement proposal, without the fear that in subsequent litigation this will be taken as evidence of committing or repeating an act of discrimination or victimisation. And it is idle to suppose that parties when they participate in negotiation or mediation, will always be calm and dispassionate. They should be able, within limits, to argue their case and speak their mind. What are the limits? To our mind they are best stated in terms of the existing exception of impropriety. This exception, as we have seen, applies only to a case where the tribunal is satisfied that the impropriety alleged in unambiguous. It applies only in the very clearest of cases. A Court or tribunal is therefore required to make a judgment as to whether the evidence which it is sought to adduce meets this test. Words which are ambiguously discriminatory will of course fall within the exception : see the example given by Cox J at Paragraph 37 of Mezzotero. It may at first sight seem unattractive, given the fact sensitive nature of discrimination cases, to exclude any evidence from which an inference of discrimination could be drawn. But it would have a substantial inhibiting effect on the ability of parties to speak freely in conducting negotiations if subsequently one or others could comb through the content of correspondence or discussions (which may have been lengthy or contentious) in order to point to equivocal words or actions in support of (or for that matter in order to defend) an inference of discrimination. Parties should be able to approach negotiations free from any concern that they would be used for evidence-gathering, or scrutinised afterwards for that purpose. ... .”

In the case of Nomura International PLc, HH Judge Hand QC also expressed doubts about the said obiter of comments of Cox J in BNP Paribas and also that Cox J appeared to be prepared to extend the list of exceptions so as to make discrimination cases an exception to the ‘without prejudice’ exclusion; rather than something to be dealt with on a case-by-case basis, considering whether on the facts there has been ‘unambiguous impropriety’. In Passmore (10-140) it is accepted that the Woodward case shows that the application of the unambiguous impropriety exception has been returned, in an employment/victimisation context, to its proper roots, and refers with approval to the judgment of HH Judge Richardson in Woodward as referred to above.

Indeed, as pointed out in Passmore (10-136) the decision in Mezzotero was not easily reconcilable with the approach of the Court of Appeal in the line of authorities such as Savings & Investment Bank Ltd v Fincken, referred to previously.

4.1 I have considered very carefully the agreed statement of facts in relation to the meeting on 25 June, in light of the authorities referred to in the previous paragraph. Applying those authorities to the agreed facts I have concluded the discussions and the details of same should not therefore be admissible in evidence, on the basis the said discussions were ‘without prejudice’; for the reasons set out in the following sub-paragraphs.

4.2 I am satisfied that, at the outset of the meeting, the respondents made it clear that the discussions were to be ‘without prejudice’. I have no doubt, on the basis of the agreed statement of facts, that the meaning of ‘without prejudice’ communications was properly explained to him. If it had been necessary to do so I would have concluded there, on the facts, was an express or implied agreement that the said discussions were to be ‘without prejudice’. I note that the claimant was not aware of the agenda or nature of the meeting in advance of attending. However, I am satisfied that the absence of such notification does not prevent the discussions being ‘without prejudice’ (see further A v B and C and Fosketh, Paragraph 9 - 12, referred to previously). Further, following the confirmation the discussions were to be ‘without prejudice’, the nature of the discussion which was to take place was outlined by the respondents. When the facts of what were discussed, as set out in the agreed statement, are considered, in my judgment, this is a ‘classic case’ of ‘parties speaking freely about all issues relevant to an employment dispute in a genuine attempt to seek a compromise (see Rush and Thompkins Ltd). From the outset of the discussion, it was apparent that the respondents, for their part, believed that there was dispute between the parties; which, if it could not be resolved at these discussions by means of a compromise agreement to terminate, by agreement, the claimant’s contract of employment the disciplinary procedure would have to be invoked and this could result in the claimant being dismissed by the respondents. As appears from the discussions, as set out in the agreed statement of facts, the claimant did not accept the respondents’ allegations about his conduct and subsequently the compromise offer made by the respondents. It is therefore apparent from the details of the said discussions that the parties were in dispute and both would have been fully aware of the potential for litigation if the matter could not be resolved (see Framlington). Clearly, as seen in Framlington, the respondents were hoping to avoid the need to go to tribunal. There is nothing to suggest, in the statement of agreed facts, the discussions were not a genuine attempt at settlement of this employment dispute, before the disciplinary procedure was invoked; with the possibility of dismissal and subsequent litigation, in a tribunal, if dismissal was the sanction imposed.

The Mezzotero case was, in my judgment, as confirmed by the various authorities referred to in the previous paragraph of this decision a particular case on its own particular facts. In this particular case, there may have been a grievance brought by the claimant but it was after the said meeting on 25 June 2013 and the discussions to resolve the dispute. On the facts, in my judgment, in the present case, as set out above, there was a dispute, whereas in Mezzotero, on its particular facts, no dispute was established.

4.3 Further, I could find nothing to show, in the agreed statement of facts, there was anything which would establish that what took place at the meeting on 25 June 2013 came within one of the recognised exceptions to the ‘without prejudice’ principle. In particular, there was nothing to show the evidence would act as cloak for perjury, blackmail or other unambiguous impropriety (see Unilever). It is apparent that it is a high hurdle to establish (see SIB). In particular, it would appear from the more recent authority, such as Woodward and Nomura International PLc, that Mezzotero has not established an exception for discrimination cases. Indeed, as seen in Woodward and Nomura International PLc, the judgment of Cox J was stated to be obiter; and, in any event, Cox J, in suggesting the exception of unambiguous authority applied, stated she did so ‘within the abuse principle’. Further, when considering the example given by Cox J at Paragraph 37 of her judgment of unambiguous authority, it is apparent that there is nothing contained in the agreed statement of facts of a similar nature. The fact that there was a disability discrimination element to this matter is not sufficient in itself, and without more, to establish the said exception of unambiguous impropriety. It must also be noted that Passmore, the leading textbook on Privilege (at Paragraph 10-136), as stated previously, acknowledged that Mezzotero was not easily reconcilable with the approach of the Court of Appeal in the line of authorities such as SIB.

4.4 In light of the foregoing and my said decision, I have therefore made, as a consequence, the said case-management orders, as set elsewhere in this decision.

5.1 I have referred previously to the decision of Employment Judge Greene at the hearing on 7 April 2014 to reserve to this tribunal the claimant’s application for an Order for Costs of the adjourned hearing on 7 April 2014. By letter dated 10 April 2014, the respondents’ representative raised a counter-application for an Order for Costs. In essence, both parties were blaming each other for the necessity for the said adjournment, with each saying that the conduct of the other and/or their representatives was unreasonable and, as a consequence, the tribunal should make an Order for Costs of the adjourned hearing on 7 April 2014.

5.2 Rule 40 of the Industrial Tribunals Rules of Procedure 2005, insofar as relevant and material, provides:-

“ (1) A tribunal or Chairman may make a Costs Order when on the application of a party it or he has postponed the day or time fixed for or adjourned a hearing under Rule 26 or pre-hearing review. The Costs Order may be made against or, as the case may require, in favour of that party as respects any costs incurred or any allowances paid as a result of the postponement or adjournment.

(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.

(2) 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.”

5.3 I have set out in a recent decision (Paul McBurney v Vemac Engineering Ltd [2014] NIIT - 3 April 2014) the relevant legal authorities in relation to an application for an Order for Costs under the above Rules. Save as set out below, I do not propose to repeat what I have stated therein for the purpose of determining the applications made at this pre-hearing review by the representatives of the claimant and the respondents.

In an application for costs for a Costs Order by a party arising from an adjourned hearing it is not necessary for the tribunal to be satisfied that one of the circumstances referred to in Rule 40(3) has been established. Indeed, even if, under Rule 40(2) and (3) of the Rules of Procedure, it has been established that the relevant party has satisfied the terms of Rule 40(3) - for example a finding of otherwise unreasonable conduct - the tribunal then has to consider, secondly and separately, whether to exercise its discretion to make an Order for Costs (see further Criddle v Epcot Ltd [UKEAT/0275/05]. Vaughan v London Borough of Lewisham & Others [2013] UKEAT/0533/12). Clearly, the tribunal, when deciding whether to make an Order for Costs under Rule 40(1) in relation to an adjourned hearing, is satisfied, for example, there has been unreasonable conduct by a party and/or their representative, this may be a relevant factor in the exercise of its discretion.

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 of Costs should be made stated:-

“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 Rules, which govern claims such as unfair dismissal/unlawful discrimination (see further the case of Gee v Shell UK Ltd [2003] IRLR 82).

In the recent decision of the Court of Appeal in the case of Barnsley Metropolitan Borough Council v Yerrakalva [2011] EWCA Civ 1255 Mummery LJ took the opportunity to review the authorities in relation to the issue of costs under the said Rules of Procedure. In the course of his judgment he stated, at Paragraph 41, that the vital point in exercising the discretion to order costs is to look at the whole picture of what happened in a case and in Paragraphs 7 - 9 of his judgment he repeated that costs are in the discretion of the Employment Tribunal and that 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. At Paragraph 49 of his judgment, Mummery LJ also made it clear that Orders for Costs are based on and reflect broad brush first instance assessments. In Sud v London Borough of Ealing [2013] EWCA Civ 949, Lord Justice Fulford, having reviewed the relevant authorities, again confirmed that an award of costs against a paying party in the Employment Tribunal is an exceptional event and that the Court should adopt a broad brush approach, against the background of the totality of the relevant circumstances.

5.4 Looking at the case-management history of this matter, as set out in the Records of Proceedings, and the agreement that was reached by the representatives, as set out in those records, in relation to how this pre-hearing review was to be conducted (namely by use of an agreed statement of facts), I consider, after hearing the submissions by both representatives that neither representatives, at the time of those Case Management Discussions fully appreciated what that would entail. Indeed, in particular, the task of agreement has proved far more difficult than had been anticipated by them. Despite genuine efforts by both counsel, including informal discussions between them ‘in the Bar Library’, up to and including the morning of the hearing on 7 April 2014, to agree a statement, this did not in the end prove possible. I am further satisfied that, as these discussions proceeded between counsel, there was not the necessary appreciation by each of them of the depth of disagreement on the facts between them and their clients, especially in relation to the meetings on 25 March 2013, 8 and 9 May 2013 and the consequences of such disagreement for the conduct of this pre-hearing review. Indeed, I suspect that this may have led to some further misunderstanding, between counsel, of their client’s respective positions at the commencement of the hearing on 7 April 2014. In this context, it is useful to have regard to the well-known dicta in the case of ET Marler Ltd v Robinson [1974] ICR 72, albeit a case on very different facts, when Sir Hugh Griffiths stated:-

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

I think there is an element of this in the circumstances that resulted, ultimately, in the adjournment of the hearing on 7 April 2014.

Indeed, despite further discussions between counsel since 7 April 2014, there was still not able to be obtained an agreed statement of facts about these meetings by the time of this hearing. Indeed, with hindsight, it would have been possible on 7 April 2014 to have proceeded with the hearing, as I had to do, on the basis of only the agreed statement of 25 June 2013 meeting; and without regard to the disputed facts relating to the meetings on 5 March 2013 and 8 - 9 May 2013. However, both representatives at the time of the hearing on 7 April 2014, no doubt for proper and good reasons, having regard to the terms of the overriding objective, agreed to the adjournment in order to try to agree a statement of facts on matters, which would include the disputed meetings. In these circumstances, I am not satisfied that either party and/or their representatives can be criticised for agreeing to adjourn the hearing on 7 April 2014, in order to try to agree a statement of facts which included agreement in relation to the said meetings; albeit it is now known that those attempts to reach agreement were ultimately to be unsuccessful. If it had been necessary for me to do so, I would not have found that the representatives and/or the parties, in the above circumstances, conducted themselves unreasonably. In any event, in the above circumstances, I am not satisfied, having regard to the authorities referred to above, that in the exercise of my discretion I should make any Order for Costs. Therefore, the application for an Order for Costs by the representatives of the claimant and the respondents are refused.

6.1 Arising from my decision, as set out above, in relation to the said preliminary issue, it is necessary, as set out below, to make further case-management directions/ orders to enable the substantive hearing to commence on 1 September 2014.

6.2 Firstly, although as indicated previously, reference can still be made in the course of these proceedings to the fact that there was a ‘without prejudice’ discussion/ meeting on 25 June 2013, albeit details of same are no longer admissible in evidence, it means that the copy of the claim form and response form, to be contained and used in the trial bundle for use by the parties and the tribunal at the substantive hearing, will be required, and I so order, to be redacted/amended to remove reference to the details of the said meeting. I will give the representatives an opportunity to agree the said redactions/amendments, in order to comply with the said order. However, in the absence of agreement, the parties must refer the matter back to the tribunal promptly and in accordance with the relevant Rules of Procedure and I will then arrange an urgent Case Management Discussion to enable me to make such further orders/directions as may be necessary to resolve any disagreement between the representatives. I hope this will not be necessary and, in this context, I remind the parties of the terms of the overriding objective.

6.3 Secondly, the timetable for the preparation and exchange of witness statements, as previously ordered, was not able to be complied with, until the said preliminary issue had been determined. The witness statements of the parties required, if necessary and appropriate, to comply with any determination by me of the said preliminary issue. It is further ordered therefore that since details of the discussions at the meeting on 25 June 2013 are not admissible, reference to the said details must be excluded from the witness statements of the parties.

In light of the foregoing, I therefore amend the previous case-management order made in this matter as follows:-

(1) Witness Statements

(a) The claimant and any witness he wishes to call must provide a signed and dated witness statement to the respondents’ representative by 5.00 pm on 11 July 2014.

(b) The respondents and any witnesses they wish to call must provide a signed and dated witness statement to the claimant’s representative by 5.00 pm on 1 August 2014.

(2) Bundles

Four bundles of all documents referred to in the index along with four copies of a further folder containing witness statements must be lodged in the Office of the Tribunals by 26 August 2014.:-

Save as set out above, all previous case-management directions/orders, in relation to the substantive hearing due to commence on 1 September 2014, continue to apply, in the absence of any further direction/order of the tribunal.

Employment Judge

Date and place of hearing: 9 June 2014, Belfast

Date decision recorded in register and issued to parties:

Notice

1. If any party fails and/or is unable to comply with any of the above Orders, any application arising out of such failure or inability to comply must be made promptly to the tribunal and in accordance with the Industrial Tribunals Rules of Procedure 2005.

2. Failure to comply with any of these Orders may result in a Costs Order or a Preparation Time Order or a Wasted Costs Order or an Order that the whole or part of the claim, or as the case may be, the response may be struck out and, where appropriate, the respondent may be debarred from responding to the claim altogether.

3. Under Article 9(4) of the Industrial Tribunals (Northern Ireland) Order 1996, any person who, without reasonable excuse, fails to comply with a requirement to grant discovery and inspection of documents under Rule 10(2)(d) of the Industrial Tribunals Rules of Procedure 2005 shall be liable on summary conviction to a fine not exceeding Level 3 on the standard scale - £1,000 at 3 September 2007, but subject to alteration from time to time.

4. A party may apply to the tribunal to vary or revoke any of the above Orders in accordance with the Industrial Tribunals Rules of Procedure 2005.