Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF:  408/15

 

 

 

CLAIMANT:                          Anthony Williams

 

 

RESPONDENTS:               1.         De La Salle College

                                                2.         Education Authority

 

 

 

DECISION ON AN APPLICATION FOR COSTS

The claimant is ordered to pay the sum of £2,000 in respect of costs to the respondent.

 

Constitution of Tribunal:

Employment Judge (sitting alone):       Employment Judge McCaffrey  

 

 

1.            The parties lodged written submissions in this case and were given the opportunity to comment on each other’s submissions. The claimant indicated that he was in Italy and did not propose to travel to Northern Ireland for any costs hearing which might be convened. The respondents’ representative indicated they were content for the matter to be dealt with by written submissions so as to avoid additional costs. Accordingly, I dealt with the application on the papers.

 

2.            The respondents made an application for costs against the claimant following the dismissal of the claimant’s claim of breach of contract by decision of the tribunal issued on 1 December 2015.  The claimant had originally lodged claims of unfair constructive dismissal and unlawful discrimination on grounds of his sexual orientation, which were withdrawn on 9 October 2015, just a month before the case was listed for hearing.  On 15 October 2015 the respondents’ solicitors sent a costs warning letter to the claimant’s solicitor indicating that in their view the actions of the claimant in the late withdrawal of the claims for constructive dismissal and sexual orientation discrimination combined with the maintenance of the breach of contract claim were vexatious, unreasonable and misconceived.  They set out a number of reasons why they considered that this was the case.  They stated that there were issues of credibility and evidence and that in the light of this the respondents believed that the claimant would fail in his action for breach of contract.  The letter concluded by inviting the claimant to withdraw all claims advanced and indicating that if the claim was not withdrawn and the claimant proceeded with his breach of contract claim and was unsuccessful, the respondents would make an application for costs up to the maximum amount of £10,000.

 

3.            The claim proceeded to hearing. In my decision I found that the claimant was not an employee of the respondent in relation to his work as a Sports Hall Manager.  Secondly, I found that even if he were an employee, I was not satisfied that he was entitled to the amount claimed for the reasons set out at paragraphs 25-34 of that decision.  It is relevant to note that in a number of important respects the claimant’s evidence was not accepted and the evidence of other witnesses was found to be more credible. 

 

4.            Following the hearing the respondents’ representative made an application for a costs hearing.  The parties were directed to exchange written submissions on the question of costs by 1 March 2016 and were given the opportunity to comment on each other’s submissions.  The respondents’ representative sent in written submissions setting out the history of the matter and details of relevant case law.  The claimant sent an email setting out his position and declining to give any information in relation to his means.  He attempted to introduce further evidence which had not been given at the hearing in his email and suggested that the claim for costs on the part of the respondents was vindictive. 

 

THE RELEVANT LAW

 

5.         The tribunal’s power to award legal costs is set out in the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 (“the 2005 Rules”).  The general power to make a costs order is set out in Schedule 1 at Rule 38.  I was specifically referred to the provisions of Rule 40, the relevant parts of which state as follows:-

 

                        “(2)      A tribunal or [employment judge] shall consider making a costs order against a paying party where, in the opinion of the tribunal or [employment judge] (as the case may be), any of the circumstances in paragraph (3) apply.  Having so considered, the tribunal or [employment judge] may make a costs order against the paying party if it or he considers it appropriate to do so.

 

                        (3)        The circumstances referred to in paragraph (2) above 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”. 

 

            “Misconceived” is defined at Regulation 2 as including “no reasonable prospect of success”.

 

6.         The tribunal’s jurisdiction in relation to costs is outlined in Harvey on Industrial Relations and Employment Law Division P1 (Practice and Procedure) at paragraph 1044 and following.  Harvey emphasises that, despite changes which have extended the tribunal’s powers to make orders for costs considerably, the fundamental principle remains that costs are the exception rather than the rule and that costs do not automatically follow the event in Employment Tribunals (McPherson v BNP Paribas (London Branch) [2004] EWCA Civ 569 at paragraph 2; and Barnsley Metropolitan Borough Council v Yerrakalva [2011] EWCA Civ 1255 at paragraph 7). 

 

7.         Tribunals must apply a two stage test to an application for costs.  First of all, they must consider whether the relevant party’s behaviour falls within Rule 40(3).  Secondly, they must consider whether it is an appropriate case in which they should exercise their decision to make a costs order.

 

Misconceived Claims

 

8.         Where there is an allegation that a claim is misconceived, the test to be applied in deciding whether or not to make an award of costs is more than a simple objective assessment of whether the claimant knew or ought to have known that his or her claim lacked substance or merit.  The tribunal must look not just at the proceedings themselves but also at the claimant’s conduct in bringing or conducting the proceedings.  The type of conduct which would be considered unreasonable by a tribunal would obviously depend on the facts of the individual case; there is no hard and fast principle applicable to every situation (Harvey, paragraph 1083).  In Cartiers Superfoods Ltd v Laws 1978 IRLR 315 Phillips J considered it was necessary “to look and see what the party knew or ought to have known if he had gone about the matter sensibly”.  In particular, if there was nothing in the evidence to support the allegations being made, this will involve an assessment of the reasonableness of bringing the proceedings, including a consideration of the question of whether a claimant ought to have known that there was no such important material.

 

Unreasonable Conduct

 

9.         Harvey (see paragraph 1064), indicates that “unreasonable” conduct includes conduct that is vexatious, abusive or disruptive.  The discretion of the tribunal is not fettered by any requirement to link the award causally to the particular cost which has been incurred as a result of specific conduct which has been identified as unreasonable.  In McPherson, Mummery LJ stated:-

 

                        “The principle of relevance means the tribunal must have regard to the nature, gravity and effect of the unreasonable conduct as factors relevant to the exercise of the discretion, but that is not the same as requiring [the receiving party] to prove that specific unreasonable conduct by [the paying party] caused particular cost to be incurred.”

 

10.      Subsequently in Yerraklava, he stressed that this passage in McPherson was not intended to be interpreted as meaning either that questions of causation are to be disregarded or that tribunals must dissect the case in detail and compartmentalise conduct.  As he observed:

 

                        “The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and ask whether there has been unreasonable conduct by the 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.”

 

11.      He also observed that:

 

                        “a costs decision in one case will not in most cases predetermine the outcome of a costs application in another case: the factors of the case will be different, as will be the interaction of the relevant factors with one another and the varying weight to be attached to them”.

 

12.      Harvey emphasises that when considering whether costs should be awarded on the grounds of unreasonable conduct, it is the conduct of a party in bringing or defending a claim, or in continuing to pursue the claim or defence, that can give rise to an award and not conduct occurring before the institution of proceedings (see paragraph 1066). 

 

Vexatious Claims

 

13.      The classic definition for vexatious claims is found in the case of ET Marler Ltd v Robertson [1974] ICR72 as follows:-

 

                        ... “[Where] an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some other improper motive, he acts vexatiously.”

 

14.      The Court made it clear that 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 be sparingly exercised ...”.

 

15.      In the case of HM Attorney General v Bentley [2002] (UKEAT/0556/11) the tribunal referred to the judgment of Bingham CJ as follows:-

 

                        “The hallmark of vexatious proceedings 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 gain likely 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 in a way that is significantly different from the ordinary and proper use of the Court process.”

 

16.      In this respect the respondent pointed to the claimant’s failure to comply with discovery obligations which required additional Case Management Discussions.  There was also an issue in relation to the dates for hearing and confusion which was compounded by the claimant’s decision to book his flights for certain dates when the dates for hearing had not been finally agreed either between the parties or by the tribunal.  This caused disruption for a number of the respondents’ witnesses who had to re-arrange their diaries to attend the hearing.

 

The Means of the Claimant

 

17.      The case of Jilley v Birmingham and Solihull Mental Health NHS Trust [UKEAT/0584/06] emphasises the importance of taking account of a claimant’s means, although lack of means to pay is not a barrier to a costs order being made.  The judgment states as follows:-

 

                        “53.  The first question is whether they [the tribunal] should take the ability to pay into account.  The tribunal has no absolute duty to do so.  As we have seen if it does not do so, a County Court may do so at a later stage.  In many cases it will be desirable to take means into account before making an order; ability to pay may affect the exercise of an overall discretion, and this course will encourage finality and may avoid lengthy enforcement proceedings.  But there may be cases where for good reason ability to pay should not be taken into account; for example, if a paying party has not attended or has given unsatisfactory evidence about means.”

 

REASONS AND DECISION

 

18.      The claimant lodged his claim in the Office of the Industrial Tribunals and Fair Employment Tribunal on 5 March 2015. The claim was eventually heard in November of the same year.  The claimant was represented throughout by solicitors and was represented by counsel at the hearing.  This is not therefore a case where the claimant came into tribunal making a case without the benefit of legal advice. The claimant decided not to pursue his sexual orientation discrimination claim and unfair dismissal claim just a few weeks before the hearing, although whether this was on the basis of legal advice or not is not clear.  The claimant infers in his email sent to the tribunal in relation to this costs hearing that the main consideration was costs, but that in his belief he had a good claim.  At this stage, it is not necessary to consider whether or not he did have a good claim on those issues; the only issue is whether his claims were misconceived or he acted unreasonably or vexatiously in pursuing them. 

 

19.      I am conscious also that an application for costs requires a two-stage consideration.  First of all I must consider whether the relevant partys’ behaviour falls within Rule 40(3) of the 2005 rules. Secondly, I must consider whether it is an appropriate case in which to exercise my discretion to make a costs order. 

 

20.      In relation to the claims of sexual orientation discrimination and constructive dismissal, I did not hear evidence on these matters and so it is difficult to make a definitive assessment of whether or not the claims were misconceived within the definition set out at Regulation 2 as including “no reasonable prospect of success.”  However it is relevant to note that the claimant’s initial claim form to the Industrial Tribunal set out a lengthy history of issues that had occurred.  The sum total of his claim in relation to sexual orientation discrimination was as follows:-

 

                        “I am an openly gay man and I do not attempt in any way to hide my sexuality.  I had heard rumours that Claire White had taken issue with other gay work colleagues whilst at a previous post.  I was also told that Claire White is a devout follower of Opus Dei and is therefore in opposition to homosexuality.  Although she never said or did anything directly to suggest she was opposed to my sexuality, I felt as did other colleagues, that she solely targeted and harassed me.  It was due to this negative focus of her energy towards me that ultimately forced me to resign.  Moreover I had to take a leave of absence due to the negative effect of the continuous harassment and bullying on my health”

         

21.      There was therefore no direct evidence of discrimination on grounds of the claimant’s sexual orientation in his claim form. Indeed set against the context of the severe financial difficulties in which the school found itself, an audit and an examination of how staff were being paid for additional duties seems entirely proper.  Moreover the claimant - who had responsibility for some of the financial management of the Sports Hall Complex - was questioned in relation to his role and seems to have regarded this as “an interrogation” as opposed to a proper audit undertaken in accordance with accepted rules of financial management. Not only was there no case of sexual orientation discrimination made out in the claimant’s ET1, but the respondent set out an explanation innocent of discrimination in its response.

 

22.      As far as the claim of constructive dismissal is concerned, while it is mentioned in the claim form, there is no detail set out of the alleged repudiatory breach or breaches of contract which would have entitled the claimant to resign. It is therefore difficult to see how that claim could have been sustained.

 

23.      As far as the claimant’s breach of contract is concerned, it is fair to say that there was a question mark over whether the claimant was legally an employee of either respondent in relation to his duties at the Sports Hall Complex as Manager.  However it was made clear in the decision that even if I had erred in law in finding that he was not an employee, I was not satisfied on the facts found that there was a contract between him and either of the respondents in relation to the sum of money he was claiming.  The decision also makes it clear that it is difficult to understand the basis on which the claimant says he believed that he was entitled to this amount, given that it was made clear to him that there was to be a recruitment process for the post of Sports Hall Manager and that he would have to compete for the post. I am conscious from the decided case law and in particular the case of Cartiers Superfood Ltd v Laws (see paragraph 8 above) that it is necessary to look and see what the party knew or ought to have known if he had gone about the matter sensibly.  There is nothing in the evidence in this case in my view to support the allegations of breach of contract made by the claimant.  Given that he was aware that there was an audit going on within the school, that he was aware that the post of Sports Hall Manager had to be evaluated and would be advertised, the claimant cannot reasonably have considered that he had effectively been appointed to the post and was going to have the sum claimed backdated and paid to him.  The claimant was already the ICT Manager of the school, so he was familiar with the recruitment process and must have known that the principal of the school did not have authority to “hire and fire” staff.  He was also aware that the school was in the process of having an audit carried out and the acting principal had clearly told him the process which had to be pursued in relation to the Sports Complex Manager’s post.  In light of all this, and the fact that the claimant had the benefit of legal representation, he ought to have known his claim for breach of contract was deeply flawed.

 

24.      It also seems curious that the claimant resigned his job in early January 2015 after a period of sick leave which had followed a meeting with the auditors from the Education Authority.  He took up a new post in Milan with effect from 7 January 2015 and did not pursue any grievance in relation to the question of the alleged contractual payment, although he was expressly offered this opportunity by Mrs White the school principal. 

 

25.      I also take into account that the respondent alleges that the claimant’s behaviour was “unreasonable”, including conduct which was vexatious, abusive or disruptive.  The claimant’s behaviour in the conduct of the case certainly appears to have been unhelpful in that there were delays in producing documentation as ordered by the tribunal and witness statements were not produced as originally directed.  Further, the dates for the hearing had to be rearranged as the claimant unilaterally booked flights for dates which had not been agreed either by the respondents’ representatives or by the tribunal, which gave rise to some difficulties in relation to the hearing, requiring further Case Management Discussions and involving increased cost for the respondent. I am satisfied that the claimant has behaved unreasonably in these matters and that the proceedings were misconceived for the reasons set out above.

 

26.      The remaining question is whether this is an appropriate question in case in which to exercise the discretion to award costs. I accept that the claimant’s behaviour in pursuing claims of constructive unfair dismissal and sexual orientation discrimination put the respondents to additional costs in having to prepare to defend these claims and that these claims were withdrawn a relatively short time before the hearing.  As a result of the withdrawal however, the hearing took three as opposed to the eight days originally set aside for it.  I am mindful, too, that the claimant’s behaviour in failing to produce the necessary documentation and to provide witness statements on time (or at all) necessitated a further Case Management Discussion and that there also had to be a Case Management Discussion in relation to the question of the actual dates for hearing, as set out above.

 

27.      The claimant gave no detail of his present means in his submissions, except to say that he was now maintaining an apartment in Milan where he works, as well as a home in Belfast. His claim form gave his net salary in his new job as £2,900 per month, compared to £1,700 per month when he worked for the first respondent.

 

28.      I am also conscious of the directive given in case law that any award of costs should be compensatory in nature and not punitive.  While the respondents have set out in detail the level of the costs incurred by the respondents, and argue that these exceed the £10,000 limit which the tribunal is empowered to award under Rule 41 of the 2005 Rules, it is not clear to me that this is in fact the case, as it is not clear whether or not there is VAT on the solicitor’s legal costs.  However, while it is my view in this case that it is appropriate to make an award of costs in favour of the respondents because of the claimant’s delay in complying with tribunal orders, his lack of consideration and communication regarding hearing dates and the fact that he put the respondents to considerable additional time and trouble in preparing to defend claims which were withdrawn late in the day, I consider that the additional work for the respondents does not warrant an award of £10,000 or anything close to that figure.  In my view, the respondents are entitled to be compensated for some of the preparatory work done in preparing to defend the claims which were not pursued and in relation to two additional Case Management Discussions which had to be arranged because of the claimant’s failure to comply with the tribunal’s directions and to rearrange dates for the hearing. Accordingly, I consider that it would be appropriate to make an award of £2,000 in respect of costs and the claimant is ordered to pay this amount to the respondents accordingly.  

 

 

 

 

Employment Judge:

 

 

Date decision recorded in register and issued to parties: