United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 336_94_2605

Appeal No. EAT/336/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 26th May 1994

HIS HONOUR JUDGE J HULL QC

MR J A SCOULLER

MRS P TURNER OBE

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MR U C MATHUR          APPELLANT

THE WELLCOME FOUNDATION LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised


 


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APPEARANCES

For the Appellant MR P NICHOLLS

(Of Counsel)

Messrs J W Saunders & Co

Solicitors

10 Cross Street

Erith

Kent

DA8 1TR


 


JUDGE J HULL QC: This is an appeal by Mr Umesh Chandra Mathur, a skilled computer expert and manager employed by the Respondents. He is a man of middle age now, about 53. His employment with the Respondents began on 1st February 1977; first purely as a computer expert, but then he rose in position and was responsible for a number of extremely successful projects. We do not need to go into the details of those.

He applied to the Industrial Tribunal and complained that he was being subjected to and had been subjected to racial discrimination. He was assisted in his case by the Commission for Racial Equality and made his complaint on the 1st March 1993.

The response from the Respondents was that they denied discrimination and the matter was pursued with skilled advice. Mr Mathur had Solicitors and Counsel instructed by the Commission and the Respondents, not surprisingly, were also well provided with Solicitors and Counsel.

The matter came before an Industrial Tribunal sitting at Ashford in Kent, presided over by Mr de Saxe and with two Industrial Members. The case first came on on 31st January 1994 and two days were devoted to the early stages of the case. It was expected that it would take ten days and it might perhaps have lasted longer. A large number of complaints were made and of course those would all have to be investigated, with the assistance again of Solicitors and Counsel. We know nothing of the merits of the case of course, apart from what we have been able to read, and are quite unable to say anything about that, but it may very well be that after two days it was becoming fairly obvious that there were difficulties here, merits there and demerits in other places and so forth, at any rate the learned Chairman expressed the strong view that he thought that the case should be settled if it could be settled and that it should not continue to the bitter end. He was entirely entitled to do that, he never suggested for one moment that he and his Tribunal would not continue with their task if they had to but he thought it in the interests of the parties that the case should be settled and he expressed that view. That view was taken seriously by Counsel on both sides, and the Solicitors, and there were negotiations and as a result of those negotiations there was an agreement entered into between the parties, which starts at page 4 of our papers, and it provided for compensation, for money to be paid; it provided for early retirement from his job by Mr Mathur and it was signed by Counsel on each side and by Mr Mathur himself. So that was an agreement which was entered into after negotiations. Among the provisions of the agreement there were terms that there should be "no publicity" for what was being agreed and there was also provision for a favourable reference to be given to Mr Mathur in the event of his asking for a reference in seeking further employment. On the basis of that agreement, perhaps I had better call it ostensible agreement, the parties went back before the Tribunal and told the Tribunal that they had reached settlement and so the Chairman and Members of the Tribunal made this Order by consent:

"Settlement having been agreed between the parties in accordance with the terms endorsed on Counsel's Brief, by consent this originating application is dismissed on withdrawal by the applicant."

and that was sent to the parties on the 4th February 1994.

Very shortly thereafter Mr Mathur claimed that his agreement had been procured by improper methods. He wrote on the 16th February 1994, that is at page 8,

"I wish to draw the attention of the Tribunal that the document settling the above complaint is in my belief void on grounds of:

1. the circumstances under which it had been drawn up

2. the inclusion of or non-inclusion of terms which render the document non-enforceable under the Race Relations Act 1976 and subsequent amendments.

I would like to place on record my grievance and request permission of the Tribunal to review the decision."

and the office of Industrial Tribunals, having of course consulted the Chairman, wrote on the 18th February 1994, at page 9,

"The Chairman refuses a review as having no reasonable prospect of success. The Tribunal's decision records a settlement reached by legal advisers - (the applicant's advisers being the Legal Officer of the Commission for Racial Equality and experienced Counsel instructed by her) - with authority to reach such an agreement. The application for a review is without foundation."

Mr Mathur was not content with that and, at page 10, he wrote on 24th February 1994 to the Secretary of the Tribunals and among other things he set out certain of the facts of the case and he said:

"The facts leading up to a settlement were:

a. The parties were directed by the presiding Chairman of the Tribunal in the case to reach a settlement . . .

d. . . . my position had been fully exploited by Wellcome by the duress and undue influence that was exercised and under which I agreed, through my counsel, to sign the contract, the terms of which I would not have agreed to voluntarily under normal circumstances."

Once again, the Chairman refused that, he said:

"with the advice of your lawyers, you entered into an agreement to settle the case. That agreement which bears your signature appears to be binding. On the basis of that settlement, the Tribunal issued a decision recording that the case had been settled. That decision cannot now be reviewed.

The Chairman agrees that he pointed out in strong terms the advantages to both parties of reaching a settlement if possible, but he also repeatedly made it clear that the Tribunal was ready to hear the case to a conclusion if settlement could not be reached."

Mr Mathur made another complaint to the effect he was not being paid under the agreement in respect of his notice period. In fact what had happened was that under the agreement he was entitled to a certain amount of further employment without actually being required to carry out any duties. That complaint, standing by itself, could not, it seems to us in any way affect the matter.

He said in his Notice of Appeal that he was persuaded to the point of coercion to enter into the agreement. He complained of economic duress.

He now appeals to us against the consent order and, secondly, he says that he wishes to appeal too against the refusal of the Chairman of the Tribunal to grant a review of the "decision", as it is put, to make the consent order. We have to consider whether this contention is admissible in law.

We have been very greatly assisted by the argument of Mr Nicholls, who came into the case late, and most certainly was not present at the Industrial Tribunal. Mr Nicholls was only instructed yesterday, or the day before, and he has prepared a very helpful skeleton argument for us. Mr Nicholls has made it plain to us that in fact the duress and coercion of which Mr Mathur complains was exerted upon him by his own Solicitor and Counsel telling him he must settle. There was no alternative.

Of course his Counsel and his Solicitor were there to protect him against any improper suggestions or influence brought to bear by the other side and if they did not do that then they were acting in breach of their duty. So what is said now is not that it was Wellcome Foundation Limited, through their Counsel and Solicitors, who exercised this undue influence and coercion, it was his own Counsel and Solicitors. Those were the circumstances, it is said, which led to the agreement being entered into.

We were referred to authority, in particular to Hennessy v. Craigmyle [1985] IRLR 446 EAT. That was a very different case on its facts. Mr Hennessy had entered into an agreement under which he had excluded his right to apply to the Industrial Tribunal, and then he did apply to the Industrial Tribunal and it was suggested by him that he was entitled to proceed with his application to the Tribunal because his agreement had been obtained by duress. This Tribunal heard a submission that because of the provisions of Section 140 of the Employment Protection (Consolidation) Act 1978 the doctrine of economic duress had no application. That was wrong, said this Tribunal: the word "agreement" in Section 140 is subject to all the qualifications by which an agreement can be avoided at common law. They said, of course, that the circumstances must be quite exceptional. Coercion, whether economic or of any other sort, must (if it is to amount to duress) be such as to deprive the opposite party of his will and to leave him with the clear position that he has no alternative but to accept what is being thrust upon him. In the Court of Appeal the same decision in effect emerged, that is reported in [1986] IRLR 300 Lord Donaldson said at p.304, paragraph 17:

"This leaves the issue of econmic duress. It appears from the opinion of the Judicial Committee of the Privy Council delivered by Lord Scarman in Pao On v. Lau Long (1980) AC 614, that in the last century there was doubt whether the common law recognised economic or commercial duress, as contrasted with duress to the person, as a ground for avoiding a contract. However, the common law is a living thing. Its principles may not change, but its application conforms to changing circumstances. Economic duress has been recognised as a potential ground for avoidance [and he referred to two important cases]. However, like the well-established duress to the person, it is a ground for avoidance only if the duress is such that the will of the contractor [he means the other party to the contract] is overborne. His consent must be vitiated."

and of course they then considered the facts of the case.

That was a quite different case because the agreement which had been entered into was entered into before the application had been made to the Tribunal and here, on any view, the application had been made to the Tribunal. The Tribunal had embarked on the consideration of it and the Tribunal had heard a good deal about the case. It appears to us that as a matter of principle a party cannot be heard to say, after accepting a consent order, "I was coerced and overborne by my own Solicitor and Counsel". It is an allegation which amounts to bad faith and what is said by Mr Nicholls, not beating about the bush, is that there was a conflict of interest which led this barrister and this solicitor to act contrary to the interests of their client and give him advice which was wrong advice and coerce and overbear him so that he entered into this agreement and so that he then consented to the consent order which was made. It appears to us that to have effect in law or equity coercion and duress, Mr Nicholls used the phrases interchangeably, must be something which proceeds from the other side and it seems to us as a matter of law that to say that one's own counsel and solicitor used these unfair and improper methods against one and thus deprived one of one's will is not something which is maintainable against the opposite party. Secondly, we have considered with Mr Nicholls' assistance what is said in the case of Larkfield of Chepstow v, Milne [1988] ICR 1. In that case (I will not go through all the facts) this Tribunal, presided over by Garland J., at the end of its judgment asked themselves a third question:

"(iii) if the agreement to which a consent order relates can be attacked, can the consent order also be attacked?

The answer must be `yes' because the consent is as vulnerable as the agreement."

Mr Nicholls concedes that that was an obiter dictum, however important, and he also agreed that it was right for us to look at what was said above. This Tribunal, in that case, cited from what was said by Slynn J in the case of Eden v. Humphries & Glasgow Ltd [1981] ICR 183 EAT. Mr Justice Slynn, as he then was, said:

"Now, as we understand the position in the High Court, from looking at `The Supreme Court Practice (1979) vol. 2, paras.2015 and 2016 under the heading `Compromise,' if an action is compromised then the compromise can only be set aside by a separate action and on certain limited grounds."

It is, to us, wholly unacceptable and, indeed, an impossible thing that a party who has with the advice of solicitor and counsel entered into an agreement compromising a suit, which agreement has included a consent order, should come along unilaterally, without any evidence relating to the matter, either from the other side or his own side, and tell the court or tribunal that it should set aside the consent order on the ground that he has been ill used by his own solicitors and counsel, or indeed ill used by the other side. If that were permitted then no consent order would be safe. It appears to us that the whole point of a compromise with the aid of legal advice, and with the court's order made on the basis of that compromise, is that it should be secure and something on which the parties can then base their future actions. If the underlying agreement is to be set aside then that must be by a separate action. It would be insufferable if a party could say things of this sort about his own solicitor and counsel without the court or the tribunal hearing from that solicitor and that counsel as to exactly what had passed; for it is on the faith of their integrity that the tribunal allows such things to happen and makes its order.

It may well be that if a party has such serious complaints to make against his own legal representatives he will have an undoubted and extremely serious action against them and can certainly make complaints of a professional sort against them to the appropriate professional bodies. Those representatives will, of course, have an opportunity to say what their side of the story is. Two things we are clear about; first of all that a complaint that a consent order should be set aside on the basis that one's own solicitor and counsel have misbehaved in reaching the settlement is not to be entertained by any court. Secondly, that if there is a complaint that an agreement is improper or void for any reason that must be asserted and established in separate proceedings and one cannot go along to the court which made the consent order in the first place and say, "my agreement was vitiated by duress, coercion", whatever one calls it, "please grant a review of the decision".

We can find no error of law here on the part of this Industrial Tribunal in making its consent order and no error of law by the Tribunal in refusing to set aside the consent order. We have contemplated other courses which may be available to Mr Mathur; those of course are entirely matters for him. It suffices to say that for the moment we cannot allow this case to proceed because it appears to us that no arguable point of law arises and we therefore dismiss the appeal.