United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 460_94_2610

Appeal No. EAT/460/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 26th October 1995

THE HONOURABLE MR JUSTICE MUMMERY (PRESIDENT)

(IN CHAMBERS)

(MEETING FOR DIRECTIONS)

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MR T D PENTON          APPELLANT

LONDON BOROUGH OF TOWER HAMLETS           RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant's Solicitors MR M MAITLAND-JONES

(Of Counsel)

Instructed by -

Messrs Henchleys

Solicitors

39a High Street

Littlehampton

West Sussex BN17 5EG

For the Respondents MR P T ROSE

(Of Counsel)

Instructed by -

MR E GAWLICK

Solicitor

Tower Hamlets

Legal Services

Mulberry Place

5 Clove Crescent

LONDON E14 2BG


 


MR JUSTICE MUMMERY (PRESIDENT)

The Issue

This is a preliminary issue on jurisdiction in an application for costs following an unsuccessful appeal to the Employment Appeal Tribunal. The question is whether the Employment Appeal Tribunal has jurisdiction to order a legal representative of an unsuccessful appellant to pay personally costs, or part of the costs, incurred by the respondent to the appeal. Jurisdiction to make "wasted costs" orders has been conferred on the Court of Appeal, the High Court and the County Court pursuant to the provisions of S.51 of the Supreme Court Act 1981, as amended by the Courts and Legal Services Act 1990. Whether that power is enjoyed by this Tribunal depends on the interpretation of the Employment Protection (Consolidation) Act 1978 and the Rules made under it.

Background

It is not necessary to examine in detail the circumstances in which the application for costs is made. The fate of the appeal brought by Mr Penton against the decision of the Industrial Tribunal held at London (North) in December 1992 and April 1993 was fully recounted in the judgment given by this Tribunal when the appeal was dismissed on 4th May 1995. In dismissing the appeal, on the ground that there was no error of law in the decision of the Industrial Tribunal and no perversity or misconduct by the Tribunal in dealing with Mr Penton's claim, Judge Hull QC referred to what he described as the "lamentable condition" of the appeal which was "quite hopeless". No Skeleton Argument had been provided in support of the appeal. No attempt was made to put before the Appeal Tribunal documents which had been before the Industrial Tribunal. No amendments had been made to the Notice of Appeal to identify exactly how the appeal was to be advanced. Counsel was only instructed on the morning of the hearing, even though a year had passed since an order was made on 16th May 1994 extending the time for serving a Notice of Appeal.

In those circumstances an application was made by the Respondent Borough of Tower Hamlets at the conclusion of the appeal for an order for costs against Mr Penton's solicitors. On the application for a "wasted costs order" Judge Hull QC directed that the solicitors should make written submissions, including a chronology of the actions taken on behalf of Mr Penton, and should indicate whether they wished the matter to be decided on written submissions alone. They were asked to provide a copy of the written submissions to the Borough of Tower Hamlets. On 18th May 1995 the solicitors wrote a letter to the Appeal Tribunal giving a chronological account of their involvement in the relevant events, with supporting documents attached. At the end of the letter the solicitors apologised for any inconvenience caused to the Tribunal and added -

"With respect we believe that the Court and Legal Services Act 1990 applies to the Court of Appeal, High Court and County Courts but not to the Employment Appeal Tribunal which was established pursuant to statute."

Another letter followed on 8th June 1995 stating that they had taken counsel's opinion and that he was of the view that there was no provision which empowered the Employment Appeal Tribunal to make the order for costs requested. In those circumstances the Registrar indicated that the matter would be set down for hearing for directions and that that would include the preliminary issue on jurisdiction to make a wasted costs order against the representative of a party to an appeal.

Common Ground

On the hearing of this preliminary point Mr Rose appeared for the Borough of Tower Hamlets. Mr Maitland-Jones appeared for Mr Penton's solicitors. In the course of their excellent arguments some common ground emerged:

(1) There is no jurisdiction to make an order for costs against a representative under the Employment Appeal Tribunal Rules 1993. Those Rules were made by the Lord Chancellor in the exercise of powers conferred on him by S.154(3) of the Employment Protection (Consolidation) Act 1978 and under certain paragraphs in Schedule 11 to the 1978 Act relating to the membership, proceedings and powers of the Employment Appeal Tribunal. In paragraph 17(1) it is provided that -

"The Lord Chancellor, after consultation with the Lord President of the Court of Session, shall make rules with respect to proceedings before the Appeal Tribunal."

Paragraph 18 provides that -

"Without prejudice to the generality of paragraph 17 the rules may include provision "[with respect to specific matters such as the time for appealing, the power to require persons to give evidence and produce documents and for dealing with interlocutory proceedings.]

Paragraph 19 provides that -

"(1) Without prejudice to the generality of paragraph 17 the rules may empower the Appeal Tribunal to order a party to any proceedings before the Tribunal to pay to any party to the proceedings the whole or part of the costs or expenses incurred by that other party in connection with the proceedings, where in the opinion of the Tribunal -

(a) the proceedings were unnecessary, improper or vexatious, or

(b) there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings.

(2) Except as provided by sub-paragraph (1), the rules shall not enable the Appeal Tribunal to order the payment of costs or expenses by any party to proceedings before the Tribunal."

Rule 34 of the 1993 Rules provides for costs or expenses in the following terms:

"34(1) Where it appears to the Appeal Tribunal that any proceedings were unnecessary, improper or vexatious or that there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings the Tribunal may order the party at fault to pay any other party the whole of such part as it thinks fit of the costs or expenses incurred by that other party in connection with the proceedings.

(2) Where an order is made under paragraph (1) of this Rule, the Appeal Tribunal may assess the sum to be paid or may direct that it be assessed by the Taxing Officer, from whose decision an appeal shall lie to a judge."

The provisions of sub-paragraphs (3) and (4) of Rule 34 are not material to the point under appeal.

The Appeal Tribunal has no power under Rule 34 to make an order for costs against the person who is not a party to the proceedings, such as the solicitors representing one of the parties: see Colley v. Corkindale [1995] ICR 965 at 973 E-G.

(2) S.51 of the Supreme Court Act 1981, as amended by S.4 of the Courts and Legal Services Act 1990, does not confer on the Appeal Tribunal power to order the legal or other representative concerned to meet the whole of any wasted costs or such part of them as may be determined in accordance with Rules of Court. That power may only be exercised in proceedings mentioned in S.51(1). That is confined to proceedings in the Civil Division of the Court of Appeal, the High Court and the County Court. The provisions of Order 62, Rule 11 of the Supreme Court, respecting the personal liability of legal representatives for costs, were amended to supplement the provisions in primary legislation. That Rule does not, and could not, apply to proceedings in the Appeal Tribunal. Similar provisions in the County Court Rules (Order 38, Rule 1) do not apply to the Appeal Tribunal.

The Solicitors' Submissions

In those circumstances Mr Maitland-Jones submitted that the Appeal Tribunal has no power to order a non-party to pay the costs of proceedings before it. There is no Act or Rule specifically conferring such a power. There is no precedent for making such an order in any reported decision of the Appeal Tribunal or of any higher court. In the absence of any specific power in primary or secondary legislation and in the absence of any precedent to that effect the Appeal Tribunal should be cautious in concluding that jurisdiction to make such an order exists. The power is a draconian one which, as appears from the Court of Appeal decision in Ridehalgh v. Horsefield [1994] 3 WLR 462, has created considerable difficulties in practice. Those difficulties disclose a tension, identified by the Court of Appeal at p.472 C-E between, on the one hand, the public interest in the fearless pursuit of clients' interests by lawyers and, on the other hand, the public interest in protecting litigants from financial detriment resulting from the unjustifiable conduct of litigation by the other side's lawyers. Mr Maitland-Jones contended that there were good reasons of policy for not extending the wasted costs jurisdiction to the Appeal Tribunal. The power to award costs against a party is more limited than in the proceedings before the Court of Appeal, the High Court and the County Court. It is unusual to make a costs order against an unsuccessful appellant. A wasted costs jurisdiction would be a back-door route to the successful party covering his costs against the unsuccessful party's representative. In a considerable number of appeals the representative does not act for reward eg, representatives provided by the Free Representation Unit or members of the legal profession acting under pro bono schemes, such as that recently established in the Appeal Tribunal by the Employment Law Bar Association. What would be the position of those representatives if a wasted costs jurisdiction existed? As observed in Ridehalgh case, there is a risk of a "new and costly form of satellite litigation ... more damaging than the disease".

Submissions of the Borough of Tower Hamlets

Mr Rose, for the Borough of Tower Hamlets, was not deterred by these considerations from advancing the submission that the Appeal Tribunal has jurisdiction to make an order for costs against a representative of an unsuccessful appellant. For reasons already explained, he did not rely on Rule 34 of the 1993 Rules or on S.51 of the Supreme Court Act 1981, as amended, or on the Rules made in the Supreme Court and the County Court dealing with wasted costs applications. Nor did he rely on any inherent jurisdiction enjoyed by the Supreme Court over solicitors as officers of the Supreme Court: see Ridehalgh (supra) at p.473 C-E. The Appeal Tribunal is not part of the Supreme Court.

Mr Rose's submissions, which were ingeniously developed, are all based on Schedule 11 to the 1978 Act.

(1) Superior Court of Record Point

Paragraph 12 of Schedule 11 provides -

"The Appeal Tribunal shall be a superior court of record ..."

It was argued that, as a superior court of record, no matter is beyond its jurisdiction, unless expressly shown to be so. In my judgment, that submission is not well founded. Statute provides that certain courts and tribunals are to be superior courts of record. The Restrictive Trade Practices Court and the Appeal Tribunal are two such examples. Mr Rose was unable to cite any authority for the proposition that a superior court of record had an inherent jurisdiction to deal with such matters as costs. There appears to be source of obscurity about what is meant by a "superior court of record". It originally meant a court whose acts and proceedings were enroled on parchment, as in the case of superior courts of common law: see Halsburys Laws Vol.10 (4th Edition), paragraph 709, Note 4. The doctrine was developed from the beginning of the 17th century that only a court of record could fine or imprison eg, for contempt. This is recognised expressly in paragraph 22(2) of the 11th Schedule which places a statutory limit on the contempt powers of the Appeal Tribunal by providing that -

"No person shall be punished for contempt of the Tribunal except by, or with the consent of, a judge."

In the absence of clear authority I am not prepared to hold that, as a Superior Court of Record, the Appeal Tribunal has an inherent jurisdiction to make costs orders against non-parties.

(2) Regulation of Procedure

Paragraph 17(2) of the 11th Schedule provides that, subject to rules made by the Lord Chancellor with respect of proceedings before the Appeal Tribunal,

"The Tribunal shall have power to regulate its own procedure."

In reliance on Bass Leisure v. Thomas [1994] IRLR 102 at 109, it was submitted that the express rules made by the Lord Chancellor eg, Rule 34 relating to costs between parties, do not prevent the Appeal Tribunal from regulating its own procedure. In my judgment, the weakness with this submission is that, in the context of paragraph 17 of the 11th Schedule, "procedure" does not include power to order costs. Paragraph 17(2) must be read in context. It forms part of a group of paragraphs concerned with making rules. The scheme of those paragraphs is that the power of the Appeal Tribunal to make orders for costs in proceedings before it is to be limited in the manner provided in paragraph 19(1) and (2). Although that paragraph is "without prejudice to the generality of paragraph 17", those words are not apt to enable the Appeal Tribunal to make an order for costs by a party against a non-party as part of regulating its own procedure.

(3) The "Incidental to Jurisdiction" Point

The third and final argument deployed by Mr Rose was based on paragraph 22 of the 11th Schedule which provides -

"22(1) The Appeal Tribunal shall, in relation to the attendance and examination of witnesses, the production and inspection of documents and all other matters incidental to its jurisdiction, have the like powers, rights, privileges and authority -

(a) in England and Wales, as the High Court,

(b) in Scotland, the Court of Session.

(2) No person shall be punished for contempt of the tribunal except by, or with the consent of, a judge."

Mr Rose submitted that the words "incidental to its jurisdiction" are not to be construed ejuisdem generis with the earlier part of paragraph 22(1). The expression is wide enough to cover the power to award costs. That is a power enjoyed by the High Court in England and Wales, incidental to its jurisdiction. The Appeal Tribunal has the same powers as the High Court, incidental to its jurisdiction. Mr Rose illustrated his argument by references to provisions in the Restrictive Practices Court Act 1976. Section 9(3) of that Act is in almost identical terms to paragraph 22(1). See also Section 22(2)(b) of the Restrictive Trade Practices Act 1976 In support of his argument that the words "incidental to its jurisdiction" were not ejuisdem generis Mr Rose relied on the provisions of paragraph 22(2) which demonstrated that the provisions of Paragraph 22(1) were wide enough to include contempt powers. They are not ejuisdem generis with powers in relation to the attendance and examination of witnesses and production and inspection of documents.

I agree with Mr Rose that, literally construed, this paragraph it would be wide enough to include power to order costs. Like all statutory provisions, however, the paragraph must be read in its context ie, in the context of Schedule 11 as a whole. The scheme of Schedule 11 in relation to the question of costs is that it will be subject to express rules made by the Lord Chancellor in restrictive terms. The power to award costs is not the same as in the High Court. The general rule in the High Court, as appears from Order 62, Rule 3(3), is that, if the Court, in the exercise of its discretion, sees fit to make any order as to the costs of any proceedings, the Court shall order the costs to follow the event, except where it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs. It is clear from the restrictive terms of paragraph 19, as implemented in Rule 34 of the 1993 Rules, that the costs power of the Appeal Tribunal under the Rules, even as between parties are limited. The Appeal Tribunal may order payment of costs by any party, as provided by paragraph 19(1). The flaw in Mr Rose's argument is that, in support of his contention for an exceptional power, he is unable to point to any express power to make wasted costs orders, either in the 1978 Act or in the Rules under it. In my judgment, the Appeal Tribunal does not have an express or incidental jurisdiction to make such orders It follows that the application for costs against Mr Penton's solicitors cannot proceed.

I would add that the ex parte Preliminary Hearing procedure followed within the Tribunal has, as its main object, the protection of the respondents to appeals from incurring unnecessary costs and expenses where it appears that there is no reasonably arguable point of law on the appeal. That procedure is usually initiated by the Appeal Tribunal of its own motion, but it may also be adopted, in an appropriate case, on application of the respondent.