United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR JOHN BOWERS (of Counsel) Messrs Town Needham & Co Solicitors John Dalton House (4th Floor) 121 Deansgate Manchester M3 2AR
For the Respondents	MR JONATHAN SWIFT (of Counsel) Messrs Baker & McKenzie 100 New Bridge Street London EC4V 6JA


 


JUDGE PETER CLARK: On 14 May 1996 we heard appeals in two separate cases. A common feature was that the Respondent in each case was Shaw Carpets Ltd. The first case of Timmins & Others v Shaw Carpets Ltd (EAT/1351-2 1995) was argued first, and judgment was reserved. The second case, United Road Transport Union (URTU) & Others v Shaw (EAT/211/96) was then heard and judgment in that case was also reserved.

A further common feature of the two cases was that the claims arose out of the same redundancy exercise. However, the individual Applicant/Appellants in the two cases, belonged to different trade unions, and their cases were originally heard and determined by different Industrial Tribunals.

On 17 June we handed down our Reserve Judgments in both cases. The appeals were dismissed. On that occasion Counsel in the case of Timmins were both present, Mr Swift for Shaw and Mr Bowers for the unsuccessful Appellants. Mr Swift applied for costs; Mr Bowers opposed that application. Having heard the submissions of counsel I reserved judgment on the application so that I could consult with my fellow members of the original appeal tribunal. Having done so, we dismissed the application in Timmins for the reasons subsequently handed down in writing.

Counsel for URTU and the individual Appellants in that case were not present. However, Mr Swift made it clear that his clients wished to pursue an application for costs in that case also. No submissions were then taken, in the absence of representation on behalf of URTU.

By letter dated 2 July 1996 Solicitors for Shaw formally applied for costs in the URTU appeal and set out their grounds. They asked for an oral hearing in the event that we were not prepared to make an order for costs on a paper application.

That application was resisted by Solicitors for URTU by letter dated 2 August 1996, who there set out their grounds for opposing the application.

A rejoinder was sent by Shaw's Solicitors by letter of 19 August.

In those circumstances, where it was plain that the costs application was fully contested, we reconvened the same Tribunal for an oral hearing. We have today received submissions from Mr Swift in support of the application, and in opposition from Mr Bowers, who is now instructed on behalf of URTU.

We should say straight away that, although there are features common to both cases, the way in which the substantive appeals were presented and argued were wholly different. Because we declined to make an order for costs in the Timmins appeal, it does not follow that we should necessarily reach the same conclusion in the URTU appeal. Instead, we must analyse the issues raised in the URTU appeal for the purposes of the present application.

The URTU Appeal

The Appellants were URTU and five named applicants, members of that Union. Arising out of the redundancy exercise carried out by Shaw in late 1994, a number of employees were dismissed by reason of redundancy, including the five individual applicants. URTU sought a protective award; the five applicants complained of unfair dismissal. Those claims were all dismissed by an Industrial Tribunal sitting at Sheffield in late November 1995. The hearing lasted for three days. The applicants were represented by Mr Thornton, a full-time official of URTU and Shaw by its Finance Director, Mr Baker. Extended Reasons for that Tribunal decision are dated 8 January 1996.

Solicitors were instructed and on 16 February 1996 a Notice of Appeal was lodged, settled by Counsel, Mr Paul Gilroy. That Notice raised the following issues:

(1) Whether the Industrial Tribunal had erred in concluding that there were special circumstances, such as to defeat the Union's claim for a protective award and

(2) Whether the Industrial Tribunal erred in finding that there were special reasons justifying a departure from an agreed redundancy procedure or customary arrangement, so as to defeat the individual claims for unfair dismissal.

No appeal was made against the Tribunal's further conclusion that the individual dismissals were reasonable under section 57(3) of the Employment Protection (Consolidation) Act 1978.

To those detailed grounds of appeal Shaw put in an Answer, traversing each pleaded ground of appeal.

Shortly before the date set for hearing of the appeal different Counsel, Mr Atherton, was instructed on behalf of the Appellants. We note from the letter dated 2 August 1996, sent by the Solicitors instructing him in opposition to this costs application, that on about 7 May 1996 Mr Atherton advised in conference that the pleaded grounds raised by Mr Gilroy ought to be abandoned. He also made it clear to us on the day that he would not be pursuing those arguments. That appears from the Skeleton Argument which he submitted. In particular, he did not feel able to sustain an argument that the Industrial Tribunal had fallen into error in concluding that there were special reasons for departing from the agreed procedure/customary arrangements, as set out in paragraph 39 of the Tribunal's Extended Reasons.

Instead he presented a quite different argument, not previously pleaded, which we described in our substantive judgment (transcript page 4 G) as "difficult to follow".

The thrust of the argument further developed by Mr Bowers today, was that the Tribunal had been wrong to accept Mr Thornton's argument that the redundancy procedure provided for LIFO and that the selection criteria adopted by Shaw amounted to a breach of the redundancy procedure/arrangements.

We also considered that paragraph 38 of the Industrial Tribunal's Reasons could have been more clearly expressed. However, the upshot of that paragraph was that the Tribunal accepted that a breach had been made out, and there was no cross-appeal by Shaw against that finding.

In these circumstances we remain mystified as to where it would take the Appellants to argue that the case, which was advanced on their behalf and accepted by the Tribunal, involved an error of law on the part of the Tribunal.

Mr Bowers accepts that, even if the argument had been accepted, it would have been necessary for the case to be remitted to the Industrial Tribunal for further findings of fact and that is one of the grounds on which we will not allow a new point to be taken. It seems to us that it is a new point to argue that the Tribunal ought not to have accepted that party's own case below.

In any event, having found a breach, the question then was whether or not Shaw had shown special reasons for departure from the agreement/arrangement. As to their critical finding on that issue, no appeal was pursued by Mr Atherton.

So analysed we are presented with a strange picture. All original grounds of appeal were abandoned as a result of the conference with Counsel. Instead the appeal was pursued on a basis which was not simply unarguable, but was not capable it seems to us, even if correct, of altering the outcome of the Industrial Tribunal proceedings.

Orders for costs in this Tribunal are extremely rare. That is because our powers to award costs are limited to the circumstances identified in Rule 34(1) of the EAT Rules 1993. The only exceptional grounds for making such an order arise where the proceedings were unnecessary, improper or vexatious or that there has been unreasonable delay or unreasonable conduct in bringing or conducting the proceedings.

In our view the reasonable and proper course to take, at the stage where Counsel advised that the existing pleaded grounds of appeal could not be sustained, was to abandon the appeal there and then. Had such a course been taken, we should not have entertained an application by the Respondent for costs. Instead the appeal proceeded to a hearing on a basis which we have found to be pointless as well as unarguable. The position is not improved by Mr Atherton's late, conditional application to amend the Notice of Appeal to raise a section 57(3) point had Mr Bowers succeeded on that ground of his appeal in the Timmins case.

We therefore find that it was both unnecessary and unreasonable for these individual Appellants to pursue their appeals to a hearing. The URTU appeal was quite properly abandoned before the hearing.

However, that is not quite the end of the matter. Two further points are taken. The first is that in pursuing their appeal the Appellants relied on the advice of Counsel. That is a relevant, but not decisive factor for us to take into account. See Stannard & Co (1969) Ltd v Wilson [1983] ICR 86. In this case, we are driven to conclude that it was the advice ultimately given by Mr Atherton which led to the unnecessary appeal hearing.

Secondly, Mr Bowers in his Skeleton Argument invited us to consider the financial circumstances of the individual Appellants. He now accepts that that does not arise here. This is a union-backed case. We shall adopt the same approach as do the Civil Courts in awarding costs against union-assisted plaintiffs in Personal Injury actions.

In all the circumstances we think that this is a proper case in which to award costs to the successful Respondent under Rule 34(1). We shall limit those costs to first, the hearing of the substantive appeal itself and not the preparatory work leading to that hearing, and secondly the costs which followed in this costs application. The Respondents should not be out of pocket in pursuing a proper costs application and Mr Bowers does not argue to the contrary.

The costs awarded should be agreed between the parties, who are both represented by Solicitors. Failing agreement, they must be taxed under the provisions of Rule 34(2).