United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J McMULLEN QC and MS M TETHER (of Counsel) Instructed by: Ms S Gilbert (Solicitor) National Union of Journalists Acorn House 314-320 Gray's Inn Road London WC1X 8DP
For the Respondents	NO APPEARANCE BY OR ON BEHALF OF THE RESPONDENTS


 


JUDGE SMITH QC: This is an appeal by Mr S Omar, the applicant before the Industrial Tribunal, against a decision of an Industrial Tribunal held at London (North) on 6th and 7th May 1997, when the Industrial Tribunal held that the appellant had not been unfairly dismissed from his employment as a translator with Worldwide News Inc., and awarded costs in favour of the respondents, Worldwide News Inc., to be assessed on County Court Scale 2. Extended reasons were sent to the parties on 22nd May 1997.

Throughout the conduct of his claim before the Industrial Tribunal and at the hearing the appellant had the benefit of being represented by Junior Counsel and by the solicitor for union, the National Union of Journalists - the NUJ.

The issue on this appeal is whether the Industrial Tribunal erred in law in ordering the appellant to pay the respondents' costs of the proceedings on County Court Scale 2 to be assessed. We have had the benefit of a very helpful argument from leading Counsel (who did not appear below) on behalf of the appellant. We have received a letter from the solicitors for the respondents making it clear that they are not attending and are relying on the reasons given by the Industrial Tribunal. We have of course paid regard to the contents of that letter. We have also considered the Chairman's comments in a document dated 28th October 1997.

Mr McMullen QC has rightly submitted to us that the appeal raises important points with regard to an Industrial Tribunal's jurisdiction to award costs under Rule 12(1) of Schedule 1 to the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993, namely, that the Industrial Tribunal wrongly took into account the conduct of the appellant's trade union representative in ordering costs against him; secondly that, in consequence, the Industrial Tribunal wrongly took into account the means of the appellant's trade union in awarding costs against him; and thirdly, that contrary to authority and practice the Industrial Tribunal failed to take into account the appellant's personal means before making an order for costs against him at all, and in considering the amount of any such order. In addition, Mr McMullen submits that, in any event, the Industrial Tribunal had no proper grounds for concluding that the appellant's representatives had acted unreasonably either in bringing or conducting the case before the Industrial Tribunal. That is no more than a brief summary of the submissions which were made to us.

Before we consider those submissions and reach our conclusions in relation to them, we must refer, briefly, to the chronology of the case, and also of course, to the Industrial Tribunal's decision.

It appears from a very helpful chronology which has been provided to us by Junior Counsel for the appellant, and also by reference to the findings of the Industrial Tribunal, that in May 1996 the appellant had presented a complaint that he had been unfairly dismissed on 26th February 1996 due to trade union activities, i.e., a complaint based on an allegation of an automatically unfair dismissal. On 31st July 1996 the respondents put in a Notice of Appearance which was amended on 23rd August 1996. On 20th November 1996 the appellant's solicitor wrote to the relevant office of Industrial Tribunals sending amended full details of the complaint to include an assertion of a statutory right under s. 104 of the 1996 Act, and claiming an unlawful deduction of wages in addition to the original claim alleging dismissal due to trade union activities. On 29th November 1996 a preliminary hearing took place when the case was adjourned to a full hearing and leave to amend was granted to the appellant without objection by the respondents. On 3rd February 1997 the parties attended for the full hearing when the appellant's Counsel informed the respondents' solicitor that the claim under s.104 was being withdrawn, but the case had to be adjourned because there was no tribunal available to hear it. On 25th March 1997, the hearing was adjourned again due to the non-attendance of the respondents' representative and an order for costs was made against the respondents in the sum of £500. Consolidated grounds of complaint were served on 7th April 1997 and a consolidated Notice of Appearance was served on 16th April 1997 which was amended on 29th April 1997. At the hearing on 6th May 1997 the respondents' solicitors complained for the first time that the claim in respect of unlawful deduction of wages was out of time, and after the short adjournment on that first day, that claim was withdrawn. That is a summary of the chronology. Reference should be made for the full chronology, should it be necessary for anyone to look at it, to the document headed "Appellant's Chronology" which has been presented to us and which sets out the full chronology of the matter.

We turn to summarise, briefly, the findings of the Industrial Tribunal. Here again, for the full findings made by the Industrial Tribunal, reference should be made to their decision. But in outline, the Industrial Tribunal defined the issues, ultimately, before them at paragraphs 4 and 5 of its decision, having of course found that Mr Omar had been employed as a journalist/translator; that he had started his employment on 4th December 1995; and that the last day that he worked for the respondents was 26th February 1996.

The Industrial Tribunal defined the issues for their decision as being whether the appellant had been dismissed because of his proposal to become a member of the trade union and because he had proposed that colleagues of his should also become members of the trade union; or had he not been dismissed at all, as the respondents contended; or alternatively if he had been dismissed, had he been dismissed on the grounds of capability.

The Industrial Tribunal went on to find that the case, as is not unusual in such cases, involved a head-on clash between the evidence of the appellant on the one hand, and the evidence of the respondents' witnesses called before the tribunal on the other, particular Mr Aziz. The Industrial Tribunal found that they preferred the evidence of the respondents' witnesses in all respects. They summarised the conflicting evidence in paragraph 7 to 12 of the decision.

They found as a fact that the appellant had not been dismissed. They accepted the evidence of Mr Aziz as set out in paragraph 8 and 10 of their decision and accepted that the only dispute that there had been between Mr Omar and Mr Aziz regarding trade union membership was the request that the respondents should pay the union's subscriptions relating to such membership. They rejected the appellant's case that he had been dismissed by virtue of s.152 of the 1992 Act.

In those circumstances, they came to deal with the question of costs, because an application was made by the solicitor representing the respondents for an order for costs. The tribunal summarised the submissions that were made to them in paragraphs 17, 18 and 19 of their decision, and they came to make their crucial findings relating to the application for costs in paragraph 20 of their decision:

"20 We find, as a fact, having considered the evidence, that Mr Omar and his representative have, in bringing or conducting the proceedings, acted frivolously, vexatiously or otherwise unreasonably. This matter could have been concluded far sooner if the issues had been defined more clearly. Indeed, during the course of the hearing, we were not happy with Mr Omar's evidence and we find, having heard his evidence, that he fabricated it in many respects. Accordingly, we award costs, these costs to be assessed on County Court, Scale 2."

It is against those findings of the Industrial Tribunal that we come to consider the submissions that were made to us by leading Counsel on behalf of the appellant. In our judgment, Mr McMullen made good on authority the following propositions:-

(1) An order for costs by an Industrial Tribunal can only be made against a party, not against a non-party, such as a solicitor representing one of the parties. See Walsall Metropolitan Council v Sidhu [1980] ICR 519, Colley v Corkindale [1995] ICR 965 and Penton v London Borough of Tower Hamlets (Appeal number EAT/460/94 - 26th October 1995).

(2) It is only in exceptional cases that in making an order for costs against a party an Industrial Tribunal should consider not only the individual means of that party, but also the means of his trade union representative. Such cases usually come under one of two headings, namely:

(a) where the union in question has brought or conducted a claim before an Industrial Tribunal on behalf of its member which to the union's knowledge or means of knowledge is without any merit, see Carr v Allen Bradley Electronics Ltd [1980] ICR 603, particularly at page 609C-G; or

(b) where the union has pursued a particular case as a "lead" or "test" case, involving an important point of principle for its membership and where usually it has offered an indemnity as to costs to the applicants concerned in such case. See Dorney & others v Chippenham College (Appeal number EAT/10/97 - 12th May 1997) a recent decision of His Honour Judge Peter Clark sitting with members of the Employment Appeal Tribunal, particularly at page 7A-G of the transcript.

In particular, Mr McMullen correctly submitted that there is no equivalent in the Industrial Tribunal regime relating to costs to the Wasted Costs Order regime where orders can be made against professional representatives, be they solicitor or Counsel, arising out of the misconduct of High Court or County Court litigation in the Wasted Costs Order regime applicable to such proceedings. There is no equivalent procedure in relation to the Industrial Tribunal for the simple reason that the two regimes are quite different.

Thus, in our judgment, it follows from the submissions made thus far to us, that the legal position is that if in a given case a trade union were to conduct a claim which was reasonably brought on behalf of its member before an Industrial Tribunal negligently or improperly in some way, that can be no reason, absent a wasted costs jurisdiction, for the Industrial Tribunal to take into account the union's means when making an order for costs under its jurisdiction against the losing party. It may be perfectly reasonable in the exercise of its discretion for an Industrial Tribunal to order costs against a losing party on the basis, as in the instant case, that the losing party has fabricated his case and told lies, but in deciding what he should pay by way of costs it is not a permissible approach for an Industrial Tribunal to take account of the means of the union in awarding costs against him, unless the union knew or ought to have known his case had no merit. In particular, any shortcomings in the way such a case is conducted by the union representative cannot amount to a reason for taking the union's means into account when assessing the amount of costs against the party concerned.

(3) Mr McMullen established on authority that, as a matter of practice, Industrial Tribunals must look at an applicant's personal means to pay before making an order for costs against him as a party. See Dorney & others v Chippenham College and also Wiggins Alloys Ltd v Jenkins [1981] IRLR 275.

In our judgment, tested against those propositions, the Industrial Tribunal's decision contains errors of law.

Firstly, in our judgment, leading Counsel for the appellant is right in his submission that it is plain that in ordering the appellant to pay costs to be assessed on County Court Scale 2, the Industrial Tribunal took into account the means of the union concerned, the NUJ. In our judgment, no other construction can be put on paragraph 20 of the decision. In our judgment, leading Counsel is also right in his submission that they had no permissible grounds for so taking into account the union's means in this case. Thus there were no grounds at all for concluding that the union had any knowledge or means of knowledge that the claim was being fabricated by the appellant. It was apparently a perfectly arguable claim. The union's solicitor could not know or have anticipated that the Industrial Tribunal would find that the appellant was lying. Nor was this other than a run of the mill case, there was no particular point of principle which affected its members which caused the union to take up or prosecute this case. Thus there were no proper grounds for taking into account the union's means. The grounds relied upon by the Industrial Tribunal was along the lines of a wasted costs enquiry which, for the reasons we have already stated, is impermissible and wrong in law. We regard it as important to re-emphasise the wise words of Waterhouse J. in Carr v Allen Bradley Electronics Ltd, the substance of which draw attention to the importance of representation of parties by trade union representatives before Industrial Tribunals and the considerable assistance provided to such Industrial Tribunals by such representation. If trade unions were at risk of having to indemnify members against cost orders made on the basis of an assumption by an Industrial Tribunal of a wasted costs jurisdiction, then this valuable right of representation might have to be reconsidered.

We should add, with respect to the Industrial Tribunal, that there were here, on analysis, no proper or sufficient grounds for concluding that the union's solicitor representative or indeed Counsel, if such is suggested, had failed in any way to clarify the issues earlier or more clearly. The chronology of the proceedings demonstrates, with respect, that the matter was handled professionally and properly throughout. It was proper for the union's solicitor, no doubt on instructions, to amend the complaint to include a claim under s.104 and for arrears of pay. No doubt again on instructions the claim with reference to s.104 was later withdrawn by 3rd February 1997 and the claim for arrears of pay was withdrawn at the hearing once the point was taken by the respondents that it was out of time. None of this could have caused the case to be concluded more quickly, or the issues to be defined more clearly. The main issue which still had to be litigated in full was the issue as to whether the appellant had been dismissed in breach of s.152 of the 1992 Act, putting the matter in shorthand. In our judgment, accordingly, even if it had been appropriate for the Industrial Tribunal to examine this aspect, which for the reasons we have given we believe it was not, this is one of those rare cases where we would have been bound to conclude that the conclusion they reached was one which was either not based on any evidence or one which was wholly wrong.

Finally, in our judgment, it is the case that, no doubt because they felt that the union's means were relevant, which they were not, the Industrial Tribunal never enquired at all into the means of the appellant himself. Thus, in our judgment, for those reasons, this appeal must be allowed. The present costs order must be set aside and the matter should be remitted to the Industrial Tribunal to determine what order for costs, if any, should be made, in the light of their finding which is not under challenge, that the appellant had fabricated his evidence before them, and in the light of his personal means and ability to meet any such order without any reference to the means of the union which represented him.