United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P GOULDING (OF COUNSEL) AND MR D SCOREY (OF COUNSEL) (Instructed by) Messrs Charles Russell Solicitors 8-10 Fetter Lane London EC4A 1RS
For the Respondent	MISS R TUCK (OF COUNSEL) (Instructed by) Messrs Mills & Reeve Solicitors Midland House 132 Hagley Road Edgbaston Birmingham B16 9NN


 


JUDGE D M LEVY QC: We are indebted to Mr Goulding and Mr Scorey who have appeared on behalf of the Appellant in this Appeal, and to Miss Tuck who has appeared on behalf of the Respondent, for the help they have given us during the course of argument which has taken almost the whole of today. The hearing might have been shortened if any one of them had provided a full chronology.

1. The Appellant's Appeal arises in the following circumstances. He submitted to an Employment Tribunal as long ago as May 1997 an IT.1 alleging breach of contract. The Respondent's IT.3 followed the following month; within it a suggestion was made that there might not be jurisdiction in the Tribunal to consider the matters raised by the Appellant. There was a pre-hearing Review on 26^th November. As a result of that Review, the Tribunal made a cost deposit Order ("the Cost Deposit Order") in these terms.

"The Tribunal considers the contentions put forward by the Applicant in the Originating Application:

have no reasonable prospects of success. The reasons in summary form, for considering that the contentions in question have no reasonable prospect of success are:

the Tribunal does not have jurisdiction in this matter. The Applicant is making a breach of contract claim against the Respondents by whom he was employed whereas Regulation 22 of the National Health Service (Injury Benefits) Regulations 1995 provides that

"Any question arising under these Regulations as to the rights or liabilities of a person to whom these Regulations apply or of a person claiming to be treated as such or the widow or widower or dependent of any person shall be determined by the Secretary of State".

The Secretary of State was not the Applicant's employer and so the Applicant was not able to bring breach of contract proceedings against the Secretary of State within the jurisdiction of this Tribunal. Any grievance which the Applicant may have lies to be dealt with elsewhere within the Industrial Tribunal.

The Tribunal therefore ORDERS the Applicant to pay a deposit of an amount of £150 not later than 21 days from the receipt of this Order as a condition of being permitted to continue to take part in the proceedings relating to the matter referred to above."

2. On 9^th December 1997 the Employment Tribunal sent to the Appellant a letter with accompanying notes because the Order contained an error. On 17^th December 1997 the Appellant sent to the Tribunal a letter complaining that he had not received any notes or information as to how he could challenge the Cost Deposit Order. We have not seen that letter, but there is clear evidence that it was received. On 23^rd December 1997 the Appellant attended at the Tribunal offices and was handed a copy of the notes which normally accompany a decision.
3. On 12^th January 1998 the Appellant wrote to the Tribunal indicating that he had received advice that he could challenge the Cost Deposit Order by way of an Application for a Review or an Appeal to the Employment Appeal Tribunal. On 14^th January 1998 the Tribunal wrote to the Appellant stating that a Chairman had directed that the Appellant's letter of 17^th December 1997 be considered as an Application for a Review of the Cost Deposit Order and invited the Appellant to send grounds for the Review. On 27^th January 1998, the Appellant wrote to the Tribunal setting out his grounds in support of his Application for a review of the Cost Deposit Order.
4. On 13^th February 1997 the Tribunal sent two Orders to the Appellant. The first, dealt with the strike-out. It reads:

"Order of the Chairman. Pursuant to the power vested in me by the Industrial Tribunal's Rules of Procedure Regulations 1993, Rule 7(7) I strike out this application, the Applicant having failed to pay the deposit ordered."

The Order was dated 12^th February 1998. We will refer to the Regulations to which he referred as the 1993 Regulations.

5. The second was the Extended Reasons on the Application for Review. Before reading those Extended Reasons we would point out that there is a peculiarity about them which make this case wholly exceptional. The first page of the Decision refers to representation: for the Applicant "in person", for the Respondent, "Mr Miller, NHS Trust". Subsequently, the Chairman made known to this Tribunal that there had not been an oral hearing as the document itself showed because the document showed there was a hearing at Shrewsbury on 3^rd February 1998.
6. The Extended Reasons set out some of the history of the matter. Commencing at paragraph 9 reads:

"9. At present, the Applicant has not paid the deposit as required by the Pre-hearing Review Order.

10. A Tribunal only as power to review a Decision. Decision is defined in Regulation 2 of the 1993 Regulations is a Pre-hearing Review reviewable. Pre-hearing assessments did not fall within the scope of the decision since it was expressly excluded from the definition of the decision in the 1985 Regulations. The 1993 Regulations do not correspondingly exclude Pre-hearing Reviews. In this case, an order has been made that the Applicant's contentions have no reasonable prospect of success and a Cost Deposit Order has been made. It is therefore arguable that such a determination does within the definition of the decision and consequently I have come to the conclusion that the Applicant is entitled to request that I should review the original decision.

11. Then having continued the Applicant's letter of 27^th January 1998 I can find nothing fresh in there that was not canvassed at the hearing where the Pre-hearing Review was ordered. In particular, I accept that paragraph 4 of the Interlocutory Order dated 15^th August 1997 and sent to the parties on 14^th October did state there will be no order upon the Respondent's request for the Originating Application to be struck out. The reason for that at the time was that I did not have before me the relevant documentation and evidence upon which I could possibly make such an order. As part of that original order the parties had to effect mutual discoverable relevant documents with a copy to me. It was only after that mutual discovery that I was then able to make the decision I did on the Pre-hearing Review.

12. In my view, I cannot see, as alleged by the Applicant that any decision was wrongly made as a result of an error on the part of the Tribunal staff. The Applicant does not so alleged. His contentions being that the error is that of the Chairman. No evidence has become available since the conclusion of the hearing to which the order relates and I cannot see that the interests of justice require a review. The reason for my original order still stands and I am able to see that the letter of 27^th January could possibly persuade me otherwise. Further, the financial order that was made was made only after full discussion with the Applicant at the time as to his ability to comply with any order that I was intended to make.

13. Accordingly, I refuse the application reviewed by the Applicant contained in his letter dated 27^th January 1998 on the grounds that it has no reasonable prospect of success."

7. Therefore, when the Appellant received the two Orders sent to the parties on 13^th February 1998, he found that there was no time extention for him to pay in the sums required for payment in of monies under the Cost Deposit Order. It had lapsed. His claim was struck out, pursuant to an oral hearing which had not taken place.
8. The Appellant had attempted to appeal out of time to this Employment Appeal Tribunal against the Orders which had been made following the hearing on 27^th November 1996. An application for an extension of time contained in a letter dated 30^th January 1998. It was considered by the Learned Registrar and refused on 12^th March 1998.
9. We summarise what happened thereafter. On 19^th March 1998, the Appellant appealed to this Tribunal against both Orders promulgated on 13^th February 1998. On 18^th November 1998, the Appellant's Appeal was heard on a PHD by a different panel. They made an Order:

"that the Appeals be allowed to a full hearing of the Employment Appeal Tribunal that the Appellant do serve Amended Grounds of Appeal within 21 days from today and Order that the Chairman to indicate whether the decision refusing the review was made pursuant to Rule 11(5) without a hearing."

10. There had, meantime, been an affidavit sworn by the Appellant on 19^th May 1999. Pursuant to that Order, Amended Notices of Appeals were made. Those read as follows:

"So far as the refusal to review is concerned, Mr Goulding who appears today and appeared on the ex-parte hearing, settle these documents. The grounds on which this Appeal is brought is that the Tribunal erred in law in that:

(a) the Tribunal failed to take into account new evidence about the Appellant's means, in particular, the depletion of the Appellant's savings which, since the loss of his job, had been used to support his family and the loss of his wife's full time employment meant that the Appellant was unable to pay the sum of £150. The interests of justice required review in that the Industrial Tribunal wholly misconceived the nature of the Appellant's claim which is for damages for breach of contract in that the Respondent processed the Appellant's claim for industrial injury benefit in a capricious and/or arbitrary manner in breach of duty of its trust and confidence and carelessly in breach of its duty to take reasonable care."

11. The Chairman thereafter sent a letter to this Tribunal dated 24^th May 1999 stating:

"My notes of the hearing of 26^th November 1997 state, inter alia, "Joint savings account under £1,000. £800"

It was on the basis that I ordered £150 then "any subsequent variation would not have influenced me on the Review." (Emphasis added).

I did ask the Applicant about his outgoings and he stated that he had all the usual outgoings of a family."

12. The Amended Grounds for the Notice of Appeal against the striking out order read as:

"The grounds upon which this Appeal is brought on the Industrial Tribunal erred in law in that:

"(a) The Industrial Tribunal wrongly refused to refute the decision order dated 4^th December 1997 requiring that the Appellant to pay the deposit in the sum of £150, the Tribunal ought to have reviewed their decision or order and set it aside or varied it on the grounds set out in the Notice of Appeal served here against that decision or order. It follows that the Industrial Tribunal ought not to have struck out the Appellant's Originating Application for failure to comply with the Cost Deposit Order which ought itself to have been set aside or varied. Further, or alternatively, having decided to dismiss the Appellant's application for review the Industrial Tribunal wrongly failed to give the Appellant any further time in which to pay the deposit. Rather, both the Extended Reasons for dismissing the application for a review of the Cost Deposit Order and the decision striking out the Originating Application for failure to comply with the Cost Deposit Order was signed by the Chairman on the 12^th February 1998 and sent to the parties on 13^th February 1999."

13. Each of the submissions of Counsel have been persuasive. In her skeleton argument as amplified in her submissions Miss Tuck submitted in summary that the suggested hearing which led to the making of the Cost Deposit Order was perfectly proper and nothing could change after that date which should cause a Chairman to have changed his mind. She took certain technical points on the 1993 Regulations and cited a number of authorities.
14. But ignoring for the moment Mr Goulding's submissions that the Tribunal wrongly appreciated the case which the Appellant was trying to put forward, we cannot ignore the peculiarities of some of the events which occurred between 9^th December particularly, by the Chairman and 13^th February. We have already noted that the record shows a hearing before a Chairman took place in February which is erroneous. We think we should refer to something which the Appellant said in his affidavit sworn on 24^th May 1999 as to what happened at the hearing which led to the Cost Deposit Order.

"At the hearing of 26^th November 1997, where I was unrepresented, I was requested to give details regarding my financial position, and also, details of my wife's financial position. At that time, my net monthly income consisted of my NHS Staff retirement pension of £683.89 per month, and an incapacity benefit in the amount of £334.20. My wife was working on a full time basis and earned approximately £600 per month. I verbally gave the Chairman what my gross income was and my best recollection of my wife's salary. Had I been given a proper warning to prepare a full financial statement I would have done so and also have been able to mention my wife's pending reduction to part-time employment." (our underlining)

15. He then went on in his affidavit to give his financial position then and as at 3^rd February 1998.
16. Miss Tuck submitted that because that affidavit shows that he knew of his wife's pending reduction to part-time employment, insofar there was additional evidence as to that in it, it was something which he could and should have had in mind on 26^th November. We think, with great respect to Miss Tuck's submissions, that that really puts an Applicant in an impossible position if, when he goes to an Employment Tribunal there is sprung one on him, without specific notice, an order which takes account of the provisions of Rule 7(4), (5) and (6) of the Regulations. These read:

"(4) If upon a pre-hearing review the Tribunal considers that the contentions put forward by any party in relation to a matter required to be determined by a Tribunal have no reasonable prospects of success, the Tribunal may make an Order against that party requiring the party to pay a deposit of an amount not exceeding £150 as a condition of being permitted to continue to take part in the proceedings relating to that matter.

(5) No order shall be made under this Rule unless the Tribunal has taken reasonable steps to ascertain the ability of a party against whom it is proposed to make the Order to comply with such an Order and has taken account of any information so ascertained in determining the amount of the deposit.

(6) An Order made under this Rule and the Tribunal's reasons for considering the intentions and question have no reasonable prospect of success shall be recorded in summary form in a document signed by the Chairman, a copy of that document shall be sent to each of the parties and shall be accompanied by a note explaining that if the party against whom the Order is made persistent participating in proceedings relating to the matter to which the Order relates, he may have an aware of costs made against him and could lose his deposit."

17. From the paragraph which we have read from the Appellant's affidavit it seems that he was completely taken by surprise by the enquiries which were made, and part of the submission made to us today by Mr Goulding was that reasonable steps were not taken that day to assist the unrepresented Appellant. In a sense, that is something which goes outside the scope of this appeal because of the learned Registrars refusal to allow the appeal against the decision out of time. But that is not the end to the matter.
18. There has been reference in submissions before us as to whether the provisions of Regulation 11 of the 1993 Regulations are applicable to a review of the decision to alter the Costs Order made by the Chairman. Both Counsel suggest that Rule 11 does not apply. However, we are satisfied that the Chairman did have power to reconsider the Cost Deposit Order by reference to Rule 16(1) of the Regulations. This reads:

"(1) A tribunal may at any time on the application of a party or of its own motions give directions on any matter arising in connection with the proceedings;

(2) An application under paragraph 1 shall be made by presenting to the Secretary a Notice of Application which will state the title of the proceedings and set out the grounds of the application."

19. It was submitted by Mr Goulding that the terms of the Regulation include the power to vary a Cost Deposit Order in circumstances where an applicant is no longer able to comply with its terms because of a change in his financial reputation. Reference was made to the decision in Nicotas -v- Solihull Metropolitan Borough Council [1986] ICR 291 and Cuttapan -v- London Borough of Croydon & Ors EAT/268/98 and 392/98.
20. We have already referred to the letter of the Chairman sent to this Tribunal dated 24^th May 1999 in which he said:

"Any subsequent variation would not have influenced me on the Review"

which referred to the Appellant's means of the date of the Review.

21. With great respect to him, we think that the papers put before him should have shown there was a variation of the Appellant's means which, given the circumstances in which the matter had been dealt with at the earlier hearing, should have given him cause to pause. When he says that the Appellant stated he had "all the usual outgoings of a family", we would have expected that reasonable steps to ascertain the ability of a party to comply with the Order should have been taken. More flesh and blood on the material than is shown in the Chairman's notes is needed to justify the order made. What we would certainly have expected, when an application for a Review is made to a Chairman and material for such review is provided to him, if he considers that he has no power to conduct a Review, he should consider whether it would be appropriate for him to use the powers under the Regulation 16 to reconsider the decision.
22. Mr Goulding submitted that the Appellant's letter of 27^th January 1998 provided a full and detailed evidence of his financial position and showed how it had changed dramatically since 26^th November 1997 hearing before the Tribunal. Most striking was the fact that the Appellant's wife no longer worked full time but now only worked part-time. We have some sympathy for submission which was made by Miss Tuck that if that was not fleshed out at the first hearing, it was the fault of the Appellant. However, in our judgment, Mr Goulding's submission is right that the Chairman ought to have considered the new evidence and assessed the Cost Deposit Order afresh, when he purported to review the Cost Deposit Order. Then he should have considered whether the evidence showed it was appropriate to make a Cost Deposit Order at all or, if it remained appropriate, whether the amount of £150 specified in the Cost Deposit Order should be deposited.
23. Mr Goulding submitted that the ability and the necessity of the Tribunal making an assessment in the light of new evidence was particularly important because first, a deposit should not be fixed at an amount which may prevent the Appellant from pursuing his application purely because he could not afford to meet the sum he was required to deposit. Secondly, the Appellant's financial commitments, namely the support of wife and two children remained virtually unaltered from the time when he was in receipt of his full time salary from the Respondent. Thirdly, the Appellant's request for review, given his letter of 27^th January 1998, specifically stated that he was in greater financial difficulties in meeting the Cost Deposit Order than at the time it was ordered due to the change in his family situation. None of this was taken into account by the Chairman in his Review Decision.
24. Mr Goulding further submitted that the interests of justice required that the Cost Deposit Order should have been varied on the Appellant's application on a number of specific grounds. First, the change in the Appellant's financial circumstances warranted that the Cost Deposit Order should have been lifted or at least varied. To do otherwise might have led to the inequitable conclusion that the Appellant was unable to pursue his application solely due to his impecuniosity. Secondly, that there was a misunderstanding by the Tribunal of the Appellant's contractual claim as pleaded in this IT.1.
25. Mr Goulding also submitted that the conditions were not satisfied which would entitle the claim of the Appellant to have been struck out. Simultaneously, the Tribunal appeared to have dealt with the Review Decision (which failed to review or reconsider the Costs Order) and the strike out of the Appellant's application (because of non-payment as required by the Cost Deposit Order). It was submitted that, given the Tribunal should have set aside or varied the Cost Deposit Order, it followed that the Tribunal ought not to have struck out the Appellant's application for failure to comply with that same Order. It is clear that the Appellant would only have known on or after 13^th February that his application for review of the Cost Deposit Order had failed and therefore, that he was still required to comply with it. He was not, in the circumstances, given any time to pay the deposit following the Review Decision. He was placed in the invidious position of being automatically struck out following the Review Decision, not only without prior warning but without any opportunity to comply with the Cost Deposit Order as affirmed by the Review Decision.
26. It was submitted that the Tribunal ought to have granted the Appellant an extension of time within which to seek to comply with the Order. Mr Goulding refers to Rule 15 of the Regulations which extends the time for paying the deposit, provided for in Rule 7 if necessary, after the time had expired under that Rule. He referred us to the Immigration Advisory Services -v- Oman [1997] ICR 683 and the decision in Cuttapan referred to above.
27. It was submitted that the Tribunal ought to have afforded the Appellant a further opportunity to see whether he could gather funds together in an effort to comply with the Cost Deposit Order. Mr Goulding submitted it was manifestly unjust that whilst he was waiting to see whether his application to set aside or vary the Costs Order was successful, at the same time he was told it was not, he was also told that his application was struck out.
28. In the circumstances of this case, we accept Mr Goulding's submissions and allow this appeal.
29. In the event that we determined the appeal should be allowed, Counsel asked us to determine whether a Cost Deposit Order was appropriate and if so to make an appropriate order. We do not think that is an appropriate approach. It seems to us that the means of the Appellant may need further enquiry for reasons which have in part have been put forward by Miss Tuck in oral evidence. Cross-examination of the Appellant may be needed before any determination can be made.
30. It seems to us that the proper step for us to take is to allow the Appeal against the Decision made by the Chairman remitted to the parties on the 13^th February as to what, if any, sums should be made under Regulation 7(4) and to extend time for paying any deposit which is ordered on a further hearing until that matter has been considered and determined by an Employment Tribunal.
31. Clearly, the matter should be heard by a different Chairman and clearly, given the date of the complaint it should be heard as soon as possible. Meantime, the strike our order must be stayed.