United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MRS LAURA COX QC and MR PAUL EPSTEIN (of Counsel) BUPA Legal Department BUPA House 15-19 Bloomsbury Way London WC1A 2BA
For the Respondents	MR IAN SCOTT (of Counsel) Messrs Bolt Burdon Solicitors 16 Theberton Street Islington London N1 0QX


 


MR JUSTICE KEENE: This appeal raises a short but not unimportant point about the extent of the powers of an Employment Tribunal under the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993, Schedule 1 which we will refer to as the Rules.

1. The appeal is from the decision of an Employment Tribunal sitting at Ashford, Kent on 10th July 2000, whereby the tribunal refused to strike out the respondents' claims.
2. The appellant was the employer of seven care assistants at a residential home for the elderly. Those care assistants presented Originating Applications to the Employment Tribunal claiming, amongst other things, that they had suffered detriment as a result of making a complaint about a health and safety matter under section 44 of the Employment Rights Act 1996, a form of victimisation, and that they had been constructively dismissed.
3. The Employment Tribunal had ordered exchange of witness statements, which had taken place some nine days before the first day of the hearing, equivalent to five working days.
4. On the first day of what was anticipated to be a substantial hearing, Counsel for the appellant applied for an order striking out the claims. She did so on two separate bases: first, under Rule 13(1) of the Rules on the footing that the claims had no reasonable prospect of success, or as Mrs Cox QC prefers to put it, was doomed to fail. Secondly, the application was advanced under Rule 13(2) on the footing that the applications were scandalous, frivolous and vexatious. The tribunal refused to make such an order.
5. According to the Notice of Appeal in this case it is relation to the tribunal's approach to its powers under Rule 13(1) that this appeal is brought. The tribunal decided that it had no power under Rule 13(1) to strike out an Originating Application on the ground that it had no reasonable prospect of success. No issue arises under this appeal on Rule 13(2) in terms of any assertion that the claims were scandalous, frivolous or vexatious.
6. Rule 13(1) reads as follows:

"13.-(1) Subject to the provisions of these rules, a tribunal may regulate its own procedure "

7. The tribunal made its decision, partly because it held that a striking out power was beyond a mere matter of regulating its procedure, but also because its powers under Rule 13(1) were:

"Subject to the provisions of these rules"

In particular, in that context, the tribunal drew attention to Rule 13(2) and (3) and also to Rule 7(4). Rule 13(2), insofar as relevant for present purposes, provides that a tribunal may:

"(d) subject to paragraph (3), at any stage of the proceedings, order to be struck out or amended any originating application or notice of appearance, or anything in such application or notice of appearance, on the grounds that it is scandalous, frivolous or vexatious;

(e) subject to paragraph (3), at any stage of the proceedings, order to be struck out any originating application or notice of appearance on the grounds that the manner in which the proceedings have been conducted by or on behalf of the applicant or, as the case may be, respondent has been scandalous, frivolous or vexatious."

It will be seen that those provisions are subject to Rule 13(3), that provides:

"(3) Before making an order under subparagraph (d), (e) or (f) of paragraph (2) the tribunal shall send notice to the party against whom it is proposed that the order should be made giving him an opportunity to show cause why the order should not be made, but this paragraph shall not be taken to require the tribunal to send such notice to that party if the party has been given an opportunity to show cause orally why the order should not be made."

There is no express power in Rule 13(2) to strike out because of a lack of a reasonable prospect of success.

8. Finally, it is necessary at this stage to refer to Rule 7(4), which states:

"(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 prospect 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."

9. The tribunal clearly attached some significance to the express powers to strike out on certain grounds in Rule 13(2)(d) and (e) and to the fact that the exercise of those powers were subject to the safeguards provided by Rule 13(3). It did not regard the general power in Rule 13(1) as extending to such matters, but saw it as being confined to more procedural steps. But it also emphasised the existence and scope of Rule 7(4) saying this at paragraph 13 of its extended reasons:

"13. Under this Rule, the Tribunal can consider whether an Originating Application has any reasonable prospect of success. However, if it decides that it does not have a reasonable prospect of success, the Tribunal has no power to strike out the Originating Application. The Tribunal's power is limited to ordering an Applicant to pay a deposit not exceeding £150. As the Rules expressly provide for the Tribunal's powers should it decide that an Originating Application has no reasonable prospect of success, in our view, any power we may have under Rule 13(1) is subject to Rule 7(4), which precludes a Tribunal from dismissing an Originating Application if it decides at a Pre-Hearing Review that it has no reasonable prospect of success. We conclude that as our powers under Rule 13(1) are subject to the provisions of the Rules, we have no power under Rule 13(1) to strike out an Originating Application on the grounds that it has no reasonable prospect of success."

Consequently, the tribunal did not deal with the merits of the appellants' arguments about whether the Originating Applications had, in fact, no reasonable prospect of success or not.

10. Before us, Mrs Cox, on behalf of appellant, seeks to rely today principally not on Rule 13(1) and on the arguments advanced before the tribunal below, but upon Rule 9 of the Rules to which no reference was made before the Employment Tribunal. Rule 9(1) is part of a series of paragraphs all entitled "Procedure at hearing". Rule 9(1) itself states:

"9.-(1) The tribunal shall, so far as it appears to it appropriate, seek to avoid formality in its proceedings and shall not be bound by any enactment or rule of law relating to the admissibility of evidence in proceedings before the courts of law. The tribunal shall make such enquiries of persons appearing before it and witnesses as it considers appropriate and shall otherwise conduct the hearing in such manner as it considers most appropriate for the clarification of the issues before it and generally to the just handling of the proceedings."

11. Mrs Cox seeks to rely on this power and in particular the reference to the power of the tribunal to conduct the hearing in such manner it considers most appropriate "to the just handling of the proceedings" as enabling an Employment Tribunal to strike out an application if it has no reasonable prospect of success.
12. Patently this is a new point being raised which was not advanced before the tribunal below. It is not a point taken even in the Notice of Appeal.
13. Mr Scott for the respondents objects to it being taken, but he does not seek an adjournment if the matter is allowed to be raised and we have allowed argument to be advanced on both sides on a de bene esse basis.
14. On dealing with whether this point can now be taken before us, we bear in mind what was said in Jones v Burdett Coutts [1998] IRLR 521, where the Court of Appeal held that the Employment Appeal Tribunal had been wrong to exercise its discretion to allow an employee to amend his Notice of Appeal so as to entertain a point of law which had been conceded by his representative before the Employment Tribunal. Of course that is distinguishable immediately from the present case in that the point under Rule 9 was not a point conceded below but was a matter simply not raised. The Court of Appeal went on in Jones, however, to hold that the EAT's discretion to allow a new point of law to be raised should be exercised only in exceptional circumstances for compelling reasons, especially if the result would be to open up fresh issues of fact which were not sufficiently investigated before the Employment Tribunal. It stressed that there is public interest in finality in litigation.
15. In the present case, the parties are agreed that no further factual material is required to deal with this new point of law. We take the view that that is an important consideration. In the case of Wilson v Liverpool Corporation [1971] I WLR 302 at 307, Widgery LJ referred to:

"… the well-known rule of practice that if a point is not taken in the court of trial, it cannot be taken in the appeal court unless that court is in possession of all the material necessary to enable it to dispose of the matter fairly, without injustice to the other party, and without recourse to a further hearing below."

16. It seems to us that there are exceptional circumstances here because of the combination of a lack of any need for more facts to be found in order to decide the point now being raised, and, in addition, the reality of the situation. By that we mean this: as things are at the moment, the Employment Tribunal hearing stands adjourned pending our decision on this interlocutory point. If we at this stage do not deal with the arguments now being raised in relation to Rule 9(1) of the Rules, it is evident that as soon as this matter returns to the Employment Tribunal an argument will be advanced in relation to the powers of the tribunal under that particular provision. In those circumstances, there is a very high likelihood that this particular argument will be advanced before the Appeal Tribunal on some future occasion, no doubt before many days have passed. In those circumstances, it seems to us to be right that the matter should be allowed to be canvassed at this stage and we cannot see that any injustice results to the respondents from pursuing that course. We therefore allow the Rule 9 point to be taken in this appeal.
17. Mrs Cox submits that it was not until her clients saw the respondents' witness statements a few days before the date fixed for the hearing that they were able to see that there was no prospect of success as they judged it. The question, therefore, was whether the Employment Tribunal should sit and hear the evidence called on behalf of the applicants and after some time have to deal with the submission that there was no case to answer, or whether it could, in effect, shortcut that and say at the outset that these were applications doomed to fail.
18. In her submissions as to the powers of the tribunal, Mrs Cox relies principally on Rule 9(1). She contends that the day when the application to strike out was made by the now appellants was part of the "hearing" in the sense used in that Rule because it was the first day of that hearing and because it met the definition of a "hearing" as spelt out in Regulation 2 of the 1993 Regulations. It is argued that the power under Rule 9(1) to conduct the hearing in such manner as the tribunal considers most appropriate to the just handling of the proceedings is a very wide power, once a hearing has commenced. It enables a tribunal to do justice and in particular it enables it to carry out proper case management, which is a normal feature of litigation generally these days. Mrs Cox accepts that there is no express authority to support the contention which she advances as to the proper construction of Rule 9(1), but she does refer to the way in which the power has been used in the case of Eurobell Holding Plc v Barker [1998] ICR 299. There, the Employment Appeal Tribunal stressed the importance of case management and made reference to Rule 9(1) when holding that an Employment Tribunal can require the advance exchange of witness statements and can require its leave to be obtained before further witnesses are called by a party. Mrs Cox argues that there is authority also for the proposition that Rule 9(1) allows a submission of no case to answer to be made at the end of a party's evidence and for that she relies upon the decision in London Borough of Hackney v Usher [1997] ICR 705. If that is the situation, then, she asks rhetorically, why should that position not be arrived at the start of the hearing on the basis of the witness statements.
19. Reliance is also place by the appellants on Rule 13(1), particularly in respect of the time before a hearing. It is contended that Rule 13(1) gives a tribunal a broad power to regulate its own procedure, which extends both to the hearing and to the period of time in advance of the hearing. It is submitted that the specific powers in Rule 13(2)(d) and (e), to which we have already referred, do not restrict the general power vested in a tribunal under Rule 13(1).
20. On behalf of the respondents, Mr Scott argues that Rule 9(1) is a provision dealing with, as its heading indicates, procedure at the hearing and not about the powers of a tribunal to strike out. He emphasises that striking out is what one might call a substantive matter in that it brings a matter to a close. It is not something which properly falls within how a hearing is conducted. He contrasts that with the situation which existed in the Eurobell case.
21. On Rule 13(1) he contends that striking out does not fall within the concept of regulating a tribunal's procedure, but again is something which brings proceedings to an end because it determines a result of a complaint. In those circumstances, he submits that it is quite inappropriate that such a significant power should be construed as being conferred by those general words.
22. In addition, Mr Scott argues that the power under Rule 13(1) is subject to the Rules, as it expressly says, and that must include Rule 13(2) with its particular reference to the power to strike out on certain clearly defined grounds. Why, he asks, should subparagraphs (d) and (e) be present in Rule 13(2) if there is already a general power to strike out conferred by the provisions of Rule 13(1) or, for that matter, Rule 9(1).
23. In general, Mr Scott emphasises that the Rules expressly provide for the situation where there is no reasonable prospect of success by enabling the tribunal to require a monetary deposit to be paid by a party, that of course being a reference to the powers conferred by Rule 7.
24. Finally, he points out that the Rules contain yet another express provision for striking out on clearly defined grounds, namely the power to be found in Rule 4(7) which enables a tribunal to strike out for a failure to comply with a requirement by the tribunal on a party to furnish further particulars or to grant discovery. Yet again, Mr Scott says, we have in the Rules an express and clear power to strike out in specific situations which all indicates that a more general power to strike out without any definition of the grounds is not to be read into either Rule 9 or Rule 13.
25. There is some limited authority on the approach to this particular matter. We have in mind the decision of this tribunal in Kelly v Ingersoll-Rand Co Ltd [1982] ICR 476 at page 480. That was a case where what is now Rule 13(1) was to be found in Rule 12(1) of the 1980 version of the Rules dealing with Industrial Tribunal procedures. At page 480A-C the Appeal Tribunal said this:

"Mr Lawton suggests that the necessary power is to be found in rule 12(1). It is to be remembered that industrial tribunals are statutory bodies whose powers are exclusively conferred and regulated by statute. They have no inherent jurisdiction: any jurisdiction they have has to be found in their regulatory statutory provisions. Were it not for words in rule 12(1), "Subject to the provisions of these rules," we think it may well be that the tribunal might have had power to strike out for want of prosecution. But, in our view, when one sees that striking out for want of prosecution is expressly dealt with, subject to specific safeguards, in rule 12(2)(f), it seems to us impossible to hold that there is a right to strike out an application for want of prosecution otherwise than in accordance with the requirements of rule 12(2)(f). Mr Lawton has not suggested that those requirements were satisfied in this case. Accordingly, it seems to us that the course taken by the tribunal in this case was one which they had no jurisdiction to adopt."

That case was dealing with a slightly different point because the issue there was whether there was a power to strike out for want of prosecution under the general procedural powers possessed by a tribunal when there was an express power to do so in a later provision in the Rules. Nonetheless, it does emphasise the proper approach to these questions of construction. Moreover, we note that in that case reference was made by the EAT in its judgment to the then equivalent power to what is now Rule 9(1), which was at that time Rule 8(1) of Schedule 1 to the 1980 Procedure Regulations, and clearly the tribunal had that in mind when it dealt with the matter in the way which we have indicated.

26. Reverting to the situation as it is under the current Rules, those Rules do expressly deal with certain grounds on which a tribunal can strike out an Originating Application. Thus one finds those powers to strike out on the basis either that the application is scandalous, frivolous or vexatious, or that the conduct of the proceedings has been scandalous, frivolous or vexatious. Those powers are clearly provided by Rule 13(2)(d) and (e).
27. Again, Rule 13(2)(f) enables a strike out to be ordered on the basis of want of prosecution. There are express safeguards provided before such powers can be exercised, those safeguards being found in Rule 13(3).
28. Then there is the power to which Mr Scott has drawn attention in Rule 4(7) to strike out an application in whole or in part if a requirement by the tribunal to provide further particulars or to grant discovery has not been complied with. Again, there is an express safeguard there in the latter part of Rule 4(7).
29. Moreover, the Rules expressly deal with what a tribunal may do if it takes the view that a party's contentions have no reasonable prospect of success. That of course is Rule 7(4), which deals with the ordering of a deposit to be made by the party in question if it is to be allowed to continue to take part in the proceedings. There has to be a pre-hearing review for that latter power to be exercised, but that generally works no injustice because a party may apply for a pre-hearing review to take place: see Rule 7(1). We acknowledge that Rule 7(4) does not expressly rule out any other sanction if a tribunal takes the view that there is no reasonable prospect of success, but it is particularly noticeable that the only sanction there being referred to is that of the ordering of a deposit as a condition of being allowed to continue to participate.
30. When both the powers of strike out and the powers of a tribunal to act when there is no reasonable prospect of success are expressly dealt with in the Rules, and dealt with with some precision, its seems to us to be impossible to derive a power to strike out on grounds of no reasonable prospect of success from the more general procedural powers, whether those are to be found in Rule 9(1) or Rule 13(1).
31. Had it been the intention to provide such a power, it seems to us that it would have been expressly given by these Rules, as is the power to strike out for the other reasons to which we have referred. Especially is that so when the very topic of a lack of a reasonable prospect of success is dealt with in the Rules by express provision. Furthermore, Rule 13(2)(e) enables an Originating Application to be struck out as scandalous, frivolous or vexatious because of the manner in which proceedings have been conducted. That clearly includes the way in which they have been conducted at the hearing. And yet if Mrs Cox's argument is correct, that power exists anyway under the tribunal's general powers under Rule 9(1), and Rule 13(2)(e) could have been confined to the period in advance of the hearing. Indeed, if she is right in relation to Rule 13(1) that power was not needed at all.
32. So far as Rule 13 is concerned, the tribunal's reasoning seems to us to be persuasive for the reasons, which we have already referred to.
33. Dealing with the appellant's more specific arguments, so far as Rule 9 is concerned, that is a Rule which is explicitly intended to deal with procedural matters at a hearing. The Eurobell Holdings decision is entirely understandable on that basis. Striking out an Originating Application is a far more drastic and indeed a draconian step. It seems to us that that is why the Rules make express provision for striking out in certain defined circumstances. It goes way beyond what one would normally regard as being covered by a general power to regulate a tribunal's proceedings. Moreover, if the power to strike out on this ground exists under Rule 9(1) once the hearing has begun, it will be strange if it only existed at the hearing and not in advance in an appropriate case. But that means that Rule 13 and its interpretation becomes highly relevant to the question of the proper construction of Rule 9. As we have indicated, such a power in advance of a hearing is, in our view, quite inconsistent with Rule 7(4). Rule 7(4) is certainly a more limited power, but if a more extensive power existed at that stage, namely to strike out in advance of the hearing, one would expect to see it set out expressly. But that makes it all the more unlikely that Rule 9(1) is intended to confer a power to strike out the hearing if such a power did not exist before the hearing began.
34. As for the practical inconvenience strongly relied on by Mrs Cox, we do not regard this as a real or a widespread problem. It would rarely be wise for an Employment Tribunal to arrive at the conclusion that an applicant's application had so little chance of success that it could be struck out and given its quietus simply on the basis of the written witness statements and without hearing the witnesses in question. That would be a very novel step in the practice adopted by Employment Tribunals. Witness statements are a valuable innovation which have helped greatly to shorten hearings, but they are frequently clarified and supplemented by oral questions in chief. At Employment Tribunal hearings where, in accordance with Rule 9(1), one seeks to avoid formality so far as is appropriate, it is right that that should be so. Even if the power existed, it would normally be premature to arrive at a conclusion that the application had so little chance of success that it should be ended. That seems to us to be why it is that Rule 7(4) allows only a less stringent step to be taken when there is no real prospect of success and not the final one of bringing the proceedings to a close by a strike out.
35. In conclusion therefore, we can see no error of law by the tribunal nor do we see that the new point of law, which has been raised this afternoon by Mrs Cox, provides any basis upon which the decision by the tribunal below should be upset. In those circumstances, it follows that this appeal is dismissed.

Application for leave to the Court of Appeal

36. On the understanding, Mrs Cox, that the proceedings before the Employment Tribunal will continue as arranged, we are prepared to grant you leave to appeal. We take the view that this is a new and not unimportant point.