United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR IAN WILSON Solicitor Messrs Dean Wilson Solicitors 96 Church Street Brighton BN1 1UJ
For the Respondent	MR RICHARD MARTIN Solicitor Messrs Gouldens Solicitors 10 Old Bailey London EC4N 7NG


 


MR RECORDER BURKE QC

1. This is an appeal by the employee, Mr Saka, against an order made by the Employment Tribunal at London North, chaired by Mrs Donne and promulgated on 28 January, that Mr Saka should pay the employers' costs to be assessed of his race discrimination claim which the Tribunal had dismissed in the previous year. We are told that the costs bill presented to Mr Saka by the Respondent's solicitor's amounts to as much £16,000, although that bill has not yet been through the process of assessment. At the Preliminary Hearing of this appeal one sole ground of appeal was identified as the ground on which this appeal should be argued on behalf of Mr Saka, namely whether the Tribunal erred in law in their interpretation of the way in which the evidence was given at the hearing so as to conclude that the conduct of Mr Saka in pursuing his claim was capable of being frivolous, vexatious or otherwise unreasonable when there had been no strike out proceedings on the basis of a lack of merits and no costs warning under Rule 7 of The Employment Tribunal Rules. During the course of the argument the submissions have varied to some extent from that without any objection taken. Mr Saka has been represented by Mr Wilson, the employers by Mr Martin who represented them at the Tribunal. We are indebted to both of them for their careful and economic arguments.

2 The Facts

The relevant facts can be briefly stated. Mr Saka is an architect; he is of black African origin; he is a British national and was educated and trained in this country. In 1998 he brought a claim against an earlier employer, a firm of architects, claiming racial discrimination. The Employment Tribunal at London North heard that claim over 3 days in May 1998. Mr Saka made a series of allegations of discrimination, including discriminatory dismissal. His evidence stood alone. The employers' case was that Mr Saka did not have the necessary skills or competencies for his job; eventually he was dismissed after just about 4 months in that employment. The Tribunal in a lengthy and detailed decision rejected each one of Mr Saka's complaints of discrimination. It is pointed out by Mr Martin on behalf of the employers that the Tribunal in that case, in dismissing the claim, set out over 2 pages, in some detail, the legal framework of a discrimination claim.

2. The Appellant, Mr Saka, started his employment with the current Respondents in December 1998. Again after a brief period his employment ended in dismissal; he was still within his 3 month probationary period when the dismissal occurred. In his originating application to the Tribunal, in March 1999, he claimed, that in the case of these employers too he had been discriminated against both in the course of his employment and in his dismissal. He did not specify in his IT1 in any detail what it was that constituted the discrimination on which he relied. He gave a history of events which had occurred during the course of his employment and said:-

"I believe the treatment outlined above was racially motivated and claim race discrimination".

The employers in their IT3 said that the reason for dismissal was capability and conduct which they particularised in some detail. Not surprisingly they sought further and better particulars of the allegation that Mr Saka believed that his treatment was racially motivated; and the Tribunal ordered Mr Saka to provide those particulars. The time for so providing was extended and the particulars were provided on the last day of that extension, that day being 28 June 1999. On 30 June in response to an earlier letter from the employer's solicitors asking for an adjournment of the hearing (which was due to commence on 13 July), because of Mr Saka's continuing failures to comply with orders for discovery and particulars, the Tribunal chairman wrote as follows:-

"The chairman refuses your request for the following reasons. Applicant must face up to his obligations, comply with the orders and directions for trial and the parties must be ready by 13 July 1999".

In the further and better particulars Mr Saka said:-

"The rest of the workforce were not disciplined for their deviance from set procedure".

and

"No white architect was treated in (the same) manner".

The employers asked for further particulars of those assertions on 6 July. On 9 July Mr Saka declined to provide such particulars. At the hearing he produced no evidence of any member of the workforce who had not been disciplined for deviance from set procedure or of any white architect who had been allegedly guilty of incompetence or misconduct who had not been treated in the same manner. There was a reference, recorded by the Tribunal, in the evidence to a white woman who upon dismissal or thereafter had been escorted from the premises, as indeed happened to Mr Saka. This arose from the employers' response in evidence to suggestions from Mr Saka in cross-examination that he had been thus treated because he was black.

3. The evidence to which we have just referred was given during the course of the hearing of the race discrimination claim on its merits on 13 and 14 July. The Tribunal reserved their decision and promulgated it with extended reasons on 4 August 1999. They rejected Mr Saka's complaints one by one. The central core of their decision is at paragraph 15 which we quote:-

"We find it a fact on the evidence that Mr Saka was dismissed because of his poor performance in the short period of time for which he worked for the Respondent. We do not find as a fact and we cannot draw an inference from this primary fact that if the Respondent had been faced with an employee not of Mr Saka's ethnic origin they would have treated that employee any differently from the manner in which they treated Mr Saka. We do not find it a fact and cannot draw an inference that Mr Saka had been treated less favourably than other employees not of his ethnic origin. We note in coming to this decision that Mr Saka did not give any details of employees not of his ethnic origin whom he alleges had been treated differently from himself".

It is clear, we interpose, in that paragraph that the Tribunal looked not only at actual comparators but also at whether they could draw inferences on the basis of hypothetical comparison, as indeed they were bound to do as a matter of law in the absence of live comparators.

4. Having read the decision the employers applied by their solicitors for an order for costs. The Tribunal fixed 18 January 2000 for the hearing of that application. Mr Saka did not attend. It is not submitted that any criticism of the Tribunal's decision arises from his absence or the Tribunal's proceeding in his absence. The Tribunal concluded that in bringing and conducting his case, Mr Saka had behaved frivolously, vexatiously and unreasonably, although not abusively. They found 4 reasons for so deciding. Firstly, he had given no evidence of any live comparators who had been treated more favourably than he but were of different ethnic origin. Secondly, he gave no cogent evidence as to why he considered that he had been dismissed because of his ethnic origin as opposed to of course his lack of competence on which the employers relied. Thirdly, the Tribunal had no hesitation in concluding that he had been dismissed because of his conduct; and fourthly, the Tribunal took into account that Mr Saka had presented a similar application to the Tribunal in relation to the previous employers which had failed, to which we have already referred. It is from that decision that this appeal is now brought.
5. The Submissions

Mr Wilson submits on behalf of the Appellant that the Tribunal, which, he concedes as he must, was exercising a discretion under Rule 12 of the Employment Tribunal Rules in making the order that it did, took into account irrelevant matters or failed to take into account relevant matters or acted perversely in reaching its conclusion that an order for costs should be made. He submits that the Tribunal did not find, contrary to what Mr Martin submits on behalf of the employers, that the Appellant's case before them was hopeless. He submits that an order for costs in circumstances such as these can only be made in exceptional circumstances and here there were 3 factors, the absence of which meant either that there could not be an order for costs or that there should not have been an order for costs if those factors had been properly taken into account by the Tribunal. Those 3 factors are, firstly, that there had never been any previous application to the Tribunal to strike out the claim on the basis of an absence of merit under Rules 13 (2) (d) or 13 (2) (e) of the Tribunal Rules (albeit it should be noted that those Rules do not allow striking out on the basis that the proceedings are unreasonable as opposed to frivolous or vexatious). Secondly, there had been no previous application under Rule 7 (4) of the Rules for a deposit to be paid on the basis that the claim had no reasonable prospect of success; and thirdly, in consequence of the absence of a Rule 7 (4) application there had been no costs warning nor was there any costs warning given during the course of the hearing itself.

6. Mr Wilson submits that the employers had plenty of opportunity to make such applications and indeed had sought to strike out, as they certainly did, on the grounds of failure in relation to the provision of further and better particulars and disclosure of documents. Unrepresented applicants, submits Mr Wilson, should be given the clearest possible warning of the risk of a costs order before a Tribunal can consider making a costs order against him. The Tribunal he submits, should have had those matters to which we have referred, albeit they are not necessary pre conditions to a costs order, in mind in exercising its discretion and does not appear to have had those matters in mind.
7. He further submits that, in considering the previous proceedings and the Appellant's failure in those proceedings, the Tribunal erred, it cannot be right, he says, for a Tribunal to have a previous failure in mind unless in the course of that failure the applicant had been found to have acted frivolously or vexatiously or unreasonably and had a cost order made against him, because it is the right of somebody who believes that he has been the subject of discrimination to bring a claim in respect of that discrimination and to have it tried. He further submits that in this case there is no finding that Mr Saka did not genuinely believe that he had merits such as to justify the bringing and continuing of proceedings. He draws attention on behalf of Mr Saka to the decision of this appeal Tribunal in Keskar v Governors of All Saints Church of England School (1991) ICR 493 in which, at Page 497, in a case in which an order against an applicant for costs in a race discrimination claim had been made and was the subject of an appeal, this appeal took into account the fact that there was a finding that the applicant's motive was one of resentment and spite in bringing proceedings. In this case there is no finding of any improper motive.
8. Mr Martin submits, in summary form, firstly, that in effect the Tribunal, by its reference to the absence of evidence as to comparators and the absence of any evidence as to why the applicant considered that he had been dismissed because of his ethnic origin, was, in truth deciding that the case was without merit and, secondly, that the discretion which the Tribunal was exercising was a broad discretion which must not be fettered by preconditions and that, whatever our own views, we sitting as an appeal Tribunal can only interfere with the exercise of discretion by the Tribunal on well known grounds which do not arise here. As for the absence of any application to strike out or to seek an order for a deposit, Mr Martin points out that the sequence of events did not permit of an application to strike out because the particulars were only delivered on 28 June with a hearing on 13 July and reminds us that on 30 June the Chairman had indicated his view that the parties should get on with the hearing; and he further points out that, if an application to strike out or for a deposit had been made, it would have almost certainly been unsuccessful and would have involved both expense and time.
9. Conclusions

We wish at the outset to make it clear that Tribunals should always have in mind the very real difficulties which face a claimant in a discrimination claim. Very rarely is there overt evidence of discrimination; and thus it may be and often is very difficult for the claimant to know whether or not he has real prospects of success until the explanation of the employers' conduct which is the subject of complaint is heard, seen and tested. Nothing we say should be taken to impinge on that broad and important principle. Secondly, and it follows from that, a costs order against an applicant in a discrimination claim is always likely in the absence of misconduct to be made only in a very rare and even an exceptional case. Nothing that we say in this appeal should be taken to encourage Tribunals to make such orders more frequently than in the past or on anything other than very clear grounds. However, it is for a Tribunal to decide whether, in its opinion, a party has behaved in bringing or conducting proceedings before it frivolously, vexatiously or otherwise unreasonably and to decide whether to make a costs under Rule 12 (1). In so doing it is exercising as the parties accept a discretionary jurisdiction. In the recent decision of this appeal Tribunal in Beynon v Scadden (1999) IRLR Page 700, again in the context of a costs appeal albeit not a costs appeal arising out of a discrimination claim, the President of this appeal Tribunal sitting together with Mr Jenkins and Mr Warman, said this:-

"As for the law, in approaching an appeal as to the exercise of discretion it is right for the Appellant body to remind itself of the correct approach of a Tribunal of first instance to such a task. In Gardener v Jay 1885 Chancery Division at 58, Lord Justice Bowen said (of the courts discretion as to the mode of trial): that discretion like other judicial discretions was the exercise according to common sense and according to justice and if there is a miscarriage in the exercise of it, it will be reviewed but still it is a discretion and for my own part I think that when a Tribunal is invested by Act of Parliament or by Rules of the discretion without any indication the Act or rules of the grounds upon which the discretion is to be exercised it is a mistake to lay down any rules with a view of indicating the particular grooves in which the direction should run for if the Act or the rules did not fetter the discretion of the judge why should the court do so?"

Paragraph 14 of that decision sets out further quotations which we need not refer to expressly; and at paragraph 15 the appeal Tribunal continues:-

"So in our case whilst we shall examine the cases to which we have been referred we must be at pains to remember, firstly, that those cases cannot fetter the jurisdiction as to costs conferred upon the Employment Tribunal by the Rules and secondly, we must avoid the common error of construing the cases rather than the statute. The proper test for the Employment Tribunal was not whether its order accorded with this authority or that but, ultimately, whether it was just to have exercised as it did the power conferred upon by the Rule".

10. Thus in our judgement the discretion given to the Tribunal under Rule 12 is a wide and unfettered discretion which should not be confined by limits put upon it in individual cases. We do not accept that a Tribunal cannot make a costs order against an applicant in a discrimination claim or any other claim simply because there has been previous application to strike out or no application under Rule 7 (4) or no cost warning. These are factors which a Tribunal may or may not wish to take into account and which may or may not sway it if it does take them into account; but we do not see how it can be laid down as a matter of law or guidance that such matters can or should be preconditions to the exercise of a broad discretion under Rule 12. In this case we can well see why there was no strike out application and no Rule 7 (4) application. The sequence of events to which we have already referred demonstrates why, when the particulars which were plainly unsatisfactory arrived, it was at the very least a preferable choice for the employers, in the face particularly of the Tribunal's letter of 30 June, simply to get on with the hearing which then was only less than 2 weeks away. And, further, it is our view that if an application to strike out under Rule 7 (4) had been made at that stage it would have had very little prospect of success. No doubt the Tribunal took the history into account in making the decision that it did.
11. We also do not accept that the Tribunal was not entitled to take into account the previous claim against the previous employers which had failed. It was a factor which, in our judgement, the Tribunal was entitled to take into account; the weight which they gave to it was a matter for them and not for us. They were no doubt aware, because it had been so submitted to them by Mr Martin and they had of course seen him give evidence, that Mr Saka was an architect and therefore an intelligent man who was capable of reading the previous decision and understanding from it and from his experience of that case what a discrimination claim involved and what was the legal framework within which such a claim fell to be determined.
12. We further accept the submission of Mr Martin that the Tribunal here did not isolate what they perceived to be the lack of merit in Mr Saka's claim and form their judgement on the basis of that alone. Nor did they isolate the previous failed claim and make their decision on that alone. They looked at all factors together and concluded, as they did, on the basis of their consideration of all of those factors. We are not persuaded that they took into account any matter which they should not have taken into account or failed to take into account any matter which they should have taken into account. Nor are we persuaded that the Tribunal's decision was perverse. There was evidence on which they could decide that Mr Saka had behaved unreasonably, it is unnecessary for us to go on and consider frivolously or vexatiously separately because, a finding that he had acted unreasonably would have been sufficient. We are far from saying that we would have reached the same conclusion, had we been sitting as the Tribunal, but we are not. We are not in a position to nor would we wish to substitute our views for those of the Tribunal which, it should be pointed out, had the advantage of hearing the evidence and hearing and seeing Mr Saka over a period of 2 days when his claim was tried out on the merits.
13. Not without some reluctance, therefore, we conclude that this is not a case in which perversity on the part of the Tribunal has been established and this appeal must be dismissed for the reasons which we have set out. Our reluctance is to some extent based on the size of the bill of costs which Mr Saka has been asked to meet. The hearing before the Tribunal on the merits took 2 days. It is not for us to express any views about the size of the bill and certainly we are not the ones who are going to assess it; nor are we in any way experienced in making such assessment. No doubt those who do make the ultimate assessment will look at it with care.