United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR RAJEEV THACKER (of Counsel) Instructed by: Messr John Halson Solicitors 26 Hope Street Liverpool L1 9BX
For the Respondent	NO APPEARANCE OR REPRESENTATION BY OR ON BEHALF OF THE RESPONDENT


 


MR RECORDER BURKE QC

The Appeal

1. This is an appeal against the decision of the Employment Tribunal sitting at Manchester, chaired by Mr JM Whittaker, made on 30 March 2001 and promulgated with Extended Reasons on 22 June 2001, that the Appellant's claim against the Respondents, her employers, that she had been the subject of race and sex discrimination he dismissed on the grounds that the manner in which her proceedings had been conducted, by her or on her behalf, between a directions hearing on 30 January 2001 and a hearing on 30 March 2001, was scandalous.
2. The Tribunal was acting under, what was then, Rule 13 (2) (e) of Schedule 1 of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 1993. That Rule has survived with a different number and with substitution for the word 'frivolous' of the word 'unreasonable' in the 2001 Rules.
3. At the material time it read as follows:

12 (2) "A Tribunal may – …

(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."

4. The effect of the Tribunal's decision, made at the outset of these proceedings, before there had been any hearing on the merits, either of the substantive claims or on any preliminary issue, arising in those claims, was, of course, that the Appellant's claim was brought to a total halt. The Appellant submits that the Order was one which, in the circumstances, should not have been made and that her claims should be remitted to a differently-constituted Tribunal, so that they can be determined on their merits.
5. After a different division of the Employment Appeal Tribunal, at a Preliminary Hearing in December 2001, ordered that the Appellant's appeal should proceed to a full hearing, the Respondents by a letter dated 7 February 2002 indicated that they did not wish to oppose the appeal and more recently they have indicated that they would not be present at the hearing. True to their word they have today neither appeared nor been represented. They are in our view to be commended for making a bold, (but as will appear later in this judgment) wholly sensible decision about the merits of the appeal and for saving both the time of this Tribunal and their own funds, which are of course public funds.
6. The fact that a Respondent indicates that he does not oppose an appeal, or even purports to consent to the allowing of an appeal, does not mean that the Employment Tribunal can or should simply allow the appeal without appropriate consideration. Whatever the Respondent's attitude, it is for the Appellant to persuade the Employment Appeal Tribunal that the Employment Tribunal, from whose decision the appeal is brought, has erred in law. Unless the Appellant can succeed in doing so the appeal will not be allowed.
7. However, we feel it right to say at the outset of this judgment that we are quite satisfied, as a result of the helpful Skeleton Argument and oral submissions of Mr Thacker, on behalf of the Appellant, that the Employment Tribunal in this case did err in law.

The History

8. The relevant history can be swiftly set out. On 14 July 2000 the Appellant, who is of black African origin, made complaints of race discrimination and possibly complaints of sex discrimination (there appears to be an issue as to whether the complaints in her Originating Application are or are not such as to include claims of sex discrimination) against her employers, which went back to the beginning of her employment in 1995.
9. On the face of her Originating Application very few of her specific complaints were made within the period of 3 months prior to 14 July 2000. The employers' grounds of resistance denied all allegations, albeit only, and unsatisfactorily, by way of a general denial. The employers took the point that the matters complained of were not part of a continuing course of discrimination and were wholly or largely out of time.
10. At a Directions Hearing on 30 January 2001 which, so far as we understand it, was the first Directions Hearing in this case, the Tribunal ordered that there should be a half day Preliminary Hearing on 30 March 2001 to determine whether there was a viable sex discrimination claim on the face of the pleadings, and if so, whether it was out of time, and whether the race discrimination claim was out of time.
11. We suspect that, if the preliminary issues hereafter fall to be decided, and if any of the claims are held to be in time, the Tribunal will also have to decide whether any which are held to be out of time should be admissible in evidence and, if so, which. We mention this because it may be relevant in the future.
12. The Tribunal also ordered that there should be an agreed bundle of documents within 42 days – that is to say by about 13 March – the Respondents being responsible for the initial production of an index, with the Appellant's side to add any further documents thereto, promptly after production of the index. It was also ordered that full and complete witness statements should be exchanged no less than 28 days before the hearing date.
13. On 17 March (well after 28 days before the hearing date), Mr Halson, the Appellant's solicitor, who is a sole practitioner, wrote to the Employment Tribunal saying that he had been in difficulty in complying with the Orders that had been made and would not have a statement from the Appellant until very shortly before 30 March. For that reason he asked for an adjournment. His letter sought to explain the reasons for his getting into difficulties in complying with the Orders. It is not necessary to go into those reasons in any detail at this stage. His letter was polite and respectful, although his explanation was far from wholly convincing.
14. The Respondents indicated, by letter to the Tribunal on 21 March, that they did not object to the adjournment sought; but the Tribunal on 22 March refused the adjournment saying that Mr Halson should be able to prepare a statement in the next few days which, if done, would have given the employers' side a little time, although not very much time, to consider such statement. No doubt that is why the employers' solicitor was prepared to consent to the adjournment sought; and he was wise to take that course because, on the morning of the hearing, Mr Halson produced a witness statement from the Appellant which was, we understand, 96 pages long.
15. It is probable, although this is only an inference which we draw, that the Chairman who made the decision, set out in the Tribunal's letter of 26 March, had not seen the Respondent solicitor's letter of 21 March.

The Hearing

16. At the hearing Mr Halson produced the lengthy statement from the Appellant to which we have just referred. He did not produce any list of any further documents to be added to the Respondents' index.
17. Mr Jackson, the Respondents' solicitor, had prepared a written Skeleton Argument which went solely to the preliminary issues directed to be tried. The Skeleton Argument contained no complaint about the Appellant solicitor's failure to comply with the Orders for witness statements or documents. However, the Skeleton Argument appears to have pre-dated Mr Halson's failure to comply with those Orders; that would explain why it did not contain any comment about those failures.
18. At the outset of the hearing, as the Tribunal's decision states in paragraph 3, Mr Halson was asked to explain why the January Directions had not been complied with. He gave an explanation which was certainly inadequate. It was his duty to ensure that the Directions were complied with. He had plainly failed in that duty; it is not sufficient for a solicitor, even a sole practitioner, to say that he has not had enough time to do the work which, by accepting and continuing to accept his client's retainer, he is obliged to carry out in order properly to run his client's case.
19. If such a solicitor does not himself have sufficient time, he must either make other arrangements to enable his client's case to be properly conducted or seek an extension of time or an adjournment; and if chooses the latter route and fails to achieve it, he must then proceed by the first route.
20. The Tribunal plainly believed, and concluded in the clearest terms, that Mr Halson's conduct of the Appellant's claim had been outrageous. They said that neither the Chairman nor the Members had ever been party to such a blatant and open disregard of Directions, that the explanation given by Mr Halson was completely unacceptable and that his conduct on behalf of his client was scandalous. On that basis alone, as is manifest from their decision, they decided, in the exercise of their discretion, to strike out and dismiss the Appellant's claims under Rule 13 (2) (e).
21. There is considerable dispute between Mr Halson and the Chairman as to how the jurisdiction of the Tribunal under Rule 13 (2) (e) came into the picture. Mr Halson has said in an affidavit that the Chairman first brought it into the picture and in effect persuaded Mr Jackson, the employers' solicitor, to apply for the claim to be dismissed, not on the basis that the claim was out of time but on the basis of Mr Halson's conduct.
22. The Chairman, to whom of course a copy of Mr Halson's affidavit has been sent for his comments, has replied saying that it was Mr Jackson who raised the question of striking out under Rule 13 (2) (e). There are other differences between Mr Halson's account of how the hearing on 30 March went and the account given by the Chairman.
23. In our judgment it is not necessary to resolve those differences because, whichever version is correct, the result of this appeal must necessarily be the same. It does not really matter whether it was the Chairman who first referred to Rule 13 (2) (e) or Mr Jackson who did so. The Tribunal struck the case out under Rule 13 (2) (e) and the question for this Appeal Tribunal is, did they err in law in so doing, by whoever the possibility of so doing was introduced.

The Result

24. There are four reasons why we conclude that the Tribunal erred in law in making the Order that it did.
25. We acknowledge that the Tribunal was, of course, exercising a discretion and that the Employment Appeal Tribunal should hesitate long before interfering with the exercise by the Tribunal below of such a discretion. However, there is no doubt that the Employment Appeal Tribunal has power, in certain circumstances, so to interfere. In De Keyser Ltd v Wilson [2001] IRLR 323 the Employment Appeal Tribunal presided over by the President, Mr Justice Lindsay, said this:

21 "Firstly, it is in our view an error of law for an Employment Tribunal, when exercising a discretion, to leave out of account material which should have been taken into account or to take into account matter which should have been left out. That is common ground. Secondly, if that can be shown to have occurred, then the Employment Appeal Tribunal is at liberty to set aside the exercise of the discretion as being in error of law. Thirdly, if the discretion is thus set aside, the Employment Appeal Tribunal can either remit the matter for fresh or further consideration by the Employment Tribunal or, if the case is plain enough on the material before the Employment Appeal Tribunal, the Employment Appeal Tribunal can itself exercise the discretion that would otherwise have fallen for exercise by the Tribunal below."

26. We treat that paragraph as setting out how and on what bases the Employment Appeal Tribunal can proceed in a case such as this, De Keyser being indeed a case, as appears in more detail below, in which there had been a striking out because of the scandalous manner in which one of the parties had conducted the proceedings.
27. Firstly, the Tribunal said, in their decision at paragraph 2, that the Respondents' solicitors had made repeated requests of the Appellant and her solicitor for details of the documents on which the Appellant had intended to rely and had received no response. It seems clear that this was not the case. There had been no such repeated request.
28. Similarly, the Tribunal was very critical of Mr Halson's serving his client's witness statement on the morning of the hearing; but it does not seem to have taken into account that Mr Jackson appears not to have objected to that; and, of course, the decision taken on 22 March had anticipated that Mr Jackson would have little if any notice of its contents before the hearing started but contemplated that the hearing would nonetheless proceed on its merits. These were relevant factors which the Tribunal appears to have failed to take into account.
29. However, even if those important errors had not been made, the Tribunal, we are satisfied, nevertheless, failed to approach their consideration of whether or not to exercise the power to strike out under Rule 13 (2) (e) correctly in law.
30. The starting point for their consideration had to be whether the conduct of the Appellant's case was scandalous. In Bennett v London Borough of Southwark [2002] EWCA 223 the Court of Appeal, on appeal from the Employment Appeal Tribunal, addressed precisely this topic and addressed it in the context of the effect on the law generally at Article 6 of the European Convention on Human Rights, by that time of course forming part of the law of this country.
31. The Court of Appeal concluded, as Sedley LJ, with whom Longmore LJ agreed, set out at paragraph 27 of the judgment, that 'scandalous' does not in the modern world mean shocking. Sedley LJ said:

27 "…the word 'scandalous' in its present context seems to me to embrace two somewhat narrower meanings: one is the misuse of the privilege of legal process in order to vilify others; the other is giving gratuitous insult to the court in the course of such process."

This part of Sedley LJ's judgment is not obiter but a direct and binding exposition of the meaning of the contemporary meaning of the word "scandalous".

32. The conduct of Mr Halson, however disappointing and open to strong criticism, in our judgment did not amount to a misuse of the privilege of legal process in order to vilify others and did not amount to gratuitous insult to the court. Had the Tribunal had in front of them the judgments in Bennett v London Borough of Southwark, in our view they would necessarily have come to a different conclusion as to whether Mr Halson's conduct was scandalous, within the correct meaning of that word in Rule 13 (2) (e).
33. It is only fair to the Tribunal to say in this judgment, so that the Tribunal can read it for themselves, that the Tribunal could not in fact have had the decision in Bennett in front of them because it was not made until 21 February 2002; but of course it constitutes relevant law, which we must apply to the present case. In our judgment, the Tribunal was wrong in law in concluding that the conduct of Mr Halson in this case was scandalous.
34. Furthermore, the Tribunal appear to have proceeded on the basis that the conduct of Mr Halson was such that they should strike out by reason of that conduct without consideration of any other matters. In paragraph 4 of their decision (and we quote from the Extended Reasons although it seems that they are verbatim the same as the Summary Reasons) the Tribunal say, after having set out their views as to Mr Halson's behaviour:

4 "The Tribunal was unanimously of the view that both the Applicant and her representative had had more than ample time in which to comply with the Directions and yet when they attended before the Tribunal on 30 March they had even by then not begun to comply with the Directions in respect of an index and an agreed bundle of documents. On that basis the Tribunal was unanimously of the view that it was appropriate to strike out and dismiss the Originating Application…"

35. Before a Tribunal can, as a matter of law, strike out on the basis that there has been scandalous conduct, under Rule 13 (2) (e) as it then was or under its replacement in the 2001 Rules, the Tribunal have to consider, in addition to the degree of the shortcomings of the party or party's representatives which are under scrutiny, whether a fair trial of the issues, despite that conduct, is nevertheless possible.
36. In De Keyser the Employment Appeal Tribunal, at paragraph 24 said this:

24 "As for matters not taken into account which should have been, the Tribunal nowhere in the course of their exercising their discretion asked themselves whether a fair trial of the issues was still possible. In a case usefully drawn to our attention by both sides' counsel, namely Arrow Nominees Inc v Blackledge [2000] 2 BCLC 167, the Court of Appeal had before it a case where the judge below had more than once declined to strike out the proceedings on the basis that whilst one party had, in the course of discovery, disclosed forged documents and had lied about the forgeries during the trial, a fair trial was, in his view, still possible."

37. The Employment Appeal Tribunal went on to decide that the failure in that case to consider whether a fair trial was still possible was an omission on the part of the Employment Tribunal to consider a material issue. In so holding in De Keyser, the Employment Appeal Tribunal was following the decision of the Court of Appeal in Arrow Nominees v Blackledge [2000] 2 BCLC 167 in which the Court of Appeal quoted and approved these words of Millett J (as he then was) in the case of Logicrose v Southend Football Club Ltd [1988] The Times 5^th March:

24 "…I do not think that it would be right to drive a litigant from the judgment seat without a determination of the issues as a punishment for his conduct, however deplorable, unless there was a real risk that that conduct would render the further conduct of proceedings unsatisfactory. The Court must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice."

38. In Terry v Hoyer (UK) Ltd [2001] EWCA 6678 the Court of Appeal rejected the proposition that conduct would be capable of being scandalous such as to justify a strike out only if there could not eventually be a fair trial, notwithstanding that conduct.
39. However, it is clear from that decision, from the Arrow Nominees decision and from De Keyser, that in the current context it is essential for a Tribunal which is considering a strike-out on the basis of scandalous conduct, to consider whether, despite that conduct, a fair trial can, nevertheless, be achieved and to balance the risk, if any, that a fair trial can not be achieved against the seriousness of the conduct which is under examination.
40. In this case the Tribunal simply did not consider at all whether a fair trial could or could not be achieved. In our judgment, had the Tribunal asked itself that question only one answer could have been produced, namely that a fair trial was possible. If Mr Jackson had been unable to proceed on 30 March, then an adjournment could and should have been granted if he had sought one. Since he had been content that there should be an adjournment only a few days earlier, it would have been difficult for Mr Halson to have resisted one had it been sought. Of course the Respondents would have been entitled to an Order for costs thrown away; and the measure of the Tribunal's displeasure could have been reflected in the Order for costs which they made and perhaps in their making a forthwith Order.
41. If, on the other hand, Mr Jackson did not want an adjournment then the case could and should have proceeded on the morning of the hearing. Had documents come up during the course of that morning which Mr Jackson had not had a chance to see, needed to take instructions upon and could not take instructions on there and then, he would undoubtedly on request have obtained an adjournment on suitable terms.
42. It has to be borne in mind, too, that this was not a case of long-standing and repeated failure to comply with Orders or Directions on the part of the Appellant and her team; only one Directions Hearing had taken place. That had taken place only two months before. There are many cases, unfortunately, which the Tribunal sees and which the Employment Appeal Tribunal also sees of disregard of Orders on a considerably worse scale. A balancing exercise, if properly carried out, would, in our judgment, have inevitably produced the result that the Applicant's claims would not have been struck out.
43. There is a further reason why, in our view, the Tribunal's decision was in error. Bennett also decided that that, before the Tribunal can strike out in the face of scandalous conduct, the Tribunal must consider whether and determine that striking out is a proportionate response to the scandalous conduct. It is at least possible that that part of the decision of the Court of Appeal in Bennett which deals with proportionality is obiter dicta; but if so, it is of course persuasive and appears to us to be plainly right. It might be that there is little difference between on the one hand considering proportionality and on the other hand balancing the nature of the scandalous conduct against the risk to a fair trial, but what is plain in this case is that the Tribunal did not consider at all whether the decision to strike out was a proportionate response to the conduct of which it had been so critical.
44. We repeat that the Tribunal did not have Bennett in front of them, nor did they have De Keyser in front of them, that case having been given as a reserved decision only 10 days before the date of the hearing; and it almost certainly did not have the ability to get hold of Arrow Nominees which was reported, so far as we are aware, only in Butterworth Company Law Cases.
45. However, the law required the Tribunal to consider whether striking out was a proportionate response to the conduct complained of and whether a fair trial was possible despite that conduct. The Tribunal considered neither; and in considering neither it fell into plain error of law.
46. We have already set out in this judgment the passage from De Keyser in which the Employment Appeal Tribunal said that the Employment Appeal Tribunal can itself exercise the discretion which the Tribunal purported to exercise if the case is plain enough. In our view, the circumstances in this case are indeed wholly plain. If, contrary to what we have set out above, the conduct in this case fell within the modern definition of the word scandalous, as set out in Bennett, so that a discretion to strike out fell to be exercised, we have no doubt that it should have been exercised and should now be exercised in favour of those claims continuing.
47. We have already said that the failure to comply was of relatively short duration. The failure of Mr Halson's adjournment application is likely to have occurred only because the Tribunal made a decision without having seen the Respondent's letter which agreed to the adjournment. A fair trial of an important claim could have been obtained and was not, in reality, substantially prejudiced by what had occurred; and striking out would, in our judgment, have been wholly disproportionate to the errors, albeit serious errors, which the Appellant's solicitor had allowed to take place.
48. For those reasons we allow the appeal and remit this case for re-hearing of the preliminary issues identified in the Directions Order of 30 January 2001, to be heard before a differently-constituted Tribunal.