United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS R THOMAS (of Counsel) Instructed by: Messrs Hammonds Solicitors 2 Park Lane Leeds LS3 1ES
For the Respondent	MR A ELESINNLA (of Counsel) Instructed by: Messrs J R Jones Solicitors 55-56A The Mall Ealing London W5 3TA

SUMMARY

Practice and Procedure

Solicitors and Counsel failed to raise future loss of earnings during remedies hearing. Whether procedural mishap. Grounds for review. Whether fresh evidence could be adduced on review.


 


HIS HONOUR JUDGE ANSELL

1. In this case the Appellant seeks to appeal the decision of an Employment Tribunal held at Watford on 30 October 2003, who in a decision promulgated on 12 December 2003 unanimously agreed to allow a review of their previous remedies decision relating to compensation, which had been heard by the same Tribunal on 3 April 2003, the decision being promulgated on 24 June 2003.
2. The background facts are that the Tribunal had dealt with a merits hearing on 21 and 22 January 2003 and as a result the Appellant was held to have unfairly dismissed the Applicant on procedural grounds and to have discriminated against him contrary to section 5 (2) and section 6 of the Disability Discrimination Act 1995. They then adjourned the issue of compensation to a hearing on 3 April.
3. Prior to that hearing the Respondent's solicitors had filed a schedule of loss including within the schedule for the compensatory award in respect of unfair dismissal loss of future earnings. In fact, because of the nature of the unfair dismissal and the statutory cap, the loss of future earnings claim was more relevant to the issue of compensation in respect of the disability discrimination.
4. By the time of the remedies hearing, an updated schedule of loss had been filed, which made no mention of the issue of loss of future earnings and merely claimed loss of wages from 26 July 2002 to 3 March 2003. In the course of the hearing no evidence was adduced nor questions asked in relation to loss of future earnings. The Respondent gave no evidence, nor was any medical evidence called, nor were any figures put before the Tribunal. The Tribunal did not raise the issue themselves.
5. We understand that as they were announcing their decision, which clearly did not include any sums in respect of future losses, Mr Elesinnla who appeared below, and who no doubt then realised what he termed was an error, raised the issue with the Tribunal. Their initial view was contained in paragraphs 18 and 19 of their decision in the following terms:

18. We were not asked by the Applicant, at this hearing, to make an award of compensation for ongoing loss of wages. An earlier schedule of loss included in the bundle of documents had requested compensation for 12 further months of unemployment. This schedule was, however, withdrawn and replaced by an amended schedule. Neither that amended schedule nor the Applicant's submissions at this hearing made any reference to a claim in respect of ongoing loss. Moreover, the schedule specifically claimed loss to 3 March 2003. In arriving at its decision, this Tribunal assumed that what appeared to be a deliberate amendment had been made to take into account the fact that the Applicant's ongoing loss of wages had ceased. Counsel for the Respondent appears also to have made the same assumption and did not address the question of ongoing loss in her submissions. Only after the Tribunal had already delivered this decision orally did Mr Elesinnla state that the omission of the claim for ongoing loss from the third schedule must have been a mistake. He invited us to reconsider our decision, but we took the view that it would be unfair to the Respondent to address the claim without further evidence to support it. In particular, it would be necessary to consider the claim in the light of any failure to mitigate ongoing loss. It also appeared to the Tribunal that it would be impossible to proceed with any discussion of that situation unless and until it was explained to it why the third schedule of loss had indicated termination of the claim on 3 March 2003. Mr Elesinnla was unable to shed any light on this. We presume the schedule of loss had been prepared by the Applicant's solicitors. Our decision not to enter, without further notice, upon what would amount to a review of our earlier decision is, therefore, not on purely procedural grounds but on grounds of established injustice to the Respondent and inadequacy of the evidence before us. In our view it is open to the Applicant to request a review of this aspect of our decision but we would emphasise that that request will be considered in the light of the appropriate considerations to apply to any request for a review. We would also draw attention to the fact that, if we were to re-open this decision, we would require evidence to enable us to decide the question of mitigation and that evidence would involve medical evidence of the likelihood of the Applicant recovering from his disability.

19. It will be apparent from this Decision that a significant amount of necessary evidence has not been presented to this Tribunal and that there has been a significant amount of uncertainty as to the heads of claim which are being pursued. We deplore this situation. Quite apart from the effect upon the other party, Employment Tribunals are maintained at the expense of the state and it is irresponsible to create a situation where it is necessary to hold a further hearing if amounts of compensation are to be fully considered. There is much to be said for procedural strictness in this respect, by which strictness parties are not permitted a second chance to repair the effect of their failure properly to prepare the case for this Tribunal."

6. Thereafter an application was made for a review of the decision based primarily on the alleged mistake made by the Respondent's solicitors in the preparation of the schedule of loss that was placed before the Tribunal at the remedies hearing. In support of that application the solicitors filed yet a further schedule of loss which included a claim for loss of future earnings based on 12 months loss at £1,112.44 net per month, namely £13,349.28.
7. By the time the Tribunal came to deal with the application it seems clear to us from the language that they used that they understood that the claim for future losses was substantial and appeared to go beyond the sums claimed in the fourth schedule that had been attached to the application for the review. Indeed we were told that at the subsequent remedies hearing the sums being claimed were in excess of £300,000 and there was an eventual award of a sum in excess of £100,000.
8. The power to allow a review of a Tribunal's decision is contained in Rule 13 of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 (SI2001/1171) and provides as follows:

(1) Subject to the provision of this rule, a tribunal shall have power, on the application of a party or of its own motion, to review any decision on the grounds that -

(a) the decision was wrongly made as a result of an error on the part of the tribunal staff;

(b) a party did not receive notice of the proceedings leading to the decision;

(c) the decision was made in the absence of a party;

(d) new evidence has become available since the conclusion of the hearing to which the decision relates, provided that its existence could not have been reasonably known of or foreseen at the time of the hearing; or

(e) the interests of justice require such a review.

9. The Tribunal's decision was contained in paragraph 9 wherein they set out the various factors as follows:

"9. Turning to the question of compensation, it is the view of this Tribunal that, had the Applicant brought the appeal against termination of his employment which he wished to bring by alleging failure to implement his request for change of post, that appeal would certainly have failed. It would almost certainly have failed on the grounds that we have outlined making re-engagement in some alternative post not a reasonable practicability. In our view, the Applicant, had he been accorded a fair appeal procedure, would have been dismissed. It follows that his compensation for unfair dismissal should be limited to the basic award to which he is entitled and to loss of wages for that six-week period alone.

10. Their conclusion was set out in paragraph 10 in the following terms:

"10. The continuing loss of wages for the remainder of the period for which the Applicant claims has not been the subject of compensation for unfair dismissal and is therefore the subject of a claim for damages as a result of disability discrimination. We consider that the Applicant has made few, it any, attempts to secure alternative employment. On the assumption that he has remained disabled, however, we do not think that his failure to mitigate his loss, to date is unreasonable. We wish to emphasise, however, that this consideration only applies to the situation which we are considering to the date of this hearing. Had we been asked to consider ongoing compensation for future loss, we would have wished to receive medical evidence in support of a prognosis of the length of time for which the Applicant's disability might be expected to continue. In our view, that is a central factor in deciding upon his duty to mitigate in the future."

11. At the heart of Miss Thomas' submissions on behalf of the Appellant is the argument that the Tribunal failed to pay proper attention to the authority of Lindsay v Ironside Ray Vials [1994] ICR 384 and in particular failed to give proper consideration to the effect of the mistakes on the part of the lawyers acting for the Respondent, both in the preparation of the amended schedule that was placed before the Tribunal and also in respect of the failure to raise the issue in the course of the hearing. She argues that if the Tribunal had correctly applied the principles in Lindsay they would then not have been able to conclude that they had jurisdiction to grant the review. She also submits that the Tribunal failed to take into account relevant considerations in their application of Rule 13 (1) (e) and also as a result of their review allowed the Respondent to adduce further evidence without applying any of the principles regarding adducing fresh evidence.
12. In Lindsay an Employment Tribunal had determined at a preliminary hearing that a complaint alleging racial discrimination had been issued out of time and that it was not just and equitable to extend the time period. At the hearing the employer's solicitor had made submissions as to why it was not just and equitable to extend the period, but the employee's representative who was not a lawyer had not made any submissions in relation to the Tribunal's exercise of discretion.
13. The Tribunal allowed a review on the grounds that the representative had not addressed the Tribunal on their discretion to extend time. The EAT (Mummery J presiding) allowing the employer's appeal held that the power to grant a review on the grounds that the interests of justice required such review should be exercised cautiously and was appropriate where there had been a procedural shortcoming such as a party had been denied a fair and proper opportunity to present a case and that on the facts of that case the failure of a representative to make submissions on an issue which had been raised before the Tribunal by the employers did not amount to the denial of a fair opportunity to present an argument on a point of substance. At page 393 Mummery J said this:

"(4) The industrial tribunal erred in law in holding that it had jurisdiction to grant a review of the earlier decision and to vary it. The power to grant a review on the grounds "that the interests of justice require such a review" is in very wide terms. It is, however, a power which should be cautiously exercised. As was observed by Phillips J in Flint v Eastern Electricity Board [1975] I.C.R. 395, 404, the interests of justice include, not only the interests of the person seeking a review, but also the interests of a person resisting a review on the grounds that "once a hearing which has been fairly conducted is complete, that should be the end of the matter." There are also the interests of the general public in finality of proceedings of this kind. Phillips J said, at p. 404: "[it] should only be in unusual cases that the employee, the applicant before the tribunal, is able to have a second bite at the cherry." In the present case, it is agreed that judicial guidance on this point can be gathered from the decision of the appeal tribunal in Trimble v Supertravel Ltd [1982] I.C.R. 440. In that case an industrial tribunal held that the dismissal was unfair, but refused to award the applicant compensation on the ground that she had failed to mitigate her loss. The applicant complained that she had not been given an opportunity to address the tribunal on the question of mitigation. She applied for a review. The industrial tribunal refused a review, but the appeal tribunal allowed the applicant's appeal. Giving the judgment of the appeal tribunal Browne-Wilkinson J. said, at p. 442:

"As it seems to us the fundamental question is whether or not the industrial tribunal's decision that the employee had failed to mitigate her loss was reached after she had had a fair and proper opportunity to present her case on the point, being aware that it was a point which was in issue. We do not think that it is appropriate for an industrial tribunal to review their decision simply because it is said there was an error of law oil its face. If the matter has been ventilated and properly argued, then errors of law of that kind fall to be corrected by this appeal tribunal. If, on the other hand, due to an oversight or to some procedural occurrence one or other party can with substance say that he has not had a fair opportunity to present his argument on a point of substance, then that is a procedural shortcoming in the proceedings before the tribunal which, in our view, can be correctly dealt with by a review under rule 10 of Schedule 1 to the Industrial Tribunals (Rules of Procedure) Regulations 1980, however important the point of law or fact may be. In essence, the review procedure enables errors occurring in the course of the proceedings to be corrected but would not be normally be appropriate when the proceedings had given both parties a fair opportunity to present their case and the decision had been reached in the light of all relevant argument."

In a later passage the judgment referred, at p. 443H, to a decision "reached after there has been procedural mishap"."

Later, in paragraph (5) he added the following:

(5) … The fact that the tribunal thought it necessary, in its review decision, to make criticisms of Mrs Grenham's ability indicated that the reason for granting a review was that, in the view of the industrial tribunal, the applicant's case was not properly argued as a result of Mrs. Grenham's shortcomings. Failings of a party's representatives, professional or otherwise, will not generally constitute a ground for review. That is a dangerous path to follow. It involves the risk of encouraging a disappointed applicant to see~ to reargue his case by blaming his representative for the failure of his claim. That may involve the tribunal in inappropriate investigations into the competence of the representative who is not present at or represented at the review. If there is a justified complaint against the representative, that may be the subject of other proceedings and procedure. It is thus our view that the industrial tribunal erred in law in granting a review under rule 10 (1) (e) of the Rules of Procedure of 1985."

14. The essence of Miss Thomas' complaint is that although the Tribunal were addressed extensively during the hearing on the principles set down in Lindsay, the only time that the case is referred to in the Tribunal's decision is at paragraph 8 and the Tribunal only use the decision to support their view that review rather than recall was the appropriate way in which the case should proceed. She submits that the situation that arose in this case was clearly a "Lindsay type situation" and yet the Tribunal appear to have proceeded on the basis that they had unfettered discretion under Rule 13 without considering the effect of the dicta in Lindsay as to the effect of the failings of a parties' representatives, professional or otherwise. She argues that had the Tribunal taken those dicta into account then they could have only come to one decision which was to refuse the review since it arose from the failings of both the solicitors in failing to place a proper schedule before the Tribunal and Counsel in failing to raise these issues during the hearing.
15. Mr Elesinnla argues that the Tribunal clearly had Lindsay in mind and indeed in paragraph 8 refer to the facts when the EAT set aside the Tribunal's decision "on the ground that the Applicant had had a fair and proper opportunity to present her case and that her representative had simply failed to raise the issue of the Tribunal's discretion to extend time for the presentation of an Originating Application." He argues that the Tribunal clearly distinguished this case, which they treated as one of "error" or "omission", from the situation in Lindsay where the relevant issue had clearly been raised within the hearing by the employer's solicitor but had not been responded to by the employee's representative.
16. Mr Elesinnla then took us to a recent decision of this court in Mrs Williams v Ferrosan Ltd (UKEAT/1005/03/MAA) where in the course of a remedies hearing an issue arose as to whether that part of the award which reflected loss of future earnings was taxable. Both the Chairman and both parties' representatives were all under the misapprehension that there would be no tax liability in respect of loss of future earnings and that therefore the amount to be awarded by the Tribunal in respect of loss of future earnings should be calculated less tax. There was no dispute that the Tribunal intended to make an award in respect of the loss of future earnings upon which Mrs Williams would thereafter not be expected to pay tax which would otherwise be due on her wages. Both the Chairman and the representatives had made a mistake and that tax was payable on that part of the award relating to loss of future earnings and therefore the Tribunal ought to have made a gross award.
17. The Tribunal refused an application for a review and this court allowed the appeal. At paragraph 17 Hooper J said this:

"17. Although this is not a case where a party has been denied a fair opportunity to present its case before the Tribunal, it seems to us that the "dangerous path" argument adverted to by Mummery J is less persuasive when, as in this case, the mistake was made by both parties and by the Chairman. If the error is more than a minor one, that does not, in the light of Trimble prevent a review. It being agreed that this error would have been corrected by the EAT if an appeal had been launched and a necessary extension of time given, it seems to us, in accordance with rule 10, that using the review procedure to remedy the error saves expense and helps to ensure that the matter is dealt with expeditiously. As was said in British Midland Airways, an "appeal takes much longer and is much more expensive". On the facts of this case, we have no doubt that the "interests of justice" required that the error be put right at a review and that putting it right at a review would be dealing with the case "justly"."

18. We are quite satisfied that the Tribunal had the principles in Lindsay in mind. They had been referred to the case and made reference to it in paragraph 8. It is clear from the manner in which they dealt with the rest of the case that they were seeking to distinguish the situation in the case before them from what had occurred in Lindsay.
19. We are also mindful of the fact that in this case the Tribunal clearly accepted that there was some responsibility on them to raise the issue of future loss had they realised that there was a mistake made by the solicitors regarding the claim for ongoing loss as opposed to a date having been deliberately selected as a significant cut-off point for loss. Authorities such as Tidman v Aveling Marshall Ltd [1977] 218 EAT and Langston v Cranfield University [1998] IRLR 172 make it clear that it is the duty of the Employment Tribunal itself to raise the five categories of compensatory award, namely: immediate loss of wages, manner of dismissal, future loss of wages, loss of protection in respect of unfair dismissal and loss of pension rights, whether or not the matters have been specifically raised by the parties.
20. Miss Thomas then proceeded to make further complaints in relation to the balancing exercise that the Tribunal carried out in relation to the relevant considerations, namely:

(i) The Tribunal failed to place sufficient emphasis on importance of finality in proceedings;

(ii) Prior to the issue of future losses being raised, the Tribunal had already spent considerable time reaching a decision on remedy and therefore consider the Respondent's case as a whole and therefore it was wrong to subsequently tack on a further head of loss and consider it in isolation;

(iii) The Tribunal raised as a consequence the disadvantage to the employee from the potential denial of substantial compensation for loss of employment without considering that he could possibly have a right against his legal advisers in respect of those losses;

(iv) Since the Tribunal had made findings that the employee would have been fairly dismissed within no more than six weeks from the date of his original dismissal, as a matter of causation there would be no ongoing loss of earnings.

21. As to these issues Mr Elesinnla argues that the first three were matters that figured in the Tribunal's considerations when one carefully reads the arguments that they set out against granting the application to review. Having considered those matters carefully we agree with that submission, save that we do accept the Tribunal did not take into account the possibility that the employee might have a cause of action against his lawyers. However the Tribunal did refer to the "potential denial of substantial compensation" which in our view accurately expresses the risk that the employee faced if a review was not granted.
22. As to the issue concerning causation, we are not satisfied this was a factor relevant to the decision as to whether or not to grant a review, but rather more a potential defence to the claim for long-term loss of earnings in the event that a review was granted.
23. The final complaint made by Miss Thomas is that the review amounted to a "backdoor" method of allowing in fresh evidence when the Tribunal in paragraph 9 accepted that a review itself could not be based on the existence of fresh evidence. In Flint v Eastern Electricity Board [1975] ICR 395 Phillips J giving the decision of this court said this at page 401:

"The difficulty comes in the relationship between paragraphs (d) and (e) of rule 12. The conclusion I reach is that paragraph (d) cannot be regarded as exhaustive of cases where the ground of the application is the desire to call fresh evidence. It does not, for example, deal with circumstances where, although the evidence could be foreseen, or indeed reasonably or actually known, it was for some reason or another not available. I think that paragraph (e) is intended to be a residual category of case, designed to confer a wide discretion on industrial tribunals. But I do not think that it can embrace a case where the application is on the ground of the desire to call fresh evidence, where it was obvious that that evidence was available and there is no additional factor to be taken into account. In other words, if I may summarise it, paragraphs (d) and (e) are not mutually exclusive, but paragraph (e) at all events must be applied in practice with some regard to the kind of case which is intended to come within paragraph (d). And ordinarily speaking, a case which could be put forward under paragraph (d), and which failed under paragraph (d), would fail under paragraph (e) also. Paragraph (e), I think, exists for the case which, although it may be put forward under paragraph (d), has in it some special additional circumstances which leads to the conclusion that justice does not require a review."

24. The conflict that Phillips J highlights was indeed a factor that the Tribunal had in mind and indeed was the first argument they took into account against granting the application to review. In any event, in this case we are satisfied that there was that "additional circumstance" identified by Phillips J which led to the conclusion that justice did require a review over and above the simple application to adduce fresh evidence, that being the omission or error that had been identified, which we accept had the consequential result that fresh evidence would be adduced.
25. We are quite satisfied that in this case the Tribunal carried out the necessary balancing exercise and in doing so it clearly had in mind the overriding objective to deal with the case justly. We can find no fault in the manner which they considered the various factors and exercised their discretion. Accordingly, this appeal is dismissed.