United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr A Worthley (of Counsel) Instructed by: Messrs Kitson Hutchings Solicitors Vaughan Parade Torquay Devon TQ2 5JG
For the Respondent	Mr N Moore (Solicitor) Instructed by: Messrs Stephens & Scown Solicitors Curzon House 25-28 Southernhay East Exeter EX1 1RS


 


Summary

Practice and Procedure - Costs

ET gave insufficient reasons for its decision as to costs, and its decision is unclear to what extent it considered the Claimant's means as relevant.


 


HIS HONOUR JUDGE SEROTA QC

1. This is the full hearing of an appeal by the Claimant, from the decision of an Employment Tribunal at Exeter, Chaired by Mr J T Hollow, dismissing the Claimant's claim for unfair dismissal and ordering her to pay £4000 by way of costs to the Respondent. The claim was referred to a full hearing by HHJ Reid QC on 9 June 2006. The appeal only relates to the issue of costs.
2. We need to say something very briefly about the factual background. The Claimant was employed by the Respondent as a driver from 1997 to February 2005; her job entailed driving GP's and supporting them when they were carrying out out-of-hours cover. She was dismissed after a disciplinary process for gross misconduct. She had become involved in what amounted to physical and verbal abuse of a colleague. We say no more about this. The Employment Tribunal found the dismissal was fair. During the proceedings an issue had been raised by the Claimant about disciplinary proceedings relating to her partner Mr Robin Carter, who had also worked with the Respondent. The Claimant had acted on his behalf in the disciplinary proceedings and there is reference in the decision of the Employment Tribunal to a somewhat acrimonious internal appeals procedure during which the Claimant and Mr Carter walked out.
3. The Claimant has had the misfortune in the past to suffer from cancer. In her ET1 there is a suggestion that she suffered from a disability by reason of cancer, but in her undated further and better particulars she says that she was suffering from depression. On 27 April 2005 she issued her ET1 claiming unfair dismissal, dismissal for asserting statutory rights and for disability discrimination under the Disability Discrimination Act, both direct and indirect, and also she made a claim for failure to make reasonable adjustments. The ET1, let it be said, contained what the Respondents might have felt were rather disagreeable and unpleasant allegations, including the suggestion that although she had suffered from cancer, the investigatory and disciplinary processes were deliberately embarked upon by the Respondent and designed to pressurise her into resignation, thereby causing her serious stress, anxiety and depression. Further more there is a reference in her ET1 to the fact that she had attained work as a taxi driver from 28 March 2005 and she was said to be earning gross £232 per week compared with the £1100 per month she had earned at the Respondents.
4. There was to have been a case management discussion on 2 June; this was adjourned to 21 September so the Claimant could obtain medical advice. However, it is noticeable and there is no explanation as to why this was, that the first instructions we have seen to a doctor to obtain some form of medical evidence, were only sent on 12 September 2005. On 21 September 2005 there was a second case management discussion or an adjourned case management discussion, and it was directed on that occasion that there should be a pre-hearing review to determine firstly, whether the issue of disability discrimination had been raised under section 32 of the Employment Act 2002 and secondly whether the Claimant was disabled within the meaning of the Disability Discrimination Act. Directions were given for preparation of the bundle 21 days before the hearing, exchange of witness statements and medical evidence and the pre-hearing review was fixed for 16 January. A further direction was given on 18 November because the Claimant had failed to comply in relation, I believe, to certain directions, directing the bundle should be judged 21 days before the hearing and the witness statement 14 days before. The full hearing was fixed on 18 November for 6 March 2006.
5. On 15 December the Claimant's solicitors wrote withdrawing the Defendant's claims under the Disability Discrimination Act. As a result the preliminary hearing that was fixed for 16 January was vacated. Let it be said that albeit it appears that the withdrawal was a month before the hearing, the 15 December was very much in the Christmas period and whereas withdrawal a month before a hearing, during the working year, so as to speak, might not be regarded as particularly late, in the context of the Christmas and New Year holidays, it takes on a rather different complexion. On 7 February there is a further letter of instruction to, I think Dr Curtis, together with an application to adjourn the hearing which was directed by the Employment Tribunal on 17 February. There was a problem with the bundle. The Respondent wrote to the Employment Tribunal, it had not been able to agree a bundle and also complained that the Claimant's witness statement dealt very largely with matters relating to Mr Carter. Indeed in terms of the volume of her statement and documents that dealt with the proceedings involving Mr Carter which may be relevant, they certainly took up a disproportionate amount of space. The Claimant sent her bundle to the Employment Tribunal on 2 March. The hearing began on 6 March, which I believe was the following Monday, and on that occasion the Claimant then represented by Mr Worthley, as she is today, abandoned the claim for automatically unfair dismissal for asserting a statutory right. The Claimant did file a schedule of loss, which showed that she had lost her employment which was seasonal, being dependent on the tourist trade, in September 2005, and thereafter had been unemployed. The Employment Tribunal dealt with issues of unfair dismissal and the relevant law. Her claim was dismissed. In the light of the issue on this appeal we need not go into these matters further.
6. The Respondent made an application for costs. It relied upon a number of matters which are identified by the Employment Tribunal, including the fact that the claim had no reasonable chance of success because it involved a straight forward application of the well-known principles in British Home Stores v Burchell. Further the failure to pursue the disability claim and the conduct of that claim, led to an adjournment to obtain medical evidence which was never obtained, and in the event the disability claim was withdrawn. The Claimant and her advisers had failed adequately to prepare for the hearing. Further the suggestion that a claim could be advanced for dismissal for asserting a statutory right, had been pursued up until the beginning of the hearing when the Claimant's counsel and indeed the Employment Tribunal considered the claim to be untenable. An application had also been threatened to adduce medical evidence, which was never produced, assigned to show, that the Claimant's ability to work and earn a living had been impaired by her dismissal. The Claimant had failed to supply a witness statement and bundle at the time and it was said that the Respondent's costs had increased significantly but there was no detailed break down. The relevant parts of the decision of the Employment Tribunal in this regard, are to be found at paragraphs 27 and 28 of the decision of the Employment Tribunal and are as follows:-

"27. We do think there is some substance in the respondent's argument that this was a case which was probably or always going to present some difficulty to the claimant. We do however take more cognisance of the fact that the disability claim was withdrawn but only at a comparatively late stage. A note that I made when I held a case management conference was that the claimant was not sure whether she was disabled by reason of cancer or stress or depression. The matter was adjourned for medical evidence to be obtained. None was obtained and that aspect of the claim was subsequently withdrawn. Despite that it was an aspect of the matter which the respondent had to prepare so far as it was possible to do in the absence of medical evidence from the claimant. Other important aspects of the preparation were not undertaken promptly in accordance with the tribunal's directions. At a comparatively late stage prior to this hearing the necessary preparatory work had not been undertaken and indeed appears to have been left very much to the last minute. We accept that this has had the effect of increasing the respondent's overall costs.

28. We are satisfied that that amounted to unreasonable conduct on the part of the complainant and/or her advisers. We do think that this is a case in which the claimant should make a contribution towards the respondent's costs. The respondents will undoubtedly have incurred substantial expense. We take account of the information that is put forward in the schedule of loss that has been lodged with the tribunal as to the claimant's earnings and ability to earn. In our judgment the proper order is for payment by the claimant of the sum of £4,000. That as we say is a contribution towards, but certainly not a complete indemnity in respect of, the respondent's costs."

7. The Employment Tribunal, therefore, it will be seen, did think that there was some substance in the argument that the Claimant's case was always going to be difficult but they were more concerned about the late withdrawal of the disability claim, failure to comply with directions and as can be seen they made an award of £4000.
8. The power to make an order for costs is to be found at the Employment Tribunal's Regulations 2004 and provides that a costs order may be made where the paying party has in bringing the proceedings either by himself or his representative or has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably or the bringing or conducting of the proceedings by the paying party has been misconceived; see Regulation 40(3). The Employment Tribunal took the view that these proceedings had been conducted unreasonably. The Claimant has submitted that the Claimant's conduct has not in fact been unreasonable in relation to the particular matters relied upon by the Employment Tribunal; the disability proceedings were withdrawn a full month before the hearing and it is submitted that the Claimant's solicitors were obliged to pursue those proceedings and were instructed to do so. The delay in obtaining medical evidence does not really take matters very much further as the Respondent perhaps was saved costs rather then forced to incur them, in so far as necessary preparatory work is concerned. The witness statement that was filed late was filed in accordance with the second order of the Employment Tribunal and it was not inappropriate to include in the bundle in the way in which the Claimant's solicitors chose to arrange them, the documents relating to the Carter hearing. There was always going to be a two day hearing and nothing that was done added to the cost or length of the hearing.
9. What the Respondent says by way of riposte is that this is a case in which, at least as concerned the disability discrimination allegation, the Claimants had been "messing the Respondents' about", in the language used by Mr Justice Rimer, in a case to which I was referred in Khan v Havery and Middleton Primary Care Trust. In his skeleton argument Mr Moore, who appears on behalf of the Respondent, put the matter in this way; the Tribunal was entitled to rely on the combination of the inherently weak case bolstered by a disability claim which was never properly pursued and the dilatory and uncooperative approach of the Appellant's representative towards compliance with the Tribunal's directions, as cumulatively demonstrating unreasonable conduct. The attitude shown towards the disability claims was clearly consistent with that shown towards the preparation for trial of the unfair dismissal claim, "dilatory, unfocused, causal, but each requiring time, effort and cost to be expended by the Respondent".
10. It is apparent to us, and we say this, that albeit there is an unexplained failure to instruct a medical practitioner promptly, the medical problem appears to lie with the Claimant rather than her legal advisers who found it extremely difficult from the correspondence we have been shown to have adequate instructions from her. This is a case in which there are a number of matters which the Respondent has relied upon; I take them in no particular order, but firstly there is the unexplained four month delay in instructing a doctor. It is apparent that there was considerable doubt as to whether or not the Claimant was depressed indeed one of the letters that we have seen from the Claimant's solicitors to her doctor, Dr Conway from who they were seeking a report from 7 February 2006, suggests that she told her GP she was not depressed and the medical records confirm this, although the GP had flagged up the possibility. Her further and better particulars did say she was depressed. There was no evidence of any effort to pursue Dr Conway, who himself was unwell, to produce a report or to instruct another doctor. Further the decision to withdraw the disability claim which is explained in the letter from the Claimant's solicitors 15 December says this was based on her medical records. It is apparent from the correspondence that the solicitors had had those records for a considerable time.
11. Furthermore there does appear to have been some overloading of the documentation, 220 of the 440 of the pages of the bundle of documents relate to the Carter proceedings and something like 29 out of 32 paragraphs of the witness statement, at least that is what the Respondent submits to be the case, and the Respondents also says, "well we invited the Claimant's solicitors to agree to summarising this volume of material about the Carter proceedings and had no response". They can also point to the fact that the claim for automatic unfair dismissal, which always seemed very weak, was only withdrawn at the beginning of the hearing and they point out that there was no need to show a causal connection between unreasonable conduct and the costs. They submit that it was self evident that the Claimant's failure to comply with directions increased costs and the Respondent had to produce its own bundle. In summary they submit that the Employment Tribunal was entitled to rely on the combination of an inherently, weak case bolstered by a disability claim which was never properly pursued and a somewhat dilatory attitude in relation to trial preparation, as demonstrating unreasonable conduct. It seems to us that those submissions are correct. At this point in time we are only considering whether the decision of the Employment Tribunal as to the gateway to making a costs order had been crossed. It seems to us that the Employment Tribunal had ample material before it come to that conclusion and furthermore that its reasons for finding that that gateway had been traversed in our opinion cannot be faulted.
12. The next matter that we have to deal with is the way in which the Employment Tribunal chose to exercise its discretion and ordered the sum of £4000 to be paid. As we have said an Employment Tribunal is entitled to have regard to the Claimant's means when deciding not only how much to award by way of costs, but also whether to make an order in the first place see regulation 41(2) of the Employment Tribunals Constitution and Rules of Procedure Regulations. An Employment Tribunal is not obliged to have regard to the party's means but at least, it seems to us, it needs to give consideration to the questions of whether it should, and explain why it has or has not taken those means into account.
13. Now in this case the evidence before the Employment Tribunal was that the Claimant was unemployed and only earned something like £3500 after her dismissal. That in itself is not a reason for a refusal to make an order against the Claimant, in particular for example if she had other assets and if maybe, (and we have been told that this is the case although there is very little evidence before us,) that she had an equity in her home and that she also owned a car. These are matters that one would have expected the Employment Tribunal to take into account. But it does seem to us that the reasoning given by the Employment Tribunal is so brief that it looks as if they have simply plucked the figure of £4000 out of the air without giving any adequate explanation as to why they have chosen this figure. They give no indication as to the extent, if any, to which they have had regard to the fact that she was unemployed. It seems to us that that part of the decision cannot stand and accordingly we would remit to the Employment Tribunal the question not as to whether the gateway under Regulation 40 had been traversed, but as to whether, on the basis that it had been crossed, in the circumstances of the case it was appropriate to make an order for costs in the sum of £4000 or any other sum. We regret that in those circumstances that the case must be remitted to the Employment Tribunal for that purpose. For the avoidance of doubt the case is remitted to be heard by the same Tribunal as made the order.