United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR FRANCIS DAVEY (Of Counsel) Instructed by: Law For All 191 The Vale Acton London W3 7QS
For the Respondent	MR IRVINE MACCABE (Of Counsel) Instructed by: Messrs Moorhead James Solicitors Kildare House 3 Dorset Rise London EC4Y 8EN


 


SUMMARY

Striking-out/dismissal

Review

Review of strike-out order – principles to be applied, see Maresca; proportionality; whether lesser sanction appropriate. Case remitted for rehearing of review application.


 


HIS HONOUR JUDGE PETER CLARK

1. This is an appeal by Mr McGuire, the Claimant before the London (Central) Employment Tribunal against the judgment of a Chairman, Ms V Cook, sitting alone on 14 June 2006, refusing his application by way of review to set aside her order dated 18 April 2006 striking out his claim of disability discrimination brought against his former employer, the Respondent Centrewest London Buses Ltd, due to his failure to comply with the Tribunals orders (the strike out order). The review Judgment was promulgated with reasons on 20 June 2006. There is no appeal against the strike out order. I shall refer to the parties as they appeared below.

Procedural History

2. The Claimant, born on 24 March 1960, was employed by the Respondent as a bus driver from 13 January 2003 until his dismissal on medical grounds effective on 4 May 2005.
3. On 3 August 2005 he presented a claim to the Employment Tribunal complaining of unfair dismissal and disability discrimination. The claim was resisted. Materially, the Respondent denied, by their Grounds of Resistance, that the Claimant was disabled within the meaning of the Disability Discrimination Act 1995 (DDA).
4. A Case Management Discussion (CMD) was held before Ms Cook on 17 November 2005. The Chairman made the following material orders:

The Claimant was to serve on the Respondent any medical evidence on which he relied in support of his contention that he was disabled no later than 27 January 2006 and by 3 February the Claimant was to disclose any medical records. Thereafter the Respondent was ordered to inform the Claimant by 10 February whether the question of disability remained in issue; if so, the Respondent was to serve their own medical report by 10 March. A merits hearing on both the unfair dismissal and DDA claims was listed to commence on 10 May.

5. The Chairman's orders, dated 24 November 2005, were accompanied by the usual penal notice warning the parties that non-compliance with an order may lead to the claim or response being struck out in whole or in part.
6. In his form ET1 the Claimant did not name a representative. He gave as his address for service his then home address, 20 Star Street, Paddington. He did not thereafter give notice of any change of address for service in accordance with Rule 61(5) of the Employment Tribunal Rules of Procedure 2004 (The Rules).
7. However, it seems that he did obtain the assistance of firm of solicitors, Knights (not his present solicitors, who now instruct Mr Davey). A representative of Knights, Ms Khan, a trainee solicitor, attended the CMD before Ms Cook on 17 November 2005. That firm subsequently corresponded with the Respondent's solicitors, Moorhead James.
8. Initially, Moorhead James made application on 10 January 2006 to the Employment Tribunal for an order striking out the whole claim for the Claimant's failure to comply with an order for disclosure made at the CMD. That was not pursued. Knights sent the Claimant's list of documents on 17 January, apologising for the delay which was said to be due to the ill-health of the fee-earner having conduct of his case.
9. On 17 February Moorhead James wrote to Knights, pointing out that no medical records had been disclosed. Further correspondence followed, without response from Knights. Accordingly, on 1 March, Moorhead James wrote to the Employment Tribunal making a second strike out application. The basis for that application was the Claimant's failure to comply with the CMD order for medical evidence in respect of his disability; alternatively conduct of the proceedings by the Claimant; alternatively his failure to actively pursue the claim (Rule 18(7)(e),(c) and (d), respectively). A copy of that letter was sent by fax to Knights. On 21 February Moorhead James wrote to Knights asking for the Claimant's signed consent to access to his medical records.
10. On 14 March the Employment Tribunal wrote to Moorhead James, with a copy to the Claimant at his Star Street address, stating that 'the Chairman' (I infer, Ms Cook, who was then case-managing the matter) was considering listing the matter for a Pre Hearing Review (PHR) to consider whether to strike out the claim because of the Claimant's failure to comply with Tribunal orders. On the same day Moorhead James wrote to Knights asking for a reply to their various unanswered letters sent on 20, 31 January; 7, 21 February and 1 March.
11. On 16 March the Employment Tribunal wrote to the Claimant at his Star Street address, asking for his comments on the Respondent's solicitor's second strike out application of 1 March by 23 March. No response was then received and after prompting by Moorhead James, on 10 April the Chairman made the strike out order of 18 April under Rule 18(7)(e).
12. On 21 April Moorhead James sent a copy of the strike out order to Knights for information. Thereafter, by letter dated 25 April, Knights made application for a review and that the disability claim be restored. They had not, as at that date, come on the record. They also informed the Employment Tribunal that the Claimant had moved home without informing either the Employment Tribunal or themselves until he attended Knights offices on 24 April.
13. Meanwhile, the merits hearing date of 10 May had not been vacated. On that day the parties attended before a full Employment Tribunal chaired by Mr C A Carstairs. Again Ms Khan represented the Claimant and Ms Kelly, who had conduct of the Respondent's case at Moorhead James, represented her client. It seems that Ms Kelly was under the misapprehension that the whole claim, both unfair dismissal and DDA claims had been struck out, whereas only the disability claim was the subject of the strike out order.
14. Consequently the Carstairs Tribunal made certain case management orders. In particular, a review hearing was fixed before Ms Cook for 14 June; directions were given for medical evidence to be served by the Claimant by 14 June (no specific mention was made of medical records); conditional directions were given for the service of the Respondent's medical evidence, if disability remained in issue, by 28 July (in the event that the DDA claim was reinstated by Ms Cook) and a 3 day merits hearing was fixed for 22-24 August.
15. The review hearing took place before Ms Cook on 14 June, the Claimant appearing in person, the Respondent being represented by Mr Maccabe. I shall return later to that hearing and the Chairman's reasons for refusing relief against sanction to the Claimant.
16. For completeness, the hearing of the Claimant's unfair dismissal claim proceeded on 22 August 2006. I am told that his complaint was upheld but compensation was limited to 3 weeks loss of earnings, whereafter, an Employment Tribunal held, he would have been fairly dismissed.

The Rules

17. Rule 18(7) provides, so far as may be material:

"… a Chairman … may make a judgment or order:-

(b) striking out or amending all or parts of any claim or response on the grounds that it is scandalous, or vexatious or has no reason or prospect of success;

(c) striking out any claim or response (or part of one) on the grounds that the manner in which the proceedings had been conducted by or on behalf of the Claimant or the Respondent (as the case may be) has been scandalous, unreasonable or vexatious;

(d) striking out a claim which has not been actively pursued;

(e) striking out a claim or response (or part of one) for non-compliance for an order or practice directions;"

18. The strike out order was susceptible to review under Rule 34. By Rule 34(3), decisions may be reviewed on the following grounds, among others:

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

…

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

Strike Out

19. The principles to be applied in considering whether or not to strike out a claim under Rule 18(7)(e) were helpfully summarised by His Honour Judge Richardson, sitting with members in the Employment Appeal Tribunal in Weir Valves & Control (UK) Ltd v Armitage [2004] ICR 371. He said at paragraphs 13 – 18:

"13 What are the principles on which the employment tribunal should act in deciding whether to strike out in a case such as this, where there has been a breach of a direction?

14 Where the unreasonable conduct which the employment tribunal is considering involves no breach of a court order, the crucial and decisive question will generally be whether a fair trial of the issues is still possible: De Keyser Ltd v Wilson [2001] IRLR 32.4, 328—329, paras 2.4 and applying Logicrose Ltd v Southend United Football Club Ltd The Times, 5 March 1988 and Arrow Nominees Inc v Blackledge [2000] 2 BCLC 167. De Keyser Ltd v Wilson was recently followed and applied in Bolch v Chipman,[2004] IRLR 140 para 55 (unreported) 19 May 2003 [see [2003] ICR Part 12, Recent Points].

15 Even if a fair trial as a whole is not possible, the question of remedy must still be considered so as to ensure that the effect of a debarral order does not exceed what is proportionate: see Bolch v Chipman, para 55(3) and (4). For example, it may still be entirely just to allow a defaulting party to take some part in a question of compensation which he is liable to pay.

16 Those principles apply where there is no disobedience to an order. What if there is a court order and there has been disobedience to it? This is an additional consideration. The principles which we have set out above do not apply in the same way. The tribunal must be able to impose a sanction where there has been wilful disobedience to an order: see De Keyser Ltd v Wilson [2001] IRLR 324, 329, para 25 and Bolch v Chipman, para 55(2).

17 But it does not follow that a striking-out order or other sanction should always be the result of disobedience to an order. The guiding consideration is the overriding objective. This requires justice to be done between the parties. The court should consider all the circumstances. It should consider the magnitude of the default, whether the default is the responsibility of the solicitor or the party, what disruption, unfairness or prejudice has been caused and, still, whether a fair hearing is still possible. It should consider whether striking out or some lesser remedy would be an appropriate response to the disobedience.

18 In the Civil Procedure Rules 1998 (SI 1998/3132) there is, at Part 3 rule 9, a checklist to be considered upon an application for relief from a sanction. The Employment Tribunal Rules of Procedure 2001 contain no similar checklist; but the overriding objective in regulation 10 requires a broadly similar approach. As Miller J said, in another context, in Logicrose Ltd v Southend United Football Club Ltd: "The court must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice."

20. I also drew to the attention of both Counsel the Court of Appeal decision in Blockbuster v James [2006] IRLR 630. In that case the Claimant's claims were struck out under Rule 18(7)(c). In dismissing an appeal by the Respondent against the Employment Appeal Tribunal decision to allow the Claimant's appeal against that order Sedley LJ, giving the leading judgment of the Court, said this at paragraph 5:

"This power, as the employment tribunal reminded itself; is a draconic power, not to be readily exercised. It comes into being if, as in the judgment of the tribunal had happened here, a party has been conducting its side of the proceedings unreasonably. The two cardinal conditions for its exercise are either that the unreasonable conduct has taken the form of deliberate and persistent disregard of required procedural steps, or that it has made a fair trial impossible. If these conditions are fulfilled, it becomes necessary to consider whether, even so, striking out is a proportionate response. The principles are more fully spelt out in the decisions of this court in Arrow Nominees v Blackledge [2000] 2 BCLC 167 and of the EAT in Dc Keyser v Wilson [2001] IRLR 324, Botch v Chipman [2004] IRLR 140 and Weir Values v Armitage [20041 ICR 371, but they do not require elaboration here since they are not disputed. It will, however, be necessary to return to the question of proportionality before parting with this appeal."

He returned to the question of proportionality at paragraph 21, where he said:

"It is not only by reason of the Convention right to a fair hearing vouchsafed by Article 6 that striking out, even if otherwise warranted, must be a proportionate response. The common law, as Mr James has reminded us, has for a long time taken a similar stance: see Re Jokai Tea Holdings [19921 1 WLR 1196, especially at 1202E-H. What the jurisprudence of the European Court of Human Rights has contributed to the principle is the need for a structured examination. The particular question in a case such as the present is whether there is a less drastic means to the end for which the strike-out power exists. The answer has to take into account the fact - if it is a fact — that the tribunal is ready to try the claims; or — as the case may be — that there is still time in which orderly preparation can be made. It must not, of course, ignore either the duration or the character of the unreasonable conduct without which the question of proportionality would not have arisen; but it must even so keep in mind the purpose for which it and its procedures exist. If a straightforward refusal to admit late material or applications will enable the hearing to go ahead, or if, albeit late, they can be accommodated without unfairness, it can only be in a wholly exceptional case that a history of unreasonable conduct which has not until that point caused the claim to be struck out will now justify its summary termination. Proportionality, in other words, is not simply a corollary or function of the existence of the other conditions for striking out. It is an important check, in the overall interests of justice, upon their consequences."

Review

21. Based on the Chairman's findings of fact, to which I shall shortly turn, I am not concerned in this appeal with the application for review under Rule 34(3)(b). The real question is whether the Chairman erred in law in considering the Claimant's application under Rule 34(3)(e).
22. At the review hearing the Chairman was referred by Mr MacCabe to the judgment of Rimer J in Maresca v Motor Insurance Repair Research Centre [2005] ICR 197. The principal submission on behalf of the Claimant/Appellant in that case, where a Chairman had summarily dismissed the Claimant's review application in respect of an earlier strike out order made under the predecessor to Rule 18(7)(e) in the 2001 Rules, upheld by Rimer J, was that in reaching that decision the Chairman had failed to consider the factors set out in CPR Rule 3.9.

Rule 3.9 provides:

""Relief from sanctions

"(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including. -(a) the interests of the a ministration o Justice; (b) whether the application for relief has been made promptly; (c) whether the failure to comply was intentional; (d) whether there is a good explanation for the failure; (e) the extent to which the party in default has complied with other rules, practice directions and court orders and any relevant pre-action protocol; (f) whether the failure to comply was caused by the party or his legal representative; (g) whether the trial date or the likely date can still be met if relief is granted; (h) the effect which the failure to comply had on each party; (i) the effect which the granting of relief would have on each party.

"(2) An application for relief must be supported by evidence."

23. Pausing there, I respectfully agree with the view of Rimer J that when considering an application for review of a strike out order in the interests of justice the Chairman's exercise of discretion should be in line with the approach taken by the civil courts under CPR Rule 3.9. That was the view which I took in Goldman Sachs v Montali [2002] ICR 1251, to which Rimer J referred in Maresca (paragraph 38), in the context of varying earlier case management orders. Interestingly, Judge Richardson referred to CPR 3.9 in Weir Valves (paragraph 18), although that case, decided on 15 October 2003, was apparently not cited to Rimer J in Maresca (197F-G). Further, it is not unusual for principles drawn from a different jurisdiction to be adopted in this jurisdiction; see e.g. the incorporation of factors listed in Section 33 of the Limitation Act 1980 when exercising the Employment Tribunal's jurisdiction to extend time under the just and equitable provision in the discrimination statutes; British Coal Corporation v Keeble [1997] IRLR 336.

The Review decision

24. The Chairman heard oral evidence from the Claimant and from Ms Kelly of Moorhouse James. She did not hear from any representative of Knights. She also had before her the medical evidence relied on by the Claimant, consisting of a letter from the Claimant's General Practitioner, Dr Kelso, to Ms Khan of Knights dated 10 February 2006 and a short report from a Consultant Orthopaedic Surgeon, Mr Akmal, dated (as typed on) 13 June 2006
25. Based on that evidence and the documentary material the Chairman was satisfied that both the Claimant and Knights were aware of the material, second strike out application of 1 March 2006 (Reasons paragraph 5) and that he was properly served with the Employment Tribunal's letter of 16 March requiring his comments on that application. Consequently the application under Rule 34(3)(b) was dismissed.
26. As to the application under Rule 34(3)(e) she considered the factors listed under CPR 3.9. The relevant findings are at paragraphs 7 – 9 Reasons:

7 Turning to the application for a review 'n the niterest of justice, Mr McCabe has referred me to the EAT decision in the case of Moreska Motor Insurance Repair Research Centre. I have considered the application in the light of the matters required to be considered by me under the 3.9. I accept that the application for a review was made promptly. I have heard to satisfy that failure to comply with the orders was not intentional. Mr McGuire accepts that he assumes responsibility for obtaining medical report, he was ordered to serve any evidence on which he relied on the Respondent by no later than 27 January 2006 (Order 1). A GP report dated 10 February and addressed to Knights Solicitors was not served on the Respondent until the hearing on 10 May. It had been in the Claimant's possession, on his own evidence since he collected it in April, and was presumably received by Knights Solicitors shortly after the date it was completed.

8 Yesterday, the Respondents were given a copy of a consultant's report which is undated. This is said, by Mr McGuire to have been provided to him by fax yesterday from St Mary's Hospital. It appears to me that neither the Claimant nor Knights Solicitors who say they were acting "probono" and then say under the legal advice and assistance scheme — and are said by Mr McGuire to have accepted instructions on the basis of "no win no fee" — but have rejected this arrangement, Mr McGuire said initially before 10 May hearing and subsequently after 10 May hearing, have had little interest in pursuing this matter. In any event they have not gone on the record as acting. Mr McGuire has accepted that he assumed responsibility for the medical reports. It appears to me that neither has done anything by way preparation for progressing the case. Mr McGuire says that when he received correspondence from the Tribunal he merely passed it on to his solicitors. Mr Akmal's undated consultant's report is not very supportive of Mr McGuire's disability complaint. It says:

"At present, his situation is stable. He is able to undertake normal daily life activities ... he walks without any aid and has very little pain."

Mr McGuire strenuously disagrees with the latter part of this report.

9 The contents of the consultant's report lead the Respondent to say that they do not accept or concede that the Claimant was a disabled person for the purposes of the Disability Discrimination Act, and that they may wish to seek their own evidence if necessary to rebut its assertion. At this point the have still not obtained copies of the Claimant's medical records which should have been disclosed to them no later than 3 February 2006 and I am persuaded that if the review is granted that it is highly unlikely that the trial date which was re-fixed on 10 May and is now 22 August, will be met. In the circumstances, and in particular, those of the Claimaint's and his Solicitor's dilatory approach to the Tribunal orders made at a time when both were present, their unsatisfactory explanations for not responding to Tribunal correspondence on the proposed strike out application, and the prospect that the trial date will not be kept if the review is granted, lead me to reject the claim that a review should be granted in the interest of justice, and I refuse this application."

The Appeal

27. In advancing this appeal Mr Davey takes 3 points:

(1) the Chairman failed to distinguish between the conduct of the Claimant and his solicitors, Knights which led to the strike out

(2) the Chairman failed to examine the balance of prejudice as between the parties and whether a fair trial was possible on 22 August or later. He relies on the observations in James as to the proportionality of the strike out sanction and the possibility of a lesser sanction (see also Weir Valves. paragraph 17)

(3) the Chairman failed to distinguish between the presumption of good service for the purposes of Rule 34(3)(b) with the question as to whether the Claimant had in fact received notice of the strike out application dated 1 March and the Employment Tribunal letter of 16 March for the purposes of the Rule 34(3)(e) application.

28. I can deal shortly with the third ground. As Mr Maccabe submits, the Chairman made a clear finding of fact (Reasons paragraph 5) that both the Claimant and Knights were aware of the strike out application of 1 March. As to the Employment Tribunal letter of 16 March, that was the day on which the Claimant moved address. He made no effort to notify the Employment Tribunal (nor indeed his own solicitors, prior to 24 April) of that change of address. The Chairman was not satisfied that he did not receive the Employment Tribunal letter of 16 March (rejecting the Claimant's evidence that he did not receive that letter). In these circumstances I reject this ground of appeal.
29. The first ground of appeal is potentially of greater substance. It is clear from CPR 3.9(1)(f), adopted by Rimer J in Maresca and His Honour Judge Richardson in Weir Valves (paragraph 17) that a relevant consideration in the exercise of the Chairman's discretion under Rule 34(e) is whether the relevant default was that of the party or his solicitor/representative. The Chairman found that the non-compliance with Case Management orders was due to the default of both the Claimant and his solicitor (Reasons paragraph 9) without apportioning blame between them.
30. I recognise that where a party places the conduct of litigation entirely in the hands of a solicitor or other representative it may be a significant factor in considering whether to grant relief from sanction that that party is wholly without personal blame in the failure to comply with earlier Tribunal orders. However that is not this case. Although Knights corresponded with the Respondent's solicitors and a representative of that firm, Ms Khan, appeared on the Claimant's behalf both at the CMD on 17 November 2005 and before the Carstairs Tribunal on 10 May, 2006 they never came onto the record as acting for the Claimant before the claim was struck out.
31. The basis on which they were instructed was unclear; the Chairman (paragraph 8) could not ascertain whether they were acting pro bono, under the legal advice and assistance scheme or under a 'no win no fee' agreement. What is clear is that the Claimant retained a degree of personal responsibility for progressing the claim and it was not properly progressed; relevant orders were breached. In these circumstances I would not have allowed this appeal on the first ground alone.
32. What has troubled me is the second ground of appeal. Whilst the Employment Tribunal must be able to impose a sanction where there has been wilful disobedience to its order(s); see Weir Valves, paragraph 16 and the cases there cited, the Chairman (Reasons paragraph 7) adopts the less positive finding that she had heard nothing to satisfy her that the failure to comply with the (Employment Tribunal) orders was not intentional. That leaves open the factual question as to whether the Claimant left matters to his representative in circumstances where she was not pursuing his cause with due vigour.
33. Secondly, no consideration appears to have been given by the Chairman to a sanction short of strike out at the review stage. I note that on 10 May the Carstairs Tribunal had given conditional directions for the future conduct of the DDA claim in the event that the strike out order was rescinded by Ms Cook at the review hearing. The time-table envisaged the case on disability being prepared in time for the adjourned merits hearing listed for 22 August.
34. What those directions omit is any reference to the requirement for the Claimant to authorise release to the Respondent of his medical records without which, as Mr Maccabe rightly submits, the Respondent would be unable to receive an informed opinion from their own medical expert. The Claimant had been ordered, at the CMD held on 17 November 2005, to 'disclose' any medical records by 3 February 2006. On 21 February 2006 Moorhead James had written to Knights, asking for the Claimant's signed consent to their access to his medical records. Knights had not responded. It seems that Ms Kelly did not press for an order to that effect before the Carstairs Tribunal; at all events no such direction was given.
35. When the Claimant, representing himself, appeared before Ms Cook at the review hearing on 14 June he produced the 2 medical reports on which he relied, as directed by the Carstairs Tribunal. It would have been a simple matter for Ms Cook to direct that he forthwith signed a consent form as a condition of setting aside the strike out order. The directions given by the Carstairs Tribunal as to the future conduct of the disability claim would then apply, leading to an effective substantive hearing of that claim as well as the unfair dismissal claim on 22 August. That was an alternative sanction to strike out apparently not considered by the Chairman.
36. Further, there is no finding that in such circumstances the Respondent would suffer prejudice in defending the DDA claim; a fair trial was in these circumstances possible on the date appointed by the Carstairs Tribunal.
37. Whilst the Chairman found that Mr Akmal's report was not very supportive of the Claimant's disability complaint, she did not go as far as to say that his contention that he was disabled had no reasonable prospect of success (see Rule 18(7)(b)).
38. Finally, there is no indication from the Chairman's reasons that she considered the question as to whether striking out was a proportionate response to the Claimant's default.

Conclusion

39. For these reasons I shall allow this appeal. The Chairman, in my judgment, failed to take into account all relevant factors in dismissing the Claimant's review application in the respects identified in my consideration of the second ground of appeal.
40. I have considered whether I can, in these circumstances, properly carry out the appropriate exercise of discretion myself. I think not. It seems to me that the review application should be remitted for re-hearing before a different Chairman who will have the advantage of hearing evidence given on behalf of both parties before applying the principles which I have endeavoured to set out above.