United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS AMY ROGERS (of Counsel) Instructed by: Messrs Pannone LLP Solicitors 123 Deansgate Manchester M3 2BU
For the Respondents	Written submissions


 


SUMMARY

PRACTICE AND PROCEDURE: Costs

Partial costs order by Employment Tribunal. Illogical to award Counsel's fee but not solicitors' costs. Appeal allowed. Costs below and in Employment Appeal Tribunal assessed.


 


HIS HONOUR JUDGE PETER CLARK

1. This matter is presently proceeding in the Leeds Employment Tribunal. The parties are Dr Verma, Claimant, and (1) Harrogate & District NHS Foundation Trust and (2) Mrs Jenny Mockford, Respondents. I have before me for Full Hearing; with the permission of Mrs Justice Cox, an appeal by the Claimant against the sum awarded in his favour by way of costs against the Respondents following a Pre-Hearing Review (PHR) held before Regional Employment Judge Sneath on 16 January 2009. The Judge's judgment and Case Management Orders, with Reasons, was promulgated on 23 January. There is no cross-appeal by the Respondents against the Judge's decision to award costs.

Background

2. The Claimant was employed by the First Respondent as a locum consultant cardiologist from 12 June 2006 until his dismissal on 31 August 2007. He has presented 4 separate Forms ET1, now combined, to the Leeds Employment Tribunal complaining of unfair dismissal, race and age discrimination, victimisation, unlawful deductions from wages and breach of the Working Time Regulations 1998. The claims are resisted.
3. On 16 October 2008 a Case Management Discussion (CMD) was held before Employment Judge Burton. On that occasion the Respondents' solicitor applied for a Pre-Hearing Review (PHR) to be held to consider their application for the claims to be struck-out, alternatively that the Claimant be ordered to pay a deposit. Judge Burton directed that there be a PHR listed for one day for that purpose and gave directions for skeleton arguments and witness statements to be lodged together with an agreed core bundle.
4. Judge Sneath recorded, at paragraph 6 of his Reasons, that in listing the strike out application for PHR Judge Burton effectively gave the Respondents a costs warning if the application for a strike out turned out to be hopeless
5. In the event Judge Sneath found the application to be hopeless and dismissed it. He also gave some case management directions in his Order dated 23 January.
6. On the Claimant's application for costs, he then being represented by counsel, Ms Mulholland, Judge Sneath made a limited costs order in the Claimant's favour. He said this at paragraph 6:

"Given, however, that further case management orders were necessary, I have limited the order to Counsel's Brief fee. Had this been solely a case management discussion, it could probably have been conducted on the telephone and would have lasted substantially less time. Also, it was reasonable to instruct Counsel given the risk to the claims posed by this application."

The Appeal

7. Today Ms Rogers has appeared before me on behalf of the Claimant. The Respondents have indicated that in the interests of saving costs they will not appear and are not represented today. Ms Rogers submits that the costs order, allowing counsel's fee but disallowing the Claimants' solicitors' costs or any of them incurred in connection with the PHR and preparation therefore, was legally perverse. This is a high hurdle to surmount; see Yeboah v Crofton [2002] IRLR 634. However, it is appropriate in 'an overwhelming case', as the Respondents acknowledge in their skeleton argument, which I have read and considered. Indeed Mummery LJ, who gave the leading judgment in Crofton, so held in the Employment Tribunal costs case of McPherson v BNP Parabas SA [2004] ICR 1398; see paragraph 43.
8. In my judgment the perversity ground is made out in this appeal. It was illogical for Judge Sneath to order the Respondents to pay Counsel's fees for attending the PHR and preparing a skeleton argument, but not to permit the Claimant to recover the costs incurred by his solicitors in carrying out the directions of Judge Burton in preparing for the hearing and in attending upon counsel at the hearing. I confess that I have seen occasions when counsel's fees have been disallowed and solicitors' costs ordered but never the other way around. Further, the Judge took into account an irrelevant factor, namely the fact that Case Management Orders were made at the PHR. As he went on to say, but for the unsuccessful strike-out application (and in my view that was properly characterised as hopeless; see North Glamorgan NHS Trust v Ezsias [2007] IRLR 603) the remaining case management issues could have been dealt with by way of a telephone conference, indeed might well have been dealt with at the Case Management Discussion before Judge Burton had he not been obliged to order a PHR to consider the Respondents' strike out application, he having no power to consider it at a Case Management Discussion; see Employment Tribunal Rule 17(2).
9. It follows that this appeal is allowed.
10. The only order in these circumstances in my judgment which could reasonably be made is that the Claimant recover his reasonable costs of and occasioned by the PHR, including those of both counsel and his solicitors.

Assessment of Costs

11. Ms Rogers invites me to exercise my powers under s35(1) of the Employment Tribunals Act 1996 to carry out an assessment of costs in the PHR application, the total amount of costs not exceeding £10,000. I accede to that application.
12. For the purposes of this appeal the Claimant's solicitors prepared and served on the Respondents in good time a schedule of costs in relation to the PHR application below. That schedule appears at pages 181-184 of the bundle before me.
13. I have considered the objections to items in that costs schedule contained in the letter from the Respondents' solicitors dated 23 April 2009 (pages 185-187) and Ms Rogers has taken me to the Claimant's solicitors' response to those issues in their faxed letter dated 11 May 2009 to the Respondents' solicitors (pages 189-191). In short I accept her submission that the Claimant's solicitors have provided a complete answer to each and every one of the objections taken by the Respondents' solicitors. I am not persuaded that the absence of the fee earner assigned to this case by the Claimant's solicitors has resulted in additional work. Plainly it was appropriate to instruct counsel because Judge Sneath ordered the whole of Counsel's fee. Any Case Management Orders could have been made either at the original Case Management Discussion before Judge Burton, or alternatively at an inexpensive telephone hearing, as anticipated by Judge Sneath, had this hopeless application to strike-out not been made and pursued by the Respondents. In these circumstances I do not propose to reduce the costs claimed in the Claimant's schedule. There is already in existence an order for counsel's fees plus VAT. In addition, I shall order costs in the sum of £6,046 plus VAT as claimed.

Costs in the Employment Appeal Tribunal

14. The most recent offer made to compromise this appeal appears in a letter from the Respondents' solicitors to the Claimant's solicitors dated 13 May (pages 192-193). Initially an offer of an additional sum of £1,791.50 was made. That figure was, on 13 May, increased to £3,500 plus VAT. I have ordered £6,046 plus VAT. It seems to me, bearing in mind the limited circumstances in which costs can be awarded in the Employment Appeal Tribunal, that this is a proper case in which to do so. It is plain to me that there was no realistic prospect of holding Judge Sneath's Order in this Tribunal. That appears to have been recognised by the Respondents who have not appeared before me today, as evidenced by the two offers made to compromise this appeal. Having awarded the whole of the Claimant's costs below, it seems to me appropriate to order their reasonable costs in pursuing this appeal to a conclusion. This morning Ms Rogers has put before me a schedule of costs incurred in the appeal on behalf of the Claimant in the total sum of £4,954 plus VAT. I am told that a copy of that schedule was sent to the Respondents' solicitors yesterday afternoon. I have received no submissions in response to that schedule from the Respondents. In these circumstances the order I make is that the Respondents pay the Claimant's costs in this appeal in the sum of £4,954 plus VAT in addition to the Order I have already made in relation to the Employment Tribunal costs but I shall give the Respondents 7 days in which to apply on paper for a variation of that Order, setting out their objections to the schedule of costs prepared by the Claimant. In the absence of any objection within those 7 days my Order for costs in the Employment Appeal Tribunal will stand. If objection is made, I shall deal with the matter on paper. The Claimant will have an opportunity to respond, and then I shall consider whether or not to vary my Costs Order in this appeal.