Appeal No. UKEAT/0025/11/RN
EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
At
the Tribunal
On
11 May 2011
Before
MR
RECORDER LUBA QC
(SITTING ALONE)
MISS
T MIRIKWE APPELLANT
(1)
WILSON & CO SOLICITORS
(2) MRS A SOYER
(3) MR K VINCENT RESPONDENTS
Transcript of Proceedings
JUDGMENT
SUMMARY
UNFAIR DISMISSAL
Costs. Award made without taking account of paying
party’s means because (1) she did not attend the costs hearing (although in the
court building) and (2) her conduct of the proceedings throughout had been
‘outrageous’. Held, on appeal: the decision was well within the wide ambit of
the Tribunal’s discretion on costs.
MR RECORDER LUBA QC
1.
This is an appeal against an order for costs made by the Employment
Tribunal sitting at East London. By its order the Employment Tribunal required
Ms Mirikwe, the unsuccessful Claimant in proceedings before it, to pay the
Respondents’ costs of those proceedings, to be assessed in the County Court on
an indemnity basis.
2.
By way of general background I should record that the Appellant,
Ms Mirikwe, is a law graduate in her mid‑20s. Since graduating in
May 2006 she has been in the employment of a number of law firms in a
variety of posts. In June 2008 she was employed by the First Respondent
as a case worker in its family law department. The First Respondent is a
substantial legal aid firm with over 50 fee earners. The Appellant
was dismissed in December 2008 having achieved a little under six months
of service with the Respondent.
3.
Ms Mirikwe brought claims of race discrimination, sex
discrimination and breach of contract before the Employment Tribunal. The
Tribunal conducted a hearing of those claims which extended over six hearing days.
On the morning of 8 February 2010 the Employment Tribunal announced
that it rejected all of the claims that Ms Mirikwe had made and, further,
it awarded the Respondents the small sum of £65.00 on its own counterclaim.
4.
After announcement of the result, counsel for the successful Respondents
made an application for their costs. The Employment Tribunal then indicated
that it would hear argument on the costs application after the lunch
adjournment. Ms Mirikwe was present at the Employment Tribunal building on
8 February 2010 and had been present in the Tribunal room when the
outcome of her claims was announced; that is to say in the morning session.
She did not return to the hearing room in the afternoon for the hearing of the
costs application, but she was represented, as she had been throughout the
proceedings, by her father, Mr Mirikwe, who has been described in the
documents before me as a trainee solicitor.
5.
Having heard argument that afternoon from both parties, the Employment
Tribunal later made the order for costs that I have summarised at the outset of
this Judgment. The Employment Tribunal subsequently gave full written Reasons
for its decisions, both on the substantive claims/counterclaim and on the order
for costs. That was done in a Judgment promulgated on 5 March 2010.
The Tribunal’s reasoning in relation to costs occupies paragraphs 115 to
130 of its written Reasons.
6.
The appeal from the order for costs comes before me, pursuant to an
earlier order made by Wilkie J of this Tribunal, confined to a single
ground which relates to the Employment Tribunal’s treatment of
Ms Mirikwe’s non‑attendance on the hearing of the costs
application. That single ground was contained in an earlier skeleton argument
prepared by Ms Mirikwe’s counsel and appeared at paragraph 13
thereof. It is in these terms:
“The Tribunal erred in treating her non‑attendance
punitively. In essence, they punished her for her non‑attendance by not
taking her means into account.”
7.
That single ground, as elaborated before me today by counsel for
Ms Mirikwe, has two elements. Put shortly, the contention is firstly that
the Employment Tribunal gave improper weight in exercising its discretion on
costs, and particularly whether to take into account the means of the paying
party, to the fact that Ms Mirikwe had not returned to the Tribunal hearing
room on 8 February 2010. Secondly, or alternatively, that it had
taken that matter into account in a punitive sense; that is to say as a
punishment for her non‑attendance.
8.
That single ground and its two dimensions were fully developed in the skeleton
argument of Mr Kohanzad. It is not a mere judicial aside to indicate that
Mr Kohanzad has both written and said all that could possibly and properly
have been written and said on behalf of the Appellant on this appeal. I have
benefited greatly from his submissions in reaching the Judgment which I am now
delivering.
9.
Before I outline the competing submissions of the two parties, it is as
well to set out the relevant law. The jurisdiction of an Employment Tribunal
in relation to costs is dealt with in the Employment Tribunal (Constitution
and Rules of Procedure) Regulations 2004. Schedule 1 to those
Regulations contains the Rules of Procedure and those dealing with costs are to
be found at rules 38 to 41 inclusive.
10.
The discretion of the Tribunal to award costs is available in one of two
circumstances described in rule 40. Put shortly, the first circumstance
is that the conduct of a party has occasioned a postponement or adjournment
leading to costs being thrown away. The second circumstance arises where the
Tribunal considers that in relation to the proceedings themselves the bringing
or conduct of those proceedings has been, on the part of a party,
unreasonable. It is plain from the terms of the Tribunal’s Judgment in this
case, to which I shall shortly come, that the Tribunal were here exercising the
second of those two jurisdictions in relation to costs. The extent to which
this Employment Tribunal found the present Appellant had conducted the
proceedings unreasonably amply appears from the terms of their Judgment as will
shortly be seen.
11.
The question of the amount of any costs to be paid pursuant to an order
of the Tribunal is dealt with in rule 41. Rule 41(1) provides:
“The amount of a cost order against the paying party shall be
determined in any of the following ways -
(a) the Tribunal may specify the sum
which the paying party must pay to the receiving party, provided that sum does
not exceed £10,000;
(b) […];
(c) the Tribunal may order the paying
party to pay the receiving party the whole or a specified part of the costs of
the receiving party with the amount to be paid being determined by way of
detailed assessment in a County Court …”
12.
Rule 41 continues with a provision in sub‑rule (2) as
follows:
“The Tribunal […] may have regard to the paying party’s ability
to pay when considering whether it shall make a costs order or how much that
order should be.”
13.
The ability of the Tribunal to have regard to the paying party’s ability
to pay when exercising its discretion in relation to costs is a relatively new
provision introduced under a relatively recent adjustment of the Tribunal’s
procedural rules. Prior to the making of what is now rule 41(2), the
question of the paying party’s means would not have been relevant to the
exercise of the discretion in relation to costs. It is perhaps for that
reason, that is to say the relatively recent enactment of this power, that
there is only modest authority available as to the way in which it should be
exercised.
14.
The parties have been able to jointly find only one Judgment of an
appellate court considering the ambit of rule 41(2), and that is the
decision of this Appeal Tribunal given on 21 November 2007 in the case of Jilley
v Birmingham and Solihull Mental Health NHS Trust UKEAT/0584/06 &
UKEAT/0155/07. The Judgment in that case on behalf of the Tribunal of three
members was given by its legal chairman, HHJ Richardson.
15.
The parties are also agreed that not only is that Judgment the only
authority of direct relevance but further that the passage from it, which is
most relevant to the present case, is that contained in paragraph 53 of
the EAT’s Judgment which reads as follows:
“The first question is whether to take ability to pay into
account. The Tribunal has no absolute duty to do so. As we have seen, if it
does not do so, the County Court may do so at a later stage. In many cases it
will be desirable to take means into account before making an order; ability to
pay may affect the exercise of an overall discretion, and this course will
encourage finality and may avoid lengthy enforcement proceedings. But there
may be cases where for good reason ability to pay should not be taken into
account: for example, if the paying party has not attended or has given
unsatisfactory evidence about means.”
16.
Against the background of that description of the relevant law I shall
shortly turn to the instant case and the submissions of the two parties.
Before doing so, however, and as a matter of self‑direction, it is
sensible for me to set out the guidance given by Mummery LJ in the case of
McPherson v BNP Paribas [2004] EWCA Civ 569,
reported at [2004] ICR 1398. In the helpful resume of the relevant law set out
in the Court of Appeal’s Judgment, this appears at paragraph 26:
“When a costs order made by an Employment Tribunal is appealed
to the Employment Appeal Tribunal or to this court the prospects of success are
substantially reduced by the restriction of the right of appeal to questions of
law and by the respect properly paid by appellate courts to the exercise of
discretion by lower courts and Tribunals in accordance with legal principle and
relevant considerations. Unless the discretion has been exercised contrary to
principle, in disregard of the principle of relevance or is just plainly wrong,
an appeal against a Tribunal’s costs order will fail.”
17.
I now turn to the submissions of the parties relating to the instant
case. Of course, those submissions must be taken against the background of a
full appreciation of the reasoning of the Tribunal on the question. I shall
not extend this Judgment by reading in the full terms of paragraphs 115 to
130 of the Employment Tribunal’s Judgment, but it is important to indicate that
I have taken the whole content of them into account as forming the essential
background to considering the submissions of counsel for the Appellant and the Respondents.
Moreover, as is plain from the self‑direction as to the law that the
Tribunal set out in paragraphs 118 to 123 of that part of their Judgment,
they have had regard to the correct relevant rules, that is to say the rules
contained in rules 40 and 41 of the Employment Tribunal Rules and they
have referred at paragraph 122 in particular to the Judgment in Jilley,
which they were clearly shown or referred to.
18.
I now come to the central question on this appeal and that is whether
the Tribunal have or have not correctly dealt with the exercise of their
discretion on whether to take into account the means of the paying party. As
to that the Tribunal expressed themselves succinctly in paragraph 128.
They say this:
“With those matters in mind, that is the Claimant’s failure to
return this afternoon and the extent of the unreasonableness of her conduct of
this litigation, we consider it inappropriate to take into account the
Claimant’s means and we exercise our discretion for those reasons not to do
so.”
19.
In that single sentence the Tribunal state their conclusion on the
exercise of their discretion, that is to say that they are not going to take
into account the means of the paying party and they give their reasons. Those
reasons are to be understood in the context of their earlier paragraphs of
Judgment as being, firstly, the failure of Ms Mirikwe to return to the hearing
and, secondly, the extent of her unreasonable conduct generally in the
litigation.
20.
The essence of Mr Kohanzad’s submissions is that the Tribunal has
there, in paragraph 128, and not exclusively there, taken into account the
Appellant’s failure to return to the hearing to participate in the
determination of costs as an important factor. It has, he submits, done so
only because it has wished to punish her for that conduct, by which conduct it
can be inferred that the Tribunal was displeased.
21.
The Employment Tribunal had indeed earlier in its Judgment referred to
the fact of that non‑attendance. Mr Kohanzad drew my attention to
the relevant passages and in particular the second sentence of
paragraph 126 in which the Tribunal say in terms:
“We observe the Claimant has chosen not to return to the
Tribunal this afternoon knowing that she faced a costs application.”
22.
Further, in support of his contention that the Tribunal had mishandled
the question of non‑attendance in its relationship to the issue of
whether means should be taken into account, he pointed to the fact that in
dealing with Jilley at paragraph 122, the Tribunal, in its
summary of that case, has elected to make mention only of non‑attendance
as an example of a situation in which a party may not have their means taken
into account without mentioning the other, that is to say the giving of
unsatisfactory evidence. Those two examples appear in paragraph 53 of
HHJ Richardson’s Judgment.
23.
Mr Kohanzad submits that the Tribunal is there alighting on only
one of the two examples mentioned by the learned Judge, emphasising the
particular significance it was attaching to that matter. Mr Kohanzad
submits that non‑attendance may indeed be a relevant and proper factor
when it goes to the ability of an Employment Tribunal to identify the means or
otherwise of a paying party to pay. He submits that here it was being used as
a matter in respect of which the Tribunal was punishing the Appellant by not
taking her personal financial means into account at all. Taking such significant
or disproportionate account of that factor was, he submits, a simple reflection
of its displeasure at her conduct, rather than a matter genuinely relevant to
the question of whether her means should be considered.
24.
Mr Kohanzad further submits, and I hope I do justice to his
submissions in summarising them in this way, that here the non‑attendance
of the Appellant could not have been and should not have been treated as
significant. That is because, he submits, the Appellant did attend the costs hearing
by her representative; her father. He had represented her throughout.
Further, information about her circumstances had been made known to the
Tribunal, either because her father had told them that she was a full-time
student without part‑time employment, or because it was obvious from her
relative youth and her previous modest salary commanded from the First Respondent,
that she was not of great means. So, as a matter of law, he submits, the
Employment Tribunal gave unreasonable, improper and disproportionate weight to
the factor of non‑attendance and accordingly I should set its decision
aside.
25.
For the Respondents, Ms Katherine Newton, seeks to uphold the
Employment Tribunal’s decision, essentially for the reasons that it gave. She
reminded me that not only are costs themselves in the discretion of an
Employment Tribunal, even when the conditions for an award of are satisfied,
but further that the rules vest the Employment Tribunal with a complete
discretion as to whether to take into account the means of a paying party when
exercising the wider discretion of whether or not to make a costs order at all.
26.
She reminds me that there is no presumption either way in the wording of
rule 40, or more particularly rule 40(2). The rule does not say that
normally means will be taken into account or should be taken into account, nor
does it indicate that it is proper that a Tribunal should routinely or usually
leave them out of account. As Ms Newton put it to me in her oral
submissions this is a broad, unfettered discretion. It contains no checklist
of factors which weigh on either side of the balance.
27.
She submits that the non‑return of the Appellant to the Employment
Tribunal hearing room on the afternoon of 8 February 2010 was
properly relevant to the exercise of that “discretion within a discretion” (my
term). Her absence, submits Ms Newton, disabled the Employment Tribunal
from having evidence of her means. It further disabled the Respondents
from cross‑examining the Appellant as to her means in relation to such
evidence as she might have given.
28.
Ms Newton submits that the Employment Tribunal was acting within
the scope of rule 40(2) and in keeping with the general directions given
about the exercise of the discretion in the case of Jilley.
Moreover, she unsurprisingly draws attention to the fact that non‑attendance
of a party was one of only two examples given by HHJ Richardson in that
case.
29.
I have no hesitation in concluding that, essentially for the reasons
given in Ms Newton’s cogent written submissions, this appeal should be
dismissed. There can be no doubt that the non‑attendance of a party can
be relevant to the exercise of the discretion by an Employment Tribunal on
whether to have regard to that party’s means. That much is clear, firstly, from
the very broad and general terms in which rule 41(2) is expressed. There
is no suggestion in that wording that the matter is irrelevant. Secondly, the
decision in Jilley makes it clear that non‑attendance may
be relevant.
30.
In any event, in a case where the primary source of evidence about means
to pay would be given by a party in person, such as in the instant case, their
non‑attendance may be very or highly relevant to the exercise of the rule 41(2)
discretion. It is likewise not capable of dispute that unreasonableness of the
paying party’s conduct may weigh in the exercise of the discretion on whether
to have regard to their means or ability to pay. Where, as here, the non‑attendance
by the party is treated by the Employment Tribunal as another instance of
unreasonable behaviour, it cannot be irrelevant to the exercise of the
discretion whether to have regard to the means of the non‑attending
party.
31.
Once it is admitted, as I consider that it must be, that non‑attendance
is a relevant consideration, the weight to be given to it on the exercise of
this “discretion within a discretion” is, in my judgement, singularly a matter
for the body charged with the exercise of that discretion. That I may have
myself given more or less weight to the matter of attendance is neither here
nor there. I can only interfere with the Employment Tribunal’s order if the
Tribunal went wrong, to such extent as amounts to an error of law in the terms
I have set out from the Judgment of Mummery LJ earlier in my Judgment. I
am without hesitation not so satisfied.
32.
Of course, if the non‑attendance at a costs hearing had stood
alone as a factor in the exercise of the Employment Tribunal’s discretion
whether to take means into account in the sense of being the sole or determinative
factor, an appellate Tribunal might be persuaded the more easily to disturb the
exercise of discretion or to draw the inference that the particular factor has
been used disproportionately or punitively. However, that is not this case.
Indeed, the instant case gets nowhere near that point.
33.
In my judgement a correct construction of the Tribunal’s Judgment runs
as follows. At paragraph 125 they particularise what they describe as the
“outrageous way in which the case has been conducted”. No one holding judicial
office could read the sub‑particulars given without echoing the sentiment
of the Tribunal as to the particularly outrageous way in which this particular
Appellant behaved below in the conduct of her proceedings and in the way she
was represented.
34.
In paragraph 126, having said that those matters would be taken
into account, the Tribunal made the observation that the Claimant had chosen
not to return to the Tribunal in the afternoon. I take that to be the Tribunal
making reference to a further instance of unreasonable conduct on her part.
35.
Paragraph 127 contains a distillation of the finding of
unreasonable conduct in the particular context of legislation designed to
reduce the evil of discrimination. It is against that background that one
comes to paragraph 128. That paragraph opens with a reference to “with
those maters in mind”. That, in my judgement, is a reference back to the whole
of what has gone before in relation to the conduct of the parties. However, it
continues:
“[…] that is the Claimant’s failure to return this afternoon and
the extent of the unreasonableness of her conduct of this litigation”.
36.
There, it seems to me, the Tribunal is not simply treating the non‑attendance
as an aspect of unreasonable conduct, as it has done in paragraph 126.
The use of the word “and” demonstrates that the Tribunal is separately dealing
with the failure to return to the Tribunal hearing on the question of costs -
separate that is from her generally unreasonable conduct. That can only, in my
judgement, be because it believes that her attendance may have assisted on the
question of her means and her non‑attendance was relevant to the exercise
of its discretion or its ability to exercise the discretion on the question of
taking into account her means.
37.
In my judgement, therefore, Mr Kohanzad has not established the proposition
that the Tribunal took into account some irrelevant matter. He has not
satisfied me that the weight the Tribunal accorded to the non‑attendance
was disproportionate. I am not satisfied that the proper inference to be drawn
from the way in which the Tribunal have expressed themselves is that the factor
of non‑attendance was deployed punitively by the Employment Tribunal.
38.
Mr Kohanzad took the opportunity of inviting me to consider whether
to give general guidance on the exercise of the rule 41(2) discretion in
the course of giving this Judgment. In my opinion, this is not an appropriate
case in which to give general guidance for at least three reasons. The first
is that rule 41(2) is expressed in terms of a general unfettered
discretion. It is not appropriate for a judicial decision to cut down or, in
some way, qualify the scope of the exercise of that discretion appropriately by
Employment Tribunals.
39.
The second reason is that this case is singularly not a good vehicle for
the giving of guidance because no terms for any such guidance are addressed in
the written argument of either party’s counsel. If an appellate Tribunal is to
be asked to give general guidance to a lower Tribunal, it seems to me that it
is only right that the parties should offer what assistance they can to the
appellate Tribunal in that endeavour, perhaps by suggesting a formulation or
rubric, or series of factors or pointers, that it would be useful for the Tribunal
to address.
40.
The third reason is because such guidance, in very general terms, as
might properly be given is, in my view, to be found in the Judgment of
HHJ Richardson in the Jilley case. It might be thought in
those circumstances that it would be sensible for that case to be reported, but
that is a matter for others.
41.
I close this Judgment by dealing with what Ms Newton, for the
Respondents, has called her fallback proposition. She submits that even if I
were to have been satisfied that the Tribunal had erred in this case, I ought
not to interfere with the order made because the order can be separately and
cogently sustained by reference to the findings of unreasonable conduct that
the Tribunal had itself made. Put another way, Ms Newton’s submission is
that the extraordinary conduct of these proceedings by the Appellant and her
representative puts one into territory in which no reasonable Tribunal,
properly directing itself, could have decided that her means should be taken
into account so as to avoid her having to pay the whole of the proper costs of
the receiving party.
42.
In my judgment, for the reasons already given, it is not necessary for
me to determine this secondary or fallback position. Suffice it to say that,
in the particular circumstances of this case, I find the fallback submission an
attractive one. Had I not otherwise felt it necessary to dismiss this appeal,
I might well have been tempted to do so on the alternative basis advanced by
Ms Newton. In the event, that circumstance does not arise.
43.
For all those reasons this appeal is hereby dismissed.
