THE HONOURABLE MR JUSTICE UNDERHILL
1.
This is an appeal against the decision of an Employment Tribunal sitting
at Bury St. Edmunds, chaired by Employment Judge Cole, ordering the Appellant
to pay wasted costs in the sum of £16,037.04. The Appellant has been
represented by Mr. Tom Coghlin of counsel and the Respondents by Mr. Paul
Greatorex of counsel.
2.
The order was made in the context of proceedings being brought initially
by Mr. Andrew Lloyd, and, following his death, by his mother Mrs Betty Lloyd.
Mr Lloyd was a teacher at Bottisham Village College in Cambridgeshire. The
Respondents were the County Council, the school itself, the Warden, Ms. Evans,
and one of the governors, Mr Hodgson. Mr Lloyd was suspended in December 2005
following an allegation that he had struck one of the pupils. He and his
family have always maintained that the allegation was wholly unfounded, and
they plainly found it very upsetting. After prolonged internal proceedings
into which it is unnecessary to go, Mr Lloyd resigned in February 2007. He
issued proceedings in April 2007 claiming that he had been constructively
dismissed and also raising claims under the Sex Discrimination Act 1975
and the Disability Discrimination Act 1995. Sadly, he had in the
meantime developed cancer (to which his family believe that his treatment by
the school contributed), and he died on 9 June. The proceedings were stayed
for some time until Mrs. Lloyd obtained letters of administration, but they
were revived in early 2008. The fact that the proceedings were continued
following Mr. Lloyd’s death is an indication of the strength of feeling on the
part of his family that he had been the victim of a grave injustice.
3.
Both in the internal procedures within the school and in the employment
tribunal proceedings Mr. Lloyd, and latterly his mother, were represented by
his cousin (Mrs. Lloyd’s nephew), Mr. Paul Jackson. Mr. Jackson is a solicitor
who at all material times held a practising certificate, and was, at least in
the early stages, employed as a solicitor. However, his speciality was in
non-contentious banking law: he was not an employment specialist or indeed a litigator.
4.
The hearing of the claim began before Judge Cole and members on 9
January 2009. The Respondents were represented by Mr. George Foxwell of counsel
on the instructions of Messrs. Eversheds. After seven days the hearing was
adjourned part heard and a further hearing was fixed for 21 September.
5.
Shortly after the adjournment Mr. Jackson posted material on a Facebook
site called “Justice for Mr. Lloyd” identifying himself as Mr. Lloyd’s solicitor
and expressing his view of the rights and wrongs of the dispute. He also
obtained under the Freedom of Information Act, and supplied to the press,
documents showing the costs which had been incurred by the Council, and he made
a statement to the press complaining that those costs were wasted and that no
attempt had been made to settle the case. The Council objected, contending
among other things that Mr. Jackson’s conduct amounted to a contempt of court.
We need not consider whether that contention was correct, but Mr. Jackson’s
actions were certainly ill judged and inappropriate for a solicitor
representing his client on a professional basis. After various letters between
the parties and the Tribunal Judge Cole directed a case management discussion,
partly in order to deal with the Council’s complaint but partly also in order
to consider the possibility of advancing the dates of the second tranche of the
hearing (a proposal which Mr. Jackson strongly opposed). That CMD took place
on 7 April. Mr. Jackson undertook to make no further Facebook entries
concerning the case, and the Judge decided – on, as he put it, “a very fine
balance” – not to refer the matter to the Attorney-General for the
consideration of proceedings for contempt of court. He directed an expedited resumption
of the hearing, to commence on 10 June (a Wednesday) and conclude on 20 June
(i.e. the following Friday).
6.
Shortly before the resumed hearing Mr. Jackson wrote to the Regional
Employment Judge complaining about Judge Cole. We have not seen the complaint
in full, but it contained the submission
“ … that consideration must now be given to Judge Cole’s
dismissal from the Judiciary given the seriousness of his failings,
particularly as this is hardly the first time he has made highly inappropriate
comments while acting in a judicial capacity. His weaknesses seem to be legal
and personal. He has demonstrated an inadequate grasp of the law, bias and
discriminatory prejudice as well as poor judgment. My client has said that
Judge Cole has ‘poisoned the wells of justice’”.
7.
Remarkably, Mr. Jackson’s complaint was supported by what were said to
be transcripts of recordings of private comments made by members of the
Tribunal in the Tribunal room in the absence of the parties (and indeed apparently
– though we are not sure that this was ever definitively established – in its
own retiring room) in the course of the January hearing. A CD of the passages
in question was enclosed. The position about the recordings is complicated.
The Tribunal did its best, in circumstances to which we will come, to get to
the bottom of how they came to be made and how the extracts relied on were
selected: as to the latter point, the CD did not contain the entirety of the
recordings apparently made, but the full recordings were said to have been
destroyed. The Tribunal found Mr. Jackson’s explanations unhelpful, unreliable
and at times positively untruthful. Fortunately, we do not need to grapple
with the detail here. It did not find that he was a party to the original
recording (which seemed to have been done by a friend of the family, perhaps
without any intention of recording anything except the public hearing); but he
listened to the recordings, despite the fact that the material was plainly
confidential, and sought to make use of them in support of the complaint to which
we have referred. The Tribunal also found that he had listened to more than
appeared on the CD and was party to the destruction of the full recordings.
8.
It seems, though we are not clear whether this formed part of the
complaint to the Regional Employment Judge, that Mr. Jackson also believed that
there were grounds to suspect what he described as “over familiarity with Judge
Cole” on the part of Mr. Foxwell, since he sent him in April 2009 a list of
questions intended to elicit the extent of their relationship.
9.
Having made that complaint, at the start of the hearing on 10 June 2009
Mr. Jackson applied to the Tribunal that it should recuse itself. That
application was refused on 12 June, and reasons were given orally: they were
subsequently sent to the parties in written form on 22 June. The Respondents
had made it clear, in a note from Mr. Foxwell served at the start of the
hearing, that they regarded the application and/or Mr. Jackson’s associated
conduct as vexatious and an abuse of process and that if the application were
refused they in turn would apply to strike out the claim. That application was
duly heard on 12 June and on the following Monday, 15 June. On Tuesday 16 June
the Tribunal ordered the proceedings to be struck out. Again, reasons were
given orally but provided subsequently in written form. In both judgments the
Tribunal reviewed in some detail what had happened, in particular about the
recording of its deliberations.
10.
Mr. Foxwell had in his note of 10 June also said that if the application
to strike out were successful an application would be made for costs against
Mrs. Lloyd and/or for wasted costs against Mr. Jackson. That application was
heard on 16 June, following the delivery of the second judgment. We have an
agreed note of what occurred. Judgment was reserved and the Judgment and Reasons
were promulgated on 22 June, on the same occasion as the written Reasons for
the first two judgments, to which the Tribunal cross-refers. The Reasons read
as if they were delivered orally on 17 June; but, as we understand it, that is
slightly misleading, and neither Judgment nor Reasons were promulgated until 22
June. Nothing however turns on this. A slightly more significant error is
that at para. 2 of the Reasons the Tribunal appears to say that the strike-out
decision was made on 15 June: it is common ground that this is a mistake, and
that the judgment and oral reasons were not given until the morning of 16 June.
11.
The total of £16,037.04 which the Tribunal awarded comprised three
elements, as follows:
(1) 50% of
the costs incurred by the Respondents in considering questionnaires served by
Mr. Jackson purportedly pursuant to the Disability Discrimination Act
but which they submitted were unnecessarily prolix and to a considerable extent
irrelevant – £1,335;
(2) the Respondents’
costs of attending the CMD on 7 April, on the basis that this had been
necessitated by Mr. Jackson’s unreasonable conduct in relation to the Facebook
entries – £3,251.50;
(3) Mr.
Foxwell’s refreshers for four days in June, on the basis that those costs had
been wasted in dealing with a wholly misconceived application and the
consequent strike-out – £11,450.54.
12.
We pause to say that it will be apparent even from this very abbreviated
summary that Mr. Jackson in the course of these proceedings behaved in several
respects in a way which – to put it no higher – would not have been expected
from a solicitor conducting himself in a professional manner. The Tribunal
indeed used much stronger language, referring to his behaviour in relation to
the recordings as “appalling”. But Mr. Jackson’s general manner both towards
the Respondents and their solicitors and towards the Tribunal was also thoroughly
reprehensible. His correspondence, of which we have seen several examples, is
arrogant and bullying in tone. There was a regrettable incident when he told
the Tribunal that he was unable to attend the CMD on the first proposed date,
being 1 April, because he had a prior professional commitment but was then
unable to produce any evidence of that commitment. According to the Tribunal,
his conduct during the hearings, and in particular those in June, was thoroughly
objectionable. He made loud and inappropriate interventions; he attempted to
interfere in the way that witnesses gave their evidence; and he took no trouble
in either his body language or his expression to conceal his opinions about the
members of the Tribunal. The most charitable interpretation of Mr. Jackson’s
conduct as found is that he allowed his emotional commitment to the prosecution
of his cousin’s claim, and his associated belief that a grave injustice had
occurred, to cloud his judgment. (It is right to record that Mr. Coghlin told
us that the Appellant did not accept the full extent of the findings against
him, but he acknowledged that he was not in a position to challenge them in
this Tribunal.)
13.
The wasted costs jurisdiction of the Employment Tribunal derives from rule
48 of the Employment Tribunal Rules of Procedure, which reads (so far as
material) as follows:
“(1) A tribunal or
Employment Judge may make a wasted costs order against a party's
representative.
(2) In a wasted
costs order the tribunal or Employment Judge may:—
(a)
disallow, or order the representative of a party to meet the whole or part
of any wasted costs of any party, including an order that the representative
repay to his client any costs which have already been paid;
(b) ... .
(3) “Wasted costs”
means any costs incurred by a party:—
(a) as
a result of any improper, unreasonable or negligent act or omission on the part
of any representative; or
(b) which,
in the light of any such act or omission occurring after they were incurred,
the tribunal considers it unreasonable to expect that party to pay.
(4) In this rule “representative”
means a party's legal or other representative or any employee of such
representative, but it does not include a representative who is not acting in
pursuit of profit with regard to those proceedings. A person is considered to
be acting in pursuit of profit if he is acting on a conditional fee
arrangement.
(5)
...
(6) Before making
a wasted costs order, the tribunal or Employment Judge shall give the
representative a reasonable opportunity to make oral or written representations
as to reasons why such an order should not be made. The tribunal or Employment
Judge may also have regard to the representative's ability to pay when
considering whether it shall make a wasted costs order or how much that order
should be.
(7)-(9) … ”
As was made clear by the decisions of this Tribunal in Mitchells
v Funkwork Information Technologies York Ltd. (UKEAT/0541/07, BAILII: [2008] UKEAT 0541_07_0804 ) and in Ratcliffe
Duce and Gammer v Binns (UKEAT/100/08, BAILII: [2008] UKEAT 0100_08_2304), in applying rule 48 tribunals
should apply the principles developed in relation to the equivalent High Court
jurisdiction. The leading authorities are Ridehalgh v Horsefield
[1994] Ch 205 and Medcalf v Mardell [2003] 1 AC 120.
14.
The Appellant advances what are in substance six grounds of appeal. As
will appear, we believe that the appeal must be allowed on the basis of the
ground appearing at paras. 7.2-7.4 of the Notice of Appeal. We will accordingly
take that first and confine ourselves to brief observations about one other
remaining ground.
15.
A wasted costs order can only be made against a representative who is
“acting in pursuit of profit” (including under a CFA): see rule 48 (4). When
the application was first raised, at about 11 a.m. on 16 June, and before Mr.
Foxwell had made any submission, the Appellant said to the Tribunal in terms that
he was not acting in pursuit of profit. The Judge responded that Mr. Foxwell
should make his submissions before the Appellant was heard on that point. In
the course of those submissions Mr. Foxwell invited the Tribunal to infer that
the Appellant was acting either on a conventional retainer or under a CFA. He
said that that inference could be drawn from the fact that in advance of the CMD
referred to at para. 5 above the Appellant had made an application on behalf of
Mrs. Lloyd for wasted costs against the Council’s solicitors: he submitted that
since on the indemnity principle she could recover no costs unless she were
under a liability to her representative he must have been acting in pursuit of
profit. We should set out the circumstances in relation to that application.
In a letter dated 26 March 2009 addressing issues relating to the proposed
application the Appellant said:
“I hereby request that an order be made forthwith
against the Respondent’s solicitors, Eversheds LLP, for wasted costs of £1,000
under Rule 48. This will cover the additional work I have so far had to carry
out as a result of their ‘Facebook’ related correspondence designed to prevent
fair public comment and to change agreed hearing dates. A reading of all the
posts by ‘Facebook’ user group ‘Justice for Mr. Lloyd’ (with the exception of
the recent postings and statement by Louise Browne) will reveal their legal
irrelevance to Andrew’s case. Andrew Lloyd’s undoubted excellence as a
teacher, evidenced in comments from former pupils and their parents on
‘Facebook’, is not a matter for these proceedings.”
In fact the application was not pressed at the CMD, but it
appears from a reference in the Reasons (para. 12) that the Appellant told the
Judge that it would be prosecuted at some point in the future.
16.
In his submissions in reply the Appellant said this:
“Appellant: I can assure you that based on my client’s
costs and other costs that I believe that the application made the costs is
consistent with the fact that I was not paid and will not be paid.
Judge: It would help us no end if you can answer Mr.
Foxwell’s applications. It cannot be consistent if he made an application for
costs on 7 April.
Appellant: Not for my costs!
Judge: You are intelligent …
Appellant: Not for my costs, the costs of my client. I
am not being paid. Others have to do research. Until recently I was working
full time in London and didn’t have time. Throughout this case, as you known,
we have had people assisting and on that basis, unless I was misinformed, we do
have a middle position. No contemplation that if I was successful I’d be paid.
I am doing this case because of my cousin Andrew Lloyd.
Judge: Anything else you want to say?
Appellant: I’ll just check if I have covered
everything in relation to me. There could be many more things to say but I
won’t. A few days ago a picture was shown of me of a hanged man and it was
public knowledge that I had made a complaint against the judge and the panel.
It seems to me, that drawing sums up the situation.”
17.
The Tribunal dealt with the issue of whether rule 48 (4) was satisfied
at paras. 9-13 of its Reasons, as follows:
“9. At first sight, it may be thought that an order
against Mr. Jackson is inappropriate. Mr. Jackson told us yesterday that he is
not in pursuit of profit, nor indeed is there any condition fee arrangement so
far as his client, Mrs. Lloyd, is concerned.
10. Mr. Foxwell says that is a surprising assertion
and one which we should ignore. It is an assertion not supported by any kind
of evidence, written or otherwise. Mr. Jackson is clearly a highly intelligent
man who has been much occupied by all parts of this claim, including its
minutiae. Clearly, it is more than minutiae for Mr. Jackson not to have
anticipated the costs application today. It is an application which has been
signalled from a very early stage in the proceedings indeed. Indeed, it was
signalled last week when the proceedings returned to us by the skeleton
argument and submissions prepared by Mr. Foxwell. We are somewhat surprised,
if it be the case, that Mr. Jackson came unprepared today. That is a facet
which has not been a characteristic of his involvement in this case thus far.
Perhaps some written confirmation or other evidential material in the hands of
Mrs. Lloyd might have assisted. It may indeed be the case that Mr. Jackson
does not expect to be paid, hour by hour, day by day, in the conventional way.
But we suspect very strongly he is the beneficiary of a conditional fee
arrangement, either formal or informal. As Mr. Foxwell has frequently
observed, Mr. Jackson has displayed a “pattern” of behaviour designed to derail
these proceedings, designed to put maximum pressure upon the Respondents and to
induce a financial settlement. That, to us, seems only consistent with some
kind of conditional fee arrangement.
11. As will be seen from our earlier judgments, we
have been able to find Mr. Jackson to be a witness of consistent reliability.
Very many aspects of that which he has told us both as an advocate and by his
evidence have not stood the test of close scrutiny and much so very obviously.
12. If we have any doubt, says Mr. Foxwell, then there
is material to assist us, he asserts. He reminds us that when, at a Case
Management Discussion before the Judge of this Tribunal of 7 April 2009, the
Respondents signalled an application for costs against the Claimant, Mr.
Jackson, for the Claimant, retorted by his own application for costs in a
specified sum, albeit not arithmetically particularised in great detail. He
told the Judge then and continued to do so that that the application for costs
remains extant and will be prosecuted at some future time. Quite when Mr.
Jackson envisages that we do not know.
13. Nevertheless, as Mr. Foxwell observes, a solicitor
with conduct of proceedings is in no way able to make or even threaten to make
a costs application against the other party unless the party on behalf of whom
the application is made (by Mr. Jackson) incurs legal costs. Thus, we agree
with Mr. Foxwell it so obviously follows that, by his own recognition in April
this year, Mr. Jackson accepted, by obvious and direct implication, that either
he, as a solicitor, was acting in pursuit of profit or pursuant to a
conditional fee arrangement.”
18.
In his excellent skeleton argument on behalf of the Appellant Mr.
Coghlin submitted that it was wrong in principle that a finding that he was
acting in pursuit of profit should be made on the basis, as the Tribunal
explicitly put it, that it “suspected” – even if the suspicion was “very
strong” – that he was the beneficiary of a CFA. He went so far as to submit
that a finding of fact under rule 48 should only be made on the criminal
standard of proof. We do not accept the latter submission. As to the former,
we do accept that suspicion is not enough, but we think that on a fair reading
of these paragraphs the Tribunal meant to make a positive finding.
Nevertheless Mr. Coghlin is entitled to rely on the loose use of language in
this regard as evidence of a certain fuzziness in the Tribunal’s expressed reasoning,
which lends support to his more substantial point, which is that both the
expressed bases for its conclusion were flawed. Those bases are: (1) that the
Appellant’s behaviour in seeking “to put maximum pressure upon the Respondents
… to induce financial settlement” was “only consistent with some kind of
conditional fee arrangement”; and (2) the application for costs referred to at
para. 15 above. We take those in turn.
19.
As to (1), Mr. Coghlin submitted that it was simply wrong to say that
the pursuit of a financial settlement was an indication that the Appellant was
acting under a CFA, let alone that it was “only consistent with” such an
arrangement. On the contrary, pursuit of a settlement, financial or otherwise,
is equally consistent with a representative acting on a pro bono basis. This
is more than simply another piece of loose language. There was in the present
case a very obvious reason why the Appellant might be acting pro bono, namely
family affection and loyalty. No doubt he might nevertheless have agreed with
the family to take a part of any ultimate award or settlement, but there was no
reason to assume that he done so.
20.
As to (2), Mr. Coghlin referred to the Appellant’s explanation set out
at para. 16 above, namely that the “costs” that he was seeking constituted
expenses incurred by Mrs. Lloyd in respect of “research” done by others. Mr.
Coghlin pointed out that the definition of “costs” in rule 38 (3) includes not
only “fees” but “disbursements or expenses”, and that a party could make a
claim for such disbursements or expenses even where he was being charged
nothing by his representative. No doubt that explanation was given very
briefly, but the Tribunal was obliged to address it and should not have
rejected it without giving its reasons for doing so: in fact, the point is not
dealt with in the Reasons at all. There were also particular reasons why the Appellant’s
explanation was brief and unparticularised. He had only had notice of the
intended application when Mr. Foxwell served his note on the morning of the
first day of the resumed hearing, and it was of course at that stage contingent
on the strike-out application succeeding, which was not known until the morning
of 16 June. Mr. Foxwell’s note included no submissions in support of the
application (understandably, since even if the strike-out succeeded it would be
necessary to know the precise grounds), and the Appellant would not therefore
have known, for example, of the significance attached to his letter of 26 March
2009. It was reasonable in those circumstances that he should not have had
full particulars of the “expenses” argument at his fingertips, still less
supporting evidence. He had indeed asked the Judge, when Mr. Foxwell’s application
was first adumbrated “is it absolutely necessary for me to deal with these
matters today ?”; but the Judge had replied “yes”. He had been given
half-an-hour to prepare, but that was before, not after, Mr. Foxwell had
developed his detailed submissions.
21.
Mr. Greatorex, whose submissions also were clear and cogent, emphasised
that the question of whether the Appellant was acting in pursuit of profit was one
of fact. The only evidence before the Tribunal that he was not so acting
consisted of the Appellant’s bare denial. That was wholly unsupported. The
“expenses” explanation was so unparticularised that the Tribunal had not been
obliged to address it specifically. It was sufficient for it to make the
point, as it did at para. 11 of the Reasons, that the Appellant’s evidence
could not be treated as reliable. Mr. Greatorex emphasised that there was
ample material supporting that conclusion: he took us through the history,
identifying the points at which the Appellant could be shown to have been manipulative
or untruthful. He endorsed the Tribunal’s observation at para. 10 of the
Reasons that the Appellant must have seen the point coming: indeed he had at
the very start of the hearing of the application raised the objection that he
was not acting in pursuit of profit – see para. 15 above. He had not asked for
more time in order to produce evidence. Mr. Greatorex also questioned whether
payment for research by third parties of the kind referred to would fall within
the definition of “costs”.
22.
We acknowledge the force of Mr. Greatorex’s submissions, but in the end
we feel obliged to say that the Tribunal’s reasoning was flawed. We are very
conscious of the need to avoid a hyper-critical approach to the language of the
Reasons, or the precise detail of the reasoning; and if we thought that there
were ample grounds for the decision we might have found it possible to uphold
it. But just how tolerant we can be of such flaws is sensitive to the facts of
the particular case. The starting-point here is that there was no a priori
reason to believe that the Appellant might be acting in pursuit of profit. On
the contrary, this is just the sort of case where, because of the family
element, he might be expected to be acting pro bono; and that is what he
asserted in terms to the Tribunal – “No contemplation that if I was successful
I’d be paid. I am doing this case because of my cousin”. In those
circumstances the Tribunal needed solid grounds for a finding to the contrary.
Of the grounds that it gave, the first seems to us to be plainly wrong, for the
reasons given by Mr. Coghlin (see para. 19 above). As to the second – that is,
the claim for “costs” made by the Appellant himself – he did himself no favours
by the patronising and unforthcoming way in which he advanced his explanation;
but the fact remains that he did explicitly advance it. It seems to us that
the Tribunal was obliged to address it. We do not accept that it was enough to
observe generally that the Appellant was an unreliable witness. It is axiomatic
that unreliable witnesses cannot be assumed never to be telling the truth; and
what the Appellant was saying was not inherently implausible. It is true that
he gave almost no detail, but nor was he asked for any. In our view, once the
point was squarely raised fairness required that it should not rejected without
the Appellant having the opportunity to particularise. Probably the right
course was for the Judge to have said in terms that if the Appellant wanted the
Tribunal to accept what he was saying he would have to give more detail and –
perhaps – to do so on oath and/or provide supporting evidence. (We appreciate
that there are dicta in Ridehalgh deprecating the use of any
elaborate procedures; but we are not sure that they would preclude a tribunal
from requiring formal evidence in circumstances like the present.) If the
Appellant had continued unco-operative, appropriate inferences could have been
drawn. If he had volunteered more particulars, they would have had to be
assessed. If he offered verification that was not available there and then,
the Tribunal would have had to decide whether an adjournment was appropriate,
taking into account whether the Appellant had had adequate notice of the issue:
we address this aspect briefly at para. 28 below. But what was not acceptable
was for the Appellant’s explanation of the only available facts which
potentially justified a finding that he was acting in pursuit of profit to be rejected
(a fortiori without reasons) without any notice that his explanation was
disputed or that it needed to be developed. We have every sympathy with the
Tribunal dealing with a party who was his own worst enemy; but that is
precisely the kind of situation in which it is particularly important to see
that he appreciates what is expected of him.
23.
At a preliminary hearing of this appeal the parties agreed that if we
were to find, as we have, that the Tribunal’s reasoning was flawed, we should
ourselves resolve any issue on which its conclusion was vitiated, using our powers
under section 35 of the Employment Tribunals Act 1996. In anticipation
of that, the Appellant lodged affidavits from Mrs. Lloyd herself and from a Ms.
Wong. In summary:
(a)
Mrs. Lloyd’s affidavit explained that there was a close bond between her
son and the Appellant, and that the Appellant believed that his cousin had been
unjustly treated. She says that that was the only reason why the Appellant had
acted in the claim, which was in accordance with her son’s dying wish. She
says in terms that neither she nor her son ever made any arrangement for the
Appellant to receive any payment, and indeed the subject was never discussed
between her and him. At paras. 9 and 10 she says:
“9. In January 2009 I did pay a little money for
assistance in note taking, research and general administrative support of the
case of two non-family members. Sharon Wong (“Sharon”) and Mrs. A. O’Reilly
each received £500 for assisting. I gave Paul cheques to pass on to them. I
now produce marked “BL1” a copy of my Lloyd’s Bank current account statement
showing the two £500 cheque withdrawals. There was never any formal
arrangement for payment but I gave what I thought were tokens for the hard work
of Paul’s assistants and the fact that they gave up so much of their own time
for the January hearing.
10. In February, March and April 2009 additional work
was required in relation to the Respondents’ complaints about ‘Facebook’ and
their demands for a case management discussion. Paul needed Sharon’s
assistance. Sharon had previously used up a lot of her annual leave to support
the case. In recognition of this, I made an oral agreement with Paul in
February 2009 to pay Sharon a total of £1,000 for her to continue assisting
him. Sharon said she preferred to be paid in cash. I now produce marked “BL2”
a copy of pages from my Cambridge Building Society savings account showing cash
withdrawals from Sharon. The total sum paid does not reflect all the work that
Sharon did because as a pensioner I have to very careful with my limited funds.”
The exhibit shows
payments/withdrawals in the sums referred to.
(b)
Ms. Wong said that she was an administrator in a law firm, who had met
the original Claimant, Mr. Lloyd, at university and been a friend of the family
ever since. She had done a great deal of work supporting the Appellant in his
conduct both of the original dispute with the school and of the proceedings in
the Tribunal. She knew that he was receiving nothing, not even expenses, from
the Claimant or Mrs. Lloyd and that he was acting out of love for his cousin
and his aunt. At paras. 5 and 6 she says:
“5. After the January 2009 hearing Betty Lloyd
(“Betty”) wrote me a cheque for £500, which Paul passed on to me, as an
informal gesture of appreciation for my help with the case. I had not expected
to receive it. I deposited it into my current account. I now produce marked
“SW1” a copy of my bank statement showing the cheque deposit. My work on the
case included note taking, research, data management and general administrative
support. When the hearing was postponed until September 2009 I did not expect
to have more involvement in the case until then.
6. In February, March and April 2009 Paul, who was
busy trying to find work, needed me to help because he was short of time and
the Respondents were putting him under pressure. This led to the Respondents
insisting on having a case management discussion. I carried out research for
Paul, drafted letters, did preparatory work, and managed all the date and files
and took notes at the CMD. In February 2009 Betty agreed to pay me £1,000 to
continue assisting Paul. I preferred to be paid in cash. Over the following
months she gave me small cash sums of between £100 and £300. They were not
regular payments and I assumed she gave me cash when she had some available.”
No evidence was lodged from the Appellant himself.
24.
Both Mrs. Lloyd and Ms. Wong attended the hearing before us and were
cross-examined by Mr. Greatorex. As regards Ms. Wong’s evidence, Mr. Greatorex
did no more than query the description of the relevant credit entry in her
exhibited bank statement. As regards Mrs. Lloyd, he also raised some questions
on her bank statements, which went nowhere; but he focused principally on a
letter written by the Appellant to the Tribunal on 12 February 2009 (which had
not in fact been relied on by the Tribunal). In that letter the Appellant complained
of Eversheds’ conduct and concluded:
“I hope to raise this again in relation to costs at
the conclusion of Andrew’s case. The Respondents are hereby put on notice that
arrangements are being made to ensure that I am remunerated for my work thereby
facilitating their potential liability for the Claimant’s costs.”
Mr. Greatorex put it to her that that showed that, contrary to
her evidence, there was an understanding that the Appellant would be paid. She
denied having seen the letter at the time and maintained her evidence that no
such arrangements had ever been made. The most that there had been was a
suggestion, which came from her, that she should pay something to the two
“clerks” who seemed to have been doing a lot of work. She said that nothing
else had ever been discussed “and I wouldn’t have had the money anyway”.
25.
We regarded both Ms. Wong and Mrs. Lloyd as truthful witnesses. We accept
their evidence – which, as we have already said, is in no way implausible –
that there was never any agreement, formal or informal, that the Appellant
would be paid for his work. In our view the Appellant’s application for costs
in March/April 2009 is readily explicable by reference to the payments made to
Ms. Wong and Ms. O’Reilly. It is immaterial whether they would in fact have
fallen within the definition of “costs” in rule 38 (though on the face of it we
cannot see why they would not): the question is whether the Appellant thought
they did, or might. As for the letter of 12 February, that too may have been a
reference to these payments, but it may simply have been bluster, of a kind
characteristic of the Appellant’s correspondence: it does not of course say
that any arrangements entitling the Claimant to claim costs had in fact been
put in place. (Indeed it is good evidence – because it is, in context, an
“admission against interest” – that none was in place as at that date, which
would undermine in any event element (1) in the award.) But, whatever was
going on in the Appellant’s head when he wrote these letters, they cannot
undermine the clear and credible evidence of the witnesses from whom we heard.
26.
Mr. Greatorex submitted that we should be very slow to accept the
Appellant’s denial that he was acting in pursuit of profit in circumstances where
we had not heard evidence from him. We take the point, but it is not as if the
Appellant has been wholly silent. The evidence of Mrs. Lloyd and Ms. Wong only
confirms – with, it is true, much greater particularity – what he told the
Tribunal. It might have been better if he had himself made an affidavit; but
we do not regard it as essential that he should have done so, and we can see
why he might have regarded it as futile or inappropriate in view of what the
Tribunal had already said about his credibility.
27.
We therefore find that the Appellant was not acting in pursuit of
profit. It follows that the Tribunal was not entitled to make a wasted costs
order and that this appeal must be allowed. Given the way that the Appellant
behaved, that may be a matter of regret; but the rules do not permit the making
of wasted costs orders against representatives who are not acting in pursuit of
profit, and that must be respected.
28. As already trailed, we do not propose in those
circumstances to deal with the other grounds of appeal, save to make
observations in relation to one point. At para. 7.1 of the Amended Notice of
Appeal the Appellant contends that he was given inadequate notice of the wasted
costs application and that he should not have been required to deal with it
there and then on 16 June. We have set out the essential facts in this regard in
the course of summarising Mr. Coghlin’s submissions at para. 18 above. We have
some sympathy with the Appellant’s contention. Although he had a one-line
warning that a wasted costs application would be made if the strike-out were
successful, he knew no more than that; and, as we have observed, although he
was given half-an-hour to prepare, that was before, not after, Mr. Foxwell made
his submissions. The Tribunal was available on the following day, though of
course that would have involved some further costs. There is a real tension
between two conflicting desiderata in the wasted costs jurisdiction. On the
one hand, it is intended to be summary: the Court of Appeal made it clear in Ridehalgh
that elaborate satellite litigation about wasted costs was strongly to be
deprecated. On the other hand, it must be fair. A finding that a solicitor or
other professional representative has been negligent is a serious matter for
the person affected, and if a summary procedure is an unfair procedure fairness
must come first. In the context of employment tribunal proceedings, it is our
experience that this tension quite commonly emerges, as here, in relation to
the question of the stage at which a wasted costs application should be heard:
should it be at the conclusion of the hearing which provides the basis for it ?
or should it be adjourned to a later date ? There can be no general rule.
The starting-point is that it is obviously better from the point of view of
efficiency and economy that the application be dealt with at the selfsame
hearing, and in many cases there will be no valid objection to that course
being taken. Either the representative will have been notified in advance that
the application will or may be made, with a sufficient indication of its basis
to enable him to prepare, or the issue will be one which is sufficiently
straightforward for a professional to be able to deal with it without
substantial prior notice (to take a very simple example, where costs have been
wasted because through carelessness the representative has appeared late). But
there will be cases where it will not be fair to proceed in that way –
typically because the issues are not straightforward, or perhaps simply because
time is too short: bad decisions are sometimes made at the end of a long day.
In many such cases, where the hearing is an interim one, there may be no real
difficulty in postponing the application to a later stage in the proceedings
(though if it is important that the same Judge or tribunal hear it that may
sometimes create a problem). If, however, there would have to be a special
hearing to determine the application, the tribunal will need to consider
whether that is a proportionate course to take. If it is not, the application
may simply be refused: it is clearly stated in Ridehalgh (see at
p. 239 D-F) that there may be cases where the game is not worth the candle. We
need not, however, express a definitive view about whether the Tribunal got the
balance right in the present case, and we do not propose to do so.
29. We regret the time taken to promulgate this judgment,
which is principally the result of the pressure of work in this Tribunal.
