UKEAT/0471/11/DM
EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
At the Tribunal
Before
(SITTING ALONE)
PAYMENTSHIELD GROUP HOLDINGS LTD APPELLANT
Transcript of Proceedings
JUDGMENT
REVISED
APPEARANCES
(of Counsel) Instructed by: Reynolds Colman Bradley LLP The London Underwriting Centre (LUC) 3 Minster Court Mincing Lane London EC3R 7DD
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(of Counsel) Instructed by: Sheridans Whittington House Alfred Place London WC1E 7EA
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SUMMARY
PRACTICE AND PROCEDURE
Postponement or stay
Case management
The Claimant issued a claim. Then a CPR pre-action protocol letter and draft P/C requiring the Respondent’s response. The Respondent sought a stay in the Employment Tribunal. The Claimant consented then sought its reinstatement. The Employment Judge granted that, as the High Court proceedings had not been issued. Another Employment Judge did the same. He erred in not correctly applying Mindimaxnox to the facts. This was a case which should be stayed until any HC claim is resolved. Mindimaxnox principles applied even though no HC claim has been issued. The sole reason for the Claimant resisting a stay was that he could only fund the HC claim out of any Employment Tribunal award. By consent the EAT exercised the Employment Judge’s discretion. Stay restored.
HIS HONOUR JUDGE McMULLEN QC
Introduction
The legislation
The facts
“This is a letter before action pursuant to the CPR Practice Direction on Pre Action Conduct.
We look forward to your response by 15 December 2010. As there are ongoing proceedings in the Employment Tribunal, for which dates have been listed for trial in early February and your client has already been appraised of the factual basis for this claim for many months, we consider this period of less than 14 days for a response to be reasonable. It is in the interests of both parties, if this matter can be resolved amicably, that it be done before Christmas.
For your instructions, we attach draft particulars of claim setting out the nature of Mr Halstead’s claim.”
“On 24 December 2010, we wrote to the Tribunal to confirm that the Claimant consented to the Respondent’s application to stay the above proceedings.
The Claimant’s consent to the stay was based primarily on his understanding at the time that financially, he would be in a position to pursue High Court claims in advance of his Employment Tribunal claims. Unfortunately, due to unforeseen funding issues, this is no longer the case and as a result, the Claimant will require such compensation he receives from the Employment Tribunal to fund any subsequent High Court litigation.
Additionally, despite our best efforts, High Court without prejudice negotiations have proved unsuccessful. Therefore, we now apply pursuant to Rule 10(1) of the Employment Tribunals (Constitution & Rules of Procedure) Regulations 2004 (the “Rules”) to lift the stay imposed by the Tribunal on 4 January 2011.
The Claimant confirms that should the stay be lifted, he will not pursue any High Court claim in tandem with Tribunal proceedings and that he will wait until Tribunal proceedings have concluded prior to issuing any High Court claims.
If the Tribunal consents to the Claimant’s application, in accordance with the original Case Management Directions of 23 August 2010 and the overriding objective of the Rules, we respectfully request that the Tribunal sets a new deadline of 20 April 2011 (4 weeks’ time) for exchange of witness statements and the earliest available date thereafter for a four day hearing at London Central.”
“7. I have considered the case authorities presented to me. I do not propose to list them - we are clearly aware of what they are and indicate. I have also read the draft particulars of the Claimant’s High Court claim and revisited the Claimant’s application to the Tribunal (ET1) and the grounds of response (ET3).”
14. He summarised the position as follows:
“8. The application is to stay the proceedings in the Tribunal because of the Claimant’s stated intention to present a case to the High Court. He has gone further than merely state the intention; he has provided draft particulars of claim which go into some detail. The Respondent asserts that because the factual issues regarding the claims in these Tribunals and the potential claims in the High Court are so intertwined that in the light of authority it would be the better and more appropriate course to stay the action here affording priority to that in the High Court. Continuing the action before the Tribunals would and certainly could, they assert, unfairly affect adversely their case were it to proceed in the High Court. They say so for all the reasons adumbrated in the cases cited to me today.”
15. In the course of the exercise of discretion the Judge made the following findings:
“10. The Claimant argues on the other hand that the factual issues here relate to the statutory jurisdiction which the Tribunal operates and that they could therefore properly be dealt with in the Tribunals given the very different jurisdiction in the High Court. The Respondent counters that factual findings in [the] Tribunal will have a significant impact on any High Court case and would, to use the expression found in one of the cited authorities, ‘be in danger of imposing a straight jacket on the High Court judge.’
11. Having considered the documents mentioned, I have no doubt that factual findings following the continuation of the case before the Tribunal would have significant import in the High Court. The claim before the Tribunal rests upon an assertion that the Claimant was dismissed because he had made protected disclosures and he refers to a series of those. He also asserts that the Respondent’s assertion before dismissal that his post was redundant was untrue and simply a cover for the true reasons for dismissal - the disclosures; there was no redundancy situation.
12. Additionally the Claimant in the draft particulars of claim alleges he was dismissed because the Respondent wished to avoid paying him the generous remuneration package to which he was entitled. This the Respondent characterises as a contradiction of the grounds advanced before the Tribunal; the Claimant says it is no more than a further explanation of what lay behind his dismissal.
13. It seems to me that it is inevitable that the Tribunal would when dealing with the case before it, have to look across the piece at all of these issues as would the High Court were it to become seized of the matter. The issues, evidence and facts cannot neatly be compartmentalised. For instance the Respondent is not going to ignore the statements made in the draft particulars of claim if tackling the Claimant before this Tribunal.”
“14. The question of rescission and its effect has been raised but not argued in detail. In my view the High Court, were circumstances found to justify consideration of the award of that relief and the court to grant it, would have ample power to deal with the consequences of any findings in the Tribunals and in particular any financial ramifications. And indeed one may doubt whether rescission will be available to a Claimant who stands here before the Tribunal seeking to enforce a contract which he says should not really be in existence and who has acted under the contract for a period of months in circumstances were there may be no agreement explicit or otherwise to rescind the contract and placing the parties as though the contract had never existed might be somewhat problematic.”
“15. That the Claimant says that he cannot take action in the High Court because of his financial position and that he needs an award from this Tribunal to fund his claim before the High Court is not in itself persuasive. Firstly he is not guaranteed a finding in his favour here. Were he to be successful he cannot be sure of an award of a sum sufficient to fund a claim in the High Court. Perhaps questions of appeal would arise. The Claimant also accepts that a finding here may actually prejudice him, a risk he says he accepts.”
“16. In the end my decision has come down to balancing these various and in part conflicting matters to arrive at what I hope reflects a just and equitable approach and considering the balance of prejudice.”
“17. If I order a stay then the Claimant is put in the position of either abandoning his High Court claim because he has no funds or of mounting what would not be an easy action, perhaps even for lawyers but certainly for a non lawyer, before the High Court. Abandonment of his right to put a claim before the High Court (the course urged by the Respondent) would be a major prejudice to him and the former prejudicial to a degree. If I do not order a stay then the Respondent fears prejudice for reasons set out in the authorities. But there is no certainty that there would be any such prejudice; the action would proceed here with the anomalies to which I have briefly referred which would be the subject of proper scrutiny by the Respondent and the Tribunal in the light of their knowledge of the Claimant’s contentions across all issues. Should an action follow in the High Court I have no doubt that any difficulties arising as contended by the Respondent could be resolved justly and without prejudicing either party’s case.”
“18. At the end of the day it is a matter of balance. Significantly it is no less a matter of balance and discretion when there are contemporary proceedings actually in progress before the two bodies. Were there two sets of proceedings now underway it would still be possible to argue for those to continue contemporaneously before the Tribunal and the High Court
19. Here, there are no contemporary proceedings; there may never be any contemporary proceedings especially given the Claimant’s statement that he will commence High Court proceedings, if at all, only after the Tribunal proceedings have concluded; and there may never be such an action then. I do not know of and have not been alerted to the existence of any power residing in any court enabling it to order the Claimant to commence or maintain an action before the High or other court. By staying the action now it would in a rather roundabout way bring pressure on the Claimant to do so but in my view that would be a draconian exercise of power. Though Mr Wynne’s arguments are attractive I have decided on balance that the proper decision today is not to order a stay but to allow the proceedings to continue before the Tribunal. Weighing the balance of prejudice as between the parties it is my view that staying the action before the Tribunal would have a greater prejudicial impact on the Claimant’s case than allowing it to continue would have upon the Respondent’s case. The difficulties perceived as possibly arising from two sets of proceedings (whether contemporaneous, consecutive and acknowledging that in any event there is no certainty that the High Court proceedings would ever be lodged) are a much less likely source of prejudice and injustice than would be the forced abandonment of the Claimant’s claim; or its forced presentation; and maintenance with him unrepresented.”
21. The case therefore was listed for trial.
The Respondent’s case
The Claimant’s case
The legal principles
“27. From that general background, five submissions are made:
(1) The more appropriate forum is the High Court, since there are complex factual matters.
28. This is an invidious position to inflict on an Employment Judge. It is clear that Employment Tribunals today deal with highly complex issues relating characteristically to equal pay, discrimination in its nine strands and to major bonus issues, for example amongst traders in the City. I do not accept the simple proposition that because there are complex factual matters the Employment Tribunal’s jurisdiction is usurped. That is not the central question.
29. Given there are complex factual matters in the tribunal proceedings is it more appropriate for those matters to be determined by the High Court? It is a question of balance (see First Castle Electronics Limited v West [1989] ICR 72 at 78 and the reference I have given above to Carter). It is also the case that where the issues of fact are supported by voluminous documents that too will point to the matter being better determined in the High Court (see JMCC Holdings Limited v Conroy [1990] ICR 179).
30. I accept in principle Mr Kibling’s support for the expertise of Employment Tribunals, I indeed endorse it. The fact is that the authorities which have been shown to me indicate where there is a very substantial factual dispute the proceedings are more appropriately to be brought in the High Court. The Judge does not seem to have been alert to that distinction. He seems to have taken the view that there was some criticism of the Employment Tribunals as not having the expertise. If he did that was misplaced. There is no such criticism; it is simply a question of where it is more appropriate to decide complex factual matters.
31. There are rules of evidence which are important to resolve in disputes such as this. It has been submitted to me that a Judge of the High Court, sitting alone, with preparation time being provided by the court and reading time and making a decision on his or her own, is an expeditious way to deal with these matters. There may be some force in that.
(2) Embarrassing the High Court.
32. This is the language used in First Castle at page 78. It is that findings by the Employment Tribunal could be embarrassing for a Judge in the High Court. A similar view is taken by Sir Ralph Kilner Brown in the Employment Appeal Tribunal in Automatic Switching Limited v Brunet [1986] ICR 542 at 545; he talked about putting the High Court Judge in a straightjacket. A similar approach was taken by HHJ Ansell in GFI Holdings Limited v Mr D Camm UKEAT 0321/08, who said this:
‘It is generally desirable to dispose of High Court actions first where there are issues in both sets of proceedings which are substantially the same.’
The point is that the Employment Judge, again, seems to have been of the view that there would emerge either res judicata or issue of fact estoppels. All of the authorities where this arises indicate preference for the High Court rather than the Employment Tribunal: see, for example, Jacobs v Norsalta Limited [1977] ICR 189 at 192, where it was thought to be preferable for the tribunal to have the High Court judgment than for the High Court to have the tribunal’s judgment.
33. It appears that the Judge in our case specifically rejected the contention that findings of fact by the Employment Tribunal would embarrass the High Court. In my judgment he erred in that because they plainly would. They would impinge upon the Judge who would find it difficult not to be bound by the findings.
(3) Complex legal matters.
34. It is contended that complex legal matters are better decided by the High Court than the Employment Tribunal. Again this is a difficult submission to make and I accept from Mr Kibling that Employment Tribunals are making decisions on complex legal matters all the time. Employment Tribunals are now bound by judicial oaths and have responsibilities to determine the law as well as to be an employment jury.
35. One issue which arises in this case is said to be based upon BNP Paribas v Mezzotero [2004] IRLR 58, a judgement of Cox J. Whether or not that is to be applied in this case seems to me to be irrelevant. A judgment of the Employment Appeal Tribunal is binding on the Employment Tribunal and if the Respondents wish to rely on it they will be better off in the Employment Tribunal. On the other hand it is to mistake the simple principle. If a judgment is made by a Judge, at whatever level, which is correct, it will be followed whether regarded as binding or not by a subsequent Judge. It is relevant to consider the complexity of legal issues and it is plain that in this case there will be some complex legal issues in relation to the discussion of the bonus and so on.
36. I accept that the Judge did consider the complexity of the legal issues but again he ought to have recognised that these hugely expensive claims in the Employment Tribunal will be susceptible to a detailed analysis in the High Court, at least in respect of Mr Ho, which will influence the decision making in the Employment Tribunal if that is the sequence in which the cases are heard.
(4) Considerable overlap.
37. In my judgment Mr Griffiths is correct when he relies heavily upon the finding by the Judge that there is considerable overlap. That is the premise upon which the Judge ought to have decided that this matter should be left to the High Court. In terms of value it is 99 per cent. The only real issue is the statutory tort of unfair dismissal and I say ‘only’ bearing in mind the comments I have made above about the importance of that matter. The factual material is the same in both jurisdictions. It seems to me that where there is considerable overlap it is appropriate to cede to the High Court and the Judge was wrong not to regard this as a compelling reason for rejecting the application for a stay.
(5) The small financial value.
38. It is of small financial value and I accept the imagery of Mr Griffiths. The central issue in the case will be the amount of the bonus and whether there is entitlement to it. More issues can be determined in the High Court than in the Employment Tribunal. Mr Ho will have to face an issue relating to what essentially will be a counterclaim. It will give satisfaction, if that is the right word, to the parties to know that the central issues, in terms at least of money, and some of the issues relating to share ownership, will have been determined once in the High Court.”
28. The principles in relation to the exercise of discretion as well as those set out in Mindimaxnox appear in the Judgment of Henry LJ for the Court of Appeal in Noorani v Merseyside TEC [1999] IRLR 184:.
“32. I am satisfied, contrary to what the Employment Appeal Tribunal found, the ET were here exercising the classic discretion of the trial judge in the issue of witness summonses and in like matters. Such examples of such a discretion lie not only in the issue of witness summonses but whether to grant an adjournment or whether to order the trial of a preliminary issue etc. These decisions are entrusted to the discretion of the court at first instance. Appellate courts must recognise that in such decisions different courts may disagree without either being wrong, far less having made a mistake in law. Such decisions are, essentially, challengeable only on what loosely may be called Wednesbury grounds, when the court at first instance exercised the discretion under a mistake of law, or disregard of principle, or under a misapprehension as to the facts, where they took into account irrelevant matters or failed to take into account relevant matters, or where the conclusion reached was ‘outside the generous ambit within which a reasonable disagreement is possible’, see G v G [1985] 1 WLR at 647.”
29. Similarly Wall LJ in Canadian Imperial Bank of Commerce v Beck [2009] EWCA Civ 619 said the following:
“23. As to the correction of an error of law committed by a judge who is exercising a judicial discretion, the law is equally clear. The leading case is G v G [1985] 1 WLR 647, which contains references to the well-known judgment of Asquith LJ in Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 ALL ER 343 at 345. For an appeal to succeed, the exercise of discretion which is challenged must, in Asquith LJ's words: "exceed the generous ambit within which reasonable disagreement is possible".
[…]
25. We make this point because Mr. Oudkerk, for the Bank, came near to submitting that it was simply not open to Judge McMullen QC to reverse the ET on a case management decision. In our judgment, that submission is manifestly untenable. Whilst, of course, a judge who makes a case management decision exercises a very broad judicial discretion and such decisions will be treated with deference by superior courts, the exercise of a judicial discretion which falls foul of G v G is an error of law and is capable of being corrected on appeal.”
Discussion and conclusions
The discretion
43. The appeal is allowed. Permission to appeal refused [for reasons not transcribed].