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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Isteed v London Borough of Redbridge (Practice and Procedure: Costs) [2016] UKEAT 0442_14_2107 (21 July 2016)
URL: http://www.bailii.org/uk/cases/UKEAT/2016/0442_14_2107.html
Cite as: [2016] UKEAT 0442_14_2107, [2016] UKEAT 442_14_2107, [2017] ICR D1
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EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE
At the Tribunal
Before
THE HONOURABLE MRS JUSTICE SIMLER DBE (PRESIDENT)
(SITTING ALONE)
LONDON BOROUGH OF REDBRIDGE RESPONDENT
Transcript of Proceedings
JUDGMENT
APPEARANCES
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(Solicitor) Davis Solicitors LLP 34-36 High Street Barkingside Ilford Essex IG6 2DQ
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(of Counsel) Instructed by: London Borough of Redbridge Legal & Constitutional Affairs 128-142 High Road Ilford Essex IG1 1DD
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SUMMARY
PRACTICE AND PROCEDURE - Costs
PRACTICE AND PROCEDURE - Bias, misconduct and procedural irregularity
On appeal against a wasted costs order made against the opposing party’s solicitor, the appeal was allowed.
It was common ground that the Employment Judge made no positive findings on causation and gave no reasons for considering such an order “right”. The jurisdiction to make a wasted costs order extends only to impugned conduct that has caused a waste of costs and only to the extent of such wasted costs, demonstration of a causal link being essential. These findings were not implicit in the particular circumstances. The Employment Judge erred in failing adequately to deal with causation and the justice of such an order.
Separately, there was procedural unfairness. Given the fluid and changing nature of the application, the paying solicitors did not have proper or adequate notice of its basis that would enable them to respond. By the time of the final hearing of the application (which had taken four days separately listed), the comments and conduct of the Employment Judge led to the appearance of bias, and the Employment Judge should have recused himself.
THE HONOURABLE MRS JUSTICE SIMLER DBE (PRESIDENT)
Introduction
1. This appeal concerns a wasted costs order made against the Claimant’s solicitors following the dismissal of claims he had pursued against the Respondent, the London Borough of Redbridge. The order was made by Employment Judge Prichard in a Judgment with Reasons sent to the parties on 20 August 2014. In brief, the Claimant made claims of unfair dismissal and unlawful age discrimination arising from his retirement from employment at the age of 65. The primary limitation period in respect of these claims expired on 27 November 2011. He was represented by a firm of solicitors, Davis Solicitors LLP, and by a member of that firm, Ms Nancy Ballard. Ms Ballard emailed an ET1 to the Tribunal on 25 November 2011, but there was no record of any receipt of that document. She did not chase receipt until 15 December 2011, and the first record of a claim form received by the Tribunal was by reference to an email with attachments dated 14 February 2012. Following a hearing ultimately on 6 January 2014 the claims were held on balance to have been presented out of time, and by a Judgment with Reasons promulgated on 20 May 2014 Employment Judge Prichard held that it was reasonably practicable to have presented the unfair dismissal claim in time and not just and equitable to extend time in respect of the unlawful discrimination complaint. The claims were therefore dismissed.
2. I say at the outset that there is no doubt that those were findings that the Judge was entitled to make. He was also entitled, in my judgment, to be critical of the way in which Davis Solicitors LLP handled this claim and indeed dealt with the application concerning the Tribunal’s jurisdiction on limitation grounds. Whether the extent and nature of the criticism made by the Judge, and the way in which he expressed his views about Ms Ballard’s conduct, in particular in relation to the two emails said to have been sent by her to the Tribunal (the first on 25 November and the second on 15 December, together referred to as “the two emails”) gives rise to the appearance of bias or to procedural irregularity, falls to be addressed on this appeal.
3. Having had the claims dismissed on jurisdictional grounds, the Respondent pursued an application for wasted costs against Davis Solicitors LLP, and, although originally listed for a one-day hearing, at the end of day four by the Judgment to which I have referred, the Judge acceded to that application and made a wasted costs order. The costs have not yet been assessed but are estimated to be in the region of £35,000, which is a not-insignificant sum for a small firm of this kind.
The applicable legal principles
4. It is convenient to identify at the outset the Tribunal’s jurisdiction to make an order against a party’s representative to pay wasted costs. This derives from Rule 80 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013:
“(1) A Tribunal may make a wasted costs order against a representative in favour of any party (“the receiving party”) where that party has incurred costs -
(a) as a result of any improper, unreasonable or negligent act or omission on the part of the 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 the receiving party to pay.
Costs so incurred are described as “wasted costs”.
(2) “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 the proceedings. A person acting on a contingency or conditional fee arrangement is considered to be acting in pursuit of profit.
(3) A wasted costs order may be made in favour of a party whether or not that party is legally represented and may also be made in favour of a representative’s own client. A wasted costs order may not be made against a representative where that representative is representing a party in his or her capacity as an employee of that party.”
5. A wasted costs order can only be made against a representative who is “acting in pursuit of profit”, and that includes where the representative is acting on a contingency or conditional fee arrangement (see Rule 80(2)). The definition of wasted costs in the Rules is the same as that applied by the civil courts, and the principles developed in relation to the civil courts’ jurisdiction to order wasted costs apply equally to tribunals. The leading authorities giving guidance on when it is appropriate and in what circumstances to make such orders are Ridehalgh v Horsefield [1994] EWCA Civ 40 and Medcalf v Weatherill and Anor [2003] 1 AC 120. In Ratcliffe Duce & Gammer v Binns (t/a Parc Ferme & McDonald) UKEAT/ 0100/08 Elias P referred to the helpful summary of the applicable principles in Mitchells Solicitors v Funkwerk Information Technologies York Ltd UKEAT/0541/07 and considered that tribunals should apply a three-stage test when determining whether a wasted costs order should be contemplated. That three-stage test comprises the following questions: (1) has the legal representative of whom complaint is made acted improperly, unreasonably or negligently; (2) if so, did such conduct cause the applicant to incur unnecessary costs; and (3) if so, is it in the circumstances just to order the legal representative to compensate the applicant for the whole or any part of the relevant costs?
6. Rule 82 of the 2013 Rules provides that a wasted costs order may be made by the Tribunal but that:
“… No such order shall be made unless the representative has had a reasonable opportunity to make representations (in writing or at a hearing, as the Tribunal may order) in response to the application or proposal. …”
The issues raised by the appeal
7. There are four broad themes of challenge to the wasted costs Judgment in this case. They can be summarised as follows. First, it is said that the Judge erred in law by failing to refer to or apply the well established guidelines identified in cases such as Ridehalgh when making a wasted costs order and in particular, failed to apply the three-stage approach that is required.
8. Secondly, the Judge was perverse in concluding that Davis Solicitors LLP and Ms Ballard were acting for profit. It is said that the Judge failed to have regard to relevant evidence and in particular the letter from the Claimant dated 18 March 2014 and his oral evidence on oath given on 3 April 2014 together with the evidence of Ms Ballard herself given on 3 April 2014 too.
9. Thirdly, it is said that the wasted costs order was procedurally unfair and not in compliance with Rule 82 of the 2013 Rules. In particular, complaint is made that there was no written application and that Ms Ballard was not made or not adequately made aware of the basis on which the wasted costs order was sought or which costs were said to have been unnecessarily incurred by conduct within the scope of that order. Ms Ballard particularly relies on the fact that the original basis on which the Judge considered making a wasted costs order changed.
10. Finally, a series of points are raised relating to asserted improper conduct of the proceedings by the Employment Judge, and it is said that these gave rise to the appearance of bias. Particular reliance is placed on the fact that in making an allegation of forgery against a solicitor, as it is said the Judge did, he acted inappropriately and improperly. It is said that this improper approach affected the conduct by the Judge of the proceedings and that the Judge compounded the problem by sending the Claimant to the solicitors’ offices to fetch confidential case files that the Respondent was permitted to view in circumstances where those documents were privileged. Finally under this heading it is said that the Judge made adverse and repeated criticism of Ms Ballard’s conduct that was of such high gravity and so extreme that it too, whether looked at on its own or cumulatively with the other matters, gave rise to the appearance of bias.
Background and procedural history
11. Before addressing those grounds of appeal and the decision of the Employment Judge, it is necessary to set out in some detail the background and procedural history leading up to the order that is challenged. The history appears by reference to a series of Judgments given by Employment Judge Prichard. I do not in this Judgment attempt to summarise that history in full, but what I seek to do is to highlight critical aspects that are particularly relevant to the appeal.
12. I start with this observation. Quite apart from the failure by Davis Solicitors to ensure that the ET1 was received within the three-month primary limitation period, there is no doubt that there was a series of administrative failures by the Tribunal administration in dealing with this Claimant’s claim. In a decision dated 19 July 2013 Employment Judge Housego described the case as ill-starred. In my judgment, he was right to do so. He explained that the claim was said to have been submitted on two occasions by the Claimant but that the system failed to process it online. He said in his Judgment that:
“The Tribunal’s email records did not go back far enough for the Claimant’s assertion that it had been submitted twice before to be verified or not.”
13. He went on to explain that the Claimant’s solicitor was asked to supply a copy of the acknowledgement of the email that should have been auto-generated on receipt of the claim forms - since online submissions should have such acknowledgements - but that the Claimant’s solicitor sent in copies of emails, the two emails dated 25 November and 15 December, that were located by the Judge after that hearing in July 2013 with a covering email explaining that in fact the claims had not been issued online but had been emailed to the Tribunal as attachments to emails. In those circumstances, it appears that it was not immediately obvious that auto-generated receipts would have been received. At any rate, the Respondent was asked whether the Claimant’s solicitors’ explanation was accepted, and Employment Judge Housego records the fact that there was no reply and that directions were then given on 10 August 2012 for the case to be listed for a Full Hearing between 20 and 22 February 2013. It is most surprising that this case was listed for a Full Hearing if a jurisdictional issue that could stop the case dead in its tracks was available to the Respondent. It is obvious that this case should have been listed for a Preliminary Hearing to address jurisdiction and that would have avoided the need for the parties to prepare for a Full Hearing. It seems to me to be equally obvious that the costs incurred on both sides were considerably increased by reason of that listing, and that was done in circumstances where neither the Claimant nor the Respondent had asked for or needed a Full Hearing to be listed.
14. That was an express finding made subsequently by Employment Judge Prichard. Though he did not enquire into the reasons, he did not seek to identify why the Respondent simply went along with that three-day Full Hearing listing and did not press for a Preliminary Hearing that would have avoided the Respondent incurring the full cost of preparation. The matter was not separately listed as a Preliminary Hearing until after substantial additional cost had been incurred. As I have said, at paragraph 43 of his Judgment following the 6 January 2014 Hearing (referred to as “the January Judgment”) Employment Judge Prichard expressly recognised this point.
15. In the event, the hearing listed for 20-22 February 2013 did not proceed. It appears that the listing date was not received by Ms Ballard and that she was not aware of it until receipt of a letter dated 7 September 2012 from the Respondent. The Claimant booked a holiday on 2 September 2012, which meant he would be unavailable between 20 and 22 February, but there was no evidence to demonstrate that when he booked that holiday he knew about the listing. Ms Ballard did not write immediately to the Claimant about the listing dates, and it appears no application was made by her until 10 December 2013 for an adjournment of the February Hearing. Moreover, she did not chase the Tribunal for a decision on her adjournment application, and indeed no decision was made until early February when the application was refused. Ms Ballard did not renew that application until 18 February, and as a consequence the hearing was aborted very late in the day and was then re-listed for August 2013. I have little doubt that there is criticism to be made of Ms Ballard in relation to her approach to that listing, as the Judge ultimately found.
16. Separately, there were administrative failures by the Tribunal that led to the claim being struck out in error in 2 July 2013 for asserted non-compliance with a Tribunal order. It is clear from the Judgment of Employment Judge Housego to which I have already referred that the strike out order was made in error and that documents relating to another file had been misfiled. That led to the hearing date in August 2013 being vacated. Once the claim was restored and had been taken hold of by Judge Housego, he directed that a Preliminary Hearing should take place to address the question of limitation.
17. Meanwhile, the Respondent made an application for costs by email dated 14 February 2013, supported by a Schedule of Costs dated 21 February 2013. The Schedule states in terms that the application is made under Rule 40 of the 2004 Rules. That was accordingly an application for ordinary rather than wasted costs. The application is expressly based on the allegation that the bringing of the proceedings or their conduct had been vexatious, abusive, disruptive or otherwise unreasonable. The application is pursued both against the Claimant and Ms Ballard. The wasted costs Rule is not invoked at all.
18. The substance of the application was an application for costs caused by the late postponement of the three-day Full Hearing due to take place between 20 and 22 February 2013. On 10 June 2013 the Respondent emailed the Employment Tribunal and Davis Solicitors repeating their intention to seek costs. A further Costs Schedule was served on 7 July 2013, and the Respondent also served a witness statement from Shirley Millidge on behalf of the Respondent in advance of the Preliminary Hearing that was due to take place on 15 July 2013. At paragraph 4 of her witness statement Ms Millidge makes clear that the application is made under Rule 40 of the 2004 Rules. Again, that was, accordingly, an application for ordinary, not wasted, costs.
19. The Preliminary Hearing to deal with jurisdiction was due to take place on 14 October 2013. Ms Ballard wrote to the Tribunal in advance of that hearing stating that she was unable to attend it because of pre-existing court commitments in a part-heard matter at Romford County Court. It was her and her client’s evidence that she offered to instruct a barrister on the Claimant’s behalf to attend in her place, but because that would cost him the fee, he chose to attend alone. The Claimant accordingly attended in person. As a matter of fact, that hearing had to be adjourned. The adjournment, however, was the result of the fact that the Notice of Hearing did not give the required full notice. That was not Ms Ballard’s fault; it was the fault of the Tribunals Service. Nevertheless, the Employment Judge was highly critical of Ms Ballard and her conduct. I do not set out in detail the extent of that criticism, but by way of example of some of the matters that formed the basis of criticism and comment taken from the Respondent’s notes of that hearing, the Employment Judge said the following:
(i) He said that the Claimant was:
“not well served today
massively unprotected client”
(ii) He said:
“oldest trick in the book so she should be here to explain
missing time = [professional negligence]”
(iii) He said:
“home email [suspicious]
computer crashed?
email address not valid
cannot recover at all
all [weird]”
(iv) He said, “I have my doubts 15 [December]” …
“If bona fide -
…
[very] concerned for your claim
None of this your fault
Only ‘Nancy’ should be here!
…
She should have attended
She was in charge, not yours
She let you down today.”
(v) He went on to say, “The emails very suspicious indeed”, then:
“15 [December] odd one - her email
…
when chief witness of fact has decided to absent herself
…
she is only one who can give analysis of these emails
only she
could be the case of dishonesty at worst + negligence at best
If Ms [Ballard] [chooses] to absent herself on second occasion she should know what she is facing.”
20. In the Judgment promulgated after that hearing, sent on 18 November 2013 (referred to as “the October Judgment”) the Judge described the emails produced on the Claimant’s behalf as evidence of the ET1 being sent to the Tribunals Service within the primary time period. He did so at paragraphs 5 to 8. The Judge regarded as suspicious certain discrepancies he identified between the two copies of the 25 November email and the fact that one of the emails asked for advice at 3.45pm on a Friday when Davis Solicitors’ office was due to close shortly and time for presenting the claim was due to expire on Sunday. The Judge referred to the fact that Ms Ballard was asked to provide a copy of the Tribunal’s automated response, received in response to her 25 November email, and that she had responded to the effect that the computer in use then that would have received the automated responses to the two emails had been:
“… wiped out of the database, and as the email address is no longer in use we cannot retrieve two of the automated responses.”
21. The Judge found that sentence extraordinary. He explained that he found it extraordinary to refer to a database on a home computer. He said he also found it extraordinary that Ms Ballard was:
“12. … really working at home on that Friday afternoon doing professional correspondence from her own email …”
It is not immediately obvious why these matters were extraordinary. At paragraph 14 the Employment Judge said:
“14. Perhaps one of the most extraordinary aspects today is that the Claimant appears alone, unrepresented. Having been asked why he is unrepresented he told the tribunal that it is because he cannot afford to pay for representation and costs are spiralling. …”
22. Quite why the Judge found it so extraordinary is not explained. Ms Ballard had provided an explanation by letter, partially quoted by the Judge at paragraph 21, and she had provided copies of the emails sent. In the absence of evidence of automated receipts provided by her, that was the position. There were no automated receipts. Limitation depends on the date of receipt not the date of sending. The Employment Judge was invited to resolve this issue by the Respondent, and it would have been open to the Employment Judge to do so by finding that there was no evidence that the emails were received. Ms Ballard’s attendance was not required to achieve that result. She had made her unavailability clear before the hearing. The Tribunal had failed to comply with its own mandatory notice requirements for the hearing, and the matter was accordingly required to be adjourned.
23. Also at paragraph 14 of the October Judgment the Judge went on, having referred to costs spiralling out of control, to say:
“14. … He has not yet paid his solicitors’ bill but wanted to keep costs under control. …”
That finding is not based on anything said by the Claimant or on any evidence either party has identified. The Claimant simply said he had never received a bill, whereas that paragraph gives the impression that the Claimant had received a bill but had not yet paid it. At paragraph 22 of the October Judgment the Judge said in relation to Ms Ballard’s complaint in her letter that it was unacceptable that she should be required to attend to give oral evidence confirming the truth of the contents of the two emails that it was:
“22. … far from “unacceptable” that she should be questioned about this in circumstances where she is the only extant witness of fact and there might be a finding of dishonesty or negligence on her part if some more compelling explanation is not given.”
The Judge explained that those observations were made so that if Ms Ballard chose to absent herself on a second occasion she would know the possible findings of the Tribunal and the possible outcome for the Claimant’s claim.
24. The hearing to deal with jurisdiction resumed on 6 January 2014. This time Ms Ballard was present. At the hearing she produced an exhibit to her witness statement with screenshots of the sent items from her Outlook Express account. The screenshots showed a sent item on 25 November 2011 at 3.27pm with an attachment headed “Employment tribunal Form”. Notwithstanding that evidence, at paragraph 14 the Judge observed that:
“14. It is singularly remiss of a party, let alone a solicitor, not to have kept such an automated receipt. On the balance of probabilities, those receipts simply must have been issued if the emails were sent when Ms Ballard says they were, particularly the all-important one on 25 November 2011, which could, depending on all the other circumstances, and any enquiries made, have provided sufficient proof that the claim had been presented in time.”
25. At paragraph 15 the reasons provided by Ms Ballard for not being able to provide the automated receipts were said by the Judge to not add up as far he was concerned. He went on to say that it would appear from the evidence Ms Ballard had brought to the Tribunal that day that the emails had not all been deleted, and at paragraph 18 he referred to the email address from which the automated receipts would have been deleted, saying that it was “impossible to believe that someone could have deleted such an e-receipt without printing it off”. At paragraph 19 the Judge said:
“19. … If these emails are genuine then there is something seriously wrong with [Ms Ballard’s] professional instincts, and the email has simply disappeared if it was ever sent. …”
26. Ultimately, the Judge did not accept that the Tribunal had received the claim on that date. As I have said, that was a finding to which he was entitled to come. At paragraph 35 the Judge observed:
“35. The tribunal still does not make a categorical finding that the emails are forged and tampered with, but the email evidence is wholly unsatisfactory. The explanations for not having automated responses or any kind of acknowledgement are wholly unsatisfactory and unworthy of a solicitor. In those circumstances, the tribunal finds the claim was out of time and the tribunal cannot extend time either for the unfair dismissal claim or the discrimination claim.”
27. He also held at paragraph 43 of the January Judgment:
“43. The tribunal indicated that the way in which the case had been listed for an out of time preliminary hearing as a preliminary point in a fully prepared full hearing, was something that the parties did not ask for or need. The costs were considerably increased by reason of that listing. It should always have been the subject of a separate preliminary hearing. This may have to be borne in mind. It was not separately listed until Employment Judge Housego directed that it be heard separately, by which time, however, all the extra costs had been incurred.”
28. The application for wasted costs against Davis Solicitors was first made orally on 6 January 2014. There had been nothing in writing save for the Rule 40 applications to which I have already referred. That application was adjourned to be dealt with on 19 March. In advance of that hearing a witness statement from Ms Millidge dated 11 March 2014 was produced. That statement does not state whether the earlier application was still relied on and made no reference back to it, nor did that statement refer back to the earlier witness statement. It identified the following five broad bases for the application:
(1) The ET1 was not successfully issued in time, the absence of a receipt was not chased by Ms Ballard and nor could or did Ms Ballard produce any automated receipts from the Tribunal acknowledging receipt of the claim.
(2) Ms Ballard continued to fail to provide copies of automated receipts despite requests and a number of hearings, including 15 July and 14 October 2013 and the hearing on 6 January 2014. That led to the claim being struck out on limitation grounds. At paragraph 10 in relation to this broad aspect Ms Millidge states that the result was that the Respondent had to attend many Preliminary Hearings, make further applications for specific disclosure and enter into protracted correspondence with Ms Ballard, all of which incurred wasted costs.
(3) The fact that the October hearing was adjourned is relied on, and Ms Ballard’s non-attendance is described as unreasonable behaviour. It is said that this behaviour in not attending and/or not presenting paper evidence at the 14 October Preliminary Hearing caused wasted costs.
(4) The fact that the claim was struck out in circumstances where Ms Ballard had negligently failed to keep a paper record of the automated receipts on file was a continuing omission that had the effect of causing the Respondent wasted costs because Ms Ballard refused to disclose requested documentation and chose not to admit until a very late stage on 6 January the fact that she did not have the automated receipts.
(5) Ms Ballard did not:
“… diligently instruct an IT company to recover the automated email receipts that she said she inadvertently deleted from her laptop …”
29. In the skeleton argument prepared on behalf of the Respondent for the 19 March hearing by counsel, Ms Robinson, who appeared below and appears before me on this appeal, there is in addition a complaint relating back to the late adjournment of the 20-22 February 2013 hearing relied on as unreasonable conduct by Ms Ballard that led to that late adjournment and said to have caused the Respondent to incur the wasted costs of preparing for a Full Hearing. As I have said, that allegation was not in Ms Millidge’s witness statement of 11 March 2014, and although it appears in the skeleton argument dated 18 March that was only given to Ms Ballard at the hearing on 19 March itself.
30. At that hearing on 19 March, for the first time, Ms Ballard asserted that she was working in a pro bono capacity for the Claimant. There was an attempt to investigate that issue at the hearing, and the Claimant was telephoned in the course of the hearing and asked to attend and to give evidence, which he did. The only findings of fact made by the Judge in respect of that evidence appear at paragraph 4 of the Judgment that followed the 19 March hearing (referred to as “the March Judgment”) as follows:
“4. … He gave evidence on oath to support his understanding that there was nothing discussed about fees. …”
31. The Judge went on to say his evidence had now been dealt with unless anything substantial and new arose and he would not therefore be needed when the case reconvened as it was going to have to do. It is evident from the March Judgment that towards the end of that hearing the Claimant returned to Davis Solicitors’ offices to collect Ms Ballard’s confidential client file relating to the Claimant’s matter. At paragraph 9 the Judge explains how this came to pass. He said:
“9. This first day of the hearing ended at 4:30pm. During the hearing Mr Isteed kindly returned to Davis office [sic] in Ilford to collect Ms Ballard’s case file and I suggested to the parties at the end of the hearing now at 4:30pm that now that they are all together Ms Robinson, Ms Millidge, Ms Ballard and Mr Isteed could look at the file together to see what is and is not on it which could tell the Respondent if there is to be anything gained from the respondent or the claimant by producing documents from the file that are relevant to whether there was any agreement about payment or not.”
32. I regard that suggestion that the parties should together look through the file as a surprising one. Ms Robinson has confirmed that there was no discussion about legal professional privilege before the suggestion was made by the Judge or after, and no warning was given by the Judge in respect of the Claimant’s legal professional privilege. Ms Robinson accepts in hindsight that the Judge should not have made the suggestion he did.
33. Although the parties followed the Judge’s suggestion, perhaps not unsurprisingly, within a short time Ms Ballard realised the position she was in and objected. Her objection should, in my judgment, have been accepted without more. It was not. At paragraph 16 of the March Judgment the Judge observed that he could see no logical basis for not disclosing the whole file given the issue of whether Ms Ballard was acting for a fee. He expressed the view that privilege was impliedly waived by Ms Ballard declaring that she did not act for profit. That was plainly incorrect. The privilege was the Claimant’s to waive and not Ms Ballard’s. The Judge then observed that:
“18. … Unless there are good professional reasons or legal authority for not disclosing the full contents of the case file the tribunal may draw an adverse inference.”
Again, that is a most surprising approach.
34. The March hearing was adjourned because the time estimate was inadequate to complete the application and the wasted costs application was re-listed for two days on 3 and 4 April 2014. At the hearing in April 2014, despite the fact that the Respondent had set out in advance of the 19 March hearing (in a witness statement dated 11 March, supported by a skeleton argument dated 18 March) the basis of the wasted costs application it was pursuing, and despite the fact that in the course of oral submissions Ms Robinson made crystal clear that the Respondent was not relying on the absence of authenticity of the two emails, it is clear from paragraph 6 that this came as a surprise to the Judge right at the end of the hearing during closing submissions. At paragraph 6 the Judge said:
“6. This time the immediate cause of the adjournment, (even supposing Ms Ballard had had time to finish her closing submission), has been caused by the Judge’s query of counsel. When the Judge asked counsel for the respondent if she intended to raise, as one of the heads of conduct she relies on, the authenticity of the 2 emails, she stated, pragmatically, that she did not and that it was deliberately omitted. She stated the reason why she did not want to do it was she could predict how Ms Ballard would react to such a finding. That has proved to be the case. Ms Ballard is reiterating yet again an argument she made that to make any findings upon those emails there needs to be expert evidence before the tribunal. It has always been open to Ms Ballard to adduce expert evidence, either at the hearing at which the claims were dismissed as being out of time or on this later costs hearing.”
35. At paragraph 8 the Judge made clear that he would find it difficult to make a judgment on whether Ms Ballard was guilty of improper conduct for the purposes of Rule 80 without dealing with the issue of the authenticity of the emails. He observed at paragraph 9 that it would:
“9. … miss the main point now to skirt around it by finding only that Ms Ballard was negligent for not keeping and/or producing automated e-responses from the tribunal.”
36. The Judge said the two emails had cast a very long shadow over the entire proceedings. Then, at paragraph 11, he said:
“11. The above points do not go very far in the context of this hearing of the respondent’s wasted costs application. These 2 emails have cast a long shadow over the entire proceedings and I am satisfied that if those emails had not existed this case would quickly have been referred for a pre-hearing review on the issue of time. That might well have been the end of the proceedings without the respondent ever having to prepare [its] case on the main ET1 complaint.”
37. At paragraph 13 the Judge observed that he would feel happier if Ms Ballard were given a further opportunity to adduce expert evidence relating to authenticity of the emails. He recognised the cost to Ms Ballard but observed that there was potentially a lot at stake both financially and in terms of her professional reputation and status.
38. In the course of that hearing and following that exchange Ms Ballard made an application for the Judge to recuse himself. The Judge refused to do so, on the basis that his Judgments had done no more than was necessary to decide each issue that arose for decision at each stage. He said that the issue of improper conduct had been squarely raised in the application for a wasted costs order. He directed expert evidence be served by 24 June 2014.
39. Although expert evidence was not served by 24 June 2014 and even then not served on the Tribunal for reasons best known to Ms Ballard and not adequately explained, Davis Solicitors did serve expert evidence on the Respondent on 2 July. This was produced by the Respondent to the Judge when the wasted costs hearing resumed on 22 July 2014. The Judge also referred to a letter from Ms Ballard at paragraph 9 of his 20 August 2014 Judgment (referred to as “the July Judgment”). Ms Ballard had written to the Tribunal to say that she regarded Judge Prichard’s insistence on investigating the email issue despite the Respondent declining to rely on it as an irregularity, and she said that she had stopped participating in the hearing as she now believed she would not get a fair trial. She made a complaint about the Judge’s conduct, and presumably as a result, there was no attendance by Ms Ballard and no representation of Davis Solicitors at the July hearing. In the July Judgment at paragraph 30 the Judge said in light of the expert report:
“30. On balance and contrary to my previous finding I find that the emails, whatever they contained, were sent on 25 November and on 15 December. What I still find inexplicable (and I would have asked the expert) is why she did not open and print out the attachments to those emails, in particular a ‘.eml’ file attached to 15 December 2011 just to ensure that this actually related to the listed case and that the attachments were what they said.”
40. One might have thought that that would be the end of the matter of the authenticity of the emails, but, despite that finding, the Judge went on to identify a series of questions he would have liked the expert to have answered. These are set out at paragraphs 31 to 37, which concludes with his statement:
“37. … So despite my present findings suspicions still remain. There are many unanswered questions.”
41. He infers that his Judgments were not shown to the expert. There was no evidential basis for that inference. He concludes that Ms Ballard’s “omission” to provide his Judgments to the expert was “deliberate on [her] part” (see paragraph 38). At paragraph 41 the Judge said:
“41. I still have misgivings about the emails. It would be wrong of me not to acknowledge that.”
Nevertheless, he did find, as I have said, that the emails were sent despite not having been received by the Tribunal, and that issue accordingly could not have formed the basis of his wasted costs order.
42. Having reached that conclusion, he turned to address the unreasonable or negligent acts or omissions that could or did form the basis of a wasted costs order and were separate from the improper conduct referable to the authenticity issue. He found the following:
(i) that Ms Ballard had been extremely slow in chasing up receipt of the ET1;
(ii) that she had made no checks to corroborate if it had been received and that it was remiss of her not to chase the matter for three weeks and even more remiss of her to wait a further two weeks until February to chase it up for a third time;
(iii) that having failed to present the claim in time Ms Ballard had adopted an unrealistic stance in relation to her claim that the Tribunal was wrong and that in fact her ET1 had been presented in time;
(iv) that Ms Ballard should not have allowed the Claimant to attend the first hearing in October 2013 to deal with the matter in which only she had relevant knowledge, commenting that it was “wrong from the start”;
(v) Ms Ballard was asked to provide the auto-generated acknowledgements and never did and gave no satisfactory explanation why. Instead, she sent what the Judge described to be “2 streaky pdf’s” purporting to say that the claim had been presented on time and it was the Tribunal that was at fault. He said she should have been prepared to prove as a back-up line of defence that it was not reasonably practicable to have presented the claim in time but could only have done so with IT evidence;
(vi) that she behaved unreasonably and negligently and well below what could be expected of a solicitor by failing to provide a detailed explanation in relation to the two emails that acknowledged the practical difficulties and would have meant that the claim would certainly have been listed for the Preliminary Hearing to deal with the time point far sooner and would never have been prepared for a Full Hearing as it was, and instead there was long, unwieldy litigation that had nothing to do with the Claimant (paragraph 50);
(vii) that Davis Solicitors had been unreasonable and negligent in relation to the postponement of the February hearing by not logging the fact that the Claimant had booked a holiday on 2 September and was due to be away. Moreover, the Judge found that Ms Ballard should have notified the Claimant “immediately” upon receipt of the Notice so that he could put it in his diary, and he inferred that that “cannot have happened”. He went on to find that the application to postpone was made too late and that a last minute postponement ultimately had to be granted so that costs were again wasted (paragraph 51).
43. At paragraph 61 the Judge appears to have been critical about the adjournment of the April hearing. He was, he said:
“61. … concerned that the tribunal was being asked to sidestep an important issue simply because Ms Ballard’s sense of outrage might get in the way. …”
It is not clear whether that conduct formed part of his finding that there was negligent or unreasonable conduct on her part. What is, however, clear, finally, is that the Judge found Ms Ballard’s conduct in not attending the hearing to deal with the wasted costs application on 22 July 2014 itself to be wholly unreasonable, and he held accordingly that the firm should bear the costs of that hearing too (see paragraph 62).
44. To the extent that the Judge dealt with causation, Ms Robinson contends that he did so at paragraphs 72 and 73 as follows:
“72. On that point and in response to the tribunal’s concerns (2nd judgment (42)) nothing referable to the tribunal’s maladministration should be visited on Davis Solicitors. It was as frustrating for her as it was for the respondent. After the last-minute postponement of the February 2013 hearing, already described, all costs for work leading up to, and including, the Housego hearing on 15 July 2013 should not be visited upon Davis Solicitors. The respondent has made full allowance for that and has drafted the schedule of costs accordingly. I apologise once again on behalf of the tribunal to both parties for that episode which did not reflect at all well on the service.
73. Judge Housego however identified the important issue which had to be decided before the full hearing could be contemplated so the case was back on track after that hearing. The respondent’s schedule of costs resumed with the hearing on 14 October 2013 and continues until disposal. Although the respondent had put forward a schedule of costs in respect of the hearing for 22 and 23 July, in view of the fact that Ms Ballard did not attend the tribunal only sat until 11.35 am on 23 July. This judgment has been reserved. Counsel therefore adjusted the final schedule of costs to remove her refresher fee for 23 July. I am therefore satisfied that the scope of the costs order is now as it should be.”
45. At paragraph 74 the Judge held that there had been:
“74. … unreasonable and negligent omissions from the start of these proceedings and it is right that Davis Solicitors should be liable for those.”
46. Against that rather lengthy background I turn to address the four broad strands of appeal in turn.
Issue 1
47. It is common ground that the Employment Judge made no express reference to Ridehalgh and the other authorities dealing with wasted costs. Nor did he set out the three-stage approach identified in those cases. Ms Robinson referred to this authority in her skeleton argument at the Tribunal and submits that the fact that she did so means that the Judge was aware of it and correctly directed himself in any event. Davis Solicitors submit, to the contrary, that although the Judge’s decision does address the question of whether there was unreasonable or negligent action or omission by Ms Ballard he failed to address causation and the justice of the order. In particular, he failed to identify or explain precisely how the impugned conduct gave rise to unnecessary costs being incurred or to identify with sufficient or any clarity whether it was just to make a wasted costs order here.
48. Ms Robinson’s response to this argument is that despite failing to refer to the relevant authorities the Judge set out clearly (at paragraph 16) the issues that he was required to decide, and those, she submits, incorporated the matters that needed to be addressed. She submits that issues 2 and 5 identified at paragraph 16 (“Whether I would exercise my discretion to make a wasted cost order in this case” and “What parts of the respondent’s costs should be recoverable”) addressed both causation and justice. Moreover, she submits that the Judge dealt properly with causation at paragraphs 72 to 74; he excluded costs consequent on the Tribunal’s maladministration of this case and excluded costs in respect of the 23 July hearing day that did not take place. She submits that those paragraphs show he directed his mind to costs plainly not caused by unreasonable or negligent conduct and by implication she submits that all other costs claimed were found to have been caused by that conduct. While accepting that causation does require positive consideration and that the Judge did not expressly give that positive consideration, she submits that the decision is sufficient in relation to causation.
49. So far as the question of justice is concerned, again she submits that paragraph 74 is sufficient. The Judge explained why he had changed his mind on the authenticity issue and made proper findings by reference to the impugned conduct. She relies in writing on the fact that the Judge also dealt with Davis Solicitors’ ability to pay and observed that nothing referable to the Tribunal’s own maladministration should be visited upon Davis Solicitors. In the circumstances, she submits it is clear that he considered the question whether it would be just to order payment of all or only part of the costs here.
50. I agree with Ms Robinson that the failure by the Judge to refer to authorities on wasted costs does not of itself give rise to any arguable error of law, provided I can be satisfied that omission did not lead the Judge to misdirect himself when he came to apply the appropriate legal principles.
51. Mr Bowles, who appears on behalf of Davis Solicitors, argues that even before embarking on a detailed consideration of a wasted costs application of this kind the Judge should have addressed the appropriateness of such a course. Had he done so, he would have realised that the application was likely to be complicated, controversial and to take time. Indeed, at paragraph 1 of the March Judgment the Judge expressly referred to the fact that the single-day hearing had been complex both factually and legally and that had the Tribunal appreciated just how complex it would be a longer time estimate would have been given. Nevertheless, the Judge considered that the matter was substantial and that three days should be allowed. Mr Bowles relied on those observations to submit that the Judge was wrong to embark on the process at all. Ms Robinson, by contrast, submits that paragraph shows that the Judge had in mind questions of proportionality and that he was entitled to reach the conclusion he did that to embark on this process was appropriate in all the circumstances.
52. Lord Bingham’s speech in Medcalf at paragraph 24 shows that real care should be exercised before embarking on a wasted costs application. He said:
“24. … Save in the clearest case, applications against the lawyers acting for an opposing party are unlikely to be apt for summary determination, since any hearing to investigate the conduct of a complex action is itself likely to be expensive and time-consuming. The desirability of compensating litigating parties who have been put to unnecessary expense by the unjustified conduct of their opponents’ lawyers is, without doubt, an important public interest, but it is, as the Court of Appeal pointed out in Ridehalgh at page 226, only one of the public interests which have to be considered.”
53. That conclusion that jurisdiction in a wasted costs application should only be exercised in a reasonably plain and obvious case has been echoed since in many cases, including Gill v Humanware Europe plc [2010] EWCA Civ 799, where the EAT embarked on hearing an application for wasted costs in circumstances where there was a significant range of factual disputes that would require resolution in the context of an allegation of improper conduct by a representative. On appeal, the Court of Appeal observed that Appeal Tribunals should think carefully before embarking on an application for wasted costs where there is a conflict of evidence to be resolved. The same principle applies to first instance tribunals. They should not of course be deterred from making wasted costs orders in an appropriate case, but where an application for wasted costs cannot be fairly resolved without disproportionate investigation that takes days of tribunal time, such an application can (and perhaps, should) be dismissed on that basis alone.
54. With the benefit of hindsight, this was not a plain and obvious case. Again with the benefit of hindsight, it easy to see that the amount of time devoted to this application and the costs generated by dealing with it meant that it may have been an entirely disproportionate course to embark upon and one that perhaps should not have been embarked upon at all. I am unable, however, to say that the Judge failed to address this issue in light of paragraph 1 of the March Judgment and quite unable to conclude that the Judge’s decision to embark on this process at the time he did and without the benefit of hindsight was one that no reasonable tribunal properly directing itself could have reached.
55. I turn to the remaining points relied on by Mr Bowles as showing that the Judge did not address questions of causation and justice. I have set out already the findings made by the Judge in relation to conduct he found to be unreasonable or negligent. I have concerns about some of the criticism made by the Judge. For example, in circumstances where Ms Ballard was, justifiably as it turned out, convinced that the two emails were sent by her, the Judge does not explain why her persistent stance that the ET1 was lodged in time was unreasonable or negligent. Secondly, in relation to the October 2013 hearing, when inadequate notice was given by the Tribunal for that hearing and Ms Ballard was not available, Ms Ballard gave an explanation for the Claimant’s attendance alone that chimed with those points - namely she was pre-booked, unable to attend and offered to instruct counsel to attend but her client did not wish for her to do so. She also provided her explanation as to the two emails. Whether that explanation was adequate or not would be a matter for the Judge, but in circumstances where the Tribunal failed to give adequate notice for that hearing it seems to me that the Judge ought to have explained his conclusion that Ms Ballard’s non-attendance was negligent and unreasonable, but he did not.
56. Although I make those criticisms and have other concerns about some of the findings made, I proceed on the basis that the findings made by the Judge in relation to impugned conduct are adequately identified, since they have not been challenged, and I turn to deal with causation and justice.
57. As to causation, in Ridehalgh the Court of Appeal emphasised that the jurisdiction to make a wasted costs order extends only to impugned conduct that has caused a waste of costs and only to the extent of such wasted costs. The Court of Appeal held that demonstration of a causal link is essential and that where the conduct is proved but no waste of costs is shown to have resulted, the case may be referred to a disciplinary body or other authority, but it is not one for the exercise of the wasted costs jurisdiction. It is now common ground, as Ms Robinson accepts, that the Judge did not make positive findings on causation. He dealt with the point negatively at paragraphs 72 and 73 in the sense of excluding from the Costs Schedule those matters he regarded as caused by Tribunal maladministration. The absence of positive findings means, however, that there was, in my judgment, no proper examination of how precisely the negligent or unreasonable conduct found caused the specific costs said to have been wasted. That analysis is simply missing.
58. Two examples suffice. First, as set out above, at paragraph 43 of the January Judgment the Judge himself recognised that this case should have been listed promptly for a Preliminary Hearing to deal with limitation. That was not done. Instead, it was listed for a Full Hearing. That was not something for which Ms Ballard was responsible. It meant that the costs of a Full Hearing were incurred by the Respondent. The Judge did not return to this point in the context of causation or addressing the justice of the order he was to make. He did not determine in a positive way what costs were properly attributable to Ms Ballard’s impugned conduct and what costs related to this aspect, which encompassed the costs claimed for the aborted Full Hearing in February 2013 claimed to be in the sum of £22,000 in the February 2013 Costs Schedule. He did not explore the question whether the Respondent ought to have requested a Preliminary Hearing at an early stage or whether the Respondent ought to have considered not incurring the costs of preparing for the Full Hearing in circumstances where a limitation argument was to be pursued.
59. The second example relates to the October 2013 hearing, when inadequate notice was given by the Tribunal. Again, the Judge found that this was not Ms Ballard’s fault, but no attempt was made to identify precisely what costs her alleged negligent or unreasonable conduct caused given that background context. Moreover, the Judge failed to distinguish between the wasted costs claimed and the costs related to pursuing the wasted costs application. He failed to make clear on what basis he was addressing the different costs. For example, at paragraph 62 he found unreasonable conduct in relation to the failure to attend a hearing to deal with the wasted costs application. At paragraph 61 he referred to unreasonable conduct in relation to the April wasted costs application hearing. These were not identified as a basis for wasted costs being sought by the Respondent. The Judge did not explain how or why that behaviour caused wasted costs to be incurred. He had himself adjourned the hearing in April because of his own insistence on dealing with the authenticity issue. That was not Ms Ballard’s fault, nor did she invite him to do that; indeed, she positively resisted it, and the Respondent expressly said that it did not wish to rely on the authenticity issue.
60. It seems to me that the question of causation was not properly investigated, and I am not satisfied that it is possible to conclude that the Tribunal implicitly determined the causation issue in the Respondent’s favour in those circumstances. The reality rather, is that the Judge simply excluded those costs that were plainly and obviously caused by Tribunal maladministration and the remaining costs were costs that he ordered on the assumption that they were attributable to the negligence or the unreasonable conduct found. In my judgment, that was inadequate and an error of law.
61. So far as paragraph 74 and the question of the justice of an order for costs are concerned, the Judge concluded that it was right that the costs should be paid but provided no reasoning. This was a punitive order of last resort, and I have concluded that the Judge’s approach was inadequate in the particular circumstances of this case. I agree with Mr Bowles that given the history of this case if the Judge had expressly addressed the justice of the order he would have had to consider the chronology of the proceedings and how this wasted costs application had changed. He would have had to have regard to the fact that the application had, as he repeatedly recognised, been invoked and proceeded on the basis of improper conduct in relation to the suspected lack of authenticity of the two emails. That was his primary concern, and it remained his concern throughout. He spelt it out at paragraph 11 in the April Judgment.
62. Two points emerge from that paragraph. First, at that stage he had the view that the other allegations of negligence and unreasonable conduct relied on by the Respondent both in the 11 March witness statement and the 18 March skeleton argument did not justify the wasted costs order. If they had, in his view, justified a wasted costs order, he could have resolved the application there and then and made the order without any further ado. Secondly, that paragraph shows that the Judge took the view that if those emails were not authentic they would have been the cause of all the costs of the whole proceedings from the very start. That would have been a relatively simple issue to resolve and to address in terms of impugned conduct, causation and questions of justice.
63. Having read those observations in the April Judgment, it would have been reasonable for Ms Ballard to understand that the wasted costs application was viewed by the Judge as standing or falling on the authenticity issue and once that issue was addressed no order was likely to be appropriate. Having proceeded on that basis and ultimately found that those emails were authentic, albeit despite misgivings the Judge continued to have, in my judgment it was incumbent on the Judge to reflect on the justice of ordering wasted costs on a wholly different basis and on a basis he had provisionally expressed to be inadequate at an earlier stage. His failures to address causation and justice are, in my judgment, errors of law that vitiate this wasted costs order and mean that it must be discharged.
Issue 3: procedural fairness
64. This ground was expressed much more extravagantly in the Notice of Appeal to the effect that the basis of the application for wasted costs was never identified at all. It is advanced on a more restrained basis in oral submissions by Mr Bowles. He submits that there was insufficient clarity in relation to the basis of the application because the whole thrust of the January Judgment was to the effect that there was improper conduct by Ms Ballard in relation to the emails and this was persisted in through to the April Judgment despite the Respondent’s own deliberate decision not to rely on that conduct. Moreover, as I have already set out, the Judge made clear in the April Judgment that he did not regard the points relied on by the Respondent as to negligent and unreasonable conduct causing wasted costs as having much merit. Thus, Mr Bowles submits, the focus for Ms Ballard was on proving the authenticity of the emails rather than on the other allegations of negligent or unreasonable conduct in respect of other matters. Ms Ballard assumed, he submits, justifiably, that the costs application was founded on that question and if addressed no other costs would follow.
65. I accept, as Ms Robinson has submitted and has been emphasised in a number of cases, that the right procedure for determining claims for wasted costs will depend on the circumstances of the particular case. Proportionality is an important consideration, and where large sums are involved or serious criticisms are made about the competence or conduct of a representative that may have serious implications it may be necessary to investigate those allegations at a hearing. I also agree with Ms Robinson that the essential requirement of a fair procedure in the context of a wasted costs application is that the representative has a reasonable opportunity to make representations as to whether an order should be made. Ms Robinson submits that there is no requirement for a wasted costs application to be made in writing but even if there were such a requirement, here the application was set out clearly in the witness statement of Ms Millidge of 15 July 2013, the further statement of 11 March 2014 and a later statement produced in April, and she relies on Ms Ballard’s presence during the course of the many hearings to submit that it is inconceivable that Ms Ballard did not know the basis of the application in this case.
66. In order to have a reasonable opportunity to make representations as to whether an order should or should not be made, the party facing the order must know the basis on which the application is pursued. That should be communicated before the party is required to respond. That seems to me to be a basic principle of natural justice, and, in my judgment, in all but the most obvious of cases that should be done in writing. The question here is whether the basis of the application by reference to the relevant witness statements and the Judge’s observations during the course of the many hearings I have referred to and his Judgments identified the basis of this application in a sufficient way for Davis Solicitors to know and understand the case they were to meet.
67. I have set out the history of the costs and wasted costs applications and the basis on which this was originally made under Rule 40 as an ordinary costs application and how it changed. I have set out the approach of the Judge in the January Judgment to the authenticity issue. It is clear from the January Judgment that he found those two emails “may never have existed at 25 November or 15 December”. The inevitable inference from that paragraph was that the Judge suspected that those emails had been fabricated. One can also infer, because this was the view he expressed in the April Judgment, that he considered that their production or concoction by Ms Ballard had led to a series of unnecessary and prolonged hearings in respect of which the Respondent had incurred wasted costs that need never have been incurred but for their subsequent creation. However, far from relying on those matters, the witness statement of 11 March put the Respondent’s wasted costs application on an entirely different basis. That basis was pursued in the course of hearings in March and April by the Respondent but not accepted by the Judge. The April Judgment, read objectively, suggests that the points relied on by the Respondent were not going to go very far in the wasted costs application. The point was made by Mr Bowles, and I agree with him, that had the Judge considered that those points were sufficient to give rise to wasted costs he could have resolved the matter at the end of the April hearing without any need for a further adjournment. By the time of the July hearing and in light of the Judgments and what had been said at that hearing, it seems to me that Ms Ballard would have been entitled to assume that the wasted costs application was founded on the authenticity of the emails and that once she addressed that question no wasted costs would be awarded.
68. It seems to me in those circumstances that there is force in the complaint made on Ms Ballard’s behalf that there was a significant lack of clarity as to the precise nature of the unreasonable conduct and/or the negligence alleged and that the changing and fluid nature of the allegations gives rise to very serious procedural unfairness that also vitiates this costs order.
Issue 2: perversity
69. I deal briefly with this self-contained perversity ground relating to the finding that Davis Solicitors were acting for profit. If they were not acting for profit, the wasted costs order could not have been made. A perversity appeal can only succeed where an overwhelming case is made out that the Tribunal reached a decision that no reasonable Tribunal on a proper appreciation of the evidence and the law could have reached.
70. Ms Robinson contends that the Employment Judge assessed the evidence and reached a permissible conclusion that is not arguably perverse. She relies on the fact that the point was raised for the first time at the March hearing. She refers to the handwritten letter from the Claimant dated 18 March 2014, written in careful terms, to the effect that Ms Ballard had received no fees from the Claimant and that there was no future agreement in respect of costs. She submits that left out what happened in the middle in the sense that it did not address the existence of an agreement regarding fees. Contrary to Ms Ballard’s case that this was never addressed, it was expressly referred to and relied on by the Judge. She further relies on the fact that the Claimant was said to be a work colleague of Ms Ballard’s ex-husband and that was accordingly neutral as to the likelihood or not of Ms Ballard acting pro bono. She refers to the limited documentation disclosed by Ms Ballard as justifying the Judge’s finding that Davis Solicitors were acting for profit. There was a client terms and conditions document with extensive references to fees and to methods of payment that was found on the Claimant’s client file. She also relies on the fact that at a previous hearing when unrepresented the Claimant referred to costs getting out of hand and there were references in the witness statements of both the Claimant and Ms Ballard that were available to the Judge making reference to legal costs.
71. Although clearer findings could have been made about the oral evidence given by the Claimant and Ms Ballard at paragraphs 56 to 60 of the July Judgment, and despite references in that part of his Judgment to what he regarded as the “most likely explanation” for what had happened here, it seems to me that this ground of appeal - which is not a reasons challenge but a perversity challenge - does not succeed. I am persuaded that there was evidence to support the findings made by the Judge, and, despite the misgivings I have about the reasons he gave, I am not persuaded that the overwhelming threshold for a perversity appeal has been overcome.
Issue 4: procedural irregularity and bias
72. On behalf of Ms Ballard, it is said that the criticism expressed by the Judge in this case was repeated and was in absolute terms that were unnecessary. She submits that the criticism was of high gravity for a solicitor, and was unbalanced. It indicates that the Judge formed such an adverse view of Ms Ballard that he could not deal with challenges to her competence and conduct fairly. It is also said that the Judge entered the arena in relation to the disclosure of the client file and his insistence on the authenticity of the emails being addressed. Ms Ballard contends that the Judge ought to have recused himself on her application and was wrong not to do so and that the cumulative effect of these matters in the mind of a fair minded observer is that the Judge was no longer able to be fair and even handed in relation to this matter.
73. Ms Robinson, in the course of her submissions, accepted that the Judge came close to entering the arena but contended that he did not do so either in relation to the client file issue or in relation to his insistence on authenticity being addressed. So far as the client file is concerned, in hindsight she accepts that the Judge should not have suggested that the two sides sit down together and go through Ms Ballard’s confidential file. She accepts that irregularity should not have happened but submits it could not have affected the fairness of the ultimate decision because the Judge faced with objections from Ms Ballard did not pursue this course. As to authenticity, she submits it was in Ms Ballard’s own interests to have the authenticity allegations resolved and to do so at her own cost. She submits that Ms Ballard is in a better situation having a Judgment that says that she did not forge the emails than she would have been if the January Judgment had stood alone.
74. Although Ms Robinson appeared to suggest that there was no clarity as to the application to recuse, in her submission the Employment Judge did understand the application being made, and he addressed it, as he was entitled to do, by concluding that what he had said in his earlier Judgments had gone no further than necessary to decide each issue that arose for decision at each stage. To adjourn to obtain expert evidence in relation to the authenticity issue so that he could deal with the question of improper conduct that had been squarely raised was a proper and appropriate course to adopt. She submits that if the Judge had been biased he would not have adjourned for expert evidence to be obtained.
75. Finally, she submits that the Judge was entitled to be critical of Ms Ballard in this case, Ms Ballard’s conduct had been inadequate in many respects, and her behaviour in relation to the two emails left more questions than it answered. Moreover, the Judge was entitled to highlight the concerns he did, and as he explained himself in the January Judgment at paragraph 21 was doing so deliberately in order to help Ms Ballard and to identify those matters that required further explanation. Further, having received expert evidence, he made a finding contrary to the suspicions and provisional conclusions he had earlier voiced, that the emails were not forgeries and had in fact been sent. She submits that a fair minded and informed observer with knowledge of all the facts would conclude that the Judge had been fair and reasonable and that he had given Ms Ballard every opportunity to explain her actions. He explained what evidence was required, he set out why he made the findings he did, he changed his view when new evidence was provided. She submits that those are not the actions of a Judge who has reached a predetermined outcome, but of a Judge who reluctantly must conclude that a solicitor has conducted himself or herself improperly, unreasonably or negligently.
76. Cogently as those submissions were made, I have come to the clear but reluctant conclusion that I cannot accept them and that there was apparent bias in this somewhat exceptional case. In my judgment, that perception of bias means that the Judge should have recused himself from determining the wasted costs application and should not have gone on to determine it. My reasons follow.
77. I have already set out comments made by the Judge at the October Hearing as recorded by the Respondent’s solicitor. Much of that was unnecessary. It was certainly disparaging. If the Judge regarded the criticism as necessary, he ought to have made clear that these were provisional views that might change once explanations were provided by Ms Ballard. The same is true of comments made in subsequent Judgments. The Judge repeatedly described behaviour in relation to Ms Ballard as suspicious, extraordinary and as wholly unsatisfactory or unworthy of a solicitor, without qualification or stating that these were provisional views. In the January Judgment at paragraph 18 the Judge stated that he found it impossible to believe that emails could be deleted without printing them off first. At paragraph 19 the Judge found on the balance of probabilities that the emails were not sent and may never have existed at the date of sending. The clear inference is that he was finding that they were forgeries. That is a serious finding to make, albeit I accept it must be read with his finding at paragraph 35, where he said he was making no “categorical finding” that the emails had been forged.
78. It seems to me difficult to see why those findings were necessary in circumstances where the only issue for the Judge to resolve was whether the emails were received by the Tribunal. The Judge concluded that the emails were not received. In the absence of any proof of receipt offered by Ms Ballard that was a finding Ms Ballard would have been hard pushed to resist or challenge. It is not clear why it was necessary for the Judge to make the additional findings he did, still less an express finding that the emails may never have existed or to raise the question of forgery at that stage. The repeated criticism and comment in absolute terms was of very high gravity for a solicitor and, in my judgment, was unbalanced, as Mr Bowles has submitted.
79. So far as the March hearing is concerned, I regret to say that I regard it as wholly inappropriate for the Judge to have suggested that opposing counsel and solicitor look through Ms Ballard’s client file to see what was there and what was not. Whilst of course Ms Ballard should have objected immediately and should not have acceded to the Judge’s suggestion, in my judgment this suggestion should never have been made. It amounts to a significant procedural irregularity and carries an implication of distrust of Ms Ballard. Moreover, having made it and once Ms Ballard objected, I regard it as wrong that the Judge felt it appropriate to reach a provisional conclusion that privilege no longer attached to the file in circumstances where Ms Ballard was arguing she did not act for profit. Legal professional privilege belongs to the client - here, the Claimant - and cannot be waived by a solicitor. That the Judge went on to suggest that absent good professional reasons or legal authority for not disclosing the full contents of the case file the Tribunal may draw an adverse inference also gives rise to considerable concern. I agree with Mr Bowles that it is difficult to avoid the conclusion on an objective consideration of what occurred, that the legitimate reluctance of Ms Ballard to allow her file to be made available to the Respondent was treated by the Judge as fuelling his concern and suspicion as to her integrity and veracity when it should not have done.
80. Whatever might be said to justify the approach of the Judge prior to the April hearing, it seems to me that at the April hearing he entered the arena when despite the Respondent’s considered position (with counsel saying she had deliberately not relied on the authenticity issue) the Judge pursued the authenticity issue to the extent of adjourning the application despite the fact that it had almost concluded and requiring that issue to be addressed. I cannot accept Ms Robinson’s argument that this was done for the benefit of Ms Ballard. She did not ask for the matter to be pursued. The Respondent did not pursue the application on this basis. This was a matter that the Judge wished to have pursued for his own reasons, whatever they were, and, in my judgment, his approach went beyond what was acceptable in this regard, I regret to say.
81. That is compounded by comment and observation made by the Judge at the July hearing. Having seen the expert report and concluded at paragraph 30 that the emails were sent and were authentic, the Judge proceeded to criticise the instructions given to the expert and to observe that his suspicions still remained and that he still had misgivings. He not only assumed that the expert was not provided with his Judgments but concluded without any evidence that was a deliberate omission on Ms Ballard’s part. This whole exercise of questioning the expert report was unnecessary. It was not relevant to any issue that the Judge was required to address. It did not enable him to evaluate the issues that remained in relation to the wasted costs application. Moreover, the way in which the criticism was expressed was unbalanced. Even if the Judge was entitled to conclude before July that he ought not to recuse himself, it seems to me that he should have recused himself at this point. By then the Judge demonstrated an overwhelming preoccupation with the authenticity of the emails. A fair minded observer could not but conclude that this had an adverse impact on his attitude towards Ms Ballard, finding suspicion and expressing misgivings even once expert evidence had been provided. At no stage did the Judge give Ms Ballard the benefit of the doubt in relation to any matter. To the contrary, he drew adverse inferences against her even in the absence of evidence. Viewed as a whole and objectively as a fair minded observer would, the comments and actions of the Judge lead overwhelmingly to the conclusion that there was the appearance of bias in this case. An informed observer would conclude that there was a real possibility that the Judge had formed an early concluded view as to Ms Ballard’s integrity that prevented him from fairly and objectively judging the issues in this wasted costs application.
82. For all those reasons, I am satisfied that the Judge ought to have recused himself from determining the wasted costs application, and accordingly this ground of appeal also succeeds. The Judge’s findings as to whether Ms Ballard was acting in pursuit of profit and all his other findings relevant to the wasted costs order must accordingly be set aside.
83. The appeal is allowed. Consequential matters will be dealt with separately.