Mrs S HicksClaimantMidland Heart LimitedRespondent
Before
Employment Judge DimbylowDate 30 December 2020
JUDGMENT
[1]The proceedings are dismissed following a withdrawal of the claim by the claimant. JUDGMENT
REASONS
(1) This case was listed before me to determine the respondent’s costs application on the papers. Relevant background(2) By her ET1 submitted on 11 January 2019 the claimant claimed unfair dismissal.(3) The case was listed to be heard over 2 days on 18 - 19 March 2021 and standard case management orders were made.(4) On 10 September 2019 the respondent wrote to say that the claimant had not complied with the case management orders and had not been in contact with the respondent to explain why not. The respondent said they had provided the claimant with their list of documents and they sought an unless order for the claimant to do the same. The respondent sought extensions of time to comply with the other orders.[1]of 6 (5) On 12 September 2019 the respondent sent a costs warning letter to the claimant asserting that her claim was unlikely to succeed. It was said that the respondent takes a “robust approach” to claiming costs. Importantly however, the respondent also said that if the claimant withdrew her claim by 27 September 2019 they would not make any application for costs. (6) On 21 November 2019 EJ Dimbylow made an unless order and varied the other case management orders by extending the time for compliance. The unless order stipulated that unless the claimant provided her list of documents the claim would be dismissed on 28 November 2019. (7) On 26 November 2019 the claimant withdrew her claim. Her email doing so said as follows: (8) On 30 November 2019 EJ Dean sent a judgment dismissing the claim. (9) On 17 December 2019 the respondent applied for costs. The application was made under rule 76(1)(a) and (b) of the Tribunal’s Rules of Procedure. The respondent requested the application be dealt with on the papers. (10) The claimant was asked for comments on the respondent’s application. She did not provide any comments. The claimant was also given the opportunity to provide any representations in writing for this hearing but has not done so. (11) The respondent has submitted a costs schedule which claims costs in the sum of £6162.92. The respondent’s case in summary (12) The respondent submits that the claimant has acted vexatiously and unreasonably in bringing and continuing with her claim until 26 November 2019 given that her claim had no reasonable prospects of success and it had not been actively pursued. The respondent relies in particular on the claimant[2]of 6 proceeding with and then failing to engage with what they describe as an unmeritorious claim. The respondent also points to the claimant failing to withdraw her claim until 26 November despite the costs warning stipulating that she should withdraw by 27 September. It is said that this failure was also unreasonable. The legal principles to be applied (13) The respondent’s application is made under Rule 76 (1)(a) and (b) which provides as follows: A Tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that—(a) a party (or that party's representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted;(b) any claim or response had no reasonable prospect of success. (14) An award of costs for unreasonable conduct involves a two stage process. Firstly a finding of unreasonable conduct and secondly the exercise of discretion in making an order for costs. The Tribunal should consider the whole picture of what happened in the case to establish whether the claimant’s conduct has been unreasonable. The Tribunal must have regard to the nature, gravity and effect of the unreasonable conduct as factors relevant to the exercise of its discretion. It is not necessary to show that specific unreasonable conduct by the claimant caused particular costs to be incurred. (15) Although Rule 84 entitles me to do so I do not have any information before me which would enable me to take into account the claimant’s ability to pay. (16) Guidance as to the approach to be taken in cases where the claimant withdraws their claim was given in McPherson v BNP Paribas (London Branch) 2004 ICR 1398. It is not unreasonable conduct per se for a claimant to withdraw a claim before it proceeds to a final hearing. As the Court of Appeal in McPherson observed withdrawal could lead to a saving of costs and tribunals should not adopt a practice on costs that would deter claimants from making ‘sensible litigation decisions’. (17) On the other hand, the Court was also clear that tribunals should not follow a practice on costs that might encourage speculative claims. The critical question was therefore whether the claimant withdrawing the claim has conducted the proceedings unreasonably. (18) In National Oilwell Varco (UK) Ltd v Van de Ruit EATS 0006/14 the EAT found that the tribunal had been entitled to take into account the reasons given by the claimant for a late withdrawal in deciding not to award costs. The EAT also confirmed that, when considering whether there is unreasonable behaviour, the[3]of 6 tribunal must consider the whole conduct of the case rather than individual aspects of it. (19) In Yerrakalva v Barnsley Metropolitan Borough Council and anor 2012 ICR 420, CA Mummery LJ explained that the vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had. This process does not entail a detailed or minute assessment. Instead the tribunal should adopt a broad-brush approach, against the background of all the relevant circumstances (Sud v Ealing London Borough Council 2013 ICR D39). Conclusions (20) No findings have been made in this case. I have no evidence before me. In judging the merits of the case then I only have the pleadings and the various assertions contained in the respondent’s costs warning letter and costs application. (21) On the material before me I cannot conclude, as the respondent encourages me to, that this was an unmeritorious claim which had no reasonable prospect of success or that it was brought speculatively or vexatiously. All I can say on the basis of the information before me is that there were competing arguments which would need to be determined on the evidence before any conclusions could be reached. (22) I do not see anything unreasonable about the claimant withdrawing her claim at the time she did. This was not a last minute withdrawal. It was nearly 4 months prior to the final hearing and before the bundle had been created or witness statements prepared. In fact my understanding from the respondent’s correspondence is that the only case management step which had been taken was the respondent providing its list of documents to the claimant. In those circumstances the withdrawal in this case has undoubtedly led to a substantial saving in costs and I think I should therefore be particularly mindful of the guidance in McPherson of encouraging sensible litigation decisions. (23) The respondent suggests that the claimant should have withdrawn by 27 September as that was the timescale set in the costs warning letter. However the claimant did not wait until the eleventh hour, and I take into account her reasons for withdrawing when she did - in particular that she was struggling to cope with the pressure. It is well known that litigation is a stressful process. I therefore see nothing unreasonable in the claimant withdrawing for that reason at that point in time. In my view the withdrawal at this stage and for this reason does not give rise to any inference that this was a weak, vexatious or speculative claim. (24) Moreover the reality is that between 27 September and 26 November the respondent was simply awaiting the outcome of its applications for an unless order and for extensions of time to comply with the other case management
Conclusions
[4]of 6 orders. It did not have to take more case management steps like creating the bundle or preparing witness statements in that period. There was therefore no reason for any substantial extra costs to be incurred by the claimant’s failure to withdraw within the timescale set by the respondent. Accordingly even if the claimant’s delay in withdrawing was unreasonable I consider the effect of it would not be so serious as to justify an award of costs. (25) It also seems to me to be relevant that the respondent was willing to agree not to apply for costs if the claimant withdrew at the end of September. That offer plainly recognised the advantages to the respondent, including a considerable costs saving, if the claimant withdrew before any other case management steps needed to be taken. No doubt if the claimant was professionally represented she would have sought the respondent’s agreement not to pursue costs if she withdrew on 26 November. Given how little the case had moved on since 27 September it is difficult to see any basis on which the respondent would have refused that. (26) The claimant’s failure to comply with the case management orders was unreasonable. The particular failures were that the claimant failed to provide a schedule of loss or her list of documents. However, I observe that it seems as though the claimant has adopted a practice of not engaging properly with the respondent or tribunal. This reinforces my view that there has been unreasonable conduct. I do note that the claimant was properly corresponding with the tribunal when she first submitted her claim (in particular in response to queries about her dates of employment) and this does not support the suggestion that the claim has never been actively pursued. It may be that the reason for the later lack of communication from the claimant relates to her struggling to cope as she said in her email of 26 November. I take that into account, but I do not think it entirely excuses her behaviour. (27) In terms of the effect of the claimant’s conduct her failure to comply with the case management orders necessitated the respondent’s application for an unless order. However, this was only a 2 page letter which would not have required much time to prepare. Moreover, the costs associated with the application had already been incurred when the respondent made its offer not to apply for costs. It also seems that it was the unless order which finally prompted the claimant to make the decision to withdraw her claim and so this enabled the respondent to save the further costs of preparing the case for hearing. For those reasons I do not think the effect of the claimant’s unreasonable conduct was so serious as to justify an award of costs. (28) I have therefore reached the view that in all the circumstances I have outlined above I should not exercise the discretion to award costs in this case. I consider it would not be appropriate to do so in view of the whole picture but in summary my main reasons are:• I do not find that this claim had no reasonable prospect of success or was brought speculatively or vexatiously.• The claim was withdrawn at a relatively early stage for an understandable reason.[5]of 6• The withdrawal meant there was a substantial saving of costs, not only the costs saved of not having a hearing but also the costs saved by the respondent in not having to comply with the majority of the case management orders.• The respondent offered not to pursue costs if the claimant withdrew within a specified period. This offer was made after the claimant had failed to comply with the case management orders. The claimant did not withdraw within the specified period but the respondent had no reason to incur any significant costs after the expiry of the period and before the claimant’s withdrawal.• In that context the claimant’s unreasonable conduct of failing to comply with case management orders did not have such a serious effect as to justify the making of a costs order. (29) For the above reasons the respondent’s costs application is refused.