Mrs E Souter v The Coventry Office Furniture Warehouse: 1305876/2018

EMPLOYMENT TRIBUNALS

Case No 1305876/2018

Venue Birmingham

Hearing 4 February 2020

Between

Mrs E SouterClaimant

The Coventry Office Furniture WarehouseRespondent

Before

Employment Judge Hughes

Not in attendance for claimant

Date 4 February 2020

JUDGMENT

[1]The proceedings are dismissed following a withdrawal of the claim by the claimant. JUDGMENT MADE AT A HEARING HELD AT Birmingham ON 4 February 2020 EMPLOYMENT JUDGE Hughes Representation For the Claimant: Not in attendance For the Respondent: Mr I Saunders, Managing Director

[3]The respondent’s application for a Preparation Time Order is hereby dismissed. Signed by

REASONS

was attended by Mr Saunders, the Respondent’s Managing Director, and not by the claimant, I dismissed the Respondent’s request for a Preparation Time Order. The Respondent has subsequently requested written reasons which are below. Of my own motion I have changed the Claimant’s name to X because these reasons contain personal medical information obtained from a third party. Relevant background and findings

[1]The Claimant presented a claim on 8 December 2018 claiming disability discrimination. She had complied with the Early Conciliation requirements but had not done so within the primary time limit. Consequently, the claim was out of time, subject to the question of whether it was just and equitable to extend time.

[2]The Respondent submitted a Response on 8 January 2019 (in time) defending the claim and arguing the claim was out of time.

[3]The claimant was ordered to provide further information about her claim and the condition relied on for her disability discrimination claim by Employment Judge Camp on 28 January 2019. The case was listed for an Open Preliminary Hearing on 9 April 2019 which came before Employment Judge Connolly. The Claimant did not attend. Mr Saunders did attend. Employment Judge Connolly noted that the Respondent was unable to provide a detailed Response without further information from the Claimant. The Claimant was ordered to comply with Judge Camp’s Order. The case was relisted for an Open Preliminary Hearing on 5 July 2019 to determine whether the Claimant was a disabled person as defined by the Equality Act 2010 (section 1 and Schedule 1) and whether the claim should be allowed to proceed out of time.

[4]The Claimant did not provide further information as ordered, and the claim was dismissed by Employment Judge Richardson without a hearing.

[5]The Claimant did not appeal that judgment. The Employment Tribunal received correspondence from the Claimant’s parents dated 24 September 2019 which stated she was in receipt of Personal Independence Payments, is a vulnerable disabled woman, and has carers in daily to attend to her needs. The correspondence suggests the Claimant has serious mental health problems at present. This correspondence was emailed to the respondent on 4 October 2019, as was a further email containing further information about the Claimant dated 16 October 2019.

[6]The Respondent applied for a Preparation Time Order (“PTO”). The application came before me on 4 February 2020. I decided not to make a PTO. The Respondent has since requested written reasons.

[7]Mr Saunders submitted that correspondence from the Claimant, which he took me to in a highlighted document, R1, made reference to having a solicitor and a barrister and to contacting ACAS. The Claimant also referred to the three month minus one day time limit in an email, and to the hearing listed for 9 April 2019. He applied for 15 hours preparation time at £39.00 per hour i.e. £585.00.

[8]Mr Saunders submitted that the Claimant should have withdrawn her claim much earlier to avoid wasting his time and that of the Employment Tribunal. He also argued that the Claimant had made a claim to cause his company aggravation. He said the Claimant failed to engage with the process and should have followed due process and complied with Orders, as he had done. He was unable to address me on the Claimant’s means, or her mental health.

The Law

[9]There is no equivalent in the Employment Tribunal Rules to the general rule in the civil courts1 that the losing party will (subject to the discretion of the court) be Ordered to pay the legal costs of the winner. “The [Employment Tribunal’s] power to Order costs is more sparingly exercised and is more circumscribed by the [Employment Tribunal] Rules than that of the ordinary courts. There the general rule is that costs follow the event and the unsuccessful litigant normally has to foot the legal bill for the litigation. In the [Employment Tribunal] Costs Orders are the exception rather than the rule.”2 This reflects the policy that Employment Tribunals should be accessible, and the assumption that many Employment Tribunal cases will be dealt with satisfactorily without the 1 CPR Part 44.3 (2) (a). 2 Barnsley Metropolitan Borough Council v Yerrakalva

[2012] IRLR 78

(CA) per Mummery LJ involvement on either side of lawyers. “The employment jurisdiction is, for sound policy reasons, ordinarily a cost-free jurisdiction, and for our part we should not want to see that principle compromised or eroded”.3

[10]In the light of this history, it is not surprising that for many years it was most unusual for Employment Tribunals to make Costs Orders. Because the power to make Costs and Preparation Time Orders and Wasted Costs Orders is limited to the circumstances described in the Rules, an Employment Tribunal will expect a party who applies for such an Order to identify the specific basis for it in the Rules.

[11]There are now seven broad sets of circumstances in which a Costs Order, and sometimes a preparation time Order, may be made:(a) Adjournment of hearing for re-employment This is the one situation in which under the Rules the Employment Tribunal is required make a Costs Order. Such cases are very rare.

(b) On breach of Order or Practice Direction In such cases the Employment Tribunal has a discretion to make a Costs Order or a preparation time Order. There is no specific requirement that the paying party should have been at fault. see 13.6.

(c) Fees An Employment Tribunal may order the paying party to pay the receiving party a specified amount as reimbursement of all or part of a Tribunal fee paid by the receiving party4;

(d) On adjournment or postponement In such cases the Employment Tribunal has a discretion to make a Costs Order or a Preparation Time Order. There is no specific requirement that the paying party should have been at fault.

(e) Witness expenses incurred From 2013 the Employment Tribunal has had a discretion to make a Costs Order for a party to pay to another party, or to a witness, a specified amount in respect of expenses incurred, or to be incurred, for the purpose of, or in connection with an individual’s attendance at the Employment Tribunal. There is no requirement that the receiving party should have 3 Per Sedley LJ in Scott v Commissioners of Inland Revenue

[2004] IRLR 713

at paragraph 43. See also Lodwick v London Borough of Southwark

[2004] IRLR 554

paragraph 26 (per Pill LJ) 4 Rule 78(c) of Schedule 1 of the Rules of Procedure 2013, which has not been repealed notwithstanding the fact that no fee is currently payable because of the Supreme Court’s decision in R on the application of Unison v Lord Chancellor

[2007] UKSC 5

, [2017 IRLR 711 UKSC. Consequently there will be very few cases, if any, where an Order to pay Employment Tribunal fees is made. been represented in the case or that the party against which costs are sought should have been at fault.

(f) Unreasonable (etc) conduct An Employment Tribunal has a discretion to make a Costs Order or a Preparation Time Order where the Employment Tribunal considers that a party (or his representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either bringing the proceedings (or part of them) or the way that the proceedings (or part of them) have been conducted.

(g) The Claim or Response had no reasonable prospect of success An Employment Tribunal has a. discretion to make a Costs Order or a Preparation Time Order where it considers that any claim or Response had no reasonable prospect of success.

[12]An Employment Tribunal may only make in favour of a party either a Costs Order or a Preparation Time Order: it cannot make both There are three possibilities:(a) if the receiving party was “legally represented” the Order must be a Costs Order;5

(b) if the receiving party was not represented at all the Order must be a Preparation Time Order;6

(c) if the receiving party was represented by a lay representative the Order may be either a Costs Order or a Preparation Time Order.7 Definition of Preparation Time Order

[13]Both the term “Preparation Time Order” and the concept it denotes were first introduced in the 2004 Rules. There is no equivalent to either in the CPR (which govern proceedings in the civil courts), or, it appears, in any other jurisdiction. The term now means an Order that a party (“the paying party”) make a payment to another party (“the receiving party”) in respect of the receiving party’s preparation time while not legally represented.8 The term “preparation time” means time spent by the receiving party (including by any employees or advisers) in working on the case, except for time spent at any final hearing.9 5 Rule 75(1) (a) 6 Rule 75

(2) 7 This is the combined effect of Rules 75 (1) (a) and 75 (2) 8 Rule 75 (2) 9 Rule 75 (2) Discretionary Costs Order or Preparation Time Order (a) on breach of Order or Practice Direction or (b) on adjournment or postponement

[14]The Rules provide that in two situations an Employment Tribunal may make a Costs Order or a Preparation Time Order:(a) where a party has been in breach of any Order or Practice Direction; and

(b) where on the application of a party a hearing has been adjourned or postponed.10

[15]The discretion to make such Orders must be exercised judicially, but it is important to note that these provisions for Costs or Preparation Time Orders are independent of the main discretionary power to make such Orders, so that there is for example no requirement that the party against whom an Order is sought on breach or on an adjournment etc should have acted unreasonably (though if he has not, and the adjournment etc is as a result of some problem such as illness, beyond that party’s control, the Employment Tribunal is unlikely to make an Order. Non-compliance with an Order of the Employment Tribunal (and with the Rules themselves) may also cause the Employment Tribunal to strike out the Claim or Response11 or to make an Unless Order12. The general power to make a Costs or Preparation Time Order for unreasonable (etc) conduct and where a Claim or Response had no reasonable prospects of success

[16]By far the most important provisions giving the Employment Tribunal power to award whichever of a Costs Order or a Preparation Time Order is appropriate apply where the Employment Tribunal considers that:(a) a party (or his representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either bringing the proceedings (or part of them) or the way that the proceedings (or part of them) have been conducted; or

(b) any Claim or Response had no reasonable prospect of success.13 The provision as to costs substantially repeats the corresponding provision of the previous Rules.14 10 Rule 76 (2) 11 Rule 37 (1)

(c) 12 Rule 38 13 Rule 76 (1) (a) 14 Tribunal Rules 2001 Rule 14 (1) and 2004 Rules, Rules 40 (2) and (3) and 44 (2) and (3) In the situations described the Employment Tribunal “may” make an Order and “shall consider” whether to do so. It is plain, therefore, that the process remains a two-stage one, and that the situations set out in the Rule are a threshold, which must be passed if there is to be an Order, but which still leave the Employment Tribunal with a discretion whether to make one or not.

[17]The phrase “vexatiously, abusively, disruptively or otherwise unreasonably” applies to the conduct of the party (or his representative) in the litigation, and not to his or her conduct before dismissal. Despite the (very similar) language of the (2004) Rules, the EAT said that the aim was to compensate the party who has incurred cost in winning his case, not to punish the loser.15 The power was however later described as disciplinary rather than compensatory.16 The Rule does not state that the costs must have been caused by the relevant conduct of the paying party, but if the power is to be viewed as primarily compensatory, this would appear to follow. However, Court of Appeal has stated that, though the nature, gravity and effect of any unreasonable behaviour by the proposed paying party are factors in the exercise of the discretion as to costs, the costs the subject of an Order need not have been caused by or attributable to any such behaviour.17 A party seeking an Order should be prepared to explain to the Employment Tribunal which part (or parts) of the provisions quoted applies to the case, and the parts are considered separately below. However, there is inevitably some overlap between them, and a case may well fall within more than one of them.18 “Vexatiously”

[18]Much of the sense of the term “vexatious” in this context can be seen from the following passages.19 “If an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some other improper motive, he acts vexatiously, and likewise abuses the procedure…[a finding of vexatious conduct] is a serious finding to make against an applicant, for it will generally involve bad faith on his part and one would expect to see the discretion sparingly exercised.”20 “Vexatiousness implies the doing of something over and above that which is necessary for the conduct of the litigation, and suggests the existence of some spite or desire to harass the other side to the litigation, or the existence of some other improper motive.”21 In a 15 Davidson v John Calder (Publishers) Limited and another

[1985] IRLR 97

16 Scott v Commissioners of Inland Revenue

[2004] IRLR 713

(CA): and see 13.8.4 17 McPherson v BNP Paribas [2004] IRLR (CA) 18 See Keskar v Governors of all Saints C of E School

[1991] ICR 493

which was dealt with as a case of unreasonable conduct. Since there was a finding that the Claimant was motivated by spite in bringing a case for which there was no foundation, it might also have been treated as one of vexatious conduct.

[19]They are from cases on an earlier version of the Rules, which referred to “frivolous and vexatious” conduct; the term “frivolous” was deleted in 2001, but the passages quoted remain helpful for the meaning of “vexatious”.

[20]ET Marler Limited v Robertson [1974] ICR (NIRC)

[21]Cartiers Superfoods Limited v Laws

[1978] IRLR 315

further case on a previous version of the Rules, the Court of Appeal held that it was vexatious in the sense of being an abuse of the process of the Employment Tribunal for a Claimant to pursue her claim when it had been stayed pending trial of sample cases raising similar issues, and those issues had been determined in favour of the employer; and it remarked that the categories of vexatious conduct are not closed, and that considerations of public policy and the interests of justice are very material to whether particular conduct should be regarded as vexatious.22 The power to Order costs against a party whose conduct has been vexatious (or unreasonable) has been described as disciplinary rather than compensatory, so that it may properly be used against a Respondent who has spitefully or unfairly used the Employment Tribunal proceedings to pursue an unjust accusation that led to the act of discrimination in the first place.23 “Abusively, disruptively” 19 Since it is linked with “disruptively”, the term “abusively” refers to abusive language, rather than to abuse of the Employment Tribunal’s proceedings in a wider sense. The conduct aimed at seems to be the sort of abusive language (used to the Employment Tribunal itself, or to the other party, or a witness etc) or disruptive behaviour which makes it necessary for the Employment Tribunal to adjourn the hearing to give the defaulting party a chance to calm down and consider his position. Usually any costs awarded will be those resulting from the adjournment. “Otherwise unreasonably” 20 Perhaps the most obvious example of unreasonable conduct is behaviour which ignores a direction by the Employment Tribunal or well-known guidance for parties, and which causes delay or expense to another party,24 though it should be noted that the rules also give the Employment Tribunal separate powers in such cases. 21 Where a party told an explicit lie, alleging racial abuse, and it was at the heart of their claim, an Employment Tribunal should have found the conduct to be unreasonable (though the EAT emphasised that this was on the particular facts of the case, and was not intended to state a general principle).25 Where a Claimant made a large number of wholly unsubstantiated allegations against a

[22]Ashmore v British Coal Corporation

[1990] IRLR 283

(The case concerned a provision of the then Rules which permitted striking out of the originating application on the grounds that it was scandalous, frivolous or vexatious.)

[23]Scott v Commissioners of Inland Revenue

[2004] IRLR 713

(CA)

[24]In De Keyser v Wilson

[2001] IRLR 324

the EAT gave general guidance on the use of expert evidence in tribunal proceedings. It remarked that if a party were to fail without good reason to follow that guidance, and in consequence another party suffered delay or expense which due performance of the guidance would have been likely to avoid, the tribunal might well wish to consider whether there had been unreasonable conduct.

[25]Daleside Nursing Home Limited v Matthew

UKEAT/0519/08

manager who in fact was supportive of her, that put the Respondent to great expense at a nine-day hearing, the Employment Tribunal (which had not made an express finding that she had been dishonest) was entitled to regard her conduct as unreasonable and make a Costs Order.26 A party may be found to have acted unreasonably, although he had a sincere belief in his allegations, if he ought to have appreciated that there was no foundation for them.27 22 In exercising its discretion as to costs the Employment Tribunal should look at the whole picture of the litigation. It should ask whether there was unreasonable conduct by the paying party and, if so, identify the conduct, what was unreasonable about it, and the effect it had. “No reasonable prospect of success” 23 An Employment Tribunal cannot and should not judge a litigant in person by the standards of a professional representative….lay people are likely to lack the objectivity and knowledge of law and practice brought by a professional adviser. … It is not irrelevant that a lay person may have brought proceedings with little or no access to specialist help and advice.”28 In deciding whether a claim had no reasonable prospect of success it is relevant to consider the strict time limits which apply to Employment Tribunal claims. Factors affecting the discretion to make a Costs or Preparation Time Order 24 As noted above, if an Employment Tribunal considers that the case falls within one of the situations described in the Rules it may make a Costs or Preparation Time Order. There is a discretion, which must be exercised judicially. It is, as noted above, unusual for an Employment Tribunal to make a Costs or Preparation Time Order because there is a high hurdle to be surmounted before such an Order can be considered. It is impossible to provide an exhaustive list of the factors that it may take into account for this purpose. However, in deciding whether to make a Costs or Preparation Time Order, or the amount of it, an Employment Tribunal may have regard to the paying party’s ability to pay.29 This is the only specific factor which is mentioned in the Rules. 25 The Employment Tribunal is required30 to decide the number of hours in respect of which a Preparation Time Order should be made, on the basis of:

[26]Ghosh v Nokia Siemens Networks UK Limited

UKEAT/0125/12

[27]Keskar v Governors of All Saints C of E School

[1991] ICR 493

(EAT). (Claimant found by tribunal to have been motivated by resentment and spite in bringing a discrimination complaint.)

[28]AQ Limited v Holden

[2012] IRLR 648

[29]Rule 84

[30]Rule 79 (1) (a) information provided by the receiving party on time (while it was not legally represented) spent by it (including any employees or advisors of it) working on the case, except for time spent at any final hearing31; and (b) the Employment Tribunal’s own assessment of what it considers to be a reasonable and proportionate amount of time to spend on such preparatory work, with reference to such matters as the complexity of the proceedings, the number of witnesses and documentation required.”32 The preparation time determined as described above is multiplied33 by an hourly rate which was £33.0034, and is increased annually (from 6 April 2014) on 6 April each year by £1.00.35 Procedure as to Costs Orders and Preparation Time Orders 26 If the Employment Tribunal considers that one of the threshold conditions in the Rules is met, it is required to consider making an Order, and may make one36. It is therefore clear that it has a discretion to make an Order without there having been an application by the receiving party. Although the Rule refers only to the paying party’s being given a reasonable opportunity to make representations “in response to the application”, no doubt in a case in which the Employment Tribunal itself raises the question of an Order it should give the paying party such an opportunity. Conclusions 27 In deciding not to make a Preparation Time Order I thought the following were relevant factors: The Claimant had taken some legal advice but was not represented in respect of her Employment Tribunal claim; the Claimant did not attend the Open Preliminary Hearing in April, and her claim was dismissed when she did not provide the information required about the disability issue or the time limit issue; consequently, the Respondent was not put to the expense of defending the claim; I had no information to suggest the Claim had no reasonable prospect of success, or that the Claimant behaved unreasonably by bringing it; it could perhaps be said that the Claimant behaved unreasonably by not complying with Orders, but it appeared that the likely reason was her mental health; and the Respondent was aware of this when the application for a Preparation Time Order was made. It appeared that Mr Saunders was arguing that the claim was brought vexatiously. There was no evidence for that and I did not accept that argument. Furthermore, the Claimant has been penalised for not

Conclusions

[31]Rules 79(1) (a) and 75

(2)

[32]Rule 79 (1) (b)

[33]Rule 79 (3)

[34]Rule 79 (2)

[35]Rule 79 (3)

[36]Rule 76 (1) complying with Orders by having her claim dismissed. I had no information about her means but It appears from the fact that she has carers that she is not working. 27 In summary, I was not satisfied that the grounds of no reasonable prospects of success, or vexatious or unreasonable behaviour were met so there was no power to make a Preparation Time Order. Although the claimant had breached Orders and has caused an adjournment, so those grounds were arguably met, this was clearly not a case in which I should exercise my discretion to make a Preparation Time Order. Those are the reasons I have decided not to do so. Signed by