Mr N Phillips and Mrs C Phillips v Fernhill Health War Memorial Club: 1306935/2023 and 1306936/2023
EMPLOYMENT TRIBUNALS
Case No 1306935/2023, 1306936/2023
Between
Mr N Phillips and Mrs C PhillipsClaimantFernhill Health War Memorial ClubRespondentDate 19 April 2024
JUDGMENT
The claim is struck out.
REASONS
[1]By a letter dated 13 March 2024 the Tribunal gave the claimant an opportunity lo make representations or to request a hearing, as to why the claim should not be struck out because• the claimant had not complied with the Order of the Tribunal dated 26 October 2023.• The claimant has failed to respond to the Tribunal’s letter dated 20 March• it has not been actively pursued.[2]The claimant has failed to make representations in writing, or has failed to make any sufficient representations, why this should not be done or to request a hearing. The claim is therefore struck out.[1]The first claimant was employed as Bar Manager at the respondent from 1 December 2019 until 23 July 2023 and it appears that the second claimant is or was employed on a ‘zero hours contract’. For ease of reference in this judgment, the Tribunal has referred to both claimants simply as the claimant and primarily uses that term to identify the first claimant. It appears that an e mail was sent by one of the respondent’s committee members to that committee criticising the claimant and this was inadvertently copied to him. He raised a grievance about this which was upheld. The claimant was subsequently off sick and then on 2 July 2023 sent an e mail to the respondent headed ‘Resignation’ stating he felt unable to continue and suggesting that he was forced out and would be claiming constructive dismissal. His employment ended on 23 July 2023 and he remained in the accommodation provided as part of his job until 13 August 2023. The claimant then suggested he had not resigned and asked to continue working but the respondent declined this request. The claimant obtained alternative employment on 7 August 2023 as a Bar Manager earning a broadly similar amount as he did when employed at the respondent.[2]By a claim form presented on 24 October 2023, the claimants brought complaints of unfair dismissal. The claim form made reference to the grievance and stated that the claimant was angry and upset at receiving the e mail which he felt attacked him personally. He then went on to state that he wanted to resolve the problem internally “without the need for any legal action” proposing that the committee member who sent the e mail resign and apologise to him and suggested a meeting. The claim form further stated that whilst he was off sick with stress, another committee member, Mr Kilner, “finished my position as bar manager” leading to the claimants losing their accommodation and having to euthanise their dog. The respondent defended the claim by a response presented on 22 November 2023 denying that the claimants had been dismissed and contending that the claimant had simply resigned. It further contended that it was unaware that the second claimant had resigned but was on a zero hours contract albeit had not worked since June 2023. It contended that the claim was unclear and lacked merit and should be struck out.[3]The claim was listed for final hearing in March 2024 and case management orders were made requiring the parties to comply with certain steps. The claimants were required to provide to the respondent a statement of how much compensation was being sought and how this was calculated by 30 November 2023. This was not done and on 1 December 2023, the respondent’s solicitor notified the Tribunal and asked for the claim to be struck out. By 14 December 2023, the parties were required to provide their disclosure documents. The respondent sent its documents to the claimant on this date but the claimant did not provide any documentation. The respondent’s solicitors again notified the Tribunal of this breach in writing on 15 December 2023, again asking for the claim to be struck out. The parties were due to have an agreed bundle by 28 December 2024 and have exchanged witness statements by 11 January 2024. The claimants failed to comply and the respondent’s solicitors again notified the Tribunal on 11 January 2024 and asked for a strike out. Calls were made by the respondent’s solicitors to the Tribunal but due to an exceptionally high workload, the matter was not referred to an Employment Judge until 12 February 2024. The claimants were asked for comments on the various respondent letters but did not respond.[4]On 13 March 2024 Legal Office Metcalf issued a strike out warning to the claimant in respect of failures to comply with the orders of the Tribunal and not actively pursuing his claim. The respondent continue to prepare for the hearing which was due to start on 21 March 2024. The claimant e mailed the Tribunal on 19 March 2024 stated that he was unsure what he was expected to do, asked for help and said all his time was taken up with work and explaining that he had family problems with his elderly mother who has Alzheimer’s disease. This was referred to Employment Judge Faulkner who directed that a letter be sent to the claimant that day asking him to clarify his position and to confirm whether he was asking for the hearing to be postponed and explain why. He did not respond. The respondent was also invited to comment and indicated that it did not consent to the hearing being postponed and again asked for the claim to be struck out. As it happened, the final hearing was postponed due to lack of judicial resource on 20 March 2024. Acting Regional Employment Judge Jones then also on 20 March 2024 ordered the claimant to respond to questions to confirm whether he continued with his claim; whether he agreed that he had not complied with the orders of the Tribunal; if not; why not and when could he comply. The claimant did not respond.[5]The claim was struck out pursuant to judgment of Employment Judge Childe sent to the parties on 19 April 2024. The reasons given were that the claimant had not complied with the Order of the Tribunal dated 26 March 2023; had failed to respond to the Tribunal’s letter of 20 March 2024; had not made any representations as to why his claim should not be struck out and had not actively pursued his claim.[6]On 22 April 2024, the respondent made an application for costs under rules 76(1) (a) and (b) and 76(2) of (Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013. It contended that the claim never had any prospects of succeeding; and as a result of the claimant’s unreasonable failure to follow any of the case management orders, the respondent had incurred costs of legal representation amounting to £3,993. Copies of its bills and an account were submitted. This was listed for hearing and on 11 October 2024, Employment Judge Maxwell made case management orders for that hearing stating that if the claimants opposed the making of the order then should write setting out their reasons by 1 November 2024. A further order was made that if the claimants wished their means/ability to pay to be taken into account they should complete an attached form EX140 and return it to the Tribunal also by 1 November 2024. The claimant did not respond to either of these orders by the deadline.[7]On 23 December 2024, the Tribunal administration sent a reminder about the provision of bundles for the costs hearing. On 23 December 2024 the claimant e mailed the Tribunal (not copying the respondent) stating that he was “at a loss to all of this”. He contended that the legal proceedings were started by the then Chairman of the respondent. He stated that he no longer worked as he had to leave his job to care for his elderly mother who required 24 hour care. He stated that as his mother did not claim benefits, he was unable to claim carer’s allowance. He stated that his only income was state pension and a very small private pension and that with care commitments to his mother he was “literally living week to week”. On 5 January 2024, the first claimant sent a further e mail setting out his description of the background to the claim again alleging that he was being forced out of his employment. He stated that he obtained a new job when he left the respondent’s employment as a Bar Manager at a club in Stourport-upon-Severn but had to give up his employment due to his mother’s deteriorating condition and care needs and that they were living on his pension and his mother’s pension. He stated he was on anti-depression medication and sleeping tablets. He stated that there was “no way” he could afford to pay the expenses that were being claimed and he did not know what to do.[8]The first claimant’s e mails were referred to me on 7 January 2025 as Duty Judge and a letter was sent to the claimant on the same date explaining the purpose of the hearing and what the Tribunal would be deciding. This letter included a link to the Tribunals online guidance and sources of advice. It informed the claimant that he was able to submit evidence and make representations including about his ability to pay. The claimant e mailed the Tribunal on 9 January 2025 stating that his mother had been hospitalised on 7 January 2025 and was recovering from a fractured hip and hip replacement. He suggested that if the Tribunal wanted evidence of this, they could ask. He further stated, “I have had no time to consider what is going on with this case” and went on to suggest that the respondent’s solicitors were “trying to get money” out of him that he did not have and that he was being “persecuted”. He also added that he had not money and no life and questioned the point of carrying on. He concluded by suggesting that he would raise matters with “the right press” and that he should be left alone to try and make the best of his “broken life”.[9]The claimant did not attend the hearing nor submit any evidence or further written representations. Given the e mail sent the previous day, the Tribunal concluded that he would not be attending. The hearing proceeded in his absence on the basis of submissions only with the respondent making its application. The Tribunal decided to adjourn the hearing for a reserved judgment and reasons to be provided to the parties in writing.
The Issues
[10]The issues which needed to be determined were: 10.1. Had the claimants acted vexatiously, abusively, disruptively, or otherwise unreasonably in either the bringing of the proceedings or the way the proceedings have been conducted (within rule 74 (2)(a) of the ET Rules)? 10.2. Did the claims made by the claimants have “no reasonable prospects of success” (within rule 74 (2)(b) of the ET Rules)? 10.3. Have the claimants been in breach of any order, rule or practice direction or was a hearing adjourned (within rule 74 (2)(c) of the ET Rules)? 10.4. Should, in the Tribunal’s discretion, a costs order be made? 10.5. If so, how much should be awarded?
The relevant law
[11]References to rules below are to rules under the Employment Tribunal Procedure Rules 2024 (“the ET Rules”) which came into force on 6 January 2025 and largely replace the procedural rules found in the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013.[12]Rule 73 provides: (1) A costs order is an order that a party (“the paying party”) make a payment to— (a) another party (“the receiving party”) in respect of the costs that the receiving party has incurred while legally represented or while represented by a lay representative[13]Rule 74 provides: (1)The Tribunal may make a costs order or a preparation time order (as appropriate) on its own initiative or on the application of a party or, in respect of a costs order under rule 73(1)(b), a witness who has attended or has been ordered to attend to give oral evidence at a hearing. (2) The Tribunal must consider making a costs order or a preparation time order 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 of it, or the way that the proceedings, or part of it, have been conducted,(b) any claim, response or reply had no reasonable prospect of success, or(c) a hearing has been postponed or adjourned on the application of a party made less than 7 days before the date on which that hearing begins. (3) The Tribunal may also make a costs order or a preparation time order (as appropriate) on the application of a party where a party has been in breach of any order, rule or practice direction or where a hearing has been postponed or adjourned.[14]Rule 75 provides:(1) A party may apply for a costs order or a preparation time order at any stage up to 28 days after the date on which the judgment finally determining the proceedings in respect of that party was sent to the parties.(2) The Tribunal must not make a costs order or a preparation time order against a party unless that party has had a reasonable opportunity to make representations (in writing or at a hearing, as the Tribunal may order).[15]The relevant part of rule 76 provides: “A costs order may order the paying party to pay- (a) the receiving party a specified amount, not exceeding £20,000, in respect of the costs of the receiving party;….”[16]A Tribunal must ask whether a party’s conduct falls within rule 76(1)(a) or (b) (now rules 74 (2) or (3)). If so, the Tribunal must then go onto ask whether it is appropriate to exercise the discretion in favour of awarding costs against that party. It is only when these two stages have been completed that the tribunal may proceed to the third stage, which is to consider the amount of any award payable.[17]Gee v Shell UK Limited [2003] IRLR 82. The Court of Appeal confirmed that that costs are the exception rather than the rule and that costs do not follow the event in Employment Tribunals.[18]Litigants in person usually should be judged less harshly in terms of their own conduct than those who are professionally represented: AQ Ltd v Holden [2012] IRLR 648 EAT. However see Barton v Wright Hassall LLP [2018] 1 WLR 1119 UKSC[19]Scott v Russell [2013] EWCA Civ 1432, approved the definition of “vexatious” in Attorney General v Barker [2000] 1 FLR 759, as having no basis in law (or at least no discernible basis) and: “that whatever the intention of the proceedings may be, its effect is to subject the defendant to inconvenience, harassment and expense out of all proportion to any likely gain to accrue to the claimant, and that it involves an abuse of the process of the court, meaning that a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process”[20]Barnsley Metropolitan Borough Council v Yerrakalva [2012] ICR 420 - “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.”[21]Dyer v Secretary of State for Employment -whether conduct is unreasonable is a matter of fact for the tribunal; unreasonableness has its ordinary meaning and should not be taken by tribunals to be the equivalent of vexatious. This was accepted by the Employment Appeal Tribunal in National Oil Well Varco v Van der Ruit UKEATS/0006/14/JW.[22]McPherson v BNP Paribas [2004] ICR 1398 [40], [41] – The Court of Appeal held that (the then) r14(1) did not require a party to prove that unreasonable conduct caused particular costs to be incurred, but required the tribunal to have regard to the nature, gravity, and effect of the unreasonable conduct when determine whether to exercise their discretion to award costs. The Court of Appeal further held, it is not punitive or impermissible for a tribunal to order costs without confining them to the costs attributable to the unreasonable conduct. In Sunuva Ltd v Martin UKEAT/0174/17 at [22] the Employment Appeal Tribunal expressed the view that this is still the position under the ET Rules.[23]Scott v Inland Revenue Commissioners [2004] ICR 1410, CA in addressing rule 76 (1) (b) the focus should be on whether claims had a “reasonable prospect of success” and whether the Claimant had reasonable grounds for believing that they did and a genuine belief in wrongdoing is irrelevant[24]Radia v Jefferies International Ltd EAT 0007/18, the test as to whether the claim had no reasonable prospects of success must be judged on the basis of the information that was known or reasonably available at the start of proceedings.[25]Jilley v Birmingham and Solihull Mental Health NHS Trust UKEAT/0584/06/DA, - if a Tribunal decided not to take account of the paying party’s ability to pay, it should say why. If it decides to take into account ability to pay, it should set out its findings about ability to pay, say what impact this has had on its decision to award costs or on the amount of costs, and explain why. There may be cases where for good reasons ability to pay should not be taken into account: for example, if the paying party has not attended or has given unsatisfactory evidence about means. There are also circumstances, for example, where a claimant is completely unrepresented, where, in the face of an application for costs, the tribunal ought to raise the issue of means itself before making an order: Doyle v North West London Hospitals NHS Trust [2012] All ER (D) 205 (Jun) (UKEAT/0271/110). Submissions[26]Mrs Simon on behalf of the respondent made brief submissions in addition to the detailed application already made. She submitted that the behaviour of the claimant since the costs application confirmed that the grounds for unreasonable conduct have been made out. She pointed out that the claimant had sent e mails to her that were “bordering on harassing” and that he had made reference to going to the press. She pointed out that from the outset of proceedings, she had regularly informed the claimant that he should seek independent legal advice at earliest opportunity as she was concerned he had no understanding of the claim he had presented and the proceedings instigated by him. She submitted that the reference to the claimant wanting to resolve matters “without legal action” suggested that his claim for constructive unfair dismissal was fundamentally flawed from the outset. She pointed out that he had not complied with any orders of the Tribunal, who had been lenient with him and given him multiple opportunities to comply, and in respect of the costs application to provide evidence of his own circumstances. She contended that rather than doing so, the first claimant had “panicked and sent unpleasant e mails”. She contended that the claimant had shown no respect for the respondent, its representatives or for the Tribunal and its processes by his complete lack of compliance. She pointed out that the respondent is a community enterprise, who tried to do the right thing in the face of the claim being presented, instructed solicitors and have complied with every order of the Tribunal. In relation to the claimant’s limited information on his ability to pay, she pointed out that he was invited to provide evidence and he has chosen not to do so and rather suggested it was up to the Tribunal to contact him to seek evidence. She pointed out that it was clear from the orders made by the Tribunal in November what the claimant had to do and he has chosen not to comply with it. She pointed out that even if the claimant is correct about his own circumstances, there is no evidence of household income or outgoings given that the claimant is or was married.[27]Mrs Simon gave an update on costs incurred since the application which amounted to a bill of £658.50 plus VAT to just before hearing and £82.50 plus VAT for attendance at the hearing today.
Conclusion
[28]The Tribunal approached the issues set out at paragraph 10 above in a slightly different order but started by considering whether any of the ‘gateway’ tests within Rules 74 (2) (a), (b) and/or (c) had been met, before going on to consider the second and third stage of whether it was appropriate to make a costs award and if so how much that award should be. Issue 10.2 - Did the claim have ‘no reasonable prospects of success (rule 74 (2) (b))?[29]To answer this question, the Tribunal had to consider how at the earlier point of bringing the claims, the prospects of success in a trial that was yet to take place would have looked to determine whether those claims had reasonable prospects of succeeding. Any information gained or evidence that may cast light on that question can be considered, but information or evidence which would not have been available at that earlier time must be ignored. At the time of presenting his claim, the claimant was clearly of the view that he had a claim for constructive unfair dismissal. This had been already alluded to in his resignation letter where he contended that he was unable to continue and had been forced out (see paragraph 1 above). He had already raised a grievance about the e mail he had inadvertently received (and this had been upheld) and had gone off sick. Whilst this was never determined, a claim of constructive dismissal arising from such circumstances based on a potential breach of the implied term of trust and confidence is not one which the Tribunal could conclude had no reasonable prospect of succeeding. The way the claimant then pleaded his claim suggesting that he wanted to resolve matters and return, somewhat undermined what he was saying but it is not the case that the entire legal claim was one which had no prospect of succeeding from the outset. The matter of the claim from the second claimant also muddied the waters as there was no indication at all what this claim was founded on, nor even that this claimant had even resigned. However on balance, the circumstances were not such that there were no reasonable grounds for believing that a valid claim existed. Therefore the Tribunal cannot conclude that the circumstances of rule 74 (2) (b) apply. Issue 10.3 - Have the claimants been in breach of any order, rule or practice direction or was a hearing adjourned (within rule 74 (2) (c) of the ET Rules)?[30]The simple answer to this question is clearly yes. As set out in paragraphs 3, 4 and 6 the claimants failed to comply with any of the Tribunal’s orders. The hearing was adjourned but as this was done due to lack of judicial resource (see paragraph 4 above) I have not considered this as relevant to the matters to be considered. Issue 8.1 - Did the claimant act vexatiously, abusively, disruptively, or otherwise unreasonably in either the bringing of the proceedings or the way the proceedings have been conducted (76 (1) (a))?[31]The next question is whether the claimant acted vexatiously, disruptively or unreasonably in bringing and pursuing the claims as alleged by the respondent. The Tribunal do not conclude that the bringing of the claims per se was vexatious or necessary unreasonable for similar reasons as above, but accepted in full the submissions that the claimant was unreasonable in the conduct of the proceedings taking into account the guidance of the authorities above and have taken the ordinary meaning of the word ‘unreasonable’. He failed to comply with any Tribunal orders or interact or engage with the respondent or the Tribunal. The respondent did its best to prepare itself for a hearing to determine the claims brought by the claimants but he did absolutely nothing to progress or support his claims. He has in latter times made unhelpful comments about the respondent’s representative and still failed to do what was required of him. The Tribunal does hesitate to find as a fact that the this conduct was unreasonable. Issue 10.4 - Should a Costs Order be made?[32]Having found that the conduct of claimant fell within rules 74 (2) (a) and (b) the Tribunal had to then go onto ask whether it is appropriate to exercise the discretion in favour of awarding costs against him. The effect of the claimant’s failures to comply with the Tribunal’s orders which was also unreasonable conduct is that additional legal costs were almost certainly incurred, chasing the claimant for compliance, notifying the Tribunal and making applications to strike out his claim. However much of the valid work done in preparing disclosure, witness statements and other steps to prepare for trial would have been necessary in any event even had the claimant interacted with the respondent. It is also the case that the swift and timely actions of the respondent’s solicitors in keeping the Tribunal informed of what was happening ultimately may have reduced the overall costs by ensuring that a strike out application was made promptly and followed up on. The claim was rightly struck out and the respondent was at least saved the no doubt significant expense involved in final preparations for and attendance at the two day hearing.[33]In considering whether a costs order should be made, the Tribunal started from the proposition that costs orders in the Tribunal are the exception rather than the rule. It is also the case that a costs award is designed to be compensatory rather than punitive in nature. I have considered the limited information provided about the means of the claimant referred to in paragraph 7 and 8 above. The respondent is correct that the claimant has been given the opportunity to provide actual evidence on his means and ability to pay both back in November 2024 (see paragraph 6) and again earlier this week (see paragraph 8) but has not done so. He has however given several indications in writing that he has limited income and is now a full time carer of his elderly mother and survives on his and her pension. His caring responsibilities are clearly significant and in recent times he reports his mother has been in hospital The Tribunal has taken that information at face value and the respondent fairly does not challenge it. The claimant is a litigant in person and again has indicated in correspondence that he does not fully understand what is expected of him in this litigation. The respondent has attempted to direct him to seek legal advice and the Tribunal has provided information but the claimant has not heeded this guidance. He continues to blame the respondent for the predicament and whilst he may genuinely feel wronged at what took place at work, he has not helped his own cause by failing to prosecute the claims he chose to bring against the respondent and then unfairly criticising the respondent’s representative who was simply trying to act on behalf of her client in its best interests in accordance with her professional obligations.[34]It is finely balanced, but the Tribunal has concluded in the circumstances not to exercise its discretion to make an award of costs against the claimant. The Tribunal is satisfied that the claimant is impecunious and is undergoing domestic difficulties as a result of caring for his elderly and sick mother. To make an award of costs against the claimant who is in a difficult period of his life and will be unable to meet such an award is not an appropriate exercise of this discretion. Whilst that is not a relevant factor in the exercise of the discretion, the respondent may be in difficulty enforcing a costs award even if it were made and will inevitably incur further costs were it to try to do so. Accordingly the Tribunal has decided this is not a claim in which it is appropriate to exercise the discretion to make an award of costs for the reasons already stated and it is therefore not necessary for the final question of how much should be awarded (Issue 10.5).[35]The respondent’s application is dismissed.