Mr M Willis v GWB Harthills LLP and others: 1802068/2020 and 1803135/2021
EMPLOYMENT TRIBUNALS
Case No 1802068/2020, 1803135/2021
Between
Mr M WillisClaimantGWB Harthills LLP and othersRespondent
Before
Employment Judge Maidment
Members
Mr W RobertsMrs N Arshad-MatherMr T Cordrey (instructed by Counsel) for claimantMr A Burns (instructed by (Queens Counsel)) for respondentDate 19 February 2024
JUDGMENT
[1]The following complaints of discrimination arising from disability (section 15 Equality Act 2010 and victimisation section 27 Equality Act 2010) were withdrawn by the claimant and are dismissed. 1.1. Withholding correspondence and documents in connection with the First Respondent’s excel assessment and legal aid contracts. 1.2. Hindering the Claimant’s access to the First Respondent’s accountants. 1.3. Excluding the Claimant from the following management decisions: 1.3.1. For the Second and Third Respondents to assume the title of joint Manging Partners. 1.3.2. To appoint a HR manager. 1.3.3. To take out a fixed interest business loan in January 2021 1.3.4. To take out a Coronavirus Business Interruption Loan in March 10.5 Reserved judgment with reasons – rule 61 1 March 2017[2]All the complaints of harassment related to disability (section 26 Equality Act 2010) are also withdrawn by the claimant and are dismissed.[3]The following remaining complaints of discrimination arising from disability and victimisation made in the Claim 2 are not well founded and are also dismissed: 3.1. Failing to reinstate the Claimant to the positions of Managing Partner: 3.2. Withholding information from the Claimant: minutes of partner’s meetings: details of management decisions and supporting documents and correspondence: budgets and finance reports including information about Work in Progress. 3.3. Excluding the Claimant from partner’s and/or management meetings. 3.4. Excluding the Claimant from the management decisions to appoint new accountants, to terminate the First Respondent’s relationship with Peninsula, and to make a financial settlement to a former member of the First Respondent. 3.5. Continuing to question the Claimant’s honesty and integrity in applying for and receiving income protection and accusing him of misleading his insurers. 3.6. Subjecting the Claimant to a barrage of correspondence and maintaining a hostile and aggressive tone and content in their communications with him. 3.7. The Second and Third Respondent’s, paying themselves interest on capital on or around 10 February 2021 but not paying the Claimant’s interest on capital until 1 April 2021. 3.8. Withholding the Claimant’s profit share. 3.9. The Claimant retiring from the First Respondent on 8 March 2021.[4]The complaints of a failure to make reasonable adjustments (sections 20 and 21 Equality Act 2010) are also not well founded and are dismissed.
REASONS
Conclusions
[1]The Claimant has brought 2 Employment Tribunal claims against the Respondents alleging unlawful disability discrimination and victimisation.[2]Claim 1 was presented on 16 April 2020 bringing complaints of direct disability discrimination, indirect disability discrimination, disability related harassment, failure to make reasonable adjustments and victimisation.[3]On 24 November 2020, the Respondents’ solicitors wrote to the Claimant’s solicitors making the following admissions on behalf of the Respondents:
Relevant law
[1]The Respondents admit liability to the Claimant under section 45(2) Equality Act 2010 on the following basis: 10.5 Reserved judgment with reasons – rule 61 2 March 2017a. Contrary to s15 Equality Act 2010, they treated the Claimant unfavourably because of something arising in consequence of the Claimant’s disability, namely his sickness absence and the funds he has received under his PHI cover by: i. Removing him from his roles as a Designated Member and Managing Partner of the First Respondent: ii. Taking steps to expel him as a member of the First Respondent: iii. Removing and reinstating him as a Person with Significant Control of the First Respondent: iv. Removing him from the First Respondent’s management and decisions making processes: v. Withholding management and accounting information relating to the First Respondent and excluding him from a partners meeting in January 2020.b. The treatment was not a proportionate means of achieving the legitimate aims of properly managing the First Respondent’s business.c. Contrary to s19 Equality Act 2010 they had a practice of holding partners meetings at the First Respondent’s Rotherham Office, instead of the Claimant’s home, which put the Claimant at a particular disadvantage and was not a proportionate means of achieving the legitimate aim of properly managing the First Respondent’s Business.d. Contrary to s20 Equality Act 2010 they failed to investigate and make such reasonable adjustments to enable the Claimant to work from home, continue with his management roles and/or return on a phased basis.e. The Second and Third Respondents are liable for the discrimination as the agents of the First Respondent which is liable as it is treated as having done their acts.[2]The Respondents admit that the Claimant is entitled to a declaration that the Respondents’ unlawfully discriminated against him as claimed in paragraph 120.1 of the Particulars of Claim.[3]The Respondents admit that the above admitted acts of discrimination caused the loss claimed in the second paragraph 120.2 and paragraph 120.4 of the Particulars of Claim namely:a. Injury to his health and feelings to be assessed.b. Financial loss (if any) to be assessed.c. Interest (if any)[4]Following those limited admissions of liability, the Claimant’s solicitors unsuccessfully attempted to broaden the scope of the admissions to include the disability harassment and victimisation complaints. On 1 10.5 Reserved judgment with reasons – rule 61 3 March 2017 December 2020, the Claimant accepted the Respondent’s admissions of liability in the terms set out in their solicitor’s letter of 24 November 2020. As a result, the Claim 1 liability hearing listed for 8 days in January 2021 was vacated.
Findings of Fact
[5]Judgment was then made by consent by Employment Judge Maidment in the following terms recorded in the judgment issued on 6 January 2021. To that judgment, in square brackets the Tribunal have added the dates of the admitted acts from the record of the preliminary case management hearing of 29 June 2020 and the further and better particulars of the claim provided by the Claimant. Claim 1 Liability Judgment dated 6 June 2021 “1. On the basis of admissions made by the Respondents in their representatives’ letter of 24 November 2020 and by consent it is declareda. The Claimant’s complaints of discrimination arising from disability (Section 15 of the Equality Act 2010) are well founded and succeed in respect of: i. The claimant’s removal from the role as designated manager and manging partner of the first respondent. [13.12.19] ii. The taking of steps to expel him as a member of the first respondent. [28.11.19- 13.12.19] iii. Removing and reinstating the claimant as a person with significant control of the first respondent [13.12.19] iv. Removing the claimant from the respondent’s decision making and management processes. [13.12.19] v. Withholding from him management and accounting information relating to the first respondent. [13.12.19] vi. Excluding the claimant from a partners meeting in January 2020.b. The Claimant’s complaints of indirect disability discrimination (Section 19 of the Equality Act 2010) are well founded and succeed in respect of the practice of holding partnership meetings at the first respondents Rotherham office. [December 2019]c. The Claimant’s complaint of a failure to make reasonable adjustments (Section 20 of the Equality Act 2010) are well founded and succeed in respect of a failure to allow the Claimant to work from home, continue with his management roles and/or return to work on a phased basis. [NovemberDecember 2019]d. The Second and Third respondents are liable for the aforementioned acts of unlawful discrimination as agents of the First respondent which is treated as having done their acts. 10.5 Reserved judgment with reasons – rule 61 4 March 2017 2. The Claimant’s remaining complaints are hereby dismissed upon his withdrawal of them. For avoidance of doubt, no breach of contract claim was brought by the Claimant in these proceedings and the Claimant has stated a wish to reserve his right to bring such a complaint. 3. The matter shall proceed to be listed for a remedy hearing and to hear an application by the Claimant for his costs in bringing these proceedings”.[6]The Claim 1 pleadings provided some background to the reasonable adjustments complaint and the admissions made in relation to that complaint. In the further and better particulars of the claim provided by the Claimant on 23 May 2020 (drafted by the counsel), the following provision criterion or practice (PCP) and substantial disadvantage were identified: “The First Respondent’s policy, criterion or practice, whether as a one off decision or otherwise (from November 2019 onwards) of not permitting a partner from undertaking work (including work ordinarily undertaken as a managing partner remotely) for the First Respondent unless supported by a full medical report, and or otherwise approved by the First Respondent. The substantial disadvantage is that the PCP placed the Claimant at a substantial disadvantage due to his vulnerability as a disabled person to suffering stress and distress and the heightened negative consequences of the same. (C1/1page 62 and 63)”. (All the highlighted text in these reasons is the Tribunal’s emphasis unless otherwise specified)[7]Leave had been granted for the Respondent to provide an amended ET3 response to the claim as clarified but the Respondents were content to rely on particulars of response to the reasonable adjustment complaint already provided in their response of 23 May 2020 (C1/1 page 50) which states: “It is not clear whether the Claimant is alleging that the failure to make reasonable adjustments is limited only to his ancillary duties or whether it is being alleged that the First Respondent failed to make reasonable adjustments to facilitate his return to his substantive role as a solicitor. The Respondents aver that it is self-evident that over a period of approximately 2 years up to the date of these particulars, the Claimant has not been able to carry out any work on a substantive basis and in that context it is not reasonable for a law firm to have key roles such as Managing Partner and those relating to regulatory compliance conducted by a person who has no involvement in the day to day operation of the business and is not able other than briefly to attend its offices. For those reasons and on the assumption that the Claimant’s pleading is only in relation to ancillary and regulatory functions rather than his substantive role, the First Respondent contends that it would not have been 10.5 Reserved judgment with reasons – rule 61 5 March 2017 reasonable to allow C to continue with those roles. Moreover, temporary reassignment of those unpaid ancillary and regulatory roles does not amount to a detriment in any event”.[8]Unfortunately, the liability judgment does not record any of the agreed facts upon which liability was agreed by the parties in Claim 1 and the ‘underlying factual disputes in this case which were not straightforward, indeed they are complex”’ (see preliminary hearing record of 29 June 2020) were never determined at a liability hearing and remain unresolved when Claim 2 was presented in June 2021.[9]Understandably, Mr Cordrey seeks to rely upon the Claim 1 admissions to persuade the Tribunal to find that liability is established for the alleged discrimination in Claim 2. At paragraphs 2-8 of his written closing submissions he puts his argument in this way: 2. “Plan A had to be shelved early into January 2020 when C’s solicitors intervened. But Plan B involved marginalising C with the hope that either he would resign or at least would represent no threat to R2 and R3 running the firm as they wanted. 3. R has admitted the discriminatory components of Plan B, including stripping C of all of his powers, removing him from management and decision-making processes and withholding management and accounting information (letter of 24 November 2020). 4. They have admitted that they did these things and they did them for discriminatory reasons at some point in Claim 1 period, October 2018 to 16 April 2020. 5. The question for this hearing is whether Plan B was halted on 16 April 2020 or whether it continued on 17 April 2020-the start of the Claim 2 period. 6. It seems highly unlikely that Plan B was halted on 16 April 2020 since R3 confirmed in her oral evidence that she believed that R’s actions which comprised Plan B were lawful at that date and continued to hold that view until early November 2020. 7. More bluntly one has to ask what evidence is there of a change of heart on 17 April 2020? What evidence is there that R2 and R3 who were hell bent on expelling C during claim 1 period, relented and decided they did not in fact want to side-line and exclude him from the firm? 8. This is where careful attention to R2 and R3’s treatment of C during the Claim 1 period is required since it informs the likelihood that R2 and R3 stopped discriminating against C on 16 April 2020” (all highlighted text in these reasons is the Tribunal’s emphasis unless otherwise stated)[10]From the Claim 1 pleadings the Tribunal have identified the dates of the admitted discriminatory acts, the last of which was a planned partnership meeting in January 2020 which did not take place following the Claimant’s solicitor’s intervention. All the other complaints of discrimination were withdrawn and dismissed. One of the detriment complaints that was 10.5 Reserved judgment with reasons – rule 61 6 March 2017 withdrawn and was dismissed is the ‘withholding of profit share’ which is a complaint that reappears and features prominently in Claim 2.[11]To provide some background to that complaint the Tribunal considered how that withdrawn complaint had been presented in the first claim on 16 April 2020. In the particulars of claim (POC Claim 1) this allegation is pleaded as an act of victimisation relying on the protected act of the Claimant’s solicitor’s letter dated 6 January 2020: “The claimant has received no profit share funds since commencing his sick leave in October 2018 despite the fact he is entitled to these. This has left the claimant unable to properly plan and manage his personal finances” (paragraph 121.7 POC Claim 1)”.[12]In the Claimant’s solicitors letter dated 6 January 2020 the profit costs issue is referred to in the following way: “Profit Share and Permanent Health Insurance. Our Client has personal Permanent Health Insurance provided by Aviva. During his sickness absence as two of the Designated Members you unlawfully sought to reduce our clients profit share on the basis that he has the benefit of Permanent Health Insurance. However, it then became clear that you had no authority to do so under the LLP agreement. Following the discovery that there was no legal basis or other basis on which you could lawfully deprive our client of his profit share whilst he was off work sick, in an email to our client dated 7 October 2019,Ms Russell sought to persuade our client not to take his full profit share whilst he remained off work sick and asked him to consider whether it was “morally right” to do so. Ms Russell also made the following entirely callous and discriminatory comment in connection with our client’s profit share “I know that none of your ill-health is your fault, but it’s not ours either”. Ms Lord then confirmed her agreement with Miss Russell’s discriminatory comments in an email of the same date. Notwithstanding the above, since our client (completely understandably) would not agree to the profit share reduction it was agreed that he would receive his full entitlement and the March 2019 accounts were subsequently approved and filed with Companies House on that basis”.[13]The Respondents resisted that complaint on the ground that it was ‘misconceived’ because the alleged act of victimisation was alleged to have occurred before the protected act.[14]The Claimant’s solicitors then provided further and better particulars of that claim on 13 July 2020 which put this complaint in a different way making it about the ‘distribution’ of the profit share funds and not about the ‘allocation’ of profit share: 10.5 Reserved judgment with reasons – rule 61 7 March 2017 “The claimant pursues this complaint in so far as it relates to profit share funds which would have been distributed after 6 January 2020 following approval of the accounts on 30 December 2019.The claimant was expecting a payment of his profit share after the accounts were approved on 30 December 2019 and payment became due after the protected act. However, no payment has been made. We believe this can be pursued as a section 15,13(1) and the missed payment which fell due after the protected act”[15]As at 13 July 2020, the detriment complaint had changed and the Claimant agreed that he had been correctly allocated his full profit share into his current account, his concern was whether he had ‘missed’ any payment on the distribution of unpaid profit share after 6 January 2020. As at July 2020 the Claimant knew, that he had not missed any payment because no payments of unpaid profit share had been made to any of designated members because of the lack of available funds. This allegation of disability discrimination and or victimisation was withdrawn by the Claimant and was dismissed on 6 January 2021. No admissions were made by the Respondents that profit share was withheld from the Claimant due to discrimination in Claim1. Claim 2[16]Nearly a year later, on 7 June 2021 the Claimant presented Claim 2 in which he alleged the Respondents had committed further acts of disability discrimination (discrimination arising from disability, a failure to make reasonable adjustments) and victimisation in the period 17 April 2020 to 8 March 2021.[17]At a preliminary hearing on 30 July 2021, Employment Judge Eeley consolidated the two claims and directed they should be heard by the same Tribunal. Claim 2 liability issues were to be decided in November 2021, followed by remedy hearing for (Claim 1 and 2) in February 2022. In the record of that hearing, Employment Judge Eeley flagged up the possibility that some remedy issues might be considered at the liability hearing if time permitted recognising the Tribunal’s priority was to decide the Claim 2 liability issues. A list of issues for Claim 2 liability and for Claim 1 remedy were identified and confirmed in the form agreed by the parties’ representatives.[18]For the Claimant, profit share makes up the bulk of the compensation the Claimant claimed in his schedule of loss for the Claim 1 admitted discrimination. The remedy issues (issue 3 and 4) identify that any loss that flowed from any act of unlawful discrimination was recoverable, otherwise there was no basis upon which the Tribunal could award compensation for profit share under section 124 Equality Act 2010. “3. Past financial losses (EqA 2010 section 124) 3.1. In accordance with EqA 2010 s124(2)(b),124(6) and Ministry of Defence-v- Cannock(1994) IRLR 509,what compensation is required to put the Claimant into the financial position he would have been in but for the unlawful discrimination. In particular: 10.5 Reserved judgment with reasons – rule 61 8 March 2017 3.2. But for the unlawful discrimination, what profit share would have been paid to the Claimant by the Respondents for the financial years 2018/2019 and 2019/2020:and 3.3. What sums has the Claimant received by way of Permanent Health Insurance during this period and should any or all of these sums be deducted from the loss of profit share when calculating any past financial loss? 4. Future financial losses ((EqA 2010 section 124) 4.1. In accordance with the principles set out at para 3.1 above, what, if any compensation related to the period from the remedy hearing onwards is required to put the Claimant into the financial position he would have been in but for the unlawful discrimination (the Respondent’s position is that there is no ongoing loss)”.[19]Given all the above, the Tribunal could see why this claim was complex. At the hearing Counsel invited the Tribunal to add further matters of complexity which were not included in the list of liability issues. Mr Cordrey invited the Tribunal to consider 2 ‘discrete issues related to remedy’ which he referred to in his opening skeleton argument (paragraphs 19, 22 and 23): “The first additional issue was whether R should be permitted to resile from a concession which it made regarding the award of profit share as part of Claim 1. R (through previous counsel) gave an unequivocal written assurance to C that the remedy that would be awarded to him by a Tribunal for the discriminatory acts it had admitted as part of Claim 1 would include his profit share. C will argue that the Tribunal should confirm that as per the concession profit share will be awarded to C with the only dispute being how to correctly calculate the profit share. It should be said that even if R is allowed to withdraw its concession, C will argue that the profit share loss flows naturally and directly from the admitted discrimination and should be awarded to C. The second additional question relates to a long running dispute between the parties. Whilst off sick C received monthly PHI payments pursuant to a personal policy he had taken out with Aviva. The parties ask the Tribunal to determine whether (as R says) any profit share awarded to C should have deducted from it those PHI payments or whether (as C says) the so called “insurance exception” applies permitting C to keep his PHI payments on top of any profit share awarded”.[20]Mr Burns does not accept that such a concession has been made by the Respondents. He relies on the principle of ‘res judicata’ to defend any attempt made by the Claimant to try to go behind the terms upon which liability in Claim 1 was agreed and correctly recorded in the liability judgment, binding on this Tribunal. For the Respondent, it is contended that the true construction of the LLP Agreement and the concerns that it could be viewed as insurance fraud, were the underlying disputes that 10.5 Reserved judgment with reasons – rule 61 9 March 2017 caused the parties to fall out so badly. As part of the remedy for Claim 1 and Claim 2, the Claimant claims that he was entitled to be paid profit share and has not been paid due to discrimination which is denied by the Respondent. The respondents dispute that the ‘insurance exception’ would apply to any award of compensation for discrimination made by the Tribunal which would have to be assessed on the basis of proof of actual financial loss suffered by the Claimant as a result of the admitted discrimination.[21]Mr Burns did agree with Mr Cordrey that the ET should (if possible) determine the correct interpretation of the LLP and the interaction with the PHI policy as an issue at this hearing. In particular, he invited the Tribunal to decide whether the Respondents are correct that:a. “The PHI Policy does not permit C to be in receipt of LLP income while also receiving PHI payments.b. PHI payments should be taken into account when calculating his entitlement to drawings of profit share under the LLP Agreement when he is not able to work through illness.c. R’s accept the C has not been paid both PHI and profit share drawings. R’s contend that this is not a detriment or discrimination but in accordance with the proper construction of the LLP Agreement and the terms of the PHI policy. R’s argument is simple. It is the position initially maintained by C until he changed his mind in 2019.d. The reason that no sums in addition to drawings have been paid to R2 R3 and C is nothing to do with discrimination. Rather it is due to the financial difficulties of the LLP during the Covid Crisis. The LLP does not have excess funds from which the members can take additional drawings of profit share in any event. It is surviving due to borrowing including a government Covid Loan. R’s believed that to claim PHI whilst receiving profit share would be dishonest and it was R’s fear of being accused of being involved in dishonesty which caused all the events admitted in Claim 1.e. Although it is not an issue of discrimination in the list of issues, this issue informs the reason for R’s actions and reveals that the non-payment of profit share plus PHI is not a detriment it is the correct contractual entitlement. The parties both invite the ET to resolve this issue and determine the correct construction and interaction between the LLP and PHI Policy”.f. It was also a matter of remedy in Claim 1 and Claim 2. C is claiming in the ET he is entitled to his full earnings, his full income as a member of R1 throughout the period of his sick absence. That is in respect of the same period that he is apparently still telling Aviva, the PHI insurer the opposite-that he was totally incapable of work and had no partnership income. This was the reason R’s had concerns about C’s integrity and his misleading Aviva-it was nothing to do with his disability or discriminationg. For the LLP Agreement to make commercial sense the allocation of profit share and drawings under clause 8 and 9 must by necessary implication be read as subject to a deduction of PHI payments 10.5 Reserved judgment with reasons – rule 61 10 March 2017 received by the member pursuant to clause 18.1. It was accepted there is no express term ‘stopping profit share income accruing to the members current account while in receipt of PHI’ but invited the ET ‘if possible’ to imply such a term into the LLP Agreement for it to ‘make any sense’.[22]Both Counsel agreed that the Tribunal should as a minimum decide liability for the discrimination and victimisation complaints brought by the Claimant as a designated member against the First Respondent as a Limited Liability Partnership (LLP) and against the other designated members Miss Russell (Second Respondent) and Mrs Lord (Third Respondent) as the agents of the First Respondent. Those complaints are brought under section 45 Equality Act 2010, which provides that “an LLP must not discriminate against a member by subjecting that member to a detriment or by victimising the member or by failing to make reasonable adjustments” (If the duty to make reasonable adjustments is in fact engaged).[23]The applicable law was not contentious. Mr Burns has correctly and succinctly identified the questions for the Tribunal which are largely questions of facts. Was the Claimant subjected to the detriments and/or unfavourable treatment he alleges? If so, what was the reason for that treatment? Was it because he complained of disability discrimination in Claim 1? If the reason was related to his cancer or depression can the Respondent show it had justification for what they did? Was C put at a substantial disadvantage by the alleged PCP’s and if so, was there a failure to make reasonable adjustments? If any of the acts are discrimination- were they brought in time?[24]The Tribunal proposes in these reasons to deal with those complaints by grouping the alleged detriments/unfavourable treatment together into 4 discrete areas: ‘the profit share dispute related detriments’ (withholding profit share, delayed payment of interest on capital, and the continued questioning of the Claimant’s honesty and integrity in applying for and receiving PHI ) the ‘work related detriments’ (failing to make reasonable adjustments, failing to reinstate as Managing Partner, withholding information and exclusion from decisions and meetings), then the ‘barrage of hostile correspondence’ and the ‘retirement’ detriments/ unfavourable treatment.[25]In making its findings of fact, the Tribunal has carefully considered and evaluated the evidence provided by both parties focussing in particular on the contemporaneous documentary evidence because it was alert to the risk that over time, during a contentious and lengthy litigation process, positions might change which do not accurately represent the facts as they occurred. It was important for the Tribunal to find the facts based on the best evidence to decide what had occurred rather than the picture the parties might now want to represent with the benefit of hindsight.[26]In carrying out that evaluative exercise the Tribunal reminded itself of the burden of proof provisions that apply in discrimination and victimisation complaints which Mr Cordrey has helpfully identified in his opening skeleton argument (paragraph 13). “Section 136 Equality Act 2010 Burden of Proof. 10.5 Reserved judgment with reasons – rule 61 11 March 2017(1) This section applies to any proceedings relating to a contravention of this Act.(2) If there are facts from which the court could decide in the absence of any other explanation that a person (A) contravened the provision concerned the court must hold that the contravention occurred.(3) But subsection (2) does not apply if A shows that A did not contravene the provision”.[27]It is therefore agreed that the Claimant must establish a prima facie case of unlawful disability discrimination and victimisation (contraventions of Section 15, 20(3) & 21, 27 Equality Act 2010) before the burden of proof shifts to the Respondents to show it did not contravene those provisions. Mr Cordrey submits that “in a case where R had admitted certain acts were perpetrated for discriminatory reasons, that where R continue to perform the very same acts (as well as some new but connected acts) this in and of itself meets the first stage of the burden of proof and results in the burden of proof reversing. Once the burden of proof reverses it becomes for R to prove that the treatment of C was “in no sense whatsoever’ because of something arising in consequence of C’s disability or because of the protected acts”.[28]It was important to remember that while past discrimination might be an indicator of future discrimination the Claimant still has the burden of proving, on the balance of probabilities, those matters in Claim 2 which he wishes the Tribunal to find as facts from which the inference could properly be drawn (in the absence of any other explanation) that an unlawful act was committed. That is not the whole picture since, because along with those facts which the Claimant proves the Tribunal must also take account of facts proved by the Respondent which could prevent the necessary inference being drawn. It was also important to remember that all the complaints of harassment related to disability in Claim 1 and Claim 2 had been withdrawn and some of the complaints of discrimination arising from disability in Claim 2 were withdrawn at the hearing (see paragraph 1 of the Tribunal’s Judgment). Leaving the following remaining complaints of unlawful disability discrimination and victimisation for the Tribunal to determine: Claim 2 Liability Issues Discrimination arising from disability (section 15 Equality Act 2010)[29]Did the alleged conduct occur? Did it amount to unfavourable treatment? If so, was the reason for the unfavourable treatment something arising in consequence of the Claimant’s disability?[30]The Claimant alleges that the Respondents subjected him to the following unfavourable treatment. 30.1. The withholding of the Claimant’s profit share. 30.2. Continuing to question the Claimant’s honesty and integrity in applying for and receiving income protection (PHI) and accusing him of misleading his insurers. 10.5 Reserved judgment with reasons – rule 61 12 March 2017 30.3. The Second and Third Respondents, paying themselves interest on Capital on or around 10 February 2021 but not paying the Claimant’s interest on Capital until 1 April 2021. 30.4. Failing to reinstate the Claimant to the positions of managing partner: 30.5. Withholding information from the Claimant: minutes of partner’s meetings: details of management decisions and supporting documents and correspondence: budgets and finance reports including information about Work in Progress. 30.6. Excluding the Claimant from partner’s and/or management meetings. 30.7. Excluding the Claimant from management decisions including the decisions to appoint new accountants, to terminate the First Respondent’s relationship with Peninsula, and to make a financial settlement to a former member of the First Respondent. 30.8. Subjecting the Claimant to a barrage of correspondence and maintaining a hostile and aggressive tone and content in their communications with him. 30.9. The Claimant retiring from the First Respondent on 8 March 2021.[31]The ‘something’ arising in consequence of disability were:(a) The Claimant’s receipt of PHI payments (and/or his assertion that those payments could be retained by him in addition to his profit share entitlement)(b) The Claimant’s inability or perceived inability to discharge his full role at the First Respondent and/or(c) The Claimant’s sickness absence.[32]If the Claimant proved the unfavourable treatment was something arising in consequence of the Claimant’s disability the Respondents contend the unfavourable treatment is a proportionate means of achieving a legitimate aim. Failure to make reasonable adjustments (Section 20(3) and 21 Equality Act 2010)[33]The Claimant complains that the First Respondent failed to make reasonable adjustments. The Claimant relies upon section 20(3) Equality Act 2010 and complains that between 17 April 2020 and 8 March 2021 the First Respondent applied the following provision criteria or practices (PCP’s): 33.1. A requirement of being fully fit to return (rather than accepting fitness to perform a therapeutic level of work). 33.2. A requirement of being fit for a full time return to participate in the First Respondent rather than accepting a phased return. 33.3. A requirement on the Claimant to initiate a return/prove his fitness to return. 33.4. Holding partners’ meetings at the First Respondent’s Rotherham Office rather than at the Claimant’s home. 10.5 Reserved judgment with reasons – rule 61 13 March 2017[34]If those PCP’s were applied by the Respondent did the PCP’(s) either individually or cumulatively place the Claimant at a substantial disadvantage in comparison with non-disabled persons? If so, did the Respondent take such steps as were reasonable to avoid the disadvantage to the Claimant?[35]The Claimant claims the following adjustments should have been made:16.1 enable him to work from home16.2 continue/recommence his management roles16.3 return to work on a phased basis16.4 hold partners meeting at his house. Victimisation (section 27 Equality Act 2010)[36]It is accepted the Claimant had done 2 protected acts: (1) the Claimant’s solicitors’ letter of 6 January 2020 and bringing Claim 1 (Case Number 1802068/2020).[37]The Claimant will rely upon the same 9 alleged acts of unfavourable treatment also as detriments he was subjected to because he had done protected acts. Jurisdiction[38]It was agreed that the claim was brought in time in relation to the Claimant’s retirement on 8 March 2021. All the pre-retirement discrimination allegations are out of time, unless the act is part of a continuing act ending in retirement or time is extended for any unlawful act on just and equitable grounds.[39]The Claimant alleges the Second and Third Respondent continued their discrimination from 17 April 2020 by side-lining and freezing the Claimant out of the First Respondent in the ways alleged to the point where the Claimant’s position was untenable, and he was forced to resign in response to their discriminatory behaviour. Disability[40]Disability is conceded in relation to the Claimant’s impairments of cancer, depression and stress. It is conceded that the Claimant was a disabled person by reason of the impairment of cancer in Claim 1. In the Claim 2 period the Respondents concede they had knowledge of the impairments of ‘a depressive’ disorder’ and/or ‘stress related problem’ as a result of the fit notes provided by the Claimant during the Claim 2 period. The Respondents concede they had knowledge those impairments were disabilities from 27 July 2020 as a result of the GP’s report disclosed by the Claimant’s solicitors for the purposes of judicial mediation. The agreed limitations on the Claimant’s fitness/ability to return to work[41]During the hearing, the Tribunal requested copies of all the fit notes that the Claimant had provided to the Respondents at the material time. A supplemental bundle (pages 1931- 1945) was produced with all the fit notes issued by the Claimant’s GP covering the Claimant’s absence from work from 12 July 2018 to his retirement on 8 March 2021. All the fit notes confirm that the Claimant was unfit to perform any work for the whole of that period. 10.5 Reserved judgment with reasons – rule 61 14 March 2017[42]From 12 July 2018 up until 22 January 2020 the reason for the Claimant’s unfitness to work was ‘cancer’. From 22 January 2020 to 22 June 2020 the reason was ‘depressive disorder’. From 22 June 2020 until 27 August 2020 the reason was ‘reactive depression (cancer diagnosis stressful situation at work/stress at work)”. From August 2020 until the Claimant’s retirement on 8 March 2021 the reason was ‘stress related problem’.[43]The Claimant accepted that for the whole of the Claim 2 period, his GP had declared that he was not fit to work and had ruled out any return to work with adjustments. As well as the ‘GP limitation’ there were 2 other limitations that prevented the Claimant from returning to work for the whole of the Claim 2 period. First the ‘therapeutic contact only’ limitation imposed by the insurer, Aviva. As a precondition of the PHI benefits paid to the Claimant from October 2018, the Claimant was required to provide ongoing medical assessments confirming he was ‘totally’ unable to work. Aviva only permitted the Claimant to have ‘therapeutic contact’ with work limited to the occasional catchup coffee and attending monthly partners meetings. Second, there was the Claimant’s ‘self-imposed’ limitation. From May 2020, the Claimant was unwilling to have any direct contact with Mrs Lord or Miss Russell. From September 2020 until his retirement in March 2021 he was only willing to have contact with them via post.[44]The undisputed facts were that for nearly 3 years the Claimant was absent from work due to ill-health. He had declared to the Respondents and to the Insurer that he was totally unable to perform any work. For the whole of the Claim 2 period, medical opinion had ruled out the possibility of any return to work with or without adjustments and for the last 7 months of the partnership the Claimant was only willing to have contact by post with his partners.[45]In the light of those limitations, Mr Burns invited the Tribunal to find that the Claimant’s complaints of unlawful disability discrimination were fundamentally contrary to the evidence and the undisputed facts. He submits the remaining complaints are brought on the basis that the Claimant was fit to return to work, he was able to resume his roles as managing partner client care partner: compliance COLP: compliance COFA: credit controller and/or data protection manager and was able to have greater involvement in the day to day running of the partnership, when he knew that was never the case. While some complaints were abandoned at the hearing and withdrawn others have continued to be pursued, when they were illfounded for the same reason as the abandoned complaints.[46]The Tribunal considered whether that submission was supported by the findings of fact it made on the remaining allegations of discrimination and victimisation. Assessment of Credibility[47]The Tribunal saw documents from eight large lever arch files. There were 4 bundles for Claim 1(remedy): C1 (1-4) and 4 bundles for Claim 2 (liability): C2 (1-4) running to just under 4000 pages. Further documents were added with the permission of the Tribunal. In these reasons page numbers and bundles will be identified as C1 or C2 followed by the bundle number (1-4) and then the page number (although some documents appear in both C1 and C2). The Tribunal spent 1.5 days reading the documents from the agreed reading list which comprised the pleadings for Claim 1 and Claim 2 10.5 Reserved judgment with reasons – rule 61 15 March 2017 and the parties very lengthy witness statements prepared for Claim 1 and Claim 2. In relation to the relevant contemporaneous documents the parties accepted the reading time did not allow for that evidence to be considered in detail during the hearing and it was accepted that it would have to be considered in more detail during the deliberations. The Tribunal would have been better assisted by the parties/legal representatives at the hearing, if only relevant documents were included in the bundle and if concise witness statements were prepared including only relevant evidence on the complaints and issues.[48]We heard evidence from witnesses in the following order:11.1 Claimant,11.2 Mrs Elizabeth Lord, the Third Respondent,11.3 Miss Hester Russell, the Second Respondent.[49]The Tribunal found that Mrs Lord and Miss Russell gave their answers to questions in a straightforward, direct and open way and those answers were supported by the contemporaneous documents. In contrast, at times, the Claimant gave very unsatisfactory evidence and his answers did not accurately reflect the events or his views at the time. The Tribunal found the Claimant was evasive at times and his evidence was misleading and contradicted by the contemporaneous evidence. In the written closing submissions Mr Burns has identified some of the evidence the Claimant gave on key issues to try to persuade the Tribunal that the Claimant was not a credible witness and reluctantly invited the Tribunal to find that the evidence shows the Claimant had been ‘dishonest’.[50]The Tribunal appreciated that was a seriousness its task of evaluating the quality of the evidence provided, to assess the credibility and truthfulness of the witness evidence. It made that assessment after making all the findings of fact, by stepping back and considering the totality of the findings it had made in the round. At the end of its deliberations the Tribunal could see some force in Mr Burns submission. It was a difficult decision to make given the serious consequences it will no doubt have for the Claimant personally and for his reputation after more than 20 years as a practising solicitor. However, by bringing these allegations to a hearing, the Claimant had decided the complaints he has made should be open to that level of scrutiny and be decided by the Tribunal on the evidence provided by both parties. He also affirmed that the evidence he gave to the Tribunal was the truth.[51]The Tribunal considered whether the unsatisfactory evidence the Claimant gave could be explained as a mistake or misremembering, because this was a particularly difficult time for the Claimant because of his ill-health. The difficulty for the Tribunal was that neither of those explanations can be made to fit with the unsatisfactory evidence. The Claimant has during this difficult time been very proactive in making informed decisions on any disputed matters. His interactions with others(the Respondents, the insurers, the accountants, the HMRC, solicitors) demonstrate his ability to assert his position, to use arguments and select information to persuade, to stand his ground when he disagrees, to provide detailed counterarguments and to deflect blame onto others, all while he was suffering with ill-health. 10.5 Reserved judgment with reasons – rule 61 16 March 2017 Unfortunately, and very reluctantly we agreed with Mr Burns, that the Claimant was not a truthful witness and that he has attempted to mislead the Tribunal in some material aspects by the evidence he gave which is referred to in the findings of fact made. For those reasons where there were any material disputes of fact the Tribunal was persuaded that the Respondents witness’ evidence was far more credible and reliable than the Claimant’s evidence and should be preferred and accepted.
Findings of fact
[52]The Claimant is a solicitor and was the Managing Partner and co-founder of Grayson Willis Bennett (GWB) solicitors in 1999 which became a Limited Liability Partnership (‘LLP’) in 2012. He was absent from work due to illhealth from July 2018 and retired on 8 March 2021.[53]On 1 October 2015, GWB LLP merged with Harthills Solicitors and the merged LLP was renamed “GWB Harthills LLP” (“the First Respondent”). The Second Respondent (“Mrs Lord”) and the Third Respondent (“Miss Russell”) were both former partners at ‘Harthills Solicitors’ which was an ordinary partnership not an LLP. The Claimant and Miss Russell specialised in crime. Mrs Lord specialised in care proceedings and family law.[54]After the merger, the Claimant remained the Managing Partner. He was the Legal Aid Agency Contract Manager (LAA), the Compliance Officer for Finance and Administration (COFA), the Compliance Officer for Legal Practice (COLP) and the Data Protection Officer.[55]A limited liability partnership is a body corporate with a separate personality from its members and allows the members a measure of limitation in respect of their own personal liabilities. In return for those measures the LLP is registered with Companies House as a lawful business carried out by the designated members with a view to making profits. The LLP must prepare accounts on a true and fair basis, have these accounts audited (subject to audit thresh holds) and have them filed on public record at Companies House. In broad terms an LLP is tax transparent like any ordinary partnership and the designated members of the LLP are treated as selfemployed for tax purposes, taxed on the profits of the LLP in accordance with their profit share entitlements (whether or not those profits are actually distributed to the members).[56]LLP’s have become the modern way in which many law firms now operate. The turnover of the business (gross profit) is calculated based on the legal services provided by the LLP to clients recorded as its ‘work in progress’ irrespective of whether that work in progress is realised in payment for the legal services provided. Tax for a particular year is based on the gross profits at the end of the LLP’s year end accounts in the relevant tax year. If the LLP has made profit each designated member is allocated their profit share. At the end of each accounting period, profit share is distributed provided the funds are available in the LLP’s bank account. Each partner individually completes a tax return showing his/her share of partnership profits corresponding to the partnership return. The tax is paid by the LLP in 2 instalments at the end of January and July each year and is deducted from the partners individual current accounts at the end of the accounting year. 10.5 Reserved judgment with reasons – rule 61 17 March 2017[57]The Claimant was very familiar with the LLP model of partnership having been the Managing Partner of GWB LLP since 2012. The Claimant was registered with Companies House as a ‘person of significant control’ in the First Respondent. As the Managing Partner he had overall responsibility for managing the business. In particular, responsibility for managing the financial affairs of the LLP including budgets, billing, work in progress, financial forecasts, planning, financial statements, working with the accountants to prepare the final accounts, members individual tax, partnership tax, the calculations for the annual allocation and distribution of profits.[58]It is agreed that from 2017 an unsigned Limited Liability Partnership agreement governed the relationship between the partners and the LLP. The agreement records that “The Members have agreed to enter this agreement with the LLP to set out the basis on which the LLP is to be organised and the rights and obligations of the Members of the LLP”. At the material time the Claimant, Miss Russell and Mrs Lord, were the only ‘designated members’ (equity partners) each entitled to equal profit share of the net profits each year of 33.3%. (All highlighted text is Tribunal’s emphasis unless otherwise specified)[59]There was no express term which allowed profit to be stopped for any designated member for any reason including ill-health absence (irrespective of the length of the absence) Clause 8 confirms the level of net profit is determined by the Annual Accounts as prepared by the First Respondent’s accountants and signed off by the Members. It provides that: “The profits of the LLP shall be divided between the members in the Agreed Proportions and allocated to the Members’ current accounts with the LLP as soon as the annual accounts for the relevant Accounting Period are approved by the Members” 60. ‘Drawings’ are monies taken out of the LLP by way of a monthly income on account of profit share with the amount of drawings deducted from the profit share of that member in the final year end accounts. The LLP agreement permits the members to decide how much is paid as drawings on account of the members share of profits subject only to “the LLP retaining an appropriate provision for the relevant member’s personal tax liability” (clause 9) .The level of drawings agreed by the designated members was £5000 and additional sums could by drawn by agreement and were required to be accounted for by that member from their current account at the year end.[61]Each designated member had invested £75,000 capital in the LLP recorded in their Capital Account’s and was entitled to be paid interest on their Capital investment.[62]At the material time, Mr Mike Jones was the only ‘fixed share member’ and partner. He was not a designated member or a party to the LLP agreement. Clause 12 of the LLP agreement makes express provision to stop a fixed share member’s entitlement to profit share during a period of illness or incapacity and states: “12. Fixed Share Members 10.5 Reserved judgment with reasons – rule 61 18 March 2017 12.1(g) for any period of illness or incapacity exceeding 6 months absence in any year or lesser periods totalling 6 months in any period the Fixed Share Member shall not be entitled to any profit share.”[63]The ‘members’ are referred to as the ‘partners’ in the LLP agreement although equity in the LLP was only held by the designated members. For ease of reference the Tribunal have used the terms ‘partners’ or ‘designated members’ and the ‘firm’ or ‘LLP’ interchangeably to reflect how the parties referred to themselves at the relevant time in the contemporaneous documents.[64]Profit share is therefore payable in three ways, monthly drawings on account of profit, payments of income tax on profit share to HMRC on behalf of each partner and as additional drawings of profit share as decided by the partners, if there was any excess drawings available in the partners current accounts and the firm has the available funds at the year end to pay that surplus out. This is because the gross profit of the firm is based on the ‘work in progress’ and only when that work in progress is realised into cash funds in the LLP’s bank account can any unpaid profit share be distributed to the members from their current accounts. The partnership statements from 2016 to 2021 onwards show that an equal share of profit has always been allocated to each designated member into their current account.[65]Upon the Claimant’s retirement from the LLP on 8 March 2021, he was no longer a designated member and became an ‘outgoing member’ of the LLP. His current and capital account credit balances are transferred to become a debt of the firm. The Claimant is treated as an unsecured creditor of the LLP to be repaid in accordance with the terms agreed in the LLP agreement (by 36 monthly instalments).[66]The relevant clauses of the LLP agreement dealing with Outgoing Members and Interest on Late payments are set out below. Clause 21.3(b)(v) makes it clear that the designated members agree it is for the LLP Accountants, acting as experts not arbitrators to decide the sums to be paid to the Outgoing Member to represent his share at his leaving date. “21. Entitlements of Outgoing Members. 21.3 After his Leaving Date the LLP shall: (b) in accordance with clause 21.5 pay the Outgoing Member:(i) the amount of any capital which he is entitled to be credited by the LLP to his capital account:(ii) any sums due to him in respect of loans, loan interest and interest on capital in the LLP:(iii) any undrawn balance of his profit share in respect of any Accounting Period prior to the Accounting Period in which the Outgoing Members leaving date occurred less any proportion of income tax as the Accountants advise is applicable to any period prior to his Leaving Date:(iv) any undrawn balance of profit share in respect of the Accounting period in which the Outgoing Member’s 10.5 Reserved judgment with reasons – rule 61 19 March 2017 leaving date occurred and such sums to which he is entitled to be credited by the LLP to his current account less any proportion of income tax as the Accountants advise is applicable to the period ending on his Leaving Date: and(v) any sums as in the opinion of the Accountants (acting as experts and not as arbitrators) are required to be paid to the Outgoing Member to represent the value of his share in the LLP at his Leaving Date. 21.4 The LLP shall calculate the sums under clause 21.3 by reference to the annual accounts of the LLP (apportioned, if relevant in respect of the Accounting Period in which the Outgoing Members Leaving Date occurred) prepared using the same policies and principles as used in the preparation of the annual accounts for the preceding 2 Accounting Period (Termination Accounts). As soon as reasonably practicable after an Outgoing Member’s leaving date the Members shall instruct the Accountants to prepare the Termination Accounts. 21.5 Subject to any retention pursuant to clauses 21.6 and 21.7, the LLP shall pay the sums under clause 21.3, in 36 equal monthly instalments or as otherwise agreed by all the Designated Members on the first Business Day of each month commencing on the first Business Day of the month immediately following the agreement of the Termination Accounts provided always that the LLP may determine in its absolute discretion to make any or all of such payments at an earlier date. 21.6 The LLP shall be entitled to deduct and retain out of any sums, payable to the Outgoing Member pursuant to clauses 21.2 and 21.4 such sum as the Outgoing Member owes the LLP. In the event, that the Outgoing Member owes an amount to the LLP, that exceeds any sums calculated pursuant to clause 22.2(b)(Outstanding Balance) the Outgoing Member shall pay the Outstanding Balance to the LLP within 45 Business Days of the Accounting Reference Date in respect of the Accounting Period in which the Outgoing Member’s Leaving Date occurs. 21.7 The LLP shall be entitled to deduct and retain out of any sums payable to the Outgoing Member pursuant to clauses 21.2 and 21.4 such sum as the LLP shall, acting reasonably, estimate, and in such order or priority as the LLP shall, acting reasonably, determine, to be necessary or sufficient to discharge all or any liability attributable to the conduct of the Outgoing Member amounting to a breach of this agreement but the LLP shall have an obligation to pursue and resolve any such liability as soon as reasonably practicable and then account to the Outgoing Member promptly for any balance(if any) of any such sum retained after discharging any such liability. Any dispute over the deduction and retention of sums payable under this clause shall be referred to ADR under the provisions of clause 31. 10.5 Reserved judgment with reasons – rule 61 20 March 2017 21.8 The Designated Members shall notify details of any outgoing Member to the registrar of companies in accordance with the Act. 28. Interest on Late Payment 28.1 Where a sum is required to be paid under this agreement, but is not paid before or on the date the parties agreed, the party due to pay the sum shall pay interest on that sum at rate of 8% above the base lending rate from time to time of the Bank per annum beginning with the date on which payment was due and ending with the date the sum is paid(an the period shall continue after as before judgment). Interest shall accrue on a daily basis and be compounded quarterly.” Allegation 1: Withholding Profit Share The Pleadings[67]As at 7 June 2021, when the Claimant presented his second claim the asserted facts relied upon to support that complaint are set out at paragraph 26 and 33-35 of the Particulars of Claim (C2/1pages 35-37) as follows: “26. The Respondents have continued to deny that the Claimant is entitled to his full profit share and have continued to withhold his profit share. Profit Share33. Pursuant to the LLP agreement, the Claimant, Second Respondent and Third Respondent were entitled to 33.3% each of the First Respondent’s net profit each year. As set out above the first admitted act of discrimination relating to the First Claim was the commencement of attempts to expel the Claimant from the Respondent on 28 November 2019 with a further range of discriminatory steps taken to marginalise and remove the Claimant throughout November and December 2019 and January 2020. Around January 2020 the respondents made the decision to withhold the Claimant’s profit share, ostensibly on the basis that he was not entitled to payment of his profit share and at the same time retain income protection which he had been paid in consequence of his disability. As part of the First Claim the Respondents admitted that the withholding of profit share for 2018/19 and 2019/20 was a loss which flowed from the admitted discrimination.34. The Claimant retired from the First Respondent on 8 March 2021. Had he not retired and had he continued as a partner until the age of 65 he would have received further profit share payments for 2020/21,2021/22,2022/23 and for part of the financial year 2023/24. The Claimant has asserted in the First Claim that if it was not for the treatment comprised in the admitted discrimination he would have continued in his role as Managing Partner of the First Respondent until retirement at 65 and as such the loss of those future years of profit share flows naturally and directly from the admitted discrimination in the First Claim. 10.5 Reserved judgment with reasons – rule 61 21 March 201735. Further or alternatively, the Claimant claims that his decision to retire was significantly influenced by the discriminatory conduct of the Respondents as particularised above(and claims that the retirement itself was an act of discrimination on the Respondent’s part).Whether taken cumulatively with the admitted discrimination of the First Claim or taking the conduct particularised above on its own the loss of the future years of profit share flows naturally and directly from the Respondent’s discriminatory conduct ”[68]The relevant parts of the Respondents’ response resisting that part of claim (C2/1page 56/57) are as follows:37. “With regard to paragraph 26. It is denied that the Respondents have continued to withhold his profit share due to discriminatory reasons rather profit share was not paid to the Claimant and or the Second and Third Respondents because of their unresolved dispute and the available funds of the First Respondent were not available to do so, not least due to the impact of Covid 19 pandemic. In particular the partners meetings minutes of 24 August 2020 stated that the First Respondent “do not have any savings - hand to mouth” and again in the partners meetings of January 2021, it was minuted that the Second and Third Respondents felt the firm is at “severe risk” if they did not press ahead with a loan. Therefore, it has been evident to the Claimant that the Respondents’ have not withheld the Claimant’s profit share for discriminatory reasons. Further the Claimant is estopped from bringing a new claim on the same or substantially similar facts especially when the right to do so was not expressly reserved. In the alternative the limitation period to pursue this claim within the Second Claim may have ended in circumstances where it has been reasonably practicable for him to bring the claim as he has been legally represented throughout it would not be just and equitable to extend the time for presenting the Second Claim. Profit Share38. It is agreed that the Claimant retired from the First Respondent on 8 March 2021.It is agreed that had he not retired and had he continued as a partner until the age of 65,he would have received further profit share payments for 2021/22 2022/23 and for part of the financial year 2034/24 subject to any amendments to profit share entitlement arising from any future admission of new partners.39. It is denied that if it was not for the treatment comprised in the admitted discrimination arising from disability that the Claimant would have continued in his role as Manging Partner of the First Respondent until retirement at 65 and as such loss of those future years of profit share flow naturally and directly from the admitted discrimination in the First Claim. The Respondents reserve their position pending updated 10.5 Reserved judgment with reasons – rule 61 22 March 2017 medical evidence establishing that he would have been able to work as Managing Partner until retirement at age 65. 40. It is denied that the Claimant’s claim that the decision to retire was significantly influenced by the discriminatory conduct of the Respondents as particularised (and claims that the retirement itself was an act of discrimination on the Respondents’ part) whether taken cumulatively with the admitted discrimination of the First Claim or taking the conduct particularised on its own. It is denied that the Claimant’s act of retiring without notice is an act of discrimination on the Respondents’ part. It is further denied that the loss of future years of profit share flows naturally and directly from the respondent’s discriminatory conduct”. The Claimant’s witness statement[69]The evidence the Claimant relies upon in relation to the alleged detriment/unfavourable treatment of ‘withholding profit share” is set out at paragraphs 36-39 of his witness statement. The Tribunal has set out that evidence in full and the documentary evidence referred to in order to fairly and accurately reflect that evidence to resolve the factual disputes, to assess the credibility of that evidence and the inferences that can properly be drawn from it. (For ease of cross-reference later in these reasons the Tribunal have added subparagraphs 69.1- 69.8 in order to identify the documents the Claimant refers to in his statement which are divided into the correspondence with the Respondents about the payment of his current and capital accounts upon retirement and correspondence with Aviva about the PHI). Withholding profit share “36.The Respondents have continued to withhold my profit share since October 2018 and they have repeatedly stated that they will only pay me the profit share due to me if my PHI benefit is deducted (there are many examples of the Respondents stating this in the bundle at pages 742,776-781 and 782-783). This is despite Aviva confirming that my profit share could be paid directly into my pension fund with no impact on my right to receive PHI payments (pages 1376 and pages 1383). I have no doubt that the continuing withholding of my profit share is discriminatory.69.1 C2/2 pages 724-725: Letter dated 26 March 2021 from the Claimant to the Respondents “Payment of Monies Due. With regard to the payment of monies due whilst there is no mechanism for the repayment of Capital in full, it is open to the Designated Partners to authorise such a payment. I find it remarkable that you have refused to pay me any part of my profit share since October 2018 in breach of the LLP 10.5 Reserved judgment with reasons – rule 61 23 March 2017 agreement yet you are now seeking to hastily pay me a disputed sum so close to the final Remedy Hearing. It is premature for you to make any payments of the monies due from my current account. The final and retirement accounts have yet to be prepared and the deduction of any Permanent Health Insurance monies is not accepted by me and will be determined by the Employment Tribunal at the Remedy Hearing. For the avoidance of doubt, I remain of the firm view that the profit share payments should not be made until the correct sums due to me have been determined by the Employment Tribunal. However, in the event that you choose to ignore my perfectly reasonable request in respect of profit share payments, please ensure that any profit share payments are clearly identified to enable me to transfer them straight to my pension pot.”69.2 C2/2 pages 741-742: Letter dated 31 March 2021 from Respondents to the Claimant: “Payments of Monies Due With regard to the payment of monies due, we agree that there is no mechanism for the repayment of Capital in full, and that it is open to the Designated Partners to authorise such a payment. It is not remarkable that you have not received any part of your profit share since October 2018 as we have been in serious dispute since that date. The other Designated Partners are in the exact position that you are in regarding non-payment of profit share. We reject the assertion that we are now seeking to hastily pay you a disputed sum so close to the final remedy hearing rather we are making appropriate financial arrangements as a direct result of your decision to resign with immediate effect on 8 March. We have asked the Accountant what is due to you and I have attached their calculation for your information. The monthly figure of £5,689.17 represents what you are owed from both your capital and current account, less PHI payments you have received. It also takes into account the overpayment of tax you have made. It envisages you making your own claim to HMRC for those monies to be reimbursed as this is your individual tax and cannot be claimed back by the LLP. I confirm that we will revisit what is owed to you following the outcome of the Remedy Hearing. We note your concern regarding it being premature to make any payments from your current account and accordingly the payments in April, May and June 2021 will be made to reduce what is owed in your capital 10.5 Reserved judgment with reasons – rule 61 24 March 2017 account. I confirm that we will also revisit this following the outcome of the Remedy Hearing as we prefer to reduce both your capital and current accounts. So, to confirm payment will be made over a 36 month period commencing on 1 April 2021 with the final payment due to you on 1 March 2024”. (The calculation from the Accountant provided the Claimant with the following figures: Current Account Balance (without deduction of PHI) estimated as at 31/3/2021: £336,731.00. With deduction of PHI of £206,921.00 Leaving a current account balance of £129,810.00. To that adding a Capital Account Balance of £75,000. giving a total of the Current and Capital Account of £204,810.00 Payable over 3 years (36 months) in the amount of £5,689.17)69.3 C2/2 page 782-783: Letter dated 8 September 2021 from Respondents to Claimant. “I enclose draft accounts for year- end 2021. As you are aware, we remain concerned that whilst you are in receipt of PHI you are not entitled to your profit share. In an attempt to settle matters we offered a PHI offset on the basis that AVIVA were content with this. We are still unclear as to whether AVIVA are content with this. As a result of our concerns and to ensure the employment tribunal have the full picture we have asked the LLP accountant to draw up your current account to(a) illustrate how much you would be left if the PHI were offset and(b) to show how much would be left if you were not entitled to profit share due to being in receipt of PHI. These illustrations are enclosed for your information”.69.4 C2/3 page 1376: Letter dated 24 December 2020 from Mark Munday (Aviva Senior Claims Adviser) to the Claimant “Dear Mr Willis, Thank you for your email of 22 December 2020. I am happy to clarify the following: 1. - (A) Clarify whether you are referring to partnership profit either before or after when Mr Willis’ PHI entitlement paid out? - (B) Clarify how receipt of partnership profit into Mr Willis’ pension pot whilst he is also receiving PHI affects his claim? and 10.5 Reserved judgment with reasons – rule 61 25 March 2017 -(c) (C) Clarify how any receipt of partnership profit by Mr Willis’ whilst he is also receiving PHI monies affects his claim? Any partnership profit paid directly to the pension pot and not declared as earnings on documents to HMRC, would be excluded. This includes any historical partnership profit Mr Willis is entitled to before income protection benefit started as part of his contract. If the partnership profit is declared as earnings to HMRC then it is likely to be regarded as continuing income for the purposes of our calculations and may reduce the amount of benefit payable under income protection benefit. 2. As stated in Clause 4 of the policy “there is no entitlement to Income Protection Benefit in respect of any period during which the Insured engages in a “remunerative occupation”. It appears to us that any receipt of profit share by Mr Willis from November 2018 to date is as the result of remunerative occupation which means he has no entitlement to Income Protection Benefit, is that correct? No, we would not class Mr Willis as engaged in remunerative occupation as a result of receiving profit share. In this context clause 4 is referring to someone actively working in a remunerative occupation. 3. Is Mr Willis obliged to account for any profit share received from the LLP as clause 18a of the PHI Policy Conditions appear to impose a limitation on the amount of benefit payable? In particular, a) When Mr Willis receives his outstanding profit share, would this meet the requirements of continuing income? b) It appears to us that his Continuing Income plus the Income Protection Benefit payable will be reduced to nil subject to the value of his profit share. Is our interpretation correct? If the profit share is declared to HMRC as earnings and assessed for income tax purposes, then we would include them as continuing income. Without figures I can’t determine the affect any potential continuing income may have on Mr Willis’ income protection benefit. I hope this is helpful but please come back to me if you require any further information. Yours sincerely, Mark Munday (Senior Claims Adviser)”69.5 C2/3 Page 1383 Letter dated 11 January 2020 from Mark Munday to the Claimant 10.5 Reserved judgment with reasons – rule 61 26 March 2017 Dear Mr Willis Thank you for your email of 29 December 2020 and update. I’m happy to clarify the following: Question 5: “As a self- employed person, I will be entitled to a Profit Share from the LLP - albeit that no profit share has ever been paid to me since the commencement of the PHI and the amount is the subject of a dispute. All monies after taxation that become due will be paid in full into my pension scheme and will not be drawn as income. I provided you with the Partnership Tax Return on 14 February 2019 and on 22 March 2019, you confirmed based upon that information that my benefit was ongoing. On 21 February 2020, I supplied you with my Personal Tax Computation as drawn up by the accountant for the year to 5 April 2019 detailing any taxation due through to 31/7/20. Based upon this information you assessed my claim as ongoing in the knowledge that any profit share due would go directly into my pension scheme which you confirmed on 1st April 2019 and 21 October 2019 and this would not affect my PHI claim. Can you please reconfirm that the above is correct”? Answer: In the event, that any partnership profit is paid directly to your pension pot, and not therefore declared as earnings to HMRC, this would be excluded as continuing income. This includes any historical partnership profit you may be entitled to before the income protection benefit was paid or that you became entitled to after income protection started as part his contract. (Text in this paragraph is as highlighted by Mr Munday) However, if you elect to take an income from the pension pot then this could affect the benefit. Additionally, in the event that the event that the partnership profit is declared as earnings to HMRC then it is likely to be regarded as continuing income for the purposes of our calculations and may reduce the amount of benefit payable under income protection benefit. I hope this is helpful but please come back to me if you require any further information. Yours sincerely Mark Munday (Senior Claims Adviser)” 37. My PHI with Aviva is under a policy which is personal to me and which is not for the benefit of the First Respondent. This has repeatedly been confirmed to the Respondents. Aviva has confirmed that the First Respondent has no rights under the policy and the benefit is not dependent on me remaining a Member of the First Respondent in order to benefit from the policy (page 1369). 10.5 Reserved judgment with reasons – rule 61 27 March 201769.6 C2/3 Page 1369: Letter from Mark Munday to the Claimant dated 10 December 2020 Question 6: What is your understanding of the Claimant’s ill-health during the period he has been claiming under the PHI policy. Mr Willis has been totally unable to work since July 2018 as a result of bowel cancer, complications from his illness and from treatment/surgery and more recently mental health difficulties as a result of his diagnosis, the complications and treatment. Question 7: Please could you tell me in your own words what type of PHI cover the Claimant is benefitting from including whether it is a personal benefit or a group benefit? Mr Willis is in receipt of income protection benefit under a personally held income protection policy. The claim is assessed on Mr Willis ability to perform the generic duties of his occupation. His employer has no rights under the policy and whether Mr Willis remains with GWB Harthills LLP whilst a claim is in payment does not have an effect on the payment of benefit. Question 8: Please could you explain how the payments for the premiums work? Are you able to confirm how many payments have been paid by GWB Harthills and how many were paid by Grayson Wills Bennett/Grayson Wills Bennett LLP? Our records show that premiums of £37,122.44 in total were paid by from 1 September 2003 up to 1 October 2018 from a bank account in the name of Grayson Willis and Bennett. Since 1 November 2018 no premiums have been paid directly as they are waived whilst a claim is in progress. No premiums have been paid from any other accounts. Question 9: In your own words, please can you explain what profit share arrangements (including payment into a pension pot) are permitted under the Claimant’s PHI policy? For example, is he permitted to retain his full profit share during the period he has been claiming PHI benefits or is he required to forfeit any part of the profit share under his current PHI policy? Benefit is paid on the basis of Mr Willis’s taxable earned income in the year before his date of first absence and we take into account any ongoing taxable earned income as continuing income in our calculations. It is not within my remit to comment on any profit share arrangements. Question 10: Please can you confirm whether there is anything in the Claimant’s current PHI policy which 10.5 Reserved judgment with reasons – rule 61 28 March 2017 would prevent him claiming motoring expenses from the LLP? Mr Willis advised me in February 2020 that the partnership had been reimbursing his motoring expenses up to September 2019 for periods when he had visited the Office on therapeutic visits/catch up. I confirmed at the time that these would not affect the benefit under his individual policy. Question 11: As far as you are aware did Hester Russell Elizabeth Lord or any other person acting on behalf of the LLP contact you or your colleagues in connection with the Claimant’s profit share entitlement or his motoring expenses? We have no record of any contact from Hester Russell Elizabeth Lord or any other person acting on behalf of the LLP in connection with Mr Willis’ profit share arrangement or motoring expenses. 38. The First and Second Respondents will directly benefit from their discriminatory actions if they deduct my PHI benefits from my profit share, since the monies they deduct will increase their respective personal profit shares and will be distributed between them to my detriment. This seems grossly unfair in circumstances where since January 2020 I have remained on PHI as a direct result of the Respondent’s discriminatory actions and the significant harm, they have caused my mental health. I would have returned to the First Respondent in January 2020 and I would have continued to receive my full profit share but for the Respondent’s discriminatory actions. 39. As a result of misleading questions the Respondents have recently asked Aviva my PHI benefit has now ceased and I currently have no source of income. Tax on Profit Share 40. I received drawings from the First Respondent until October 2018. I ceased to receive drawings from the First Respondent when my PHI benefit commenced but it was always agreed and understood that I would continue to receive my share of the firms profit as set out in the LLP agreement by way of an annual payment. 41. My personal tax liability was calculated by the First Respondent on the basis that I had received a full profit share for the 2018/2019 and 2019/2020 accounting years and the First Respondent paid this tax directly by taking out loans and more recently deducting £45,002.43 of tax from the capital sum I paid into the First Respondent (page 926 -928). To date I have been taxed the sum of £252,283.53 on profit share that has been deliberately withheld from me by the Respondents. I now understand that tax should not have been paid on a profit share that had been deliberately withheld from me. 10.5 Reserved judgment with reasons – rule 61 29 March 201769.7 C2/2 pages 741-742: Letter dated 27 July 2021 from the Claimant to the Respondents: “I confirm receipt of your letter today confirming the payment of my income tax on my full profit share As you are aware, I stated that any payments made to me are by way of capital repayment only-as set out in my email of 4/2/21. This had been agreed by Elizabeth in her letter of 31 March 2021.The only change has been the remedy hearing has been delayed until November, therefore this arrangement will continue until then. There has been no consultation to change the arrangement nor to reduce the payment which is unacceptable. Please confirm the monthly Capital repayment continues as agreed with the next payment being stated by you as 1/8/21. The amount of my Capital Account paid to 1/7/21 by agreement is £22,756.68 leaving a balance due of £52,243.32. I reaffirm that payment of my Current Account balance is not appropriate until decided by the Employment Tribunal. There remains substantial areas of disagreement and the Accounts for 2020/21 are not completed and therefore there is no basis for accurately deciding profit shares”.69.8 C2/2 pages 741-742: Letter dated 27 July 2021 from the Respondents to the Claimant: “Re; Repayment of Capital We write in response to your email dated 27 July 2021. We understand that you are requesting we pay to you only your capital account. Your capital account upon your retirement stood at £75,000. Since your retirement we have made the following payments: (a) £5,689.17 for the months of April May June and July 2021. (b) A Tax payment on your behalf of £45,002.73 (c) £4,282.83 for the month of August This leaves an amount outstanding of £2,957.76. As a result, your next monthly payment will be for the outstanding balance on your capital account of £2,957.76. In accordance with your requests we shall not commence payments of your current account at this stage. We must draw your attention to the fact that should the tribunal determine that you have suffered no financial loss due to being in receipt of PHI payments then your 10.5 Reserved judgment with reasons – rule 61 30 March 2017 current account is significantly overdrawn due to the amount of tax that has been paid on your behalf so it is perhaps sensible at this stage for us to respect your wishes and not to make any further payments in case you have a large sum to pay back to the LLP at the end of the litigation. For ease of reference we enclose your capital only repayment schedule”. 44. During recovery from my operation in October 2018, the Respondents attempted to expel me and the 2018/2019 accounts were prepared and filed. At the time I was recovering from a lifethreatening illness and the attempted expulsion had left me absolutely distraught. Therefore, the question of whether or not I should have paid tax on the profit share that I had not received was not something I gave any thought to as I assumed it would be dealt with properly by the First Respondent’s accountant. 45. At no stage have the First Respondent’s accountants ever provided advice that indicated that it was inappropriate that I be taxed in the sum of £252,283.53 on monies that I have not received. Claimant’s evidence on tax position in October 2021 46. On 18 October 2021 since the Respondents were insisting, I had ‘continuing’ or ‘earned income’ (this text is as highlighted by the Claimant) because I had paid tax on my profit share. I decided to check the position directly with a HMRC adviser via Gov UK Income Tax Enquiry Line. I provided the tax adviser with my UTR Number and National Insurance details to allow access my online account which included copies of my partnership tax returns and my individual tax returns for the financial years 2018/2019,2019/20 and 2020/21.During this call I explained that payments from the First Respondent ceased in October 2018 and that I have received nothing thereafter. I also explained the ongoing and admitted discrimination issues. 47. The tax adviser was unable to answer my query about “earned income” (this text is as highlighted by the Claimant) and she said that she would pass the enquiry on to the HMRC Technical Office who would call me back within 3 working days. 48. On 19 October 2021, I again called HMRC and I spoke to a Tax Adviser, but no Technical Tax Adviser was available. 49. On 20 October 2021, I received a telephone call from Mr Eban, a Tax Inspector assigned to my query. I again explained the situation to him, and he accessed the partnership tax returns for the First Respondent and my personal tax returns. The 2019/20 partnership and personal tax returns showed a profit share of £372,404.00 upon which I have been taxed. I then explained no monies had been paid to me by First Respondent since October 2018. 50. I asked Mr Eban whether I should have declared and paid tax on an income that had not actually been received. Mr Eban 10.5 Reserved judgment with reasons – rule 61 31 March 2017 indicated that he was not sure of the answer and would look into the issue. Mr Eban said that, strictly speaking, all partnership income must be declared. However, he was not sure where I stood in these particular unusual circumstances. I asked Mr Eban to email the advice, when it was available, but he indicated that he could not provide advice by email outside the department. However, he assured me that he would call back once he had looked into my queries. 51.Two hours after our initial call, Mr Eban called back and explained that he had looked at the Income Tax Guidance but there was no answer to what he described as a “unique situation”. However, after running my specific situation by a colleague, he confirmed that I should not have paid tax on the profit share that was being deliberately withheld from me by the Respondents on the basis that they had disputed my entitlement to it. 52. Mr Eban provided me with a number of options, but he said he was unable to advise me on which option I should take. He also suggested that I submitted amended tax returns showing my income as “nil”. Mr Eban again confirmed this was a unique situation where no monies had been paid and where there was a finding of disability discrimination and an ongoing case. 53. Mr Eban asked me why I had paid monies I had not received in the first place and I explained that the tax was paid by the First Respondent. I explained the history of cancer. PHI and mental illness as well as the ongoing litigation. I also stated that the accountants had never raised the issue of paying Income Tax on monies that had not been paid. Mr Eban confirmed he understood why the tax had been paid based on my explanations. 54. Based on the advice from HMRC (my contemporaneous notes of the conversation are at pages 1923-1924) on 1 November 2021 my accountant submitted amended tax returns on my behalf (pages 1798-1828) showing that I had earned ‘nil’ income and referring to the conversation with Mr Eban. However, whilst I have amended my tax returns, I have decided not to apply for a tax refund at present in view of the current dispute with the Respondents 58. It should be noted that had my profit share been paid directly into my pension pot, Aviva confirmed that it would not have constituted ‘earned income’ or ‘continuing income’ (page 1383) and the tax position would have been completely different. It is stating the obvious that the fact that the First Respondent wrongly paid income tax on profit share payments which were never paid to me does not mean that I received income and therefore that I should not have received PHI payments. I have received no income from the First Respondent since October 2018 and the payment of notional income tax does not change that fact. The tax went directly to HMRC and I have received nothing. Even if I had been paid my profit share it would have gone directly into my pension and not been available to me or used by me as income, 10.5 Reserved judgment with reasons – rule 61 32 March 2017 and therefore would not have prevented me from receiving PHI payments under the terms of my policy. 59. The Respondents have also benefitted from me paying tax on my unpaid profit share since October 2018 because it has reduced their own tax liabilities.” Who paid the PHI premiums?[70]During the merger, Mrs Lord realised she did not have a Permanent Health Insurance (PHI) policy in place to cover her for any lost income in the event she was unwell and unable to work. Miss Russell did have a PHI policy she paid for personally until August 2016. Miss Russell queried her personal payments with the Claimant because she believed they should be paid by firm as a business expense. The Claimant agreed and the payments were transferred to the firm which was already paying the PHI premiums for the Claimant and for Mr Jones who both had the same PHI policy with Aviva. The premiums appear as “members life and health insurance” in the expenditure column of the firm’s “Trading Profit and Loss Accounts”.[71]Clause 18 of the LLP agreement deals with Insurance and provides: “18.1 The LLP shall at its own expense maintain insurance policies (for the benefit of the Members or the LLP as appropriate) in such amounts as the Members determine in respect of:(a) property of the LLP:(b) private health insurance for Members and Employees:(c) life assurance for the Members and Employee:(d) employer’s liability:(e) public liability:(f) professional negligence:(g) loss of profits arising out of sickness and accident:(h) loss of profits arising out of destruction or damage to the premises used for the Business: and(i) permanent health. 18.2 The Members shall cooperate with the LLP in obtaining the insurance policies in Clause 18.1 and undergo any medical examination regarded as reasonably necessary for the procurement of any such insurance policy”.[72]Mrs Lord then obtained her own PHI policy at a premium of £60 a month which would entitle her to a benefit of 75% of her drawings (£3000 a month) if she was unable to work due to sickness. She personally paid the premiums until March 2018 when the issue of PHI came up again at a partners meeting. As the Managing Partner, the Claimant confirmed that the payments should be made by the firm as a business expense and not individually by the members. As a result, the Claimant authorised a reimbursement payment to Mrs Lord of the PHI premiums she had personally paid for in error for more than 2 years.[73]At that time, Mrs Lord expressed her concerns about the apparent inequality between the partners in terms of the cost of premiums and benefits provided 10.5 Reserved judgment with reasons – rule 61 33 March 2017 when all the premiums were paid for by the firm as a business expense. The Claimant’s monthly premium of £279.35 entitled him to payments of £6,000 to £7000 per month from his policy if he was unable to work due to ill health while Mrs Lord’s premium of £60 would only entitle her to claim £3,000 per month benefit if she was unable to work due to ill-heath. The Claimant and Mr Jones had put in place better policies with higher monthly premiums. All PHI premiums were paid for by the LLP as an expense of the firm before any net profits were allocated to the partners. This business expense was listed with other business expenses like the office insurance, the lease of office equipment etc. When this was raised as an issue in the partners meeting in 2018 the Claimant agreed it was a business expense of the LLP and not a personal expense of the designated members. Mrs Lord’s clear and unchallenged evidence was supported by the contemporaneous documents (minutes of partners meeting, emails communications, evidence of reimbursement, the Profit and Loss accounts).[74]The Claimant’s evidence was surprisingly unclear about this given his detailed knowledge of the LLP finances and his involvement in the issue as the Managing Partner in 2018. He suggested that he indirectly paid for the PHI payments, made “through the LLP” rather than “by the LLP” for “administrative convenience”. At paragraph 102 of the Claimant’s first witness statement he states: “The PHI premiums are paid personally by me, the Second and Third Respondent (being the 3 Designated Members of the First Respondent) with the premiums taken from our profit share. As a matter of administrative convenience rather than each receiving our profit share and contributing separately to our premiums, the premiums are paid out from the First Respondent’s account and deducted from the profit share which we subsequently each receive”.[75]To support his position the Claimant had created a document (C2/1 page 151) dated 9 November 2020 identified in the index to the bundle as the ‘Claimant’s PHI Payments Schedule’ to show that from 2003 he had paid for the premiums through his partnership share. On 4 November 2020, the Claimant had emailed Mark Munday to urgently request a list of the PHI contributions made from 2003 for his ‘discrimination’ claim (C2/3 page1354). On the same day, Mr Munday provided that information in a document headed “M Willis- premiums paid under policy” which provided the dates the payments were made, the monthly amount paid and the total amount paid up until 1/11/18 when the premiums were waived by Aviva under the claim.[76]The Claimant’s Schedule has a column headed “MDW Proportion based on Partnership Share” and a second column headed “HJR/LL Individual Proportion Paid”. The Claimant has then divided the monthly premium paid in the proportion of the partnership profit share to show that he contributed 1/3 of the cost of the PHI premiums and Miss Russell and Mrs Lord contributed 1/3 each as their individual proportion of the premium paid. The Claimant did not refer to PHI being paid indirectly by the partners in those individual proportions when the issue of PHI payments arose in 2018. The partnership minutes of the PHI discussion do not record this was the Claimant’s understanding of the PHI payments at the time when Mrs Lord raised the issue before the dispute. 10.5 Reserved judgment with reasons – rule 61 34 March 2017[77]The Claimant made further enquiries with Mr Munday on 10 December 2020 and asked him to explain how the payments for PHI premiums worked. The Tribunal found this was an odd question to ask if for more than 20 years the Claimant genuinely believed he personally paid a proportion of the premiums through his partnership share (see CWS paragraph 37). Question 8: Please could you explain how the payments for the premiums work? Are you able to confirm how many payments have been paid by GWB Harthills and how many were paid by Grayson Wills Bennett/Grayson Wills Bennett LLP? Answer: Our records show that premiums of £37,122.44 in total were paid by from 1 September 2003 up to 1 October 2018 from a bank account in the name of Grayson Willis and Bennett. Since 1 November 2018 no premiums have been paid directly as they are waived whilst a claim is in progress. No premiums have been paid from any other accounts.[78]Mr Cordrey submitted that the fact that payments for the insurance were made from the First Respondent’s bank account rather than each Designated Member individually arranging the payment from their own personal account, was ‘entirely irrelevant’. As C described in his statement this was simply a matter of ‘administrative convenience’. In his written closing submissions (paragraphs 84-86) Mr Cordrey suggests the Tribunal should find that “In September 2003, C took out, personally, an income protection policy with Aviva [B1-451].Over the years, C personally forewent thousands of pounds which he could have taken in his pocket as profit share, but which instead he spent on the PHI premiums. Other partners may have preferred to gamble and take the higher annual profit share, C preferred to be prudent and have the insurance in place”.[79]The Tribunal found the Claimant’s ‘PHI Payments Schedule’ was misleading and self-serving. It was created to present an artificial argument to support the case presented at this hearing that the Claimant personally paid the premiums which was untrue. The PHI premiums were not a personal expense of the partners ‘deducted from their profit share’. They were a business expense of the LLP and have always been treated in that way. That was clear from the premium payment history, the LLP agreement and the LLP Accounts from October 2015 onwards as approved by the partners to reflect the true financial position. The Claimant as the Managing Partner knew that was the true position which he confirmed was the case to the other partners when he authorised the repayment to Mrs Lord before the dispute arose.[80]While the Tribunal agreed the Claimant had been ‘prudent’ putting in place such a good insurance policy, it did not agree with or was persuaded by the self-serving artificial suggestion made on the Claimant’s behalf that he was making a greater personal sacrifice to have better benefits, or that Miss Russell and Mrs Lord had ‘preferred to gamble’ taking a higher profit share, instead of having a better policy. It was clear from the evidence that in 2018 Mrs Lord believed it was unfair and wanted to have the same benefits as the Claimant because she knew the LLP was paying for all the partners PHI policies as a normal business expense.[81]Unfortunately, the LLP agreement does not provide any more detail about the PHI than what is set out at Clause 18 which lists a variety of policies the 10.5 Reserved judgment with reasons – rule 61 35 March 2017 LLP may pay for either for the benefit of the member or the LLP (as appropriate). It does not say which type of policy falls into which category or how a member should account to the LLP for any PHI payments received by a member under a policy paid for by the LLP. The only clause in the LLP agreement that relates to a members’ accounting to the LLP for any personal benefit is in relation to any personal benefit derived from the business. Clause 15 under the heading “Members Duties and Restrictions” at 15.2(j) provides that: “A Member shall at all times “account to the LLP for any profit derived from a business, office or appointment accepted by him in breach of this agreement, or any personal benefit derived by him from the business, the use of the Name or Trading Name, or property of the LLP in breach of this agreement”.[82]The Tribunal has not been invited to and does not make any findings of fact about this clause or whether it would apply in respect of the Claimant’s PHI payments.[83]The Tribunal does however make the findings of fact that Mr Burns invites the Tribunal to make on this issue which are supported by the evidence. The premiums are a normal expense of the business. The LLP is a separate legal personality from the members, the very point of limited liability. The PHI premium is not paid by members but by the LLP. That is why Mrs Lord was repaid two year of premiums because it was not her expense. It was the obligation of the LLP to pay the premiums, which the Claimant had accepted at the time. The Claimant had created a misleading schedule suggesting that he had been paying for the premiums for 20 years. The Claimant had not. The payment of premiums only affects the profit of all the members in the same way that any other business expense does. Mr Burns gave the example of the LLP renting a photocopier, the members do not indirectly pay the rental payments. If the LLP makes a profit it is distributed to members. If it keeps costs down (and income up) they will all earn profit. What were the terms of the Aviva PHI Policy (formerly the “Friends Provident Income Protection Plan”)[84]In June 2018, the Claimant was diagnosed with cancer. His cancer is now thankfully in remission and the Tribunal recognises that this must have been a very worrying time for the Claimant and his family. The Claimant contacted the PHI provider Aviva on 18 September 2018 and submitted a claim. Mark Munday was the Senior Claims Adviser for Aviva who has dealt with the claim throughout. In making the claim the Claimant had declared he was totally unable to work and had not worked since 5 July 2018 because of his cancer and then because of other illness. Under the terms of the policy the Claimant has an ongoing duty to inform the insurer of any change in material circumstances during the claim.[85]Under the terms of the PHI policy the Claimant understood that he was paid on the basis he was totally unable to work since July 2018. Mr Munday permitted the Claimant to have unpaid therapeutic contact with work. The Claimant confirmed this was limited to his attendance at monthly partner meetings and the occasional coffee catch up. The Claimant agreed he would have been a breach of the PHI policy terms if he did any work beyond the permitted ‘therapeutic’ remit. 10.5 Reserved judgment with reasons – rule 61 36 March 2017[86]The definitions section of the Aviva PHI policy (C2/3page 1324) provides “Pre-incapacity earnings” - includes earnings from all the Insured remunerative occupation and for the self-employed this means: The Insureds share of pre-tax profit from their trade profession or vocation in the 52 weeks immediately prior to the Period of Incapacity for the purposes of Schedule D Case 1 and II of the Income and Corporation Taxes Act 1988(i.e. their share of pre-tax profit after deduction of trading expenses) as assessed for Income Tax and agreed by the Inland Revenue in respect of earnings in the United Kingdom. “Continuing income” means income received by the Insured or to which the insured becomes entitled. Continuing Income received by the Insured is the amount received net of income tax. Where the actual Income Tax liability cannot yet be established, Friends Provident at its discretion will make an approximation of the net figure by reference to the current tax regime. Adjustments will then be made as appropriate when the actual when the actual tax liability is known or waiver of a regular payment due from the Insured during a period of Incapacity. It Includes other income derived by the Insured from all remunerative occupations”.[87]The Claimant’s pre-incapacity earnings were assessed by Aviva based on the financial information he provided in September 2018 (see 69.5 which records the historical financial information the Claimant provided to Aviva to support the initial assessment of his claim).[88]On 26 September 2018, (C1/2 page 506) Mr Munday wrote to the Claimant to inform him that payments would be paid into the LLP account which was the account from which the premiums had been paid. The Claimant then arranged for a change of account to his personal bank account so that the payments could be made to him directly. In that email Mr Munday informed the Claimant of his obligations to provide ongoing financial information to support the claim: “Benefit is payable from 4 October 2018 and as we pay monthly in arrears the first payment will be made on 3 November 2018 to the account premiums are deducted from. My calculation shows I am able to pay £1,432.22 per week (£6,223.34 per month). This isn’t the full sum insured under your policy and I have attached a break-down of my calculation. The figures are based on the partnership accounts for the year ending 31 March 2018. I’ll need a copy of the relevant tax return the figures appear in to complete my calculation. I’ll also need future partnership accounts and your tax returns to ensure there is no continuing income. If we overpay benefit, then this will need to be reclaimed from you: if the tax return shows I can increase 10.5 Reserved judgment with reasons – rule 61 37 March 2017 your pre-incapacity income then I’ll pay you an underpayment benefit. While were paying benefit we’ll also pay the premiums. This means that we’ll pay your premiums for this policy from 1 November 2018” The financial information sheet provided to the Claimant (C1/2 page 474) explained the purpose of the benefit payment. “Q. If you agree my claim will you pay me the Income Protection Benefit amount shown in the policy schedule. A. For most customers, yes, we will. We look to replace a proportion of the earnings you’ve lost. We consider what you earned before you became ill or injured and what you receive from various sources while your unable to work because of your illness or injury”.[89]The Claimant was required to and did provide “evidence of his preincapacity earnings”. He was also required to provide evidence of “continuing income’ defined under the policy as income received by the Insured or to which the insured becomes entitled which would include any profit costs which were allocated to him after October 2018. The Claimant was also required to provide “immediate written notice of the Insured’s medical adviser’s declaration of the termination of a period of incapacity” (clauses 17 (a) (g) and (i) (C2/1 page 461). This ongoing disclosure conditions relating to ‘medical incapacity’ and ‘income’ were required because the Income Protection benefit was paid to the Claimant to replace a proportion of the income the Claimant had lost because he was unable to work due to illness. Any material changes to either of those 2 qualifying conditions would impact the amount of PHI benefit paid. From 25 September 2018 the Claimant would have known that he had an obligation to provide ongoing financial information and that if that evidence disclosed any continuing income it would affect his PHI benefit payments because that was income the Claimant was continuing to receive while he was unable to work because of his illness.[90]The ongoing duty of disclosure of the Insured to the Insurer under the Policy is confirmed in Clause 17(a) which provides that: “if in connection with the happening or purported happening of any event insured by this policy the Insured makes an untrue statement or omits to disclose a material fact the Policy will immediately become void and no benefit whatsoever will be payable”.[91]Clause 18 explains how any continuing income would affect the amount of benefit paid and provides that: Income Protection Benefit. If at the end of the deferred period the Insured continuing income plus the Income Protection Benefit specified in the Policy schedule exceeds the Maximum Insurable Benefit, then any income Protection Benefit payable under this Policy will be reduced by the amount of the excess. 10.5 Reserved judgment with reasons – rule 61 38 March 2017 The calculation set out in the preceding paragraph of this Condition will be repeated whenever there is a change in the Insured’s continuing income or in any event at least every 3 years… Rights of other parties. Friends Provident and the Policy Holder are the parties to the contract. It is not intended to benefit any other person, neither is it intended that any other person has any direct or indirect contractual rights other than the parties to the contract”.[92]It is accepted that the First Respondent was not a party to the insurance contract and had no rights under that contract. From October 2018, the Respondents were completely dependent on the Claimant to voluntarily share information about the policy and his communications with Aviva in so far as any decisions of the LLP might be affected by that insurance contract. The Claimant did not provide a copy of policy to the Respondents until July 2020 in response to a disclosure order. The Respondents only made their own enquiries of Aviva in August 2021 after which PHI benefit payments were suspended by Aviva on 4 November 2021.[93]It is accepted that during the period between October 2018 and 20 January 2020 the Claimant had been declared unfit to work and was receiving PHI benefit because of his cancer diagnosis and treatment. From 22 January 2020 until his benefit was suspended in 2021 the Claimant was receiving PHI benefit because of his mental health diagnosis and treatment. If the Claimant had been declared fit by his medical advisers at any stage during that absence and was no longer considered unfit to work, his PHI benefit payment would have stopped.[94]The issue of transparency was relevant to the alleged detriment/unfavourable treatment of the Respondents continuing to question the Claimant’s honesty and integrity in applying for and receiving income protection benefit, the allegation of withholding profit costs and to the delayed payment of interest on Capital. The Claimant views the continuing questioning by the Respondents as ‘extremely serious allegations’ which were in his view completely unjustified because he was being ‘completely transparent’ with Aviva and with the Respondents and had “provided all documentation Aviva have required” to assess his claim (paragraph 108 CWS1). The Respondents do not accept that the Claimant had been completely transparent either with them or with the Insurer. They believed the Claimant was selective about the information he disclosed to them and deliberately supressed material facts/information from the Insurer which they believed could have implicated them in potential dishonesty/ insurance fraud and was the reason why they sought the appropriate assurances from the Claimant that what he was requesting them to do was acceptable to Aviva. When did the PHI/Profit Share dispute between the parties first arise?[95]On 27 September 2018, (C1/2 page 530) the Claimant sent an email to the other partners (copied to the firm’s then accountant, Sarah Fields). In that email the Claimant confirmed his understanding of the LLP agreement and PHI. 10.5 Reserved judgment with reasons – rule 61 39 March 2017 “Under the terms of the insurance I cannot be paid by the firm after 4 October 2018. I would be grateful if I could draw an additional £4000 this week which will then be offset at the year end. Thank you for your consideration”[96]As at this date there was a common understanding between the partners about the interrelationship between PHI payments and profit costs that the Claimant which put simply was that the Claimant could not have both. For that reason, the Claimant requested his partners agreement to pay an extra £4000 drawings before the PHI payments started so as not to breach the terms of his insurance contract. The Claimant was not expecting to take any drawings from 4 October 2018, because he knew it would have been treated as ‘continuing income’ which would have reduced his monthly income protection benefit payment. Despite that being the Claimant’s clear understanding of the reason why he was not paid any profit share as monthly drawings from October 2018, the Claimant has continued to allege the Respondents have ‘continued to discriminate’ by withholding his profit share since October 2018 (paragraph 36 CWS)[97]At the time the Respondents did not know that Mr Munday had already written to the Claimant on 26 September 2018, (C1/2 page 506) informing him that: “Benefit is payable from 4 October 2018 and as we pay monthly in arrears the first payment will be made on 3 November 2018 to the account premiums are deducted from. My calculation shows I am able to pay £1,432.22 per week (£6,223.34 per month). This isn’t the full sum insured under your policy and I have attached a breakdown of my calculation. The figures are based on the partnership accounts for the year ending 31 March 2018. I’ll need a copy of the relevant tax return the figures appear in to complete my calculation. I’ll also need future partnership accounts and your tax returns to ensure there is no continuing income. If we overpay benefit, then this will need to be reclaimed from you: if the tax return shows I can increase your pre-incapacity income then I’ll pay you an underpayment benefit”. The financial information sheet provided to the Claimant by Aviva (C1/2 page 474) explained the payment. Q. If you agree my claim will you pay me the Income Protection Benefit amount shown in the policy schedule. A. For most customers, yes, we will. We look to replace a proportion of the earnings you’ve lost. We consider what you earned before you became ill or injured and what you receive from various sources while your unable to work because of your illness or injury.[98]Mrs Lord’s evidence (paragraph 36-38 WS) was that although Aviva correspondence was only revealed on disclosure, it accords with her assumption that Aviva would only pay if the Claimant was not getting any income and if he was getting profit share it would affect his benefit. Her understanding of the LLP agreement was that “a Member who is off sick who therefore cannot devote his whole time would be in breach of the LLP 10.5 Reserved judgment with reasons – rule 61 40 March 2017 Agreement and liable for his drawings of Profit Share. So, the LLP Agreement puts in place Permanent Health Insurance (PHI) to protect Members from this loss when they are unable to work as required. As a result, it is obvious that members do not receive both their full profit share and their insurance payments to cover the profit share whilst absent from work through long term illness” (paragraph 16 WS). She refers to clause 18.1 which provides that “the LLP shall at its own expense maintain insurance policies (for the benefit of the Members or the LLP as appropriate) in such amounts as the Members determine in respect of b) private health insurance for Members and Employees and (l) permanent health” She was content to waive the terms of the LLP Agreement until the PHI payments started.[99]To clarify the Claimant’s understanding of PHI payments Mr Burns put 3 propositions to the Claimant which were agreed. Firstly, that the purpose of insurance is to provide cover for something you are not otherwise getting. Secondly during illness if you were paid by the LLP there would be no point in having an insurance policy. Thirdly that if the LLP paid out normally, then insurance would not pay out.[100]Consistent with that understanding on 17 April 2019, the Claimant confirmed to his partners at a partner’s meeting that the firm’s accountant (who was also his personal accountant) had confirmed that he ‘could not have both’ (profit costs and PHI).[101]From 27 September 2018 until 16 October 2019 all the partners were singing from the same hymn sheet. That position only changed when the Claimant changed his mind and decided that he could have both which was first communicated to his partners at a partners meeting on 16 October 2019.[102]Mrs Lord’s evidence about the partners meeting that day was very clear. The Claimant informed the partners that he had taken independent financial advice and had been advised that provided he put his profit share directly into his pension then he was permitted to receive it without deduction of his PHI. Mrs Lord recalls that she was stunned into silence. She describes this as a ‘bombshell’ and how it seemed completely wrong to her at the time. The Claimant did not provide any more information but simply expected his partners to agree.[103]Miss Russell was so concerned that immediately after the meeting she sent an email to the Claimant (C2/3 pages 541-542) which we set out in full. “Dear all Following our meeting this evening (Sarah I’m copying you in as your advice is of relevance) I confirm that I agreed that Mike W could (from my point of view) take his profit share from the business. Mike and Elizabeth L were silent on the point. I confirmed my view having been assured that Mike’s financial adviser who I do not know and Sarah Fields who I trust implicitly said that this was acceptable. I’m really keen that Mike W (and his family) feel looked after and supported – as I said, money is not important. Having thought things over though, alarm bells are ringing and I’m really, really, worried. Please all take legal advice – especially you Mike W. The dictionary definition of insurance is “an arrangement by 10.5 Reserved judgment with reasons – rule 61 41 March 2017 which a company or the state undertakes to provide a guarantee of compensation for a specified loss, damage, illness or death in return for payment of a specified premium.” If the monthly payment you receive is to compensate you for your illness, Mike then you are clear. If, however, it is to compensate you for the loss of income then you cannot possibly claim insurance whilst at the same time taking your profit share from the firm. On reflection, it’s not sufficient to have an assurance from our accountant and from your financial adviser, they are not lawyers, we are. Mike, please contact your insurers and ask them to confirm in writing that they are happy for you to keep the monies that you’ve received from them in addition to profit share. On reflection I have very very grave concerns (not only about this year but also about the monies that you placed into your pension last year. I feel personally and professionally compromised by this. I agreed to you placing monies into your pension last year on the understanding that this was acceptable to them. Tonight, you commented that your financial advisor said that it would be alright if money went into your pension. This is not the same as your insurer agreeing to this. I want to make it very clear that my agreement to you taking monies from the firm in addition to insurance payments was strictly on the basis that this was acceptable to your insurers. If it is not, then you must not take money from the firm whilst claiming upon your insurance. Please look at the Fraud Act 2006 section 2. I hope that this is a storm in a tea- cup and that you have got direct confirmation from your insurers – if so then my apologies for the stress. I do not want anyone to think that I was trying to legitimise this without making the appropriate enquiries of your insurers”. (highlighted text is Tribunal’s emphasis)[104]This email very clearly and unequivocally confirms Miss Russell’s concerns at the time which never changed. If the payment from the insurer was made to compensate the Claimant for his illness, she had no problem. However, if the payment was to compensate the Claimant for loss of income (profit share) then her position was very clear. The Claimant “cannot possibly claim insurance whilst at the same time taking your profit share from the firm’. She felt she was being personally and professionally compromised by the Claimant’s request. She wanted confirmation from the Insurer that it was acceptable to them because she believed it was potential insurance fraud and did not want anyone to think she was trying to legitimise it by turning a blind eye to it. She did not agree that by paying it into the Claimant’s pension it was no longer treated as income from the firm. The Claimant accepted Miss Russell was genuinely worried about the consequences not only for herself but also for the Claimant and for the firm and was expecting him to make the appropriate enquiries of the insurer. The Tribunal find that Miss Russell and Mrs Lord genuinely believed the Claimant’s proposed actions were wrong and potential insurance fraud which could have serious implications for them individually and for the LLP. This was the reason why they could not ‘comply’ with the Claimant’s request or leave this request unchallenged and the reason why they insisted the Claimant obtained and provided them with the appropriate assurances from the Insurer that this was acceptable. 10.5 Reserved judgment with reasons – rule 61 42 March 2017[105]In his witness statement (paragraph 8 CW2) the Claimant says that “if the Respondent’s had complied with this request such payments would not have been considered ‘earned income’ and they would have been excluded as continuing income. The letters from Aviva dated 24 December 2020 and 12 January 2021 confirm this. I have never suggested that I would take my profit share as drawings during the period I was in receipt of the PHI benefit”.[106]The Claimant has confirmed again that he was not expecting to take any profit share as drawings because the drawings would be treated ‘earned income’ which would affect his PHI benefit and that continued to be his position from October 2018 until his retirement on 8 March 2021. The Claimant also knew that his full profit share (including the amount his partners had taken as monthly drawings) was being allocated in full into his partnership current account at the end of each accounting year. He knew that because he could see that from the LLP accounts which he and his partners approved at the end of December 2018, December 2019 and December 2020 which were filed with Companies House. The Tribunal found the Claimant’s position on the pleaded detriment of ‘withholding profit share’ was and has been fundamentally contradictory to his own evidence and the undisputed facts.[107]As an equity partner for over 20 years the Claimant knew that the partners paid income tax on the income as it was earned by the firm rather than when it was received into the firm’s bank account. He also knew the reason why the Respondents wanted his insurers to confirm that what he was proposing they agreed to do, was all above board so they could not be implicated in any wrongdoing. As practising solicitors and joint owners of the LLP it was reasonable for Miss Russell and Mrs Lord as part of their own due diligence and good faith obligations to seek the appropriate assurances from the Claimant and his insurer rather than just comply with his request. The LLP agreement expressly provides that “each member shall show the utmost good faith to the LLP and to the other members” (clause 15.2).[108]It was clear that the Claimant needed his partners agreement to treat his profit share in a different way so that it was not considered ‘earned income’ and would not affect his PHI payments. We agreed with Mr Burns submission that “whilst it might be true for an employee whose employer ‘directly’ and without paying it to the insured employee paid monies into an occupational pension, the Claimant (an experienced solicitor and partner) must have known that a self -employed person with a private pension scheme cannot have any money paid ‘directly’ into the scheme by anyone else but him. And that money will be taxable earnings”.[109]On 19 October 2019, Miss Russell emailed the Claimant questioning his sudden change of position reminding him that he had previously accepted that ‘he could not have both’ having taken advice from the firm’s accountant. “My clear recollection is that, after this email and some discussions you agreed Mike. You had clearly run that past Sarah Fields as your response was that it would mean Liz and I paying more tax. I maintain the position that I (very gently) made clear in this email. I hope this assists you in recalling the discussions we had in April. You cannot U turn at this juncture” 10.5 Reserved judgment with reasons – rule 61 43 March 2017[110]On 21 October 2019, the Claimant sent an email to the partners enclosing an email from Aviva (which was the only correspondence the Claimant voluntarily disclosed to the Respondents) in which he states: “My profit share will go into my pension pot and as such my insurance payments are totally separate and unaffected. There has been no U turn from me as the problem was that the original advice provided by Sarah Fields was based upon a misunderstanding. It was only in the last few weeks that she and BHP have looked at the situation and their advice has been confirmed by Aviva. There will still be benefit to the firm’s overall tax bill of reducing my tax bill which will assist us all. I hope this is now clear and finally lays to rest any fears that may have been held over me acting fraudulently or in bad faith”. Those suggestions were totally unjustified and only served to catastrophes the situation in a way that was totally unjustified.[111]The attached email was from Mr Munday dated 21 October 2019 and very briefly states: “further to our call last week and earlier today, if your share of the partnership profit is paid directly into your pension pot the claim would be unaffected”.[112]In cross examination, the Claimant was asked how Mr Munday had got the impression that partnership profit would be paid directly from the firm into his pension pot which suggests that it would not involve the Claimant first receiving that profit in his hands as taxable income. In answer the Claimant said it was it was not a ‘wrong-headed assumption’ to make and reflected his understanding of the situation at the time.[113]This email was the only information from Aviva the Claimant voluntarily disclosed to the Respondents, even though he had in his possession policy documents and email communications that supported the Respondent’s concerns. He had in his possession Mr Munday’s email of 26 September 2019 which confirmed he had an ongoing obligation to disclose the partnership accounts and his personal tax returns to prove that he was not receiving any continuing income whilst claiming income protection benefit to avoid the overpayment of benefit. This would have supported the ‘can’t have both’ common understanding shared by the partners from September 2018 to 19 December 2019 before the Claimant changed his mind.[114]On 30 December 2019 (C1/2 page 559) the partnership accounts for 2018/2019 were finalised and agreed by the partners allocating the Claimant’s full profit share into his current account. The email communications exchanged between the Respondents to the accountant confirm that ‘Mike has not given us the information needed regarding his permanent health insurance we have no choice but to move forward on that basis and look again in due course”. The respondents were clearly still waiting for the Claimant to provide information from Aviva.[115]In January 2020, the Trading and Profit Loss Account for the year ended 31 March 2019, and the partners current account schedules (page C1/2 page 812) show each equity partner was allocated an equal share of the profit of £167,819. Drawings in respect of tax paid by the LLP on behalf of the 10.5 Reserved judgment with reasons – rule 61 44 March 2017 partner were deducted as well as any other drawings made in that year. The Claimant’s drawings in respect of his payment of tax were £88,274. He/his accountant completed a self-assessment form and his tax for the tax year 2018-2019 was paid on 31 January 2019 and 31 July 2019.[116]At this time the Respondents did not know the Claimant had not provided the partnership accounts and his tax return to Aviva. The Claimant was being deliberately selective about the information he disclosed to the Respondent to attempt to secure their ‘compliance’ to his request to pay his profit share into his pension pot. He was also being selective about the information he disclosed to Aviva about his payment of tax. As at January 2020 the Claimant was not being completely transparent with Aviva or with the Respondent. Allegation 1: the withholding of the Claimant’s profit share in January 2020.[117]The Claimant had accepted the Respondents had not withheld his profit share as at July 2020 (see paragraph 14) and had withdrawn that complaint in January 2021. His concern was whether he had missed a payment due but knew that he had not in fact missed any payments in January 2020 or subsequently in the Claim 2 period. The Claimant accepted the reason why unpaid profit share was not distributed throughout the Claim 2 period was because the firm was significantly impacted by the Covid-19 pandemic and there was no cashflow to pay out unpaid profit share.[118]The Tribunal asked the Claimant some questions to try to clarify his understanding of the circumstances in which an annual distribution of profit would be made to the partners and how the firm’s cashflow was affected during the pandemic from January 2020 to March 2021. The Claimant confirmed that profit share was only distributed (paid) to the partners if the firm had the cashflow i.e. available funds in the LLP’s bank account to make payment. Distribution of profit share was dependent on cash flow. He confirmed cash flow was ‘seriously affected’ for the firm by court closures during the pandemic which meant cases could not be completed and payments were delayed. He confirmed that in January 2020 and January 2021 when payments due would normally be made there was a lack of cash flow which prevented payment of profit share and that remained the situation up until his retirement. Those answers were clarified and confirmed in re-examination and fit in with the other undisputed evidence about the firm’s lack of cash flow which was the reason the firm had to obtain a Government (Coronavirus Business Interruption Loan) ‘CBIL’ loan for it to remain financially viable.[119]On 29 October 2020, (page 583 C1/2) the Claimant wrote to the firm’s new accountant, Rebecca Birkett (SMH Haywood & Co) to introduce himself and to provide some background of “his knowledge and experience as Managing and Senior partner for over 20 years”. In that letter he states: “I will not need your services for my own personnel tax (I have appointed accountants) but we will obviously need to work together when completing and submitting the Members Income Tax at the appropriate time and the Annual Accounts and Reports. The LLP is responsible for the payment of the Individual Members income tax (which we usually fund by ‘6’ month loan arrangements.) 10.5 Reserved judgment with reasons – rule 61 45 March 2017 I am aware that my income tax payment due on 31 July 2020 was deferred without my knowledge and contrary to my express instructions. The LLP was advised by Hodgson & Oldfield to set aside a monthly provision for that tax although I am not aware of the extent that the advice was followed. I had requested my outstanding tax to be paid in July 2020 but that was not done, and I would require my tax be paid as soon as possible from any provision set aside. The LLP is governed by an LLP agreement from 1 October 2015(albeit unsigned) that all members agree applies-it sets out the Profit Share ratios Capital levels and the usual areas of agreement. On the 31st December 2019 the Annual Accounts (for 2018/2019) were signed off as accurate by all Members. My colleagues confirmed my entitlement to a full profit share. I ceased taking any drawings from the LLP in October 2018 when a personal PHI scheme commenced- this does not affect my entitlement to a full profit share, and this was expressly confirmed by my colleagues in December 2019 when communicating with our previous Accountants. The PHI payments are tax free and therefore do not form part of any tax calculation. The only stipulation from Aviva PHI is that my profit share is paid into my pension scheme which is entirely appropriate as I move towards retirement. I felt it only appropriate to set this information out and please do not hesitate to contact me if you require any further clarification or information. I have a detailed knowledge of the Law Fushion Management Accounts system should you need help accessing financial information.”[120]The letter the Claimant sent to the accountant demonstrates his ability to recall and convey detailed factual information to the accountant to persuade her that he understood and had access to detailed financial information, that he knew what he was doing and should continue to be involved. He confirms his intention to proactively be involved in the completion and submission of the members income tax, the payments of tax, the preparation of annual accounts and the financial reports. He confirms his familiarity with, and ability to, remotely access the management account systems and offers to assist the new accountants to access that information. He also made it clear that his own personal accountant would be calculating his tax liability and insisted his tax payments due to HMRC on his continuing income were to be paid on time and not deferred and wanted adequate provision made by the LLP for his tax to be paid on time.[121]During the pandemic, businesses were able to defer tax payments to assist them financially during this difficult time. The firm wanted to utilise this option instead of taking out a loan to pay the tax liabilities which did not have to be paid at that time to help the firm. The Claimant was very proactive in making decisions about the payment of his tax, how it was calculated and when it was paid. Unsurprisingly, the LLP accountant did not advise the Claimant that he was not required to pay any tax on his profit share which is how the Claimant now puts his case to explain why he paid his tax liability. The Claimant was being advised about his tax liabilities by his own accountant who it appears was the accountant assisting him with completing his personal tax self-assessment, at this time. 10.5 Reserved judgment with reasons – rule 61 46 March 2017[122]On 3 December 2020 (page 597 C1/2) the Respondents’ identified some questions they wanted the Claimant to ask the insurer about the interaction between PHI and profit costs having had sight of the Aviva Policy in July 2020. Mrs Lord sought the Claimant’s written consent to jointly write to Aviva which she thought was the swiftest way to find a solution without ‘yet more legal costs being spent’.[123]The Claimant did not consent and without his agreement Aviva would not disclose any information to the Respondents.[124]In cross examination the Claimant was shown the written advice he had been given by Mr M. Munday (Senior Claims Adviser) on the two occasions he refers to, in his witness statement, the emails of 24 December 2020 and 12 January 2021 which were not disclosed to the Respondents. In providing that written advice on two occasions Mr Munday emphasises in bold the fact that the Claimant could only take profit share if it was not declared as earnings to HMRC. The emails states: “Any partnership profit paid directly to the pension pot and not declared as earnings on documents to HMRC would be excluded…. If the partnership profit is declared as earnings to HMRC then it is likely to be regarded as continuing income for the purposes of our calculations and may reduce the amount of benefit payable under income protection benefit”[125]The Claimant accepts that at this time his share of partnership profit had been allocated and had been declared as earnings to HMRC and that the tax due on those earnings had at his insistence been paid and not deferred. During cross examination the Claimant was asked twice why he did not tell Mr Munday that his profit share was declared to HMRC during the period he had received PHI benefits. The Claimant tried to avoid answering the question until he was pressed to do so by the Tribunal. He said he could not explain his failure to share information which would have impacted his PHI benefit. His answer was; “I have no answer to give and was not deliberately misleading them. I have provided them with all the information”. The Claimant had not provided Aviva with ‘all the information’, because he had not informed Mr Munday that tax had been paid and had not provided Aviva with a copy of his tax returns or the partnership accounts. If he had they would have revealed the true position that income had been declared to HMRC, which would be treated as continuing income which would have affected the PHI benefit paid. The inference the Tribunal draws from this evidence is that the Claimant was deliberately supressing this information from the Insurer.[126]Although the Claimant knew the Respondents were seeking further information from Aviva, he did not make those enquiries on their behalf or disclose the information he already had which would have made the position clear. At paragraph 37 of the Claimant’s witness statement he refers (see paragraph 69.6) to a letter sent by Mr Munday on 10 December 2020 which was not disclosed to the Respondents but might have helped resolve the dispute. The relevant part of that letter is: Question 9: In your own words, please can you explain what profit share arrangements (including payment into a pension pot) are permitted under the Claimant’s PHI policy? For example, is he permitted to retain his full 10.5 Reserved judgment with reasons – rule 61 47 March 2017 profit share during the period he has been claiming PHI benefits or is he required to forfeit any part of the profit share under his current PHI policy? Benefit is paid on the basis of Mr Willis’s taxable earned income in the year before his date of first absence and we take into account any ongoing taxable earned income as continuing income in our calculations. It is not within my remit to comment on any profit share arrangements.[127]The answer confirms that the key issue for the insurer was whether there was any ongoing taxable earned income because that would affect the amount of benefit paid. Mr Munday does not comment on the profit share arrangement (including payment into a pension pot) and does not indicate that there are any exceptions to the general rule.[128]The answer provided by Mr Munday was unhelpful to the Claimant’s position and was not disclosed to the Respondents at the time and would have supported their concerns about the appropriateness of the action proposed. The inference drawn was that the Claimant was deliberately supressing information from the Respondents. When these 3 letters (10/12/20,24/12/20 and 24/1/21) were disclosed, the Respondents’ solicitors wrote to the Claimant’s solicitors on 10 February 2021 with some questions which were answered by the Claimant’s solicitors the next day on 11 February 2021 (C2/1 page 243-244). “Aviva Letter Dated 24/1/21 Question 1: Does your client accept that his unpaid profit share has been declared as earning to HMRC upon which tax has been paid on his behalf by the LLP in January 2021? If not, why not? Answer: Our client has provided Aviva with all relevant financial information and accounts in respect of profit share and tax so that Aviva could calculate his entitlement accordingly. Aviva has also confirmed that it is content that our clients profit share due to date can be paid into his pension pot without affecting his benefit since it will not be taken as income. Question 2: We refer you to Aviva’s letter of 10 December 2020 whereby it confirms that benefit is paid on your clients taxable earned income in the year before his date of first absence. Mark Munday confirmed that Aviva would take into account any ongoing taxable income as continuing income in their calculations. We also refer you to paragraph 5 of Aviva’s letter dated 12 January 2021 which confirms that any partnership profit not declared as earnings to HMRC would be excluded as continuing income. Does your client accept that taxed unpaid profit share cannot be excluded as continuing income? If not why not? Answer: Please see the response to 1 above. Our client has provided Aviva with details of his personal tax return for the previous financial year and this has been accepted by Aviva. He also supplied Aviva with a full set of Accounts when Aviva initially assessed his claim. In this 10.5 Reserved judgment with reasons – rule 61 48 March 2017 respect please refer to the email exchanges between our client and Aviva dated 14 February 2019,12 March 2019 and 22 March 2019. Friends Provident IPP. Our client has been completely transparent with Aviva about the unpaid profit share and the tax paid. Both we and our client are extremely concerned about the contents of your letter and the fact that you appear to now be alleging that he has misled or been untruthful in respect of his PHI claim”.[129]This then takes us to the Claimant’s second ‘change of mind’ in October 2021 regarding his tax liability. On 22 October 2021, (C2/3page 1410) the Claimant wrote to Mr Munday as follows: “I wish to clarify an important issue that has been raised with Aviva by the Respondent’s in my disability discrimination case. As I have explained at the outset, I have not received any income from the LLP since the commencement of my PHI payments in October 2018. My profit share, payable under the LLP agreement has never been distributed by the LLP to me although I have paid the tax to the HMRC. My position has never changed, and Aviva have accepted that position. I have had the opportunity of having detailed conversations with an Income Tax Inspector at the HMRC on 19th and 20th October 2021(after my question was referred from an HMRC Tax Adviser to an Inspector). The issue I raised with the HMRC was whether I should have paid income tax for the years 2018/2019 (post October 2018),2019/2020 and 2020/2021 when I have not received any income. The advice given to me by the HMRC is that as the monies have never been paid to me, they are not ‘earned income’ for the purposes of Income Tax. The amended tax returns will confirm that I have had no earnings during the period of my PHI claim and that tax should not have been paid at this time. The HMRC stated that for 2018/2019 year I can seek Overpayment Relief and for the subsequent years my Personal Income Tax Return can be amended to show nil income paid in those years. These amendments accurately reflect my situation and I have authorised my accountant to make appropriate applications and amendments in line with HMRC advice. Tax will be payable when the distributed monies are paid to me and the tax paid thus far will be held on account against future taxation(I will not be seeking a refund).All of these monies when paid will be placed in my pension pot as we agreed from the outset and declared on further tax forms. I will not be drawing down any income from that pension before I am 65. HMRC expressed surprise that the income tax had been declared when I had not received any income. Unfortunately, this was done during my serious illness and at no stage was I 10.5 Reserved judgment with reasons – rule 61 49 March 2017 made aware of the situation by the accountants. I have acted immediately I became aware of the issue. I will forward to you the amended tax returns for the periods 2018 to 2021 and the Overpayment Relief Claim once I have received that information.”[130]The statement the Claimant makes that he was “at no stage” made aware by the accountants of the basis upon which income tax was declared, contradicts the position he set out to the accountants about his tax on 29 October 2020. The Claimant knew income tax had been declared and paid on his profit share allocation.[131]On 3 November 2021, the Claimant’s solicitors sent the Respondents’ Solicitors the Claimant’s amended tax returns for the 2019/2020 tax year and 2020/2021 tax year to show a nil income for each of those years.[132]On 12 November 2021, the Respondents’ Solicitors challenged the appropriateness of the ‘nil sum tax return’ suggesting that it was misleading and should be withdrawn. In that letter under the heading “Does your client receive a taxable profit share only when money is received?” the Respondents’ Solicitors made the position clear supported by references to the Taxes Management Act 1970. “ When members of an LLP file their personal tax returns, they are required to include as a taxable profit from the LLP whatever sum has been allocated to them in the partnership statement contained within the LLP’s partnership return: section 8(1B)-(1)(C) of the Taxes Management Act 1970(‘TMA’)The legislation does not permit a member of an LLP to avoid paying tax on a profit share which has been allocated to him, which has not been paid to him” “As a long-standing LLP member, your client is familiar with the taxation of profit share. Once the LLP agreement allocates a profit share to a member of the firm then that sum is their taxable profit share. There is no provision in the legislation which makes ‘receipt’ the taxable even rather than ‘allocation’. It would be very surprising for a HMRC adviser to have advised that receipt was the taxable event and so there must have been a miscommunication between your client and the HMRC adviser. (highlighted text is our emphasis)[133]The applicable law set out in that letter was not in dispute. The legislation does not permit a member of an LLP to avoid paying tax on a profit share which has been allocated to him, which has not been paid to him. Mrs Lord addresses the sudden change of position in her supplemental witness statement. At paragraph 8 she states “I do not understand why Mike has filed nil tax returns with HMRC.As members of an LLP we know income tax is payable upon the allocation of profit share. Mike will be taxed on his share of profits as they arise whether they are paid out to him or not, as the LLP is tax transparent”.[134]In the Claimant’s witness statement (set out in full at paragraph 69 subparagraphs 46-59) he explains his change of mind in this way: 46. “On 18 October 2021 since the Respondents were insisting, I had ‘continuing’ or ‘earned income’ (this text is highlighted by 10.5 Reserved judgment with reasons – rule 61 50 March 2017 the Claimant) because I had paid tax on my profit share. I decided to check the position directly with a HMRC adviser via Gov UK Income Tax Enquiry Line. I provided the tax adviser with my UTR Number and National Insurance details to allow access my online account which included copies of my partnership tax returns and my individual tax returns for the financial years 2018/2019,2019/20 and 2020/21.During this call I explained that payments from the First Respondent ceased in October 2018 and that I have received nothing thereafter. I also explained the ongoing and admitted discrimination issues. 50. I asked Mr Eban whether I should have declared and paid tax on an income that had not actually been received. Mr Eban indicated that he was not sure of the answer and would look into the issue. Mr Eban said that, strictly speaking, all partnership income must be declared. However, he was not sure where I stood in these particular unusual circumstances. I asked Mr Eban to email the advice, when it was available, but he indicated that he could not provide advice by email outside the department. However, he assured me that he would call back once he had looked into my queries. 52.Mr Eban provided me with a number of options, but he said he was unable to advise me on which option I should take. He also suggested that I submitted amended tax returns showing my income as “nil”. Mr Eban again confirmed this was a unique situation where no monies had been paid and where there was a finding of disability discrimination and an ongoing case.53. Mr Eban asked me why I had paid monies I had not received in the first place and I explained that the tax was paid by the First Respondent. I explained the history of cancer. PHI and mental illness as well as the ongoing litigation. I also stated that the accountants had never raised the issue of paying Income Tax on monies that had not been paid. Mr Eban confirmed he understood why the tax had been paid based on my explanations.54. Based on the advice from HMRC … on 1 November 2021 my accountant submitted amended tax returns on my behalf (pages 1798-1828) showing that I had earned ‘nil’ income and referring to the conversation with Mr Eban. 58. it is stating the obvious that the fact that the First Respondent wrongly paid income tax on profit share payments which were never paid to me does not mean that I received income and therefore that I should not have received PHI payments. I have received no income from the First Respondent since October 2018 and the payment of notional income tax does not change that fact. The tax went directly to HMRC and I have received nothing. Even if I had been paid my profit share it would have gone directly into my pension and not been available to me or used by me as income, and therefore would not have prevented me from receiving PHI payments under the terms of the policy” 10.5 Reserved judgment with reasons – rule 61 51 March 2017[135]The Claimant suggests that he only made the tax enquiry on 18 October 2021 because the Respondents were insisting that he had ‘continuing’ or ‘earned income’ because he paid tax on my profit share. The Respondents position on tax was accurate and consistent with the legislation and the Claimants position on tax for more than 20 years. The Claimant had the opportunity of explaining his change of position as a ‘miscommunication’ issue and could have withdrawn the nil tax return. The accuracy of any advice given by the HMRC in response to a tax enquiry is dependent upon the accuracy of information provided by the individual making the enquiry. When the Claimant was asked why he had paid tax, he did not disclose his own proactive role in the payment and calculation of his tax or his communications with the firm’s accountant about the calculation and payment of his tax. The Claimant has given the Tribunal a misleading impression in his evidence suggesting the enquiry was only made in October 2021 because the Respondents were insisting profit share was ‘continuing income’ as though that had come as a surprise to him, when he had known that had been their position for the previous 3 years. The Claimant also says he explained to the HMRC Inspector: “the history of cancer. PHI and mental illness as well as the ongoing litigation. I also stated that the accountants had never raised the issue of paying Income Tax on monies that had not been paid”. The Claimant was not being completely transparent with the HMRC about his dealings with the LLP accountant, his detailed understanding of partnership income and tax and individual members tax liabilities on partnership income. The Claimant an experienced LLP member and Managing Partner was very familiar with the legislation and knew that it did not permit a member of an LLP to avoid paying tax on a profit share which has been allocated but has not been paid.[136]The Tribunal found the timing of the enquiry and the selective reporting of information to HMRC was extremely suspicious and self-serving. The Claimant has continued to unfairly blame the First Respondent and/or the First Respondent’s accountant for ‘wrongly’ paying his tax on profit share when he knew it was paid correctly and on time with his knowledge and approval. His contradictory evidence to the Tribunal at this hearing suggesting otherwise was untruthful and misleading.[137]As at October 2021 the Claimant also knew (see paragraph65.1 and65.2 ) that he had instructed the Respondents that it was ‘premature to make any payments of the monies due from my current account’. He was adamant he should not be paid “For the avoidance of doubt, I remain of the firm view that the profit share payments should not be made until the correct sums due to me have been determined by the Employment Tribunal. The Respondents agreed to that request and to “revisit this following the outcome of the Remedy Hearing as we prefer to reduce both your capital and current accounts”. Both parties agreed to leave it to the Remedy Hearing to decide the issue. The fact that it was the Claimant who had instructed the Respondent that profit share payments should not be paid until the outcome of the remedy hearing is not information that the Claimant (on his account) appears to have shared with the HMRC. Instead he informed them that “that payments from the First Respondent ceased in October 2018 and that I have received nothing thereafter” which was misleading because it did not disclose the full facts but implied that the 10.5 Reserved judgment with reasons – rule 61 52 March 2017 Respondents were unlawfully withholding the Claimant’s profit share from October 2018 which was also untrue. Allegation 2: the delayed payment of interest on Capital[138]On 9 February 2021, Mrs Lord authorised the payment of interest on Capital to all members but wanted to check with the Claimant that he was able to receive this payment from the LLP under the terms of his PHI policy. On 10 February 2021 the members were paid interest on their Capital.[139]On 19 February 2021, Mrs Lord wrote to the Claimant requesting that he provide written confirmation that the payment of the interest on Capital under the terms of the LLP, would not affect his eligibility to PHI payments under the terms of his insurance policy to protect the First Respondent’s position.[140]On 23 February 2021, the Claimant sent an email to Mrs Lord insisting payment was made ‘without any caveat’ confirming he was unwilling to provide the assurances sought. Mrs Lord responded confirming he would be paid immediately upon receipt of those assurances. The Respondent’s solicitors then sought those assurances from the Claimant’s solicitors and the payment was made on 1 April 2021 with interest calculated to the date of payment, at the rate of 5% in accordance with the terms of the LLP agreement. The Claimant did not lose out financially by the delay and understood why the assurances were being sought because the Respondents were genuinely concerned that they could be implicated in insurance fraud/wrongdoing.[141]The Claimant says the request was an unnecessary ‘obstacle’ to him receiving monies that were properly due. The Tribunal do not agree. It was reasonable for the Respondents to request those assurances from him to protect their position so that they could not be implicated in any wrongdoing. If the Claimant was being completely transparent with the Insurers and the Respondents, it does not explain why he was so unwilling to provide the assurances requested.[142]The evidence given by Mrs Lord about the delay and her reason for seeking those assurances from the Claimant was not challenged in crossexamination.[143]That brings us full circle in this long running ongoing partnership dispute between the parties which began in October 2019 about profit share and PHI which as at the date of this hearing remains unresolved but provides context to the next allegation. Allegation 3: continuing to question the Claimant’s honesty and integrity in relation in applying for and receiving income protection and accusing him of misleading his insurers[144]At paragraphs 142 -160 of the Claimant’s witness statement he deals with the alleged detriment/unfavourable treatment of the Respondents continuing to question his honesty and integrity in relation to applying for and receiving income protection and accusing him of misleading his insurers. At paragraph 142 he states: “In June 2018 my PHI Provider requested a number of documents from me to assess my potential claim. At all times I have been completely transparent 10.5 Reserved judgment with reasons – rule 61 53 March 2017 and open with my PHI provider about my health my finances and the work I carried out during my sickness absence. If I was(1) made aware of: or(2) unsure of any matters which may affect my continuing PHI entitlement I have shared or queried such matters with Mark Munday, the Senior Claims Assessor at Aviva, who has been dealing with my PHI claim throughout my sickness absence” (paragraph 142).[145]The Claimant then refers to a request made in December 2020 for his consent to send a joint letter of enquiry to Aviva which he refused to give. He states (paragraph 143) that he did not wish for the Respondents to contact Aviva directly in circumstances where they had “already been indiscreet, accused me of fraudulent behaviour shared sensitive data without my permission and made a number of disparaging (and untrue) statements”. It was not apparent to the Tribunal why a joint letter containing the joint questions for Aviva to answer would create any problems for the Claimant, if he had been completely transparent with Aviva about his health and finances. The Claimant complains (paragraph 153) that the Respondent’s and their lawyers “have continued to question my honesty and integrity through aggressive correspondence and questions which suggest that I have misled Aviva. I find the Respondent’s persistence in trying to find evidence that I have misled my insurers extremely stressful and distressing as well as time consuming and costly for me to respond to (often with the assistance of my solicitors)”.[146]The Respondents were in some difficulty obtaining information from the Insurer because they were not a party to the contract. They had asked some questions of the Claimant’s solicitors in January 2021 but were not satisfied by the response and without the Claimant’s consent, Aviva would not disclose any information to them. The Claimant complains that the tone and nature of the questions were aggressive and misleading because they suggest:• his PHI insurance was “invalid because profit share was earned income”,• he had “received his full profit share into his current account” and that “his profit share had not been paid into his pension fund” (paragraph 160 CW2). The 6 questions the Respondent’s solicitors requested the Claimant’s solicitors to ask Aviva in their letter dated 19 October 2021 (C2/1page 402) are as follows: 1. “Mr Willis is asserting in his employment tribunal claims that provided his current and future profit share is paid directly into his pension pot, he is able to receive both PHI and net profit share. Please can you explain why receipt of taxed partnership profit into a policy holder’s pension pot whilst receiving PHI entitlement would not affect the PHI Benefit and/or PHI claim. 2. We are instructed that the pension contribution limit is currently 100% of income with a cap of £40,000 for tax relief purposes. Mr Willis’ profit share for year ending 18/19,19/20 and 20/21 is approximately £615,350.Therefore we understand that whilst Mr Willis would be able to put all of this income into his pension pot, 10.5 Reserved judgment with reasons – rule 61 54 March 2017 the bulk of it will be taxed and all of it declared to HMRC. Mr Willis’ profit share for year-end 18/19,19/20 and 20/21 has not gone directly into his pension pot, rather he has received it into his current account and the First Respondent has paid his personal tax liability to HMRC on the partnership pot in January 2021 on his behalf. Are you aware of this? 3. Please confirm whether you have received from Mr Willis his annual self-assessment tax returns and/or invoice for the tax payments from HMRC? How would Aviva take the policy holder’s profit share (i.e. taxable income) into account when calculating PHI benefit? How would this affect the PHI benefit? 4. Please confirm what Aviva’s approach is where a policy holder has received income by way of profit share which has been declared as taxable earnings to HMRC? How would Aviva take the policy holder’s profit share (i.e. taxable income) for the same period he has been claiming his PHI benefit? How would this affect the PHI benefit? 5. Please confirm the effect on Mr Willis’ PHI policy if he were to be paid his full profit share (i.e. taxable income) for the same period he has been claiming his PHI benefit? Please confirm how his PHI benefit will be affected and/or reduced in the future? 6. Clause 17(a) of the Friends Provident Income Protection Plan provides: “if in connection with the happening or purported happening of any event insured by this policy the Insured makes an untrue statement or omits to disclose a material fact the Policy will immediately become void and no benefit whatsoever will be payable”. Are the payment of a) Mr Willis’s non-therapeutic motoring expenses and b) the payment on his behalf of tax to HMRC on his undistributed profit share material facts?”[147]The claimant complains that as a direct result of those ‘misleading’ questions from 4 November 2021 his PHI payments were suspended pending further investigation. No written evidence has been provided to the Tribunal about the reason why the PHI payments were suspended. The Tribunal do not agree that the questions were misleading. The asserted facts in the questions reflect the Respondents understanding of the position and their interpretation of the policy. They were entitled to make their own reasonable enquiries of Aviva on the effect any continuing income would have on the payment of PHI benefit given their concerns that the LLP and the designated members of the LLP may be implicated in potential insurance fraud.[148]By then on 15 September 2021 (C2/3page 1402) Mr Munday had written to the Claimant in the following terms: “You may remember from my email dated 26 September 2019 that I needed to see future partnership accounts and your tax returns to verify that you’ve had no continuing income. Following a recent internal review, it’s been noted that I’ve not followed up on these. I apologise for my oversight but to ensure our records are updated please can you send a copy of the partnership accounts and your tax returns including tax schedules from the 10.5 Reserved judgment with reasons – rule 61 55 March 2017 tax year ending 2017 to date and a copy of the LLP partnership agreement” .[149]It was not known what had prompted that review, but it was reasonable to infer it might have been prompted by the Respondents’ solicitors questions. In his letter, Mr Munday has referred to his earlier letter of 26 September 2019 sent before any PHI payments had been made to the Claimant, to remind him of his continuing obligations to provide ongoing financial information and warning the Claimant of the consequences any continuing income would have on his PHI benefit payments and on the risk of recovery by way of overpayment (see paragraph 97).[150]On 22 September 2021, the Claimant sent an email to Mr Munday confirming the information he had provided in response to that request which was: 1. Accounts to 31/3/2017/2018/2019/2020. 2. Partnership Tax Returns -6/4/2017-2018/2018- 2019/2019-2020. 3. Tax Calculations 5/4/19 and 5/4/2020. 4. LLP Agreement. He then states as follows: “The Annual Accounts for the year to 31/3/21 have not been agreed and will form part of the ongoing litigation. To assist I can confirm as background that I was a Member of the LLP until 8 March 2021 when I left due to ongoing disability discrimination and ill health(which forms the second claim-the first claim having been admitted by the Respondents).The second disability discrimination case is the subject of a weeklong hearing in November 2021. Since the commencement of the PHI Insurance in October 2018 I have not received any continuing-payments from the LLP nor do I have any alternative income (other than the pre-existing pension which has been disclosed to you). I remain medically unable to work. My entitlement to profit share is the subject of the disability discrimination case and will be resolved at the Remedy Hearing to be held by the Employment Tribunal between the 7th and 15 February 2022(for claim 1 and 2).I have not received any profit share that is contained within the attached documents albeit I have been taxed. The LLP have withheld monies as part of the Discrimination. As agreed with you previously any profit share that is released to me after the remedy hearing would be paid directly into my pension scheme and will not be taken as income. I have a Capital Account of £75,000 which was invested in the LLP. I have been repaid £35,000 but the LLP has suddenly ceased to pay me and again this is an issue of continuing discrimination. This is my Capital Contribution in the LLP and is not taxable income. All monies have been used towards my legal expenses.”[151]It was clear from those facts that the Claimant had not provided any of the financial information he was required to provide on an ongoing basis from September 2019 until September 2021. He was also being very careful about how he explained his position in the light of the financial information 10.5 Reserved judgment with reasons – rule 61 56 March 2017 he had disclosed. The Claimant refers to not having had any ‘continuing payments’ from October 2018 because the tax returns would reveal ‘continuing income’ which had been declared to HMRC. The Claimant seeks to blame the Respondent’s solicitors for continuing to question his honesty and integrity in relation to applying for and receiving PHI inferring and suggest their questions are unjustified because he had been “completely transparent with Aviva about the unpaid profit share and the tax paid”(see paragraph 128) when the evidence shows that was not the case.[152]When the Respondents made enquiries directly with Aviva in October 2021, they did not know that the Claimant had not disclosed relevant financial information to Aviva until September 2021, but the Claimant did know he had not disclosed that information. The Respondents’ solicitors only made their own direct enquiries after failing to obtain information in cooperation with the Claimant and his solicitors because he refused to agree to any joint letter of enquiry. The reason why the Respondents were continuing to make those enquiries was because they were not satisfied with the Claimant’s response and had still not received the appropriate assurances from the Claimant or the Insurer. They were still genuinely concerned they could be implicated in insurance fraud. The fact that the Claimant does not agree/like the way the second question was phrased, does not mean it was ‘misleading’.[153]Aviva could easily objectively verify the answer they gave by reference to the financial information provided in September 2021 Aviva were free to answer/refuse to answer any questions in any way they chose to. Aviva decided to suspend the Claimant’s PHI payments. The Claimant asserts that the reason why his benefit was suspended was because of the ‘misleading’ questions asked by the Respondent but has not disclosed those answers to the Respondents or to the Tribunal to show how the questions influenced the answers that resulted in the suspension of benefit made to support the allegation made. Aviva were best placed to interpret and apply the PHI policy based on the financial information disclosed by the Claimant in September 2021 which was historical and not open to manipulation by either party. Joint questions would have been the quickest and easiest way to resolve the issue and address any concerns about potential insurance fraud.[154]Despite those undisputed facts the Claimant continues at this hearing to blame the Respondent for the suspension of his PHI stating “ if my PHI provider considers that I am not entitled to the benefit paid to me since October 2018 this is not because I have misled them it is because the Respondents have it appears deliberately misled them by stating I have received my full profit share into my current account. Indeed, if I had received my full profit share (which I have not) the profit share due to me would have been paid directly into my pension account as permitted by Aviva” (paragraph 159 CW2). The Claimant is ignoring the impact of the financial information he disclosed to Aviva showing the taxable income declared to HMRC after October 2018 and tax of £252,283.53 which had been paid on that income. The Claimant’s allegation that the Respondents have deliberately misled Aviva is untrue and is completely unfounded. The Claim 1 Admissions 10.5 Reserved judgment with reasons – rule 61 57 March 2017[155]Before dealing with the alleged failure to make reasonable adjustments complaint and allegation 4,5,6 and 7, the 4 ‘return to work’ detriments, some of the background of the admitted discrimination in Claim 1 is set out using (in part) Mr Cordrey’s summary of those events.[156]On 28 November 2019, the Claimant was served with a letter giving notice of a partners’ meeting which would consider whether he was “physically and/or mentally unfit” to continue to hold his responsibilities as a member of the firm. The letter page C1/2 page 690 refers to Clause 20.1(j) of the LLP agreement which provides that; “Clause 20 Expulsion. 20.1 The LLP may by written notice to the Member concerned with effect from the date of the notice expel that person from membership of the LLP where the Member concerned: (j) becomes, in the reasonable opinion of the Members, physically or mentally unfit (whether or not certified as such by a medical practitioner) to carry on his duties and obligations as a Member under this agreement”.[157]In the Claimant’s absence at a partners meeting on 13 December 2019 the Claimant was declared physically and or mentally unfit and stripped of his responsibilities. No medical evidence had been sought before the declaration was made.
Conclusions
[158]On 17 December 2019, Miss Russell and Mrs Lord filed form LLPSCO1 with Companies House to remove the Claimant as a person with significant control of the First Respondent. After their unlawful actions were pointed out by the Claimant’s solicitors the Claimant was reinstated as a person with significant control.[159]On 19 December 2019, the Claimant was served with a letter notifying him of a meeting that would be held on 31 December 2019 with a vote to expel him from the First Respondent. As a result of intervention by the Claimant’s solicitors that meeting did not take place.[160]By admissions made on 24 November 2020, the Respondents admitted they treated the Claimant unfavourably because of something arising in consequence of the Claimant’s disability, namely his sickness absence and the funds he has received under his PHI cover, and that that treatment was not a proportionate means of achieving the Respondent’s legitimate aims of properly managing the First Respondent’s business.[161]The admitted unfavourable treatment was removing the Claimant from his roles as Managing Partner of the First Respondent, taking steps to expel him as a member of the First Respondent on 28 November 2019 , removing him as a Person with Significant Control of the First Respondent on 19 December 2019, removing him from the First Respondent’s management and decisions making processes on 19 December 2022, withholding management and accounting information relating to the First Respondent and excluding him from a partners meeting arranged for 7 January 2020.[162]The Respondents also admitted indirect disability discrimination by applying a practice of holding partners meetings at the First Respondent’s Rotherham Office, instead of the Claimant’s home, on 6 December 2019 postponed to 13 December 2019 which put the Claimant at a particular 10.5 Reserved judgment with reasons – rule 61 58 March 2017 disadvantage and was not a proportionate means of achieving the legitimate aim of properly managing the First Respondent’s Business.[163]The Respondents also admitted it had failed to investigate and make such reasonable adjustments to enable the Claimant to work from home, continue with his management roles and/or return on a phased basis.[164]The Claimant’s Solicitors had written to the Respondents on 6 January 2020 (“the protected act”) alleging that the proposed expulsion and removal of the Claimant’s roles was discriminatory. The Respondents did not take any further steps to expel the Claimant. They agreed to try to obtain medical evidence relating to the Claimant’s likely fitness to return to work. The Claimant was reinstated as a person of significant control in January 2020. Mrs Lord and Miss Russell had jointly assumed the role and responsibilities of the Managing Partner because those roles needed to be performed on a day to day basis and it was not tenable for those roles to be undertaken by the Claimant while he was absent from work due to illness. As at 22 January 2021 the Claimant’s absence was expected to last until 22 March 2021.[165]Up until 22 January 2020 the reason for the Claimant’s unfitness to work was ‘cancer’. From 22 March 2020 to 22 June 2020 the reason was ‘depressive disorder’. From 22 June 2020 until 27 August 2020 the reason was ‘reactive depression (cancer diagnosis stressful situation at work/stress at work)”. From August 2020 until the Claimant’s retirement on 8 March 2021 the reason was ‘stress related problem’. The medical advice on the fit notes had ruled out any return to work with or without adjustments. Allegation of a failure to make reasonable adjustments[166]On 19 February 2020, the Respondent’s solicitors wrote to the Claimant requesting any suggestions for any reasonable adjustment that could be made to assist with a return to work. On 24 February 2020 they wrote requesting the Claimant’s consent and cooperation for the First Respondent to obtain a medical report about his prognosis, fitness to return to work, a timescale for a return , whether he could return part time/phased return or whether any other adjustments could be made. In response the Claimant’s solicitors confirmed the Claimant’s prognosis was that he had been signed off work on 22 March 2020 for 3 months for depressive disorder and that he was unfit to return to work.[167]Mrs Lord confirmed that the Respondents wanted to be guided by the medical advice and by the Claimant/his solicitors and no reasonable adjustments had been suggested that they could then put in place. In cross examination, Mr Cordrey suggested that a return to work on a phased basis would have been a reasonable adjustment for the Claimant accepting that suggestion was never communicated to the Respondents at the time. Mrs Lord confirmed that if it had been suggested it would have agreed provided it was supported by the Claimant and by medical advice.[168]The 4 PCP’s the First Respondent is said to have applied to the Claimant from 17 April 2020 to 8 March 2021 are: 168.1. A requirement of being fully fit to return (rather than accepting fitness to perform a therapeutic level of work). 10.5 Reserved judgment with reasons – rule 61 59 March 2017 168.2. A requirement of being fit for a full time return to participate in the First Respondent rather than accepting a phased return. 168.3. A requirement on the Claimant to initiate a return/prove his fitness to return. 168.4. Holding partners’ meetings at the First Respondent’s Rotherham Office rather than at the Claimant’s home.[169]Although the issue of substantial disadvantage is identified at paragraph 31 of the list of issues. The Claimant has failed to assert any facts identifying the substantial disadvantage of the PCP’s he relies upon for comparison with non-disabled persons. The purpose of the comparison with people who are not disabled is to establish whether it is because of disability, that the PCP applied by the First Respondent disadvantages the disabled person. Only if there is in fact a substantial disadvantage and the respondents know (or ought to have known) that the Claimant was substantially disadvantaged in the way alleged, is the duty to make reasonable adjustments engaged.[170]Not only has the Claimant failed to identify the substantial disadvantage but 3 of the PCP’s involve a requirement involving some form of return to work which was inconsistent with the Claimant receipt of PHI benefit during this period based on his declaration that he was ‘totally unable to work’ and his GP’s medically assessment of his fitness to work. The therapeutic exemption by the Insurer only permitted the Claimant to attend monthly partners meetings, not a phased return or involvement in any other work activity. Those were the requirements imposed by the Insurer and not the Respondent which prevented the Claimant from returning to work while he was in receipt of PHI. Although the Claimant suggests a reasonable adjustment of holding partners meetings in his house, the reality was that was not something the Claimant would have ever agreed to or wanted. He confirmed it was ‘impossible’ for him to have any face to face meeting with Mrs Lord or Miss Russell and that was the reason why he did not attend any partners meeting in person or remotely. Allegation 4: Failing to reinstate the Claimant to the positions of managing partner: client care partner: compliance COLP: compliance COFA: credit[171]It is accepted the Claimant was not reinstated into the role of Managing Partner because the Claimant was assessed as medically unfit for work, he was in receipt of PHI benefit on the basis he was totally unfit to work and any return to work had been ruled out on the fit notes throughout the Claim 2 period.[172]It is the Respondent’s case that if it had required the Claimant to fulfil these important and demanding roles of responsibility in a firm with 60 plus staff in a Covid-19 pandemic, at a time when the Claimant was clearly too unwell to manage work, it could have been held liable for disability discrimination. The role and responsibilities of managing partner: client care partner: compliance COLP: compliance COFA: credit controller and/or data protection manager had been taken over by Mrs Lord and Miss Russell because those roles needed to be performed fully and daily to meet the firms responsibilities to its employees, the Solicitors Regulatory Authority and the Legal Aid Authority. 10.5 Reserved judgment with reasons – rule 61 60 March 2017[173]It was put to Mrs Lord that she had blocked and side-lined the Claimant from returning to his role as part of the Respondents’ ‘Plan B’ a continuation of the Plan A discrimination, a strategy to force the Claimant to leave the partnership. Mrs Lord denied such a ‘strategy’ existed or that the Claimant was blocked or side-lined. She explained the reason the Claimant could not and did not resume the role of Managing Partner was because he had been declared unfit to work and that remained the position for the whole of Claim 2. Her answer was supported by the fit notes and the Claimant’s concession that medical opinion had completely ruled out any return to work. He and his solicitors had not identified any reasonable adjustments that could have been made. If he was no longer declared unfit to work by his GP, his PHI payments would have stopped.[174]Miss Lord and Miss Russell had assumed the role of Joint Managing Partners and shared the responsibilities of the role during the Claimant’s absence. Mrs Lord did not agree with the suggestion made by Mr Cordrey that as a ‘gesture of good will’ she should have restored the Claimant’s Managing Partner ‘title’ without requiring him to perform any of the responsibilities of the role. She said it would be misleading and inappropriate for the firm to misrepresent the position in that way. In his closing submissions Mr Burns reminded the Tribunal that this reframed detriment was not the pleaded detriment. The Tribunal agreed that was not the pleaded detriment and agreed that it would be unreasonable and inappropriate for the Respondents to run the firm in the misleading way suggested.[175]From May 2020 the Claimant decided he could not have any direct contact with Miss Lord and Miss Russell. The Claimant confirmed it was ‘impossible’ for him to have any face to face contact with Mrs Lord or Miss Russell and that was the reason why he did not attend any partners meeting in person or remotely. Given the limitations put in place by the insurer, the GP and the Claimant it was difficult to see how the Claimant makes his case that he should have been reinstated and more involved in the day to day management of the firm during his ill-heath absence. This was another aspect of the Claimant’s case which the Tribunal found was fundamentally contrary to the evidence. Allegation 5: Withholding information from the Claimant: minutes of partner’s meetings: details of management decisions and supporting documents and correspondence: budgets and finance reports including information about Work in Progress[176]The partners meeting minutes were available to all the partners in the management folder on the desktop of the Claimant’s work laptop. The management folder also contained details of management decisions and finance documents.[177]The Claimant agreed that he had access to those documents in the Claim 2 period and that his access had never been blocked. He was familiar with the system and the folders, having been involved in setting them up and having used them for much longer than Mrs Lord and Miss Russell and having confirmed that position to the LLP accountant in October 2020.[178]Mrs Lords evidence was clear. The Claimant had access to everything on the desktop and as far as she was aware no information had been withheld. 10.5 Reserved judgment with reasons – rule 61 61 March 2017 She was also aware the Claimant did not want any direct contact and he was unwell. She limited the contact she had with the Claimant in the way he permitted for those reasons. The Respondents did not withhold information from the Claimant.[179]It was also difficult to see why the Claimant would need to have access to the level of detailed information referred to in this allegation when he was unfit to perform any work. The Tribunal questioned why the Claimant would need to see ‘supporting documents and correspondence for management decisions’ when the Joint Managing Partners had assumed those responsibilities and he was totally unable to work. It was not reasonable for the Claimant to expect to see any more information than that which he already had access to on the system and was provided by post when requested by the Claimant or was required and provided for the partnership meetings. Allegation 6: Excluding the Claimant from partner’s and/or management meetings.[180]The ‘therapeutic’ limitation did not permit the Claimant to attend management meetings about the day to day management of the firm. The Claimant did not expect to attend those meetings and the Respondents did not require him to attend while he was unfit to work. The Claimant confirmed it was ‘impossible’ for him to have any face to face with Mrs Lord or Miss Russell and that was the reason why he did not attend any partners meeting in person or remotely so in reality the Claimant was not excluded he would not have attended management meetings.[181]From September 2020, the Claimant had only agreed to having contact by post with the Respondents. As a result, during the pandemic Mrs Lord would attend the office to make sure she photocopied all the paperwork for partnership meetings in good time before the meetings to enable the Claimant to contribute to those meeting. She made those adjustments because the Claimant would not accept any email contact and was only willing to be contacted by post.[182]Mrs Lord complied with all the agreed adjustments by sending an agenda for the partners meeting out by post on the first Friday of each month. On the second Friday of each month the Claimant would confirm what further information he required or whether he wished to make additions to the agenda. On the third Friday of each month any necessary alterations to the agenda were made and the Claimant would be provided with the documents requested. On the fourth Friday of every month a partners meeting would be held. As a result of the pandemic all partners meetings were conducted virtually by Microsoft Teams and the Claimant never indicated that he wanted those meetings to take place at his house which is his pleaded case unsupported by his own evidence. Allegation 7:Excluding the Claimant from management decisions of(1) appointing new accountants,(2) terminating the First Respondent’s relationship with Peninsula, and(3) making a financial settlement to a former member of the First Respondent[183]Out of the 8 specific complaints brought under the overarching allegation of exclusion from management decisions, only 3 were pursued at the hearing 10.5 Reserved judgment with reasons – rule 61 62 March 2017 (the withdrawn allegations were the decision for Mrs Lord and Miss Russell to assume the title of Joint Manging Partners: the decision to appoint a HR manager, the decision to take out a fixed interest business loan in January 2020 to pay the tax, and the decision to take out a Coronavirus Business Interruption Loan(CBIL) loan in March 2021)[184]By withdrawing those complaints of unlawful discrimination, the Claimant appears to be accepting that most of the management decisions made by Mrs Lord and Miss Russell during his ill-heath absence were lawful and only 3 were unlawful discrimination or victimisation without explaining how that distinction was made. It must also be remembered that Miss Russell and Mrs Lord had lawfully assumed the role of Joint Managing Partners and that they were limited in the contact they could have with the Claimant because of his unwillingness to have any direct contact with them and because of his continued ill heath absence.[185]The first management decision the Claimant complains was unlawful detriment/unfavourable treatment was made in August 2020 when the firm’s accountant Sarah Fields suddenly resigned because she decided there was a conflict of interest to act for the firm and the Claimant. As a result of that resignation, there was an urgent need to find a replacement accountant because the firm needed to submit SRA accounts by the end of September 2020.The Claimant provided his input through Mr Jones that one of the proposed accountancy practices should not be appointed. Mrs Lord and Miss Russell accepted his view and the partners agreed to appoint a different accountancy practice. On 29 October 2020, the Claimant wrote to the new accountants accepting their appointment. The Claimant was not excluded from that management decision.[186]The second management decision the Claimant complains is unlawful discrimination is the decision made in July 2020 to terminate the firms contract with Peninsula. During the pandemic, the HR manager had reported difficulties with Peninsula who were not answering queries or provide advice in a timely manner. As a result, the HR manager was having to find the answers elsewhere which was time consuming and meant that Peninsula were being paid for a service they were not in fact providing. The Claimant could not comment on those circumstances but accepted that if true continuing with that situation would have left the firm in a ‘vulnerable’ position at a difficult time. Mrs Lord and Miss Russell confirmed those were the circumstances the HR manager conveyed to them at the time. On that basis as the Managing Partners they made a reasonable management decision to end the contract with Peninsula and find a provider that could better meet the firm’s needs.[187]The third management decision was the settlement payment made to a former partner JB. The Claimant agreed that when he saw JB’s claim to the Employment Tribunal on 6 May 2020 it came as a surprise. The Claimant was included in all the emails and was provided with a copy the legal advice obtained by the firm which advised a settlement. On 20 May 2020, the Claimant directed that all direct contact should cease. The Respondent’s complied with that instruction and stopped sending the Claimant emails. A settlement was concluded based on the legal advice obtained by the firm. It was reasonable for the First Respondent to make that decision based on the legal advice obtained. In closing submissions, it was conceded that the 10.5 Reserved judgment with reasons – rule 61 63 March 2017 Claimant had been ‘partially involved’ in that decision and had not been excluded. Despite making that concession the complaint was not withdrawn. Allegation 8: Subjecting the Claimant to a barrage of correspondence and maintaining a hostile and aggressive tone and content in their communications with him.[188]This alleged detriment is not referred to at all in Mr Cordrey’s closing submission but is still pursued and was dealt with by Mr Burns at paragraph 70-71 of his closing submissions.[189]We agreed with the short and valid point Mr Burns makes that of the 4 examples the Claimant has referred to in his witness statement, 3 of the letters were sent between the solicitors litigating in Claim 1 and were not sent directly to the Claimant. Parties in litigation adopt a combative tone at times. The Claimant as an experienced solicitor is familiar with how that litigation process works.[190]The first letter the Respondents sent directly to the Claimant is the letter dated 6 January 2021 about the proposed office move. Mrs Lord was making the Claimant aware that his refusal to vote on or agree to the office move meant the firm would have to deal with the dilapidation works for the unsafe premises which she believed was not in the best interests of the firm. The Claimant complains this letter was intended to place ‘undue pressure’ on him. Further details of that correspondence are provided later in these reasons.[191]In the Claimant’s evidence he refers specifically to a second letter dated 1st March 2021 which was sent by Mrs Lord in circumstances where the Claimant was not agreeing to the CBIL loan. The Claimant complains that Mrs Lord was accusing him of not acting properly or in the best interests of the firm and he has identified the following comments which he found “deeply upsetting” (paragraph 136 CWS). “ It strikes me that you were prepared to allow us to take this loan out to the tune of 1.7 million pounds when It resulted in you benefitting from it yet when it is now clear that it is in fact the firm who need to benefit from it you seek to prevent it.”[192]In making those comments Mrs Lord was referring to the fact that the Claimant had agreed to the firm taking out a loan to pay the Claimant’s tax liabilities which could have been deferred to a later date while at the same time refusing to agree to the CBIL loan which was being offered on favourable terms and was desperately needed for the firm to remain financially viable. It was clear from the tone of those letters that Mrs Lord was becoming increasingly frustrated with the Claimant. She perceived he was being unreasonable and uncooperative in his approach to the office move and the CBIL loan.[193]It was reasonable for Mrs Lord as the Joint Managing Partner to be able to communicate her feelings in a clear and frank way to a fellow partner and joint owner of that business at a time of crisis. She was communicating her genuinely held view that the Claimant was behaving unreasonably by refusing to agree to a loan she believed was (and has proved to be) in the best interests of the firm. The Claimant accepted it was sent at a time when 10.5 Reserved judgment with reasons – rule 61 64 March 2017 the firm was in ‘absolute crisis’ and that Mrs Lord and Miss Russell appeared to be worried about the firm. Objectively viewed it was not reasonable for the Claimant to treat any of the letters sent by Mrs Lord or the letters exchanged between the parties’ solicitors during litigation as a detriment or unfavourable treatment. Allegation 9: Claimant’s retirement on 8 March 2021[194]In September 2020, the Respondents were still seeking a full health update and medical report about the possibility of the Claimant returning to work and whether any adjustments could be made to facilitate that. The Claimant accepted the contemporaneous evidence shows a ‘clear offer to make reasonable adjustments as soon as medical opinion said it was appropriate’.[195]When the Claimant agreed to having contact by post, the Respondents immediately put into place agreed adjustments which would enable the Claimant to participate in partnership meeting remotely. Mrs Lord would send an agenda and information in the post for the Claimant in advance of the partnership meeting so that the Claimant could add items, provide his input or request information. She would answer any request for information provide copies and post it out before the meeting, so that the Claimant was able to contribute to and be involved in partnership decisions. Her evidence about the steps she took from September 2020 was not challenged. It was also supported by the contemporaneous evidence we saw in relation to two urgent partnership issues that arose before the Claimant’s retirement relating to the premises and the loan.[196]The firm operated from two premises Number 7 and Number 9 North Church Street. A health and safety evaluation of the premises at No 7 had found the premises were ‘below an acceptable level’ and identified the problems which required urgent corrective action for the premises to be safe. The firm’s solicitors had advised the Respondents that because the lease was a full repair lease, the firm would be responsible for the repairs. In early October 2020 the Claimant was provided with all the available information and a proposed action plan to tackle the issues identified which were to be considered at a partnership meeting on 23 October 2020.[197]At that partners meeting, Mrs Lord and Miss Russell proposed a move out of No 7 and No 9 Church Street to a new location, 10 Paradise Square. These premises were owned by the same landlord who agreed that the firm could move out of Number 7 without having to deal with any of the repairs thereby releasing the firm from its obligations under the existing lease. The landlord was offering a solution which protected the firm from the costs of the repairs, and the insurance risks of continuing to operate from unsafe premises. The Claimant refused to enter a new lease and refused to agree to the move. Mrs Lord and Miss Russell voted for the move. Mr Jones abstained from voting because he was retiring at the end of March 2021 and did not think it was appropriate to be a signatory to any new lease. Without the Claimant’s consent, the firm could not take up the offer made by the landlord and the insurance on No 7 would remain invalid until the repairs were carried out.[198]The second issue that arose at this time was the Coronavirus Business Interruption Loan (‘CBIL’). It was a difficult time for the firm which like other 10.5 Reserved judgment with reasons – rule 61 65 March 2017 businesses was forced to close during the lockdown. The firm was able to obtain a loan of £700,000 from the government on very favourable terms but there was a government set deadline of 31 January 2021 for the application. On 6 January 2021, Mrs Lord resent the Claimant a copy of all the information she had previously provided about obtaining the loan because the situation was becoming very urgent and the Claimant was not responding. She invited the Claimant to speak separately to the bank manager and the firm’s accountant, both of whom had been consulted by the Respondents if he needed any assurances about the loan. The Claimant admitted he received all the information about the loan. The eligibility criteria required the business to show it would be viable were it not for the pandemic and it had been adversely impacted by the coronavirus. The Claimant said he understood CBIL and was familiar with it. He knew that financially the firm was in crisis and urgently needed this loan and accepted that Mrs Lord and Miss Russell were worried about the firm’s ability to survive the situation. Despite understanding and accepting the seriousness of the situation for the firm, the Claimant refused to agree to the loan. He instructed his solicitors to warn the Respondents’ solicitors that if the firm obtained the loan without his agreement, Mrs Lord and Miss Russell would be acting in breach of the LLP agreement. This was a striking stance for the Claimant to take knowing how important the CBIL loan was for the future viability of the firm.[199]It was even more striking because at this time the Claimant had insisted the firm take out a loan to pay the partners’ tax which was due to be paid on 31 January 2021 when the firm had the option to defer the tax payment. All the other partners had agreed to the deferral. On 25 January 2021, the Claimant wrote to his partners insisting his tax liability was paid in full and was not deferred. It was clear from the correspondence that the Claimant was able to proactively engage in discussions with the Respondents to ensure tax on his profit share was paid in full and on time. Even the Claimant’s solicitors became involved and insisted the Claimant’s tax liability was paid on time and could not be deferred. The Respondent paid the Claimant’s tax liability in full as a result of those express instructions.[200]On 4 February 2021, Mrs Lord wrote to the Claimant providing him with the agenda and information for the partners meeting to be held on 26 February 2021. She confirmed a decision needed to be made at that meeting about the premises and the CBIL loan(the deadline to apply having been extended to 31.3.21) and asked the Claimant to let her know if he required any further information before that meeting.[201]On 17 February 2021, having not had any further contact Mrs Lord sent a chaser letter to the Claimant reiterating the importance of having the Claimant’s vote on the premises and the loan.[202]On 25 February 2021 the Claimant communicated his decision to his partners through Mr Jones. He abstained from voting on the premises move and he refused to agree to the CBIL loan.[203]On the same day, Mrs Lord wrote to the Claimant urging him to speak to the bank about the loan if he had concerns about it. She also invited the Claimant to speak to firm’s accountant. Although the bank had sanctioned the loan, the firm could not obtain the loan without the Claimant’s express 10.5 Reserved judgment with reasons – rule 61 66 March 2017 agreement. Mrs Lord requested the Claimant confirm his agreement to the loan by 5 March 2021. She could not have made it any clearer as to the urgency of the situation.[204]On 2 March 2021 Mrs Lord sent another letter to the Claimant notifying him that an urgent partners meeting had been arranged on 10 March 2021 to discuss CBIL and the premises. The letter written in very clear direct and concise terms. The material parts are: “1. The CBIL. If this remains unauthorised then the firm is not financially viable. 2. Number 7. If you continue to abstain from voting on this issue, then we are left with a building which is not fit for habitation and poses a health and safety risk to our staff and client. By virtue of you not authorising the CBILS then we shall have insufficient funds to deal with dilapidations moving forward. As a result of the above issues we now need to consider our business continuity plan in line with our fiduciary duties to the LLP. We now need to consider whether it remains finically viable to continue to run the firm in light of the clear financial difficulties that present themselves as a result of you failing to authorise CBIL and preventing the move out of No 7 Church Street”[205]By abstaining from voting on the premises and refusing to agree to the CBIL the Claimant was not only preventing the firm from moving out of unsafe premises but he was also preventing the firm from obtaining a loan to carry out the necessary repairs to make the existing premises safe. By this stage Mrs Lord had done her best to persuade the Claimant that these decisions were being made in the best interests of the firm. She had provided all the available information, she had repeatedly invited him to speak separately to the Bank manager and the firm’s accountant, both of whom had been consulted by the Respondents. The Claimant did not take up any of those offers. The Claimant understood he was being asked to agree to the loan “on the basis that it might not be financially viable for the firm to continue without the loan’(paragraph 128 witness statement) and in cross examination accepted that the firm was in ‘absolute crisis’.[206]Given those undisputed facts about the attempts Mrs Lord made to try to persuade the Claimant to agree to CBIL it is surprising that the Claimant has alleged that he was ‘excluded’ from that management decision an allegation which was only withdrawn at this hearing.[207]In cross examination the Claimant accepted his inability to agree an interest free government Covid loan and his veto on moving out of the unsafe premises meant that the Respondents were forced to consider liquidation. The Claimant accepted that he knew that he had a difficult choice to make to either vote for the loan or for the firm to go into liquidation. He had all the information he needed to agree a loan. It was offered on favourable terms at a time when the firm was in ‘absolute crisis’ and could not have continued without the loan. Unfortunately, having made the decision not to agree to the premises move or to the loan the Claimant was not prepared to back down and was placed in the situation of having to face the consequences of his decisions. 10.5 Reserved judgment with reasons – rule 61 67 March 2017[208]The Claimant resigned with immediate effect by email sent on 8 March 2021. The Claimant’s resignation was accepted at the urgent partners meeting on 10 March 2021.Following the Claimant’s retirement the Respondents obtained the interest free CBILS loan, avoided liquidation, moved out of the unsafe premises and signed a new lease.[209]The Claimant says he resigned as “a direct result of the discriminatory treatment starting in Claim 2 which continued with the alleged unlawful treatment in Claim 2, as a result of his GP’s advice, he felt his position became untenable and he had no option but to retire” His last GP’s fit note expired on 8 March 2021.[210]At the time of the Claimant’s retirement Mrs Lord and Miss Russell believed the Claimant knew that by ‘obstructing’ these important decisions he was putting himself at risk if the firm collapsed. They believed that by resigning the Claimant avoided having to be at or involved in the crunch meeting on 10 March 2021 when he would have had to decide whether to cooperate with his partners and agree to the loan or disagree and see the firm fold.[211]After the Claimant’s retirement and in accordance with the LLP agreement the Claimant ceased to be a designated partner and then became an ‘outgoing member’ and a creditor of the LLP in relation to any undrawn balance of his profit share, capital and interest on capital. While the Capital and Interest are easily identifiable and calculable and no issue arises about that between the parties and the amount due has now been paid (less a tax liability deducted from the Capital Account which may/may not be an issue between the parties in the future). Clause 21(5) of the LLP Agreement provides that “where there is a dispute about the undrawn balance of profit share between the Outgoing Member and Designated Members it is for the Accountant to decide “any sums as in the opinion of the Accountants (acting as experts and not as arbitrators) are required to be paid to the Outgoing Member to represent the value of his share in the LLP at his Leaving Date”. The LLP agreement clearly envisages that in any dispute about the sums to be paid to the outgoing member to represent the value of his share in the LLP at his leaving date it is a decision for the LLP Accountants to make not the designated or outgoing member.[212]On 31 March 2021 (see Claimant’s witness statement paragraph 63.2 letter dated 31 March 2021) Mrs Lord wrote to the Claimant confirming: “We have asked the LLP Accountant to calculate what is due to you and I attach their calculation for your information. The monthly figure of £5,689.17 represents what you are owed from both your capital and current account, less the PHI payments you have received…. I confirm that we will revisit what is owed to you following the outcome of the Remedy Hearing”.[213]At paragraph 65.7 and 65.8 the Tribunal have set out the correspondence that follows and highlighted some text from the letter dated 27 July 2021 from the Claimant to Respondents in which the Claimant acknowledged the “ payment of my income tax on my full profit share” and “reaffirm(ed) that payment of my Current Account balance is not appropriate until decided by the Employment Tribunal”. In response the Respondents confirmed that in “accordance with your requests we shall not commence payments of your current account at this stage”. 10.5 Reserved judgment with reasons – rule 61 68 March 2017[214]On 31 March 2021 the Accountants had calculated the value of the Claimant’s share at his leaving date and decided that as an outgoing member the PHI payments received (£206,921.00) should be deducted from his estimated current account balance. As at 31/3/21 the profit share forecasts were £336,731.00 leaving an amount owed to the Claimant of £129,810 which is disputed. It was left for the Remedy hearing to decide if the £206,921.00 in dispute was a loss flowing from any unlawful discrimination for which damages should properly be awarded in accordance with Section 124 Equality Act 2010.
Applicable Law
[215]These complaints of unlawful discrimination are brought under section 45 Equality Act 2010 (‘EqA’).[216]Section 45(2)(d) provides that “An LLP(a) (A) must not discriminate against a member(b) (B) by subjecting B to any other detriment”. Section 45(6)(d) provides that “An LLP must not victimise a member (B) by subjecting B any other detriment”. Section 45(7) provides that “A duty to make reasonable adjustments applies to an LLP”. ‘LLP’ means a limited liability partnership within the meaning of the Limited Liability Partnership Act 2000.[217]For the disability discrimination complaints Section 15 (discrimination arising from disability) and sections 20 and 21(failure to make reasonable adjustments) apply. For the victimisation complaints section 27 EqA applies.[218]For the Tribunal to have jurisdiction to consider the EqA complaints. Section 123 EqA requires that the claim is brought in time and provides that: “proceedings may not be brought after the end of a) the period of 3 months starting with the date of the act to which the complaint relates or(b) such other period as the employment tribunal thinks just and equitable”.[219]Subsection 123(3) EqA provides that “conduct extending over a period is to be treated as done at the end of the period and failure to do something is to be treated as occurring when the person in question decided on it”[220]The Claimant has the burden to prove a prima facie case in relation to the alleged contraventions of Sections 15, 20 and 21 and 27 EqA. Section 136 EqA (burden of proof) provides that: “(1) This section applies to any proceedings relating to a contravention of this Act. (2) If there are facts from which the court could decide, in the absence of any other explanation, that a person (A) contravened the provision concerned, the court must hold the contravention occurred. (3) But subsection (2) does not apply if A shows that A did not contravene the provision”. 10.5 Reserved judgment with reasons – rule 61 69 March 2017[221]In Hewage and Grampian Health Board 2012 ICR 1054 SC. The Supreme Court provided some useful guidance about the role of the burden of proof provisions: “They will require careful attention where there is room for doubt as to the facts necessary to establish discrimination, but they have nothing to offer where the tribunal is in a position to make positive findings on the evidence one way or another”[222]If the Employment Tribunal is satisfied that the reason given by the employer is a genuine one and does not disclose either conscious or unconscious discrimination, then that is the end of the matter (see Laing - v- Manchester City Council 2006 ICR EAT).[223]The ‘burden of proof’ provisions were considered more recently in Royal Mail Group Ltd-v- Efobi 2021 UKSC33. The Hewage guidance was referred as a useful reminder ‘not to make too much of the provision’. The Supreme Court also confirmed the correct approach to applying the provisions in discrimination cases: “The Claimant has the burden of proving, on the balance of probabilities, those matters which he or she wishes the Tribunal to find as facts from which the inference could properly be drawn (in the absence of any other explanation) that an unlawful act was committed. That is not the whole picture since, as discussed along with those facts which the Claimant proves the Tribunal must also take account of facts proved by the Respondent which could prevent the necessary inference being drawn”[224]Section 15(1) EqA provides that treatment of a disabled person amounts to discrimination arising from disability when “A person(a) (A) discriminates against a disabled person(b) (B) if: (a) A treats B unfavourably because of something arising in consequence of B’s disability, and (b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim.[225]For a complaint under Section 15 to succeed: 1. There must be unfavourable treatment by A. 2. There must be something that arises in consequence of the B’s disability. 3. The unfavourable treatment must be because of (i.e. caused by) the something that arises in consequence of the disability and 4. The alleged discriminator(A) cannot show the unfavourable treatment is a proportionate means of achieving a legitimate aim.[226]Comprehensive guidance has been provided about those requirements in Secretary of State for Justice -v- Dunn EAT 2016/02341 and in Pnaiser -vNHS England 2016 IRLR 170. “The Tribunal must first decide whether A treated B unfavourably in the respects relied upon by B. They must then determine what caused the impugned treatment or what was the reason for it. The focus at this stage 10.5 Reserved judgment with reasons – rule 61 70 March 2017 is on the reason in the mind of A. An examination of the thought processes of A is likely to be required. The ‘something’ that causes the unfavourable treatment need not be the main or sole reason but must have at least a significant (or more than trivial) influence on the unfavourable treatment and so amount to an effective reason for, or cause of it. The causal link between the something that causes unfavourable treatment and the disability may include more than one link. In other words, more than one relevant consequence of the disability may require consideration and it will be a question of fact assessed robustly in each case whether something can properly be said to arise in consequence of disability”.[227]In relation to the meaning of ‘unfavourable’ treatment the Supreme Court provided guidance on the meaning and whether it means the same as detriment in the case of Williams -v Trustee of Swansea University Pension and Assurance Scheme 2019 ICR 230 SC. It held that “this term in section 15 was deliberately chosen by Parliament and used in preference to detriment because it has the sense of placing a hurdle in front of creating a particular difficulty for disadvantaging a person. It followed that treatment that was advantageous cannot be said to be unfavourable treatment because it was not sufficiently advantageous”.[228]Section 27(1) EqA prohibits victimisation which occurs when: “A person(a) (A) victimises another person(b) (B) if A subjects B to a detriment because B does a protected act or A believes that B has done or may do a protected act”.[229]Section 27(2) identifies what can constitute a protected act:(a) bringing proceedings under the EqA,(b) giving evidence or information in connection with proceedings under the EqA,(c) doing any other thing for the purposes of or in connection with the EqA (d) making an allegation(whether or not express) that A or another person has contravened the EqA.[230]It is accepted that the Claimant did protected acts falling within 27(d) by virtue of the Claimant’s solicitors’ letter of 6 January 2020 and 27(2)(a) by the Claimant bringing Claim 1 on 16 April 2020.[231]For the Claimant to establish a prima facie case of victimisation. The Tribunal must first decide whether A subjected B to a detriment, if so, what was the reason for? was it because B did a protected act?[232]The Equality and Human Rights Code of Practice on Employment 2011(‘EHRC’) explains that unfavourable treatment means ‘put at a disadvantage’ (paragraph 5.7). Detriment in the context of victimisation (paragraph 9.8) is “anything which the individual concerned might reasonably consider changed their position for the worse or put them at a disadvantage”.[233]The meaning of detriment was recently considered by the EAT in Warburton-v-The Chief Constable of Northamptonshire Police EA2020/000378. It was confirmed in that case that the key test is “Is the treatment of such a kind that a reasonable worker would or might take the view that in all the circumstances it was to his detriment” (Shamoon-v- Chief Constable of the Royal Ulster Constabulary 2003 ICR337 HL).[234]Detriment is to be interpreted widely in this context. It is not necessary to establish any physical or economic consequence. Although the test is framed by reference to a reasonable worker, it is not a wholly objective test. 10.5 Reserved judgment with reasons – rule 61 71 March 2017 It is enough that a reasonable worker might take such a view. This means that the answer to the question cannot be found only in the view taken by the Employment Tribunal itself. The Employment Tribunal might be of one view, and be perfectly reasonable in that view, but if a reasonable worker (although not all reasonable workers) might take the view that in all the circumstances it was to his detriment, the test is satisfied.[235]As to causation or the “reason why” the correct question was whether the protected act had a significant effect on the outcome.(see Chief Constable of West Yorkshire Police-v-Khan 2001 1WLR 1947, Nagarajan-v-London Regional Transport 2000AC 502,Chief Constable of Greater Manchester-vBailey 2017EWCA CIV 425 and Page-v- Lord Chancellor 2021ICR912 CA)[236]Section 20 (3) EqA imposes a duty on a person A to make reasonable adjustments “where a provision, criterion or practice of A’s puts a disabled person at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled, to take such steps as it is reasonable to have to take to avoid the disadvantage”.[237]Section 21 EqA provides that a failure to comply with Section 20(3) is a failure to comply with a duty to make reasonable adjustments.[238]Schedule 8 paragraph 20 EqA deals with the limitations on the duty to make reasonable adjustments if the employer does not have actual or constructive knowledge of disability or of the disadvantage and provides “A is not subject to a duty to make reasonable adjustments if A does not know and could not reasonably be expected to know that an interested disabled person has a disability and is likely to be placed at the disadvantage referred to”.[239]In Environment Agency-v- Rowan 208 IRLR 20 the EAT provided guidance on the matters an Employment Tribunal must identify before it can properly make findings of a failure to make reasonable adjustments. Firstly, the PCP applied by or on behalf of the employer, or the relevant physical feature of the premises occupied by the employer. Secondly the identity of the non-disabled comparators (if appropriate) and thirdly the nature and extent of the substantial disadvantage suffered by the disabled person.[240]Guidance on ‘what disadvantage gives rise to the duty?’ is provided in the EHRC at paragraphs 6.15 and 6.16. A substantial disadvantage is something that is “more than minor or trivial” (section 212(1) EqA). Whether such a disadvantage exists in a particular case is a question of fact and is to be assessed on an objective basis. The purpose of the comparison with people who are not disabled is to establish whether it is because of disability that a particular provision criterion practice or physical feature or the absence of an auxiliary aid, disadvantages the disabled person in question.[241]EHRC Code at paragraph 11.23(Chapter 11) provides that: “where a LLP is required to make adjustments for a disabled member the cost of making the adjustment must be borne by the LLP. The member may be required (because members share the costs of the LLP) to make a reasonable contribution towards the expense. In assessing the reasonableness of any contribution (or level of such contribution) particular regard should be had 10.5 Reserved judgment with reasons – rule 61 72 March 2017 to the proportion in which the disabled member is entitled to share in the LLP’s profits, the cost of the reasonable contribution and the size and administrative resources of the LLP”. Submissions[242]Both Counsel provided detailed and lengthy written closing submissions which the Tribunal considered very carefully in our deliberations. Conclusions Should the Tribunal imply a term into the LLP agreement ‘stopping profit share income accruing to the members current account while a member is in receipt of PHI’[243]First the Tribunal decided this issue as it was invited to do by Mr Burns. It was accepted that there was no express term ‘stopping profit share income accruing to the members current account while a member is in receipt of PHI’ and invited the Tribunal to imply that term into the LLP agreement on the basis that it is clear from the evidence that:a. The PHI Policy does not permit C to be paid in work and/or receipt of LLP profit share income while also receiving PHI payments:b. The LLP Agreement makes provision for PHI and therefore must (by necessary implication) mean that a members’ entitlement to earn profit share does not apply when he is totally unable to work through illness and claiming PHI instead.[244]Mr Burns invites the Tribunal to imply such a term in order for the LLP Agreement to make any sense. In his written closing submissions (paragraphs 20-21) he refers to recent leading authorities of Marks and Spencer plc-v- BNP Paribas Securities Services Trust Co (Jersey) Ltd (2016) AC 742 and the useful summary of the position given in Ali Petroleum Co of Trinidad and Tobago (2017) UKSPC 2 at (7): “It is enough to reiterate that the process of implying a term into the contract must not become the re-writing of the contract in a way which the court believes to be reasonable or which the court prefers to the agreement which the parties have negotiated. A term is to be implied only if it is necessary to make the contract work, and this may be if (i) it is so obvious that it goes without saying(and the parties although they did not exhypothesi, apply their minds to the point would have rounded on the notional officious bystander to say, and with one voice “Oh, of course’) and/or(ii) it is necessary to give the contract business efficacy. Usually the outcome of either approach will be the same. The concept of necessity must not be watered down. Necessity is not established by showing that the contract would be improved by the addition. The fairness or equity of a suggested implied term is an essential but not a sufficient pre-condition for inclusion. And if there is an express term in the contract which is inconsistent with the proposed implied term, the latter cannot, by definition, meet these tests, since the parties have demonstrated that it is not their agreement”.[245]Mr Burns has identified the ‘M&S principles’ for implying a term which are set out at paragraph 21 (a)-(h) of his written submission. At (g) the principle highlighted is that “the question is to be assessed at the time the contract 10.5 Reserved judgment with reasons – rule 61 73 March 2017 was made : it is wrong to approach the question with the benefit of hindsight in the light of the particular issue that has in fact arisen. Nor is it enough to show that, had the parties foreseen the eventuality which in fact occurred, they would have wished to make provision for it, unless it can also be shown either that there was only one contractual solution or that one of several possible solutions would without doubt have been preferred”.[246]The Tribunal agreed it would be wrong to approach the question with the benefit of hindsight just because a particular issue subsequently arises, like the PHI/Profit Share issue which arose in December 2019, 4 years after the LLP Agreement was made. That agreement is a detailed commercial contract made between the designated members of the LLP, all of whom are experienced solicitors. Each of the parties had invested the same amount of capital in the business each had an equal share and equal bargaining power to decide the terms of that contract. They could agree to include or exclude any term they wished to and the precise wording of the term they agreed to include in the contract.[247]Accordingly, they agreed to include clause 12(1)(g) in relation to fixed share members providing that “for any period of illness or incapacity exceeding 6 months absence in any year or lesser periods totalling 6 months in any period the Fixed Share Member shall not be entitled to any profit share.” They decided not to include a similar term for the designated members ‘stopping profit share income accruing to the members current account while he is in receipt of PHI’ or to address their minds to the contractual solution they wanted in the event that a designated member was absent for any period of illness or incapacity.[248]There was more than one possible solution to consider in relation to PHI benefit and stopping profit share, for example how long into a period of illness of the designated member before their profit share was stopped: was after days/months/or years of incapacity? How would the profit share be stopped? Would this term be inconsistent with any other express terms (the profit share allocation clause) and if so, how would any inconstancy between the express term and implied term be resolved? There were so many possibilities that the term was not capable of clear expression in precise terms depended on what the parties to the contract preferred.[249]It was not necessary to imply the suggested term to make the contract workable, or to give it business efficacy because it had been working without that term from 2015-2019 without any issues. The Tribunal did not agree with the suggestion made by Mr Burns that without the term the contract would lack commercial or practical coherence. It was also not necessary to imply the term to satisfy the obviousness test that it was so obvious that it goes without saying and the parties would have said with one voice “oh of course”. There were so many possibilities to consider for any period of illness or incapacity absence that the designated members had not applied their minds to or had wished to when the contract was made for it to be so obvious to the Tribunal that the term now proposed was the one they would have agreed to. For those reasons the Tribunal does not imply any term into the LLP agreement ‘stopping profit share income accruing to the members current account while the member is in receipt of PHI. 10.5 Reserved judgment with reasons – rule 61 74 March 2017 How should the Tribunal decide Claim 1 Remedy Issues?[250]The remedy list of issues for the admitted discrimination in Claim 1 have already been identified. PHI payments received by the Claimant will be only be taken into account by the Tribunal, if they are relevant to remedy, if profit share is awarded as a loss that flows naturally and directly from any unlawful discrimination (see remedy list of issues for past and future financial loss at paragraph 18). Past Financial Loss (EqA 2010 section 124) 3.2. But for the unlawful discrimination, what profit share would have been paid to the Claimant by the Respondents for the financial years 2018/2019 and 2019/2020: and 3.3. What sums has the Claimant received by way of Permanent Health Insurance during this period and should any, or all of these sums be deducted from the loss of profit share when calculating any past financial loss? 4. Future Financial losses 4.1. In accordance with the principles set out at para 3.1 above, what, if any compensation related to the period from the remedy hearing onwards is required to put the Claimant into the financial position he would have been in but for the unlawful discrimination (the Respondent’s position is that there is no ongoing loss)”.[251]The Tribunal has not therefore decided the remedy issue Mr Cordrey invited it to, as to whether the Respondent should be permitted to resile from their (disputed) “unequivocal written concession” made before the Claim 1 liability judgment that profit share will be awarded to the Claimant, with the only dispute being how to correctly calculate that profit share (see paragraph 19). The Tribunal’s view is that if the parties do not agree remedy in Claim 1 the Tribunal will decide the remedy issues as identified and can only award compensation if the loss flows naturally and directly from the admitted discrimination and should be properly be awarded to the Claimant and is supported by evidence. In relation to the disputed concession the Tribunal agreed with Mr Burns that the principle of ‘res-judicata’ applies to the Claim 1 Liability Judgment and any dispute about the terms upon which liability was settled between the parties at that hearing before judgment was issued by Employment Judge Maidment would require an application for reconsideration to the Employment Judge and cannot be decided by this Tribunal which is bound by that earlier judgment.[252]The Tribunal has also not decided what the correct construction and interaction is between the LLP and PHI because it was not necessary for it to be decided as part of the liability judgment. The Tribunal has set out in its findings the relevant terms of the LLP and PHI policies to understand the parties’ positions on the disputed issues and to decide the facts relevant to the detriment/unfavourable treatment complaints. The parties accept this is not an issue of discrimination in the list of issues and unless it is a remedy issue it is not clear to the Tribunal how or why it should resolve a contract dispute about the LLP agreement which has expressly been carved out of the Claim 1 liability judgment and may be brought in another Court if it cannot be resolved. As far as the insurance contract between the Claimant 10.5 Reserved judgment with reasons – rule 61 75 March 2017 and Aviva is concerned the interaction and correct construction of that contract will now have been considered by Aviva, who will have seen the LLP agreement and the financial information provided by the Claimant. If the parties consider it is relevant to remedy, then it will be necessary for the Tribunal to see Aviva’s answers to the questions and their reasons for suspending the benefit, if it affects any loss of income claim made in respect of any unlawful discrimination. Similarly if the parties consider a remedy issue involves consideration of the ‘insurance exception’ rule which the parties must ensure the Tribunal has all the relevant information at the remedy hearing and any applicable case law so that representations about this can be considered at the remedy hearing. Liability Issues in Claim 2 : Victimisation/discrimination arising from disability.[253]The issues the Tribunal had to decide were whether the alleged conduct occurred? For the victimisation complaints the issue was whether that conduct had occurred did it amount to a detriment? If so, did the first claim (protected act) have a significant effect on the outcome? For the discrimination arising from disability if the alleged occurred, the issue was whether the conduct amounted to unfavourable treatment? If so, was the reason for that unfavourable treatment something arising in consequence of the Claimant’s disability? Allegation 1: Withholding Profit Share[254]Mr Cordrey submits (paragraph 79 and 80 written submissions) that the Respondents were withholding profit share as part of a tactic to pressure the Claimant to resign. He submits Miss Russell and Mrs Lord have taken approximately £360,000 of profit out of the business over the last three years whilst the Claimant has received nothing. The reason the Claimant has received nothing is the same reason that they sought to expel him from the firm and marginalise and exclude him: because of his sickness absence, his entitlement to PHI and profit share and the fact he had issued a discrimination claim against them.[255]Mr Burns submits (paragraphs 76-83) that the alleged conduct of ‘withholding’ profit is not made out on the undisputed facts. Profit share is payable in 3 ways, monthly drawings of £5,000 on account of profit share, payments of income tax on profit share to HMRC on behalf of each member and any additional drawings of profit decided by the members if there is excess in the members’ current account and good cashflow to enable profit to be taken.[256]It is common ground that all members have been treated the same in relation to the payment of income tax. The accounts were filed on the Claimant’s insistence, as if he was entitled to full profit share without any deduction due to PHI - therefore all members have drawn profit share on account of income tax. Albeit the Claimant has filed contradictory accounts on 1 November 2021 to show that he earned no profit and was not required to pay income tax during 2019 and 2020. Mr Burns submits the Claimant’s motivation for doing so appears ‘rather murky’. 10.5 Reserved judgment with reasons – rule 61 76 March 2017[257]Mr Burns submits that it is also common ground that the Claimant has not taken monthly drawings of £5,000 while in receipts of £6-7,000 in monthly PHI payments. These drawings were not paid with his agreement initially. It is assumed that he did not want the Respondent to pay him monthly drawings as he wanted instead to take the profit as a lump sum so he could pay it into his pension fund and represent to Aviva that it was actually paid ‘directly’ from the LLP to ‘his pension pot’. Therefore, it is not thought that this is part of his claim of withholding. None of the members have had any profit share in excess of monthly drawings throughout the period of Claim 2. There has not been the cashflow to pay out further profit share even if there had been no dispute. Mr Burns relies on the Claimant’s repeated concession (made during the Tribunal’s questioning and in re-examination) that lack of cashflow was the reason why he had not been paid profit share before his retirement. It was also conceded that the reason why the LLP members have not been paid any profit share as an annual lump sum over and above drawings is due to Covid - related cash flow which the Respondents submit have nothing to do with disability or the Claimant bringing his first claim on 16 April 2020. Conclusions on Allegation 1: Withholding Profit Share[258]The Tribunal preferred and accepted all of Mr Burns submissions on this allegation which were supported by the findings of fact made by the Tribunal at paragraphs 117-137. Firstly, Mr Burns has correctly assumed the reason why the Claimant was not paid his monthly drawings from October 2018 was because of the common understanding of the parties that profit share paid by the firm would affect the income protection benefit paid by Aviva, the Claimant could not have both. As the Claimant confirmed to his partners on 27 September 2018 “under the terms of the insurance I cannot be paid by the firm after 4 October 2018”. The timing of the Claimant’s communication to his partners fits with the Insurer’s written confirmation email of 26 September 2018, that any continuing income would be taken into account in calculating the benefit entitlement and could exhaust/exceed the PHI payment made by the Insurer which could result in an overpayment of benefit which would be reclaimed. The Insurer was being transparent with the Claimant before it made any payments and made it clear there was an ongoing duty of disclosure of medical incapacity and of financial information. Two years later in October 2020 the Claimant wrote to the LLP’s new accountant to provide some background and confirmed “I ceased taking any drawings from the LLP in October 2018 when a personal PHI scheme commenced” .He confirmed that position at this hearing in his witness statement “I have never suggested that I would take my profit share as drawings during the period I was in receipt of the PHI benefit”(see paragraph 105). The decision not to take any monthly drawings from October 2018, was a decision made by the Claimant because it suited him and was financially in his best interests. The Claimant now seeks to unfairly portray Miss Russell and Mrs Lord as the greedy partners paying themselves the drawings they were entitled to be paid for working from October 2018 and not paying him when he was totally unable to work and was claiming benefit for his lost income under the terms of the insurance. 10.5 Reserved judgment with reasons – rule 61 77 March 2017[259]At the end of each LLP accounting period in December 2018/2019 and 2019/2020 the LLP Accounts were approved and agreed by the equity partners. The Claimant knew his full profit share had been allocated (without reduction) to his current account and that his tax liability on his profit share was declared to HMRC and paid in full on time at his insistence. He accepted there was no cash flow available for the whole Claim 2 period and that was the reason why unpaid profit share was not distributed to any designated member. The LLP accounts showed profit share had not been ‘withheld’ from him and had been correctly allocated to him in the LLP accounts. The Respondents correctly pleaded in their response that it has been evident to the Claimant that the Respondents’ have not withheld the Claimant’s profit share for discriminatory reasons (see paragraph 68). It was evident that was his understanding in July 2020 in the further and better particulars provided for Claim 1 and to the LLP accountant in October 2020 his concern was about missing any distribution of profit share made to the other designated members and it would have been apparent from the accounts that had not happened because the firm did not have the available funds. At all times up until the Claimant’s retirement on 8 March 2021 the Claimant knew his full profit share had been allocated to his current account and had not been withheld yet has continued to present a case fundamentally contrary to the evidence.[260]When the Claimant retired on 8 March 2021, he retired knowing his full unpaid profit share had been allocated to his current account. As at the leaving date the Claimant was no longer a designated member and became an “outgoing member” of the LLP whose unpaid profit share and capital became a debt of the firm. On 31 March 2021 in accordance with the terms of the LLP agreement the LLP accountant calculated his entitlement as at the leaving date. The accountant deducted PHI payments received by the Claimant and then calculated a monthly repayment figure for 3 years to 31 March 2024. The Respondents wanted to start repaying the Claimant to reduce the debt from his capital and current account, but the Claimant insisted he was not to be paid anything from the balance of his current account until the Tribunal decided remedy. The Respondents complied with his instruction which he reaffirmed, for the ‘avoidance of any doubt’. In light of those incontrovertible facts (known to the Claimant), it was difficult for the Tribunal to understand why the second claim was presented in June 2021 alleging that as a designated member he was subjected to unlawful discrimination in January 2020 when he knew his profit share had not been withheld from him.[261]Mr Cordrey has not identified any of the evidence from which the Tribunal could make the necessary findings of facts to establish a prima facie case of unlawful discrimination that the Respondents were withholding the Claimant’s profit share. Instead the submission made focusses on Miss Russell and Mrs Lord unfairly taking advantage of the situation by taking their monthly drawings and paying the Claimant nothing when in reality the situation was being engineered by the Claimant to achieve the outcome that was most advantageous to him. Unfortunately, the Respondents would not legitimise that plan because they believed it was dishonest, wrong and potential insurance fraud. The Tribunal finds the alleged conduct of the Respondents ‘withholding profit share’ is not proved. It follows that there was no detrimental/unfavourable treatment by the Respondents. 10.5 Reserved judgment with reasons – rule 61 78 March 2017 Allegation 2: Continuing to question the Claimant’s honesty and integrity in applying for and receiving income protection (PHI) and accusing him of misleading his insurers,[262]Mr Cordrey did not address the Tribunal on this allegation in his written closing submissions which he limited to the allegations of withholding profit share, excluding the Claimant from some management decisions, the Claimant’s retirement and reasonable adjustments.[263]Mr Burns submits that the Respondents had genuine and justified concerns about the PHI claim and the Claimant’s failure to tell Mr Munday the full story as he submits was revealed during the course of the hearing. This was not something in consequence of his disability or his claim but entirely caused by the Claimant’s questionable conduct in trying to claim both PHI and profit share. It is very difficult to see how, in the light of the evidence given to the Tribunal, that the Claimant could have honestly believed he was entitled to both. He said was unable to answer the Judge’s question about why he did not tell his insurers that he did have earnings declared to HMRC when they had twice emphasised that this would affect his PHI payments. Mr Burns submits that the cross examination made very clear that the Claimant has engaged in very dubious conduct and reluctantly and unusually invited the Tribunal to find that the Claimant has been actively dishonest rather than just very foolish. It is now clear that he has sought to hide behind oral advice from Mr Munday, oral advice from HMRC all to suggest that he genuinely believed that he could simultaneously be paid PHI income protection payments and the very income that they were supposed to insure. The Respondents suspected all along that he could not genuinely and honestly believe that to be the case-he was an experienced and intelligent solicitor and partner. Their suspicions were confirmed by the views of the LLP Accountants. The Claimant accepted the correct analysis in the propositions that were put to him about how the insurance policy and profit costs work that if the LLP paid out normally the insurance would not pay out which were agreed by the Claimant confirming that was his understanding at the time. Conclusions on allegation 2: Continuing to question the Claimant’s honesty and integrity in applying for and receiving income protection (PHI) and accusing him of misleading his insurers[264]The Tribunal reminded itself that ‘detriment’ is to be interpreted widely in this context. It is not necessary to establish any physical or economic consequence. Although the test is framed by reference to a reasonable worker, it is not a wholly objective test. It is enough that a reasonable worker might take such a view. This means that the answer to the question cannot be found only in the view taken by the Tribunal itself. The Tribunal might be of one view, and be perfectly reasonable in that view, but if a reasonable worker (although not all reasonable workers) might take the view that in all the circumstances it was to his detriment, the test is satisfied.[265]The Tribunal has unusually in these reasons set out all the evidence in chief on this allegation, which was given by the Claimant (orally and by way of 10.5 Reserved judgment with reasons – rule 61 79 March 2017 documents) to evaluate the credibility of the evidence the Claimant gave to decide whether it support his allegation that the Respondents had by continuing to question his honesty and integrity in Claim 2 and suggested that he was misleading his insurer were subjecting him to unlawful discrimination and victimisation? To argue this was a detriment and these questions were unjustified the Claimant asserts he was ‘completely transparent with Aviva about the unpaid profit share and the tax paid’ and provided them with all the documentation. The Respondents do not agree that the Claimant had been completely transparent either with them or with Aviva and has been selective about the information he has disclosed and has supressed material facts/information. They were concerned they could be implicated in potential wrongdoing/ insurance fraud and wanted to obtain appropriate assurances from the Claimant/Insurer to protect the designated members and the LLP.[266]The findings of fact made by the Tribunal(paragraphs 125, 128, 144-154) support the Respondents belief at the time that the Claimant was not being completely transparent about the unpaid profit share or tax .The Claimant was a Senior Solicitor and an experienced Managing Partner who had detailed knowledge of the firm’s finances, partnership tax and individual members tax liabilities. Historically the Respondents and the Claimant had always correctly treated profit share as earned income of the LLP until the Claimant changed his mind in November 2021 by filling amended nil tax returns. Up to that point and for more than 20 years he worked under the common understanding that “when members of an LLP file their personal tax returns, they are required to include as a taxable profit from the LLP whatever sum has been allocated to them in the partnership statement contained within the LLP’s partnership return: section 8(1B)-(1)(C) of the Taxes Management Act 1970. He knew ‘receipt’ was not the taxable event in the LLP. The Claimant confirmed his understanding of his personal tax liability to the new LLP accountant in October 2020. He confirmed it was his intention to continue to be proactively involved in the calculation of the members income tax and confirmed his personal accountant would be submitting his tax returns. He insisted his tax on his unpaid profit share was paid on time. Consistent with that position, his tax return was submitted in January 2021 with the advice and assistance of his accountant declaring income (profit share) in the same way as it had always been declared. The Tribunal found the Claimant’s enquiry to HMRC involved selective reporting of information and was extremely suspicious and self-serving. The nil tax returns were provided to AVIVA to persuade the Insurer that there were no ‘continuing payments’ in an attempt to explain the Claimant’s omission in declaring his ‘continuing income’. If that new tax return was correct, the LLP accounts approved by the Claimant and filed at Companies House each year allocating him his full profit share were incorrect. The Claimant has continued to unfairly blame the First Respondent and/or the First Respondent’s accountant for ‘wrongly’ paying his tax on profit share when he knew it was paid correctly on his unpaid profit share with his knowledge and approval. His case was fundamentally contrary to the evidence and his evidence at this hearing was untruthful and was misleading.[267]The Claimant’s assertion that he was being ‘completely transparent’ with the Aviva and had disclosed all the information they requested was also untrue. It had taken the Claimant 3 years (September 2018 to September 10.5 Reserved judgment with reasons – rule 61 80 March 2017 2021) to provide information requested by Aviva. Up to then the Claimant had only disclosed historical information to support the initial assessment of his claim leaving Aviva to assume(wrongly) that there was no ongoing continuing income declared to HMRC. The Claimant never verbally informed Mr Munday that he was receiving continuing income on which tax had been paid twice yearly (January and July) in 2019, 2020, 2021 in the total sum of £252,283.53. He gave unsatisfactory evidence that did not explain the omission. It had taken more than 14 months (December 2019 to February 2021) for the Claimant to answer the Respondent’s questions about PHI/Profit Share and a further 6 months before the Respondents solicitors went on to make their own direct reasonable enquiries with Aviva, because the Claimant was unwilling to cooperate with making a joint enquiry. The questions the Respondents wanted to ask Aviva were not misleading. The answers have been provided to the Claimant but have not been shared with the Respondents or the Tribunal. They are said to have resulted in PHI payments being suspended from November 2021, presumably because the financial information the Claimant provided in September 2021 disclosed continuing income which affected the PHI benefit which had been the Respondents’ position all along.[268]The Tribunal agreed with Mr Burns submissions which were supported by the findings of fact. Unfortunately, the overall impression the Tribunal had of the Claimant was that he was not a truthful witness he was not completely transparent and had given misleading evidence to the Tribunal in an attempt to hide the true facts because they were unhelpful to his case. However, it was not the Tribunal’s view as to the Claimant’s honesty and integrity that was relevant to decide if he had been subjected to a detriment by the Respondents’ continuing to question the Claimant’s honesty and integrity in applying for and receiving income protection (PHI) and accusing him of misleading his insurers.[269]The key issue is whether “the treatment is of such a kind that a reasonable worker would or might take the view that in all the circumstances it was to his detriment” The relevant circumstances of the treatment of the worker are that he is an equity partner in a law firm, which pays the partners’ premiums for income protection benefit to compensate the partner for lost income as a result of medical incapacity. The partners agree that while the worker is in receipt of income protection benefit, he cannot be paid by the firm. A year later the worker changes his mind and wants the other partners agree to pay him by way of an annual lump sum made directly into his pension so that he can be paid by the firm and by the insurer. There is then a dispute between the partners about whether it was appropriate for the firm to make payments in the way suggested based on their understanding of insurance and potential fraud. The firm and the other partners are concerned that if they agreed to do what the worker suggests they could be implicated in potential insurance fraud/dishonesty. In those circumstance they seek appropriate assurances from the worker and his solicitors to protect their position. The firm and the other partners were not satisfied by the responses provided to those enquiries and seek the worker’s agreement to making a joint insurance enquiry with the workers solicitors so the insurer can provide the appropriate assurances. The worker is uncooperative and unwilling to 10.5 Reserved judgment with reasons – rule 61 81 March 2017 make those joint enquiries. As a result, the firm and the other partners attempt to make their own enquiries with the insurer. The insurer conducts its own investigation and requests the worker provides financial information. Payment of income protection benefit is then suspended pending further investigation. The worker complains the continuing enquiries made by the firm and the partners about the insurance and payment by the firm were unjustified because he has been completely transparent with the insurer.[270]Would a reasonable worker in those circumstances view continuing enquiries being made of the worker’s insurance claim and receipt of benefit as a detriment or unfavourable treatment? The Claimant would be put at a disadvantage if the continuing enquiries were unjustified because he had provided satisfactory responses to the questions asked and had cooperated with a joint enquiry. That was not the position because the Claimant was not being transparent with the Insurer or with the Respondent and he had not disclosed all information about unpaid profit share and tax paid. The reason why the Respondents continued to ask questions was because they were not satisfied by the response the Claimant had given to them or by the very limited information the Claimant was prepared to voluntarily disclose to them. They were genuinely concerned, and the Tribunal have found, that information was being supressed from the Respondents and from the Insurer. The continued questioning was not in all the circumstances a detriment or unfavourable treatment. All designated members of an LLP have responsibilities to each other and the LLP to act in good faith and would be expected to seek appropriate assurances to protect the LLP. If the Tribunal was wrong in its view that it was not a detriment or unfavourable treatment, the Tribunal agreed with Mr Burns submissions that the reason why, the Respondents continued to ask questions was clear from the positive findings of fact the Tribunal was able to make that it was not because of anything arising in consequence of the Claimant’s disability or because of his first claim to the Tribunal, it was because of the Claimant’s lack of transparency, his unsatisfactory responses to questions, his unwillingness to cooperate with any joint enquiry, which did not alleviate the genuinely held concerns the Respondents’ held at the time that they could be implicated in insurance fraud. Conclusions on allegation 3 :The Second and Third Respondents, paying themselves interest on Capital on or around 10 February 2021 but not paying the Claimant’s interest on Capital until 1 April 2021.[271]The Tribunal’s findings of fact are set out at paragraphs 138-143. The Tribunal found it was reasonable for the Respondents to request assurances from the Claimant before making payments from the firm to protect their position so that they could not be implicated in any wrongdoing. If the Claimant was being completely transparent with the Insurers and with the Respondents, he cannot explain why he was unwilling to provide the assurances requested.[272]Objectively viewed the Tribunal concluded this treatment was not such a kind that a reasonable worker would or might take the view that in all the circumstances including the previous history. It was not detrimental or unfavourable treatment. Even if it was the Tribunal concluded that the reason why those assurances were sought was not because of anything arising in consequence of the Claimant’s disability or his first claim to the 10.5 Reserved judgment with reasons – rule 61 82 March 2017 Tribunal, it was because of the Claimant’s lack of transparency, his unsatisfactory responses to requests for information from the insurer, his willingness to cooperate with any joint enquiries, and the genuinely held concerns the Respondents held at the time that they could be implicated in insurance fraud. Conclusions on allegation 4: Failing to reinstate the Claimant to the positions of Managing Partner: Client Care Partner: Compliance COLP: Compliance COFA: Credit controller and/or Data Protection Manager.[273]The Tribunal’s findings of fact are set out at paragraphs 172-176. It is accepted the Claimant was not reinstated into the role of Managing Partner, Controller and/or Data Protection Manager because the Claimant was assessed as medically unfit for work, he was in receipt of PHI benefit on the basis he was totally unfit to work and any return to work had been ruled out on the fit notes throughout the Claim 2 period.[274]Miss Lord and Miss Russell had assumed the role of Joint Managing Partners and shared those responsibilities during the Claimant’s absence. Mrs Lord did not agree with the suggestion made by Mr Cordrey that as a ‘gesture of good will’ she should have restored the Claimant’s Managing Partner ‘title’ without requiring him to perform any of the responsibilities of the role. She said it would be misleading and inappropriate for the firm to misrepresent the position in that way. In his closing submissions Mr Burns reminded the Tribunal that this reframed detriment was not the pleaded detriment. The Tribunal agreed that was not the pleaded detriment and that it was unreasonable and inappropriate for the Respondents to run the firm in the misleading way suggested.[275]The alleged conduct is not made out on the facts. The complaint of detriment/unfavourable treatment is not well founded. Conclusions on allegation 5 : Withholding information from the Claimant: minutes of partner’s meetings: details of management decisions and supporting documents and correspondence: budgets and finance reports including information about Work in Progress[276]The Tribunal’s findings of fact are set out at paragraphs 176-179. The Respondents did not withhold information from the Claimant. The alleged conduct is not made out on the facts. The complaint of detriment/ unfavourable treatment is not well founded. Conclusions on allegation 6 : Excluding the Claimant from partner’s and/or management meetings.[277]The Tribunal’s findings of fact are set out at paragraphs 180-182. The Claimant was included in all partners meeting and was not excluded from any partners meetings. The alleged conduct is not made out on the facts. The complaint of detriment/ unfavourable treatment is not well founded and is dismissed.[278]The ‘therapeutic’ limitation put in place by the Insurer only permitted attendance at partners meeting not management meetings involving the day to day management of the firm. The Claimant did not expect to attend those meetings and the Respondents did not require him to attend those 10.5 Reserved judgment with reasons – rule 61 83 March 2017 meeting while his fitness to work rule out a return to work with or without adjustments. The Claimant confirmed it was ‘impossible’ for him to have any face to face with Mrs Lord or Miss Russell and that was the reason why he did not attend any partners meeting in person or remotely so in reality the Claimant would not have attended management meetings.[279]It was a reasonable for the Respondents not to include the Claimant in management meetings when day to day management responsibilities had been assumed by Mrs Lord and Miss Russell as the joint managing partners. Objectively viewed the Tribunal concluded this treatment was not such a kind that a reasonable worker would or might take the view that in all the circumstances it was to his detriment or unfavourable treatment. The complaint of detriment/unfavourable treatment is not well founded. Conclusions on allegation 7 : Excluding the Claimant from management decisions including the decisions to appoint new accountants, to terminate the First Respondent’s relationship with Peninsula, and to make a financial settlement to a former member of the First Respondent[280]The Tribunal’s findings of fact are set out at paragraphs 183-187. Out of 8 original allegations only 3 remained to be pursued as unlawful treatment with no explanation provided to explain why the claimant accepted the majority of the decisions were lawful management decisions taken by the joint manging partners who had lawfully assume the role and had taken over the responsibilities of that role.[281]The Claimant was not excluded from the partnership decision to appoint new accountants. He was consulted, his input was accepted by Mrs Lord and Miss Russell and as a result of his input the partners agreed to appoint a different accountancy practice. On 29 October 2020, the Claimant wrote to the new accountants accepting their appointment. The alleged conduct is not made out on the facts. The complaint of detriment/ unfavourable treatment is not well founded.[282]The decision to terminate the First Respondent’s relationship with Peninsula in July 2020 was made during the pandemic because the HR manager had reported difficulties to the managing partners that Peninsula who were not answering queries or provide advice in a timely manner which left the firm in a ‘vulnerable’ position at a difficult time. Mrs Lord and Miss Russell as the managing partners made a reasonable management decision to end the contract with Peninsula and find a provider that could better meet the firm’s needs instead of leaving the firm in a vulnerable condition. Given those undisputed facts we find the complain that the Claimant reasonably believed he was being subjected to a detriment or unfavourable treatment is not well founded.[283]The Claimant was not excluded from the partnership decision to make a settlement payment to a former member on the legal advice of the First Respondent’s solicitors. The Claimant was included in all the emails and was provided with a copy the legal advice obtained by the firm which advised a settlement. A settlement was concluded based on the legal advice obtained by the firm. It was reasonable for the partners to make that decision and follow the legal advice obtained by the First Respondent’s solicitors. In closing submissions, it was conceded that the Claimant had been ‘partially involved’ in that decision. Despite making that concession the 10.5 Reserved judgment with reasons – rule 61 84 March 2017 complaint was not withdrawn. Given those undisputed facts we find the complain that the Claimant reasonably believed he was being subjected to a detriment or unfavourable treatment is not well founded. Conclusions on allegation 8: Subjecting the Claimant to a barrage of correspondence and maintaining a hostile and aggressive tone and content in their communications with him.[284]The Tribunal’s findings of fact are set out at paragraphs 188-193.[285]This alleged detriment is not referred to at all in Mr Cordrey’s closing submission but is dealt with by Mr Burns at paragraph 70-71 of his closing submissions.[286]We agreed with the short and valid point Mr Burns makes that of the 4 examples the Claimant has referred to in his witness statement, 3 of the letters were sent between the solicitors litigating in Claim 1 and were not sent directly to the Claimant. Parties in litigation adopt a combative tone at times. The Claimant as an experienced solicitor is familiar with how that litigation process works.[287]In relation to the correspondence with Mrs Lord it was reasonable for Mrs Lord as the joint managing partner to be able to communicate her feelings in a clear and frank way to a fellow partner at a time of crisis. She was communicating her genuinely held view that the Claimant was behaving unreasonably by refusing to agree to a loan she believed was (and has proved to be) in the best interests of the firm. The Claimant accepted it was sent at a time when the firm was in ‘absolute crisis’ and that Mrs Lord and Miss Russell appeared to be worried about the firm. Objectively viewed the Tribunal concluded the letters sent by Mrs Lord or the letters exchanged between the parties’ solicitors during litigation was not treatment of such a kind that a reasonable worker would or might take the view that in all the circumstances it was to his detriment or unfavourable treatment. The complaint is not well founded and is dismissed. Allegation 9: Claimant’s retirement on 8 March 2021[288]The Tribunal were able to make very clear positive findings that did not support any of the alleged unlawful pre-retirement discrimination and the Claimant has failed to prove a prima facie case of discrimination arising from disability or victimisation. Dealing then with the retirement. Was the Claimant’s decision to retire an act of unlawful discrimination or victimisation by the Respondents? Did the Respondent treat the Claimant unfavourably because of something arising from disability or was the Claimant subjected to a detriment because the Claimant did a protected act? It must be remembered that the unfavourable or detrimental act was not a decision made by the Respondent it was the Claimant’s decision to retire with immediate effect on 8 March 2021.[289]Mr Cordrey has made very brief written closing submissions about the reason why the Claimant retired on 8 March 2021(paragraph 81-83). He submits that the Claimant’s decision to retire was significantly influenced by the alleged discrimination relied upon in Claim 2 and was therefore of itself, an act of unlawful discrimination on the Respondent’s part. He relies upon 10.5 Reserved judgment with reasons – rule 61 85 March 2017 the first admitted act of discrimination in Claim 1 which was the commencement of attempts to expel the Claimant from the Respondent on 28 November 2019, with a range of further discriminatory steps taken to marginalise and remove the Claimant throughout November, December 2019 and January 2020. He submits that in around January 2020, the Respondents made a decision to withhold the Claimant’s profit share, ostensibly on the basis that he was not entitled to payment of his profit share and at the same time retain income protection PHI payments which he had been paid in consequence of his disability. He submits that whether taken cumulatively with the admitted discrimination of Claim 1 or taking the conduct particularised in Claim 2, the loss of the future years of profit share flows naturally and directly from the Respondent’s discriminatory conduct.[290]Mr Burns submissions (paragraph 83-88) are detailed and rely upon the undisputed contemporaneous documentary evidence and Claimant’s own evidence about the circumstances that existed at the time he made his decision to retire. He submits that evidence reveals the real reason why the Claimant resigned on 8th March 2021 which was that he did not want to have to choose between supporting the proposal for a CBIL loan and premises move or allowing the firm to go into liquidation. Had he stayed as a partner and continued to veto the crisis proposals liquidation was inevitable. He retired on the last day of his fit note to avoid the crunch decision. His retirement was not caused by discrimination or victimisation but by the economic and organisational pressures facing the firm Conclusions on allegation 9: Claimant’s retirement on 8 March 2021[291]The Tribunal’s findings of fact are set out at paragraphs 194-214. Although Mr Cordrey’s closing submissions are silent on the timing and circumstances as at 8 March 2021, the Tribunal could not ignore those circumstances to decide what had significantly influenced the Claimant in making that decision on that day. We reminded ourselves that it is for the Claimant to prove on the balance of probabilities the matters which he wished the Tribunal to find, from which an inference could properly be drawn that his decision to resign was an unlawful act of discrimination arising from disability or because he had done a protected act.[292]The Claimant says he resigned as “a direct result of the discriminatory treatment starting in Claim 1 which continued with the alleged unlawful treatment in Claim 2, as a result of his GP’s advice, he felt his position became untenable and he had no option but to retire”. The Claimant has not proved any acts of unlawful discrimination have occurred in the Claim 2 period of 17 April 2020 to 8 March 2021. The last admitted act of discrimination in Claim 1 occurred in January 2020 which was the act of excluding him from a partners meeting which did not take place. If the Claimant was resigning in response to that act, he cannot explain why he continued to be a partner in the firm for over a year after that act to March 2021.[293]The reality was the Claimant had been absent from the partnership due to ill-heath from September 2018 to March 2021. The relationship between the partners had broken down from October 2019. The Claimant had refused to have any direct contact with his partners from May 2020 and only agreed to 10.5 Reserved judgment with reasons – rule 61 86 March 2017 having limited contact by post from September 2020. From that date onwards Mrs Lord was communicating with the Claimant by post and reasonable adjustments had been made to enable the Claimant to remotely participate in partnership meetings. The Claimant was included in all partners meeting up until his retirement. He was provided with all the relevant information by post in good time before the meetings and was encouraged to participate and provide feedback. Mrs Lord tried to persuade the Claimant that the CBIL loan and premises move were in the best interests of the firm. She invited the Claimant to speak to others (the firm’s Bank and the firm’s accountants) if he needed any reassurances about the loan. The Claimant understood why the CBIL loan was urgently needed by the firm and that it was provided on favourable terms. He knew why the firm needed to move out of premises which were deemed to be unsafe. He knew the landlord had offered new premises on favourable terms. The Claimant knew what the consequences were to the firm if those decisions were not made. While the Claimant was able to refuse to agree to taking out a loan, he knew was urgently needed for the firm’s future viability, he was able to insist the firm took out a loan to pay the partners tax liability when those payments could have been deferred. Despite the Respondent’s best efforts, the Claimant steadfastly refused to agree to the loan or the premises move going so far as instructing his solicitors to warn Mrs Lord and Miss Russell that they would be in breach of the LLP agreement if they proceeded without his consent.[294]The Claimant refers to resigning ‘as a result of his GP’s advice’ and that he felt his position ‘became untenable’. The Tribunal accept that was how the Claimant felt, but considered why he felt his position as a partner had become untenable on 8th March 2021, with immediate effect that day? We agreed with Mr Burns submissions which are supported by our findings of fact. The Claimant’s last fit note expired on 8 March 2021 and he knew he had 2 days left before he had to make a crunch decision choosing between supporting the proposal for a CBIL loan and premises move or allowing the firm to go into liquidation. The fate of the firm rest in his hands. The Claimant did not want to lose face and cooperate with his partners and then continue to be in partnership with them, but he also did not want to be responsible for the firm’s liquidation by continuing to veto the crisis proposals. The significant influence for the Claimant in making his decision to retire on 8 March 2021 was that it was the only way of avoiding having to make that crunch decision. That was why he chose to retire on that day instead of choosing to continue in partnership. It was his choice and an entirely voluntary decision. It was not unfavourable treatment or a detrimental treatment by the Respondents. It was not an act of unlawful disability discrimination or victimisation.[295]Finally, at the beginning of these reasons the Tribunal identified three undisputed limitations which affected the Claimant’s ability to work or engage in work related activities during the Claim 2 period of 17 April 2020 to 8 March 2021. The medical limitation that ruled out the possibility of any return to work. The insurers ‘therapeutic limitation’ which only permitted the Claimant to attend monthly partners meetings and the Claimant’s ‘selfimposed limitation’ based on his unwillingness to have direct contact with the Respondents. The Respondents had not imposed any of those limitations on the Claimant who does not appear to have considered how 10.5 Reserved judgment with reasons – rule 61 87 March 2017 those agreed limitations, impact on the prospects of success of his workrelated complaints of unlawful disability discrimination and a failure to make reasonable adjustments. Reasonable Adjustments[296]Dealing then with the complaint of a failure to make reasonable adjustments made pursuant to sections 20(3) and 21 Equality Act 2010. The Tribunal must firstly, identifying the PCP applied by or on behalf of the employer. Secondly the identity of the non-disabled comparators (if appropriate) and thirdly the nature and extent of the substantial disadvantage suffered by the disabled person.[297]Mr Cordrey’s submission (paragraph 84) was very brief. He submits that “despite admitting discrimination in this regard as part of Claim 1 the Respondents continued to fail to investigate and make reasonable adjustments as would have enabled the Claimant to work from home, continue with his management roles and/or return to work on a phased basis”.[298]Mr Burns’ detailed submissions (paragraphs 89-94) are supported by the Tribunals findings of fact at paragraphs 167-171. Mr Burns highlighted the evidence that shows the duty to make reasonable adjustments was never engaged because the Respondents never applied any of the 4 PCP’s the Claimant relies upon at the material time. The Claimant has not proved facts that could show they were applied or placed the Claimant at any substantial disadvantage. As the duty to make reasonable adjustments under section 20(3) was never engaged the Respondent cannot have failed to make reasonable adjustments under section 21. All the fit notes provided for the whole Claim 2 period ruled out a return to work with reasonable adjustments. The Claimant accepted the Respondents were offering to make reasonable adjustments as soon as the medical opinion said it was appropriate for him to return to work. In the meantime, the Respondents made the adjustments they could make for the Claimant to participate in partnership meetings remotely by post in the limited way he had permitted.[299]The Tribunal agreed with Mr Burns submission that the Claimant has the burden of proving a prima facie case that the duty to make reasonable adjustments was engaged and the respondents failed to comply with that duty. The first step is to prove the four the provisions criteria or practices were applied to the Claimant by the Respondent. The Claimant has not shown the respondent applied any requirement that he was ‘fully ft to return, rather than accepting fitness to perform a therapeutic level of work’. The Respondents followed the Claimant’s lead as to his level of involvement in the firm during his sickness absence. When the Claimant refused to have any direct contact with the Respondents from May 2020 they complied with that instruction. When the Claimant agreed to have contact by post from September 2020, the Respondents complied with his instruction and adjustments were made to enable the Claimant to continue to be involved in partnership meetings remotely by post. The Claimant has not shown the First Respondent applied a requirement that he was ‘fit for a full time return to participate in the firm rather than accepting a phased return’. The Claimant was never fit to return to work on a phased basis. The Claimant has not shown the Respondent applied a requirement of ‘holding partners’ 10.5 Reserved judgment with reasons – rule 61 88 March 2017 meetings at the Rotherham office rather than at the Claimant’s home’. There was no requirement applied by the Respondent for the Claimant to attend meetings in the office rather than at the Claimant’s home. The pleaded PCP does not fit with the Claimant’s instruction of ‘no direct contact’. It was not clear to the Tribunal how the Claimant can argue that a reasonable step the firm should have taken during the Claim 2 period was to hold partners meetings at his house.[300]Mr Cordrey appears to rely solely on an admission made in Claim 1 of a failure to make reasonable adjustments to support allegations of a failure to make reasonable adjustments in the Claim 2 period. None of the facts necessary to show the duty to make adjustments was in fact engaged in the Claim 2 period have been proved by the Claimant. The complaint fails at the first hurdle and was another complaint of unlawful disability discrimination which was fundamentally contrary to the evidence. The Tribunal preferred and accepted Mr Burns submissions supported by the evidence and by the findings of fact. The complaint of a failure to make reasonable adjustments is not well founded and is also dismissed.[301]As a result of those conclusions the only matters that remain to be determined at the remedy hearing are remedy for the admitted discrimination in Claim 1 as identified in the remedy list of issues and the Claimant’s outstanding costs application.
Relevant law
[1]In accordance with section 124(2)(b) Equality Act 2010, the Tribunal makes no award of compensation for injury to feelings.[2]In accordance with section 124(6) Equality 2010, the Tribunal makes no award of compensation for personal injury.[3]The compensation claims for special damages and gratuitous care are not well founded and are dismissed.[4]The claim for pecuniary loss (past and future loss of profit share) is withdrawn but is not dismissed.
Relevant law
[1]The extant remedy issue was whether the claimant a designated member of the 1st Respondent (“the LLP”) had suffered any non-pecuniary loss (injury to feelings and personal injury) flowing from the conceded acts of unlawful disability discrimination committed by the 2nd Respondent (“Mrs Lord”) and the 3rdd Respondent “Miss Russell” the designated members and agents of the 1st Respondent held vicariously liable to pay any compensation awarded by the tribunal.[2]The parties had settled liability issues in relation to the first claim lodged on 16 April 2020 (Claim1) based on the concessions made by the respondent in November 2020 admitting the unlawful conduct recorded in the liability judgment made by Employment Judge Maidment on 6 January 2021. While the declaration of unlawful conduct avoided the need for a liability hearing, the parties then agreed Claim 1 compensation issues would be decided after liability had been determined in the claimant’s second claim lodged on 7 June 2021. In Claim 2 the claimant made allegations of continuing disability discrimination in the period from 17 April 2020 to 8 March 2021 when he voluntarily retired from the LLP. After a liability hearing lasting 6 days all the complaints were dismissed for the reasons given in the reserved judgment sent to the parties on 3 May 2022 (C2 Judgment pages 1102-1190).[3]The tribunal had found that during the period July 2018 to 8 March 2021 the claimant was on a long-term ill-health absence. Initially his absence was due to his disability (cancer) and from 22 January 2020 it was due to acute stress reaction and then depression. The respondent’s treatment of the claimant during his long-term absence before and after the admitted discrimination was found to be lawful. Sandwiched in between the period of lawful conduct were the admitted acts of unlawful disability discrimination which had occurred in late 2019 and early 2020.[4]In Claim 2 the Tribunal had concluded that the claimant was an untruthful witness who had attempted to mislead the tribunal in some material aspects of his case for the reasons given in the C2 judgment. The evidence he gave was largely contradicted and unsupported by the undisputed contemporaneous evidence. During his long- term absence, the claimant was receiving Permanent Health Insurance (PHI) benefit from the insurer (Aviva). He had concealed the truth from Aviva about the work he was doing and about his income from the LLP because it would have affected his PHI benefit. He had also concealed the truth from the respondents about the information he had disclosed Aviva supporting their legitimate concerns that he may be engaging in insurance fraud. He had pursued complaints to obtain relief which were fundamentally contrary to the undisputed facts or would have involved running the LLP in an unreasonable and inappropriate way. His complaint of a failure to make a reasonable adjustment was made on the basis that it would have been reasonable to hold partners meeting at his home when the claimant knew it was impossible for him to meet with Mrs Lord and Miss Russell after they had accused him of insurance fraud, and he would not have allowed or wanted them in his home. The claimant had pursued a detriment complaint alleging it was unfavourable treatment not to allow him to retain his title of ‘Managing Partner’ as a gesture of good will even though he was not performing the responsibilities of that role because he was unfit to work. The tribunal had dismissed the complaint concluding it would have been a misleading way to run the LLP.[5]Before this hearing the parties knew that the second claim had failed and the reasons why it had failed, and that the tribunal would be assessing Claim 1 compensation with the benefit of its findings in Claim 2. It had been agreed that Claim 2 should be decided before Claim 1 remedy and before the Claim 1 costs’ application. If the second claim had succeeded, the tribunal would have assessed compensation for both claims at this hearing. The claimant knew he was expected to provide evidence to prove the injury to feelings and personal injury he relies upon to support his claim for compensation for non-pecuniary loss assessed at £80,000. The parties had been unable to agree to any of the facts before this hearing, leaving the tribunal to find all the relevant facts on the evidence provided on the balance of probabilities.[6]For ease of reference in these reasons the admitted unlawful conduct has been extracted from the liability judgment and rearranged in chronological order. Any highlighted text in these reasons is for our emphasis only. “1. The Respondent’s admit liability to the Claimant under s 45(2) Equality Act 2010 on the following basis: a) Contrary to s 15 Equality Act 2010, they treated the Claimant unfavourably because of something arising in consequence of the Claimant’s disability, namely his sickness absence and the funds he has received under his PHI cover by:(i) Withholding management and accounting information (November/December 2019)(ii) Removing the claimant from his roles as a Designated Member and Managing Partner (28 November 2019 – 16 December 2019).(iii) Removing the claimant on (13 December 2019) as a Person with Significant Control of the First Respondent and reinstating him (22 January 2020).(iv) Removing the claimant from the First Respondent’s management and decisions making processes.(v) Taking steps to expel him as a member of the First Respondent (19 December 2019- 7 January 2020).(vi) Excluding him from a partners’ meeting scheduled to take place on 24 January 2020 cancelled on 7 January 2020. b) The treatment was not a proportionate means of achieving the Respondent’s legitimate aims of properly managing the First Respondent’s business. c) Contrary to section 19 Equality Act 2010, they had a practice of holding partners meetings at the First Respondent’s Rotherham Office, instead of the Claimant’s home which put the Claimant at a particular disadvantage and was not a proportionate means of achieving the legitimate aim of properly managing the First Respondent’s business. d) Contrary to section 20 Equality Act 2010 they failed to investigate and make such reasonable adjustments to enable the claimant to work from home, continue with his management roles and/or return to work on a phased basis. e) The Second and Third Respondent are liable for the discrimination as the agents of the First Respondent which is liable and is treated as having done their acts”. The agreed issues: Compensation[7]The agreed list of remedy issues drafted by counsel was: “Background[1]By case number 1802068/2020 lodged on 16 April 2020 (Claim 1) the claimant alleged various acts of disability discrimination by R1(the LLP) (R2 Hester Russell) and R3 (Elizabeth Lord) covering the period from 1 October 2018 to 16 April 2020.[2]By a letter dated 24 November 2020 the Respondents’ admitted in response to Claim 1 having committed certain acts of disability discrimination against the claimant.[3]On 6 January 2021 Judgment in Claim 1 was made by consent by EJ Maidment setting out the admitted claims and those which were dismissed on withdrawal. References below to ‘the unlawful discrimination’ are to the unlawful conduct as per that Claim 1 Liability Judgment. Compensation for personal injury (Sheriff-v-Klyne Tugs (Lowestoft) Ltd (1999) IRLR 481)[4]Did any of the unlawful discrimination cause the claimant’s personal injury? If so,a. What general damages for pain suffering and loss of amenity should be awarded to the claimant?b. What financial losses if any, flow from the personal injury? Injury to feelings pursuant to EqA 2010 s119(4) and aggravated damages (Armitage Marsden and HM Prison Service -v- Johnson (1997) IRLR 162)[5]What Injury to feelings did the claimant suffer as a result of the unlawful discrimination?[6]Taking into account the relevant Presidential Guidance and uprating for RPI, which Vento band applies and what award should be made?[7]Was the unlawful discrimination: a) done in a high-handed, malicious, insulting, or oppressive way: and/or b) motivated by prejudice animosity spite or vindictiveness, and/or c) was there a failure to apologise or treat the claimant’s complaints about his treatment seriously?[8]If so, objectively viewed, was the conduct capable of having aggravated the claimant’s sense of injustice and injured the claimant’s feelings further.[9]If so what award of aggravated damages, if any, are appropriate?[10]What interest is due on any award?” Evidence 8. The parties provided 3 remedy bundles (RB total 2595 pages) and 2 costs bundles (CB total 1193 pages) running to 4000 pages of documents which was in our view excessive and unnecessary in relation to a limited number of admitted acts of unlawful conduct over a short period of time. We were provided 3 reports from the Consultant Psychiatrist Dr J K Appelford, dated 12 January 2021 (‘Appelford1’ RB pages 1031-1119), 23 March 2021 (‘Appelford 2’ RB pages 1121-1160), and 22 September 2021(‘Appelford 3” CB 1453-1496 pages). As part of our prereading we read the following witness statements:7.1 Claimant’s first witness statement signed 20.9.2022 (RB pages 2370-2418).7.2 Claimant’s supplemental witness statement signed 20.9.2022 (RB pages 2419-2426)7.3 Claimant’s second witness statement updated signed 20.9.2022 (RB pages 2455-2503)7.4 Jennifer Willis’ witness statement updated 20.9.2022 (RB pages 2427-2444).7.5 Jennifer Willis’ supplemental witness updated signed 20.9.2022 (RB pages 2445-2454)7.6 Second respondent’s updated witness statement signed 20.9.2022 (RB pages 2504-2531)7.7 Third Respondent’s updated witness statement signed 20.9.2022 (RB 2532- 2572) 9. Mr Burns had requested the Tribunal listen to audio recordings of some of the telephone calls made between the claimant and Mr Munday (Senior Claims Adviser, Aviva) and read the undisputed transcript of those recordings admitted in evidence. These recordings were obtained by the claimant in June 2022 following a data subject access request. The agreed transcript of those calls has been prepared by the respondent’s solicitors. The claimant relied on the call of 1 April 2019 (transcript at pages CB 998-992). The respondent relied upon the calls of 18 June 2018 (pages CB976-981) and 29 November 2019 (pages CB1005- 1007). 10. We listened to all 3 calls and read the transcripts. The call made by the claimant on 29th November 2019 was by far the most significant and relevant call in the timeline of events we were considering. It was a call the claimant had made to Mr Munday which provided a contemporaneous insight into the claimant real thoughts and feelings about the events at work and how he felt about returning to work.[11]Evidence we excluded from our considerations was the recent disclosure of an email the claimant had sent to his insurer in September 2018 which had not previously been disclosed to the respondents. Mr Burns submits this email significantly damages the claimant’s credibility undermining the case he had presented at the last hearing when he had viewed the PHI premiums paid by the LLP as his personal expense not a business expense of the firm. It was accepted this email had not been disclosed and there was some dispute as to whether the fault for that lay with the claimant or with his solicitor. Irrespective of fault, Mr Burns wanted the tribunal to consider the contents of the email because it was damaging to the claimant’s credibility. We decided not to attach any weight to this email because it was not relevant to remedy. We were able to assess the claimant’s credibility on the evidence relevant to the claimant’s compensation claim without considering evidence of emails or calls or messages relating to an earlier period. We spent a lot of time in deliberations considering and assessing a large amount of documentary evidence and took the view it was unnecessary and disproportionate to extend the scope of our enquiries to make findings of fact about this email. Applicable Law[12]Equality Act 2010(EQA 2010) Remedies: general. “Section 124 provides that(1) This section applies if an employment tribunal finds that there has been a contravention of a provision referred to in section120(1)” (here 120 (1) (a) a contravention of Part 5 (work) (section 45 Limited Liability Partnerships applies)(2) The tribunal may- (a) Make a declaration as to the rights of the complainant and the respondent in relation to the matters to which the proceedings relate: (b) Order the respondent to pay compensation to the complainant: (c) Make an appropriate recommendation.(3) An appropriate recommendation is a recommendation that within a specified period the respondent takes specified steps for the purpose of obviating or reducing the adverse effect on the complainant of any matter to which the proceedings relate.(4) Subsection (5) applies if the tribunal (a) finds that a contravention is established by virtue of section 19, but (b) is satisfied that the provision criterion or practice was not applied with the intention of discriminating against the complainant.(5) It must not make an order under section 2(b) unless it first considers whether to act under subsection(2)(a) or(c).(6) The amount of compensation which may be awarded under subsection 2(b) corresponds to the amount which could be awarded by the county court under section 119.(7) if a respondent fails without reasonable excuse, to comply with an appropriate recommendation the tribunal may- (a) if an order was made under subsection (2) (b) increase the amount of compensation to be paid. (b) if no such order was made, make one. Section 119 (2) provides that the county court has power to grant any remedy which could be granted by the High Court (a) in proceedings in tort”.[13]Equality and Human Rights Commission Code of Practice on Employment 2011 (EHRC) 13.1 Chapter 15 of the EHRC code provides guidance on the remedy provisions of the Equality Act 2010 (paragraphs 15.40-15.54) and in Chapter 11 guidance on the statutory provisions that apply specifically to Limited Liability Partnerships (paragraphs 11.19-11.23: “15.40: (ss 124(6) and 119) An Employment Tribunal can award a claimant compensation for injury to feelings. An award of compensation may also include personal injury (physical or psychological) caused by the discrimination: aggravated damages which are awarded when the respondent has behaved in a highhanded malicious insulting or oppressive manner. 15.42: Generally, compensation must be directly attributable to the unlawful act. This may be straightforward where the loss is, for example related to an unlawful discriminatory dismissal. However, subsequent losses including personal injury may be difficult to assess. 15.43: A worker who is dismissed for a discriminatory reason is expected to take reasonable steps to mitigate their loss for example by looking for new work or applying for state benefits. Failure to take reasonable steps to mitigate loss may reduce compensation awarded by a tribunal. However, it is for the respondent to show that the claimant did not mitigate their loss. 15.44: (ss 124(4) & (5)). Where an Employment Tribunal makes a finding of indirect discrimination but is satisfied that the provision criterion or practice was not applied with the intention of discriminating against the claimant it must not make an award of compensation unless it first considers whether it would be more appropriate to dispose of the case by providing another remedy such as a declaration or a recommendation. If the tribunal considers that another remedy is not appropriate in the circumstances, it may make an award of damages”. Guidance from Cases: Injury to feelings and Aggravated Damages[14]In Ministry of Defence and Connock 1994 IRLR 509 the principle established of compensating for injury feelings were confirmed as being tortious to as best as money can do, put the applicant into the position they would have been in but for the unlawful conduct.[15]In Vento -v- Chief Constable of West Yorkshire Police (No2) (2003) IRLR 102 the Court of Appeal endorsed the following principles to assist Employment Tribunals in assessing non-pecuniary loss in discrimination cases. The relevant guidance in relation to injury to feelings (paragraphs 50-53) and quantum (paragraphs 65-68) is: “50. It is self-evident that the assessment of compensation for an injury or loss, which is neither physical nor financial, presents special problems for the judicial process, which aims to produce results objectively justified by evidence, reason and precedent. Subjective feelings of upset, frustration, worry, anxiety, mental distress, fear, grief, anguish, humiliation, unhappiness, stress, depression and so on and the degree of their intensity are incapable of objective proof or of measurement in monetary terms. Translating hurt feelings into hard currency is bound to be an artificial exercise. ….. there is no medium of exchange or market for nonpecuniary losses and their monetary evaluation “… is a philosophical and policy exercise more than a legal or logical one. The award must be fair and reasonable, fairness being gauged by earlier decisions; but the award must also of necessity be arbitrary or conventional. No money can provide true restitution.” 51. Although they are incapable of objective proof or measurement in monetary terms, hurt feelings are none the less real in human terms. The courts and tribunals have to do the best they can on the available material to make a sensible assessment, accepting that it is impossible to justify or explain a particular sum with the same kind of solid evidential foundation and persuasive practical reasoning available in the calculation of financial loss or compensation for bodily injury. In these circumstances an appellate body is not be entitled to interfere with the assessment of the Employment Tribunal simply because it would have awarded more or less than the tribunal has done. It has to be established that the tribunal has acted on a wrong principle of law or has misapprehended the facts or made a wholly erroneous estimate of the loss suffered. Striking the right balance between awarding too much and too little is obviously not easy. 53. In HM Prison Service -v- Johnson Smith J reviewed the authorities on compensation for non-pecuniary loss and made a valuable summary of the general principles gathered from them. We would gratefully adopt that summary. Employment Tribunals should have it in mind when carrying out this challenging exercise. In her judgment on behalf of the Appeal Tribunal Smith J said at p. 283B(i) Awards for injury to feelings are compensatory. They should be just to both parties. They should compensate fully without punishing the tortfeasor. Feelings of indignation at the tortfeasor’s conduct should not be allowed to inflate the award.(ii) Awards should not be too low, as that would diminish respect for the policy of the anti-discrimination legislation. Society has condemned discrimination and awards must ensure that it is seen to be wrong. On the other hand, awards should be restrained, as excessive awards could, to use the phrase of Sir Thomas Bingham MR, be seen as the way to “untaxed riches”.(iii) Awards should bear some broad general similarity to the range of awards in personal injury cases. We do not think that this should be done by reference to any particular type of personal injury award, rather to the whole range of such awards.(iv) In exercising that discretion in assessing a sum, tribunals should remind themselves of the value in everyday life of the sum they have in mind. This may be done by reference to purchasing power or by reference to earnings.(v) Finally, tribunals should bear in mind Sir Thomas Bingham’s reference for the need for public respect for the level of awards made. Guidance 65. Employment Tribunals and those who practise in them might find it helpful if this Court were to identify three broad bands of compensation for injury to feelings, as distinct from compensation for psychiatric or similar personal injury. (i) The top band should normally be between £15,000 and £25,000. Sums in this range should be awarded in the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment on the ground of sex or race. This case falls within that band. Only in the most exceptional case should an award of compensation for injury to feelings exceed £25,000. (ii) The middle band of between £5,000 and £15,000 should be used for serious cases, which do not merit an award in the highest band. (iii) Awards of between £500 and £5,000 are appropriate for less serious cases, such as where the act of discrimination is an isolated or oneoff occurrence. In general, awards of less than £500 are to be avoided altogether, as they risk being regarded as so low as not to be a proper recognition of injury to feelings. 66. There is, of course, within each band considerable flexibility, allowing tribunals to fix what is considered to be fair, reasonable and just compensation in the particular circumstances of the case. 67. The decision whether or not to award aggravated damages and, if so, in what amount must depend on the particular circumstances of the discrimination and on the way in which the complaint of discrimination has been handled. 68. Common sense requires that regard should also be had to the overall magnitude of the sum total of the awards of compensation for nonpecuniary loss made under the various headings of injury to feelings, psychiatric damage and aggravated damage. In particular, double recovery should be avoided by taking appropriate account of the overlap between the individual heads of damage. The extent of overlap will depend on the facts of each particular case”.[16]It is agreed that the updated (applicable) “Presidential Guidance on Employment Tribunals Awards for Injury to Feelings and Psychiatric Injury (third addendum dated 27 March 2020) in respect of claims presented on or after 6 April 2020, sets the Vento bands at: (i.) A lower band of £900 to £9,000 (less serious cases). (ii.) A middle band of £9,000 to £27,000 (cases that do not merit an award in the upper band (iii.) An upper band of £27,000 to £45,000(the most serious cases), with the most exceptional cases capable of exceeding £45,000. Aggravated Damages[17]In Police Commissioner Metropolis-v- Shaw (2012 IRLR 299) the Court of Appeal provided more detailed guidance on aggravated damages: “22. The circumstances attracting an award of aggravated damages fall into the three categories: The manner in which the wrong was committed.(a) The basic concept here is of course that the distress caused by an act of discrimination may be made worse by it being done in an exceptionally upsetting way. In this context the phrase “high-handed, malicious, insulting or oppressive” is often referred to. An award can be made in the case of any exceptional (or contumelious) conduct which has the effect of seriously increasing the claimant’s distress. Motive.(b) Discriminatory conduct which is evidently based on prejudice or animosity or which is spiteful or vindictive or intended to wound is, as a matter of common sense and common experience, likely to cause more distress than the same acts would cause if evidently done without such a motive – say, as a result of ignorance or insensitivity. That will, however, only of course be the case if the claimant is aware of the motive in question: otherwise it could not be effective to aggravate the injury There is thus in practice a considerable overlap with head (a). Subsequent conduct.(c) The practice of awarding aggravated damages for conduct subsequent to the actual act complained of originated, again, in the law of defamation, to cover cases where the defendant conducted his case at trial in an unnecessarily offensive manner. A failure to apologise may also come into this category; but whether it is in fact a significantly aggravating feature will depend on the circumstances of the particular case. This basis of awarding aggravated damages is rather different from the other two in as much as it involves reliance on conduct by the defendant other than the acts complained of themselves or the behaviour immediately associated with them. A purist might object that subsequent acts of this kind should be treated as distinct wrongs, but the law has taken a more pragmatic approach. However, tribunals should be aware of the risks of awarding compensation in respect of conduct which has not been properly proved or examined in evidence, and of allowing the scope of the hearing to be disproportionately extended by considering distinct allegations of subsequent misconduct only on the basis that they are said to be relevant to a claim for aggravated damages. How to fix the amount of aggravated damages.[23]As Mummery LJ said in Vento v Chief Constable of West Yorkshire Police (no. 2) [2003] ICR 318 , at paras. 50-51 (pp. 331–2), “translating hurt feelings into hard currency is bound to be an artificial exercise”. Quoting from a decision of the Supreme Court of Canada, he said: “The award must be fair and reasonable, fairness being gauged by earlier decisions; but the award must also of necessity be arbitrary or conventional.” Since, there is no sure measure for assessing injury to feelings, choosing the “right” figure within that range cannot be a nicely calibrated exercise. Those observations apply equally to the assessment of aggravated damages – inevitably so since, as we have sought to show, they are simply a particular aspect of the compensation awarded for injury to feelings; but the artificiality of the exercise is further increased by the difficulty, both conceptual and evidential, of distinguishing between the injury caused by the discriminatory act itself and the injury attributable to the aggravating elements. Because of that artificiality, the dividing line between the award for injury to feelings on the one hand and the award of aggravated damages on the other will always be very blurred, and tribunals must beware of the risk of unwittingly compensating claimants under both heads for what is in fact the same loss. The risk of double-counting of this kind was emphasised by Mummery LJ in Vento; but the fact that his warning is not always heeded is illustrated by Fletcher (above). The ultimate question must be not so much whether the respective awards considered in isolation are acceptable but whether the overall award is proportionate to the totality of the suffering caused to the claimant. Relationship between the seriousness of the conduct and the seriousness of the injury.[24]It is natural for a tribunal, faced with the difficulty of assessing the additional injury specifically attributable to the aggravating conduct, to focus instead on the quality of that conduct, which is inherently easier to assess. This approach is not necessarily illegitimate: as a matter of broad common sense, the more heinous the conduct the greater the impact is likely to have been on the claimant’s feelings. Nevertheless, it should be applied with caution, because a focus on the respondent’s conduct can too easily lead a tribunal into fixing compensation by reference to what it thinks is appropriate by way of punishment or in order to give vent to its indignation. Tribunals should always bear in mind that the ultimate question is “what additional distress was caused to this particular claimant, in the particular circumstances of this case, by the aggravating feature(s) in question?”, even if in practice the approach to fixing compensation for that distress has to be to some extent “arbitrary or conventional”. 28. ……“It would be a healthy reminder of the real nature of aggravated damages if any such awards were in future formulated as a sub-heading of “injury to feelings” – i.e. “injury to feelings in the sum of £X, incorporating aggravated damages in the sum of £Y” – rather than as a wholly distinct head: this may reduce the risk of the tribunal being seduced into introducing a punitive element by the back door. More generally, tribunals should pay careful attention to the principles which we have endeavoured to set out above. Ultimately the most important thing is that they identify the main considerations which have led them to make the overall award for injury to feelings, specifying any aggravating or mitigating features to which they attach particular weight. As long as this is done, they should not lose sleep over exactly where the dividing line falls between the award for (“ordinary”) injury to feelings and the award of aggravated damages (and the award for psychiatric injury where one is made). What matters is whether the total award for non-pecuniary loss is fair and proportionate”. 18. Finally, in this section, Mr Cordrey has helpfully referred to the unreported case of HM Land Registry -v- McGlue (UKEAT/0435/11) decided in 2013 by the then President of the EAT, Mr Justice Langstaff. In a case of indirect sex discrimination, the EAT upheld an injury to feelings of £12,000 but did not uphold the £5,000 awarded for aggravated damages which it held was made on an insufficient basis. Helpful guidance was provided at paragraphs 26 and 35 about the correct approach to fact finding in relation to injury to feelings and aggravated damages further explaining the 3 categories of conduct identified above in Shaw at paragraph 22: “26 We must recognise that the Tribunal here had an opportunity which we do not have on review as an Appellate Court: it saw and heard the claimant. In any case involving injury to feelings, the Tribunal using its experience must assess the effect upon the individual. That involves understanding and evaluating what truly is the subjective effect of what objectively is discrimination. It means a considerable margin must be recognised around any award which is made.[35]A Tribunal in examining whether there is a case for aggravated damages, has to look first whether objectively viewed the conduct is capable of being aggravating, that is aggravating the sense of injustice which the individual feels and injuring their feelings still further. The three categories set out by Ms Wheeler all give examples rather than an exhaustive list of the behaviour which will qualify under each head. We note however that the emphasis is one of degree. Thus under (a) the word exceptionally is used to qualify the word “upsetting”. The expression “highhanded” and “insulting” occurs, in the general phrase involving four words all of which characterise the phrase including “malicious” and “oppressive”. Aggravated damages certainly have a place and role to fill, but a Tribunal should also be aware and be cautious not to award under the heading “Injury to Feelings” damages for the self-same conduct as it then compensates under the heading “Aggravated Damages”. It must be recognised that aggravated damages are not punitive and therefore do not depend on any sense of outrage by a Tribunal as to the conduct which has occurred”. 19. The summary of the law provided by Mr Cordrey was agreed. Compensation for personal injuries resulting from unlawful discrimination lies within the jurisdiction of the Employment Tribunal (per Stuart-Smith LJ in Sheriff -v- Klyne Tugs (Lowestoft) Ltd (1999) ICR 1170). So long as there is a direct causal link between the unlawful discrimination and the loss suffered the Tribunal may make an award of compensation for the losses flowing from an injury including an award of general damages for pain suffering and loss of amenity (per Pill LJ in Essa-v Laing Ltd (2004) ICR 746). 20. Once a causal link is determined the principles on which to award general damages for pain and suffering and loss of amenity are to be applied by the Tribunal which must have regard to the relevant Judicial College Guidelines 15 Edition Psychiatric and psychological damage is dealt with in Chapter 4 of which Section (a) sets out the general approach to valuing claims for psychiatric damage generally. 21. Both Counsel referred the Tribunal to the case of BAE Systems (Operations) Ltd v Konczak (2017 EWCA Civ. 1188) in which the Court of Appeal considered how Employment Tribunal’s should approach the divisibility of injury and the apportionment of causative responsibility for injury where part of the illness may be due to the employers wrong, and a part is due to other causes for which the employer is not liable to pay compensation: “An injury was single and indivisible where there was simply no rational basis for an objective apportionment of causative responsibility for the injury; that an employment tribunal had to try to identify a rational basis on which the harm suffered could be apportioned between a part caused by the employer’s wrong and a part that was not so caused, that exercise being concerned not with the divisibility of the causative contribution but with the divisibility of the harm; that, in the case of psychiatric injury, where a claimant suddenly tipped over from being under stress into being ill, the tribunal should seek to find a rational basis for distinguishing between a part of the illness due to the employer’s wrong and a part due to other causes; that, if there was no such basis, the injury would be truly indivisible, and the claimant was required to be compensated for the whole of the injury, though, importantly, if the claimant had a vulnerable personality, a discount might be required to take account of the chance that the claimant would have succumbed to a stress-related disorder in any event; that it would often be appropriate to look closely, particularly in a case where psychiatric injury proved indivisible, to establish whether the pre-existing state might not nevertheless demonstrate a high degree of vulnerability to, and the probability of, future injury; that the employment tribunal had been entitled to conclude, on the evidence, that it was only after the comment was made that the claimant developed a diagnosable mental illness, and, while in such a case where there was vulnerability”. Findings of Fact 22. Throughout the claimant’s long-term absence from July 2018 to 8 March 2021 he was unfit to perform any work whether as a criminal solicitor or designated member and managing partner with delegated day-to-day responsibility for running the firm and its finances or to perform the regulatory and statutory functions for the LLP to provide legal services to the public. For the period we were considering the relevant fit notes confirming the claimant was totally unfit for work were:a. Dated 18 October 2019: diagnosis: carcinoma metastatic: duration: 1 October 2019 – 2 December 2019.b. Dated 3 December 2019: diagnosis: carcinoma metastatic: duration: 2 December 2019 – 20 January 20120.c. Dated 22 January 2019: diagnosis: acute stress reaction: carcinoma: duration: 22 January -22 March 2020.d. Dated 23 March 2019: diagnosis: depressive disorder: duration: 22 March 2020-22 June 2020. 23. The admitted discrimination arising from disability had started in November 2019 and stopped on 7 January 2020 following the claimant’s solicitors’ intervention. The complaints of discriminated were taken seriously and corrective action was taken. The respondents appointed new solicitors in October 2020 and shorty after disclosure they conceded liability for the limited admitted unlawful conduct. By December 2020 the liability terms were settled in relation to 6 acts of unfavourable treatment arising from disability, indirect disability discrimination and a failure to make reasonable adjustments. 24. It is agreed that from 9/10/18 until 3/4/21, the claimant received PHI benefit payments from Aviva in the total sum of £214,216.82. From late November 2019 he received monthly payments of £6,948.90 which increased to £7,295.35 per month in September 2020. Payments continued to be made until April 2021 when the PHI benefit claim was suspended pending an investigation to the claim. The claimant knew when he presented his claim for compensation for non-pecuniary loss that his full profit share for the years 2018/2019 and 2019/2020 had been allocated into his current account without any deductions for the PHI payments he had received in those financial years. He also knew that the LLP agreement provides that when a designated member leaves the LLP, they become an outgoing member of the firm and a creditor of the LLP in relation to any undrawn balance of profit share, capital, and interest on capital. After the claimant retired on 8 March 2021 the LLP accountant prepared the final accounts which enabled the claimant to be repaid his capital and interest. As at 31/3/21 based on the profit share forecasts there was a sum of £336,731 to be paid to the claimant if there was no deduction made for the PHI payments which is part of the ongoing dispute between the parties and the reason why the final accounts have not been approved. 25. Until October 2019, the claimant had agreed with the respondents that he could not have the PHI benefit (paid to compensate him for lost income) and profit costs (continuing income) from the firm. After October 2019, the claimant changed his mind and decided he could have both without any deductions of his PHI benefit. He told the respondents that Aviva agreed with his interpretation of the policy until PHI benefit was suspended on 3 April 2021. There has since then been an ongoing investigation by Aviva however the only documentary evidence the claimant has voluntarily disclosed and admitted into evidence is the audio recordings of the telephone calls made between the claimant and the claims adviser, Mr Munday following his Data Subject Access Request (DSAR) made in June 2022. 26. Witness statements had been amended and updated in September 2022. We read all the statements and heard evidence from the claimant. The Tribunal were considering all the evidence it saw and heard to understand and evaluating what the true subjective effect of the conceded unlawful conduct was and whether objectively viewed there were any aggravating features of the unlawful conduct to answer the question “what additional distress was caused to this particular claimant, in the particular circumstances of this case, by the aggravating feature(s) in question?” 27. Mr Burns invites the Tribunal to carefully examine the evidence having found the claimant has proved himself to be an unreliable historian because his account is often unsupported by the unchallenged more reliable contemporaneous documentary evidence. The claimant has been found to be untruthful and has given misleading evidence unsupported by the contemporaneous evidence and has concealed the truth. The claimant has asserted that but for admitted discrimination he would have returned to work in January 2020 which is untrue and is not supported by the transcript of the call made to Mr Munday on 29 November 2019. He tells the tribunal he believes he had been expelled from the firm when he received the letter dated 27 November 2019 when he knows that was not true. These assertions are made to support a claim for a substantial award of compensation from the tribunal and should be carefully considered. 28. Mr Cordrey invites the Tribunal to accept the evidence given by the claimant and his wife about the effects of the admitted discrimination. He invited the Tribunal to focus on the way in which the admitted discrimination took place to consider whether it was done in a high handed and malicious way. In relation to the personal injury claim, Mr Cordrey suggests the focus should be on the evidence of the joint medical expert Dr Appleford. In order to prove the conduct was high handed and malicious the claimant relies upon the ‘cruel’ WhatsApp messages exchanged between Mrs Lord and Miss Russell “as well as the ‘inherent’ vindictiveness of their admitted conduct” A key finding of fact he invited the Tribunal to make to support the seriousness of the injury claimed is that “but for the Claim 1 discrimination, the claimant would have returned to work on or around January 2020” (paragraph 32 claimant’s written submissions). His suggested approach to our fact finding was that “since the injury to feelings test is largely subjective, and the aggravated damages test involves an objective assessment, it is necessary for the Tribunal to reach findings of fact about nature of the admitted discrimination and its gravity, as well as its effects on C’s feelings. Relationship between the claimant Mrs Lord and Miss Russell before the admitted acts of discrimination 29. On 16 October 2019, the last partners meeting before the admitted unlawful conduct, there was a common understanding between the partners about how the PHI benefit payments the claimant received would be treated by the LLP. It had been agreed that the claimant could not have PHI and profit share from the firm. The detailed findings of fact about that dispute are deal with in the Claim 2 judgment (C2 judgment) at paragraphs 95 -116 (pages 1140-1146). The claimant has confirmed that he understands how insurance works and that PHI benefit was a form of insurance to replace income while the insured person is in incapable of working due to illness or injury. Insurance provides cover for something you are not otherwise getting. The claimant agreed that if he was expecting to be paid by the LLP during his illness there would be no point in having an insurance policy. The claimant had accepted that the insured person was being paid normally during the period of incapacity, the insurance would not pay the benefit because there was no loss to cover. After this partners’ meeting the claimant decided he could have both. When Mrs Lord and Miss Russell raised concerns that the claimant was acting in bad faith and engaging in insurance fraud. The claimant acknowledged those were their genuine concerns at the time in the emails exchanged immediately after the partner’s meeting and before any of the admitted unlawful conduct. In response to Mrs Lord and Miss Russell directly raising those concerns with the claimant he accused them of ‘catastrophising’ the situation and was dismissive and annoyed that they would not agree with what he intended to do (RB page 549). 30. Mrs Lord and Miss Russell were genuinely and legitimately concerned that they could be implicated in insurance fraud and felt personally and professionally compromised by the claimant’s change of position and his unwillingness to reconsider his position. Just a few weeks later they reported the claimant to the SRA on the grounds he was engaging in fraudulent behaviour (paragraph 82 claimant’s witness statement). At this time, the respondents had suspected, and we later found, the claimant was not at this time being transparent with the insurer or with the respondents (C2 judgment paragraph 125). 31. On 18 October 2019, 2 days after that partners’ meeting the claimant provided another fit note which confirmed his cancer related absence was continuing and that he remained unfit to work until 2 December 2019. 32. On 19 October 2019, Miss Russell sent an email to the claimant in which she “very gently” requested the claimant reconsider his position on his PHI benefit and revert to the previously agreed position. The claimant refused to reconsider his position leaving Mrs Lord and Miss Russell with no other option but to take steps to protect themselves and the firm. Mrs Lord and Miss Russell’s report to SRA about the claimant made on 15 November 33. During the claimant’s ill-health absence, the claimant had never given, and Mrs Lord or Miss Russell had never requested access to the LLP’s bank account. The claimant had always insisted he remain the Managing Partner and he would control the finances of the firm during his absence with the assistance of the practice manager. 34. On 5 November 2019, Mrs Lord accessed the LLP’s bank account and statements discovering that the claimant had been reimbursing himself ‘work related’ business expenses. As a result of the business expenses and the suspected insurance fraud Mrs Lord and Miss Russell jointly reported the claimant to the Solicitors Regulatory Authority (SRA) for suspected financial misconduct. 35. The referral to the SRA was made on 15 November 2019 (RB page 652-653). It summarised the events leading to the report and provided the documentary evidence that was available to the respondents at that time to support the referral. It explained why the respondents were not satisfied with the claimant’s assurances: “It took things no further as it did not say that mike could work. I do not know what has been said to mike’s insurer, but it seems inconceivable that they would pay him insurance for incapacity whilst at the same time allowing him to work”. “Up until this point we trusted Mike Willis and did not feel that it was necessary to scrutinise bank accounts ourselves. It seems clear that Mike Willis has been claiming expenses from business that cannot possibly be associated with business expenses since he is not working”.[36]Mr Jones (the non-designated member) had informed the claimant about the SRA referral. This had been one of the detriment complaints made in Claim 1 which had been withdrawn and dismissed in the liability judgment. The claimant had seen the SRA referral and the ET3 response and knew why the referral had been made (paragraph 10 page 44). When he gave his account at this hearing, he knew the tribunal had already found that the respondents had been legitimately concerned that he may be engaged in insurance fraud. For the avoidance of any doubt this is not one of the admitted acts of disability discrimination for which the respondent is liable to pay the claimant compensation for any injury caused by the referral, but the claimant has given evidence about this to support his compensation claim.[37]The claimant was very upset and angry about the SRA referral which he asserts was made “entirely in bad faith motivated by malice greed and spite”. In his account he has referred to clause 9.5 of the LLP agreement which allows designated members to claim reimbursement of expenses. He expected Mrs Lord and Miss Russell would as solicitors “be more than capable of understanding” the terms of LLP agreement. He says this clause authorised him to reimburse his motoring expenses under this clause “as agreed from time to time”. He does not explain how the respondents knew he had made the reimbursement when they did not have access to the account or the bank statements until November 2019.[38]We agreed that for a solicitor to refer another solicitor to the SRA is a very serious step to take. If it was done in bad faith, it would be a very serious misconduct. The claimant’s assertions were not supported by the findings of fact made by that the respondents were legitimately concerned that the claimant was engaging in insurance fraud. They had attempted to raise those concerns directly with the claimant they had pleaded with him to reconsider but he refused. Those were the circumstances in which Mrs Lord and Miss Russell jointly made the SRA referral on 15 November 2019. The SRA referral was made in good faith based on legitimate concerns of suspected financial misconduct. They were not motivated by malice greed or spite but by their professional obligation to report their legitimate concerns.[39]Although the referral was not an admitted act of disability discrimination, the claimant’s solicitors asked the medical expert Dr Appleford to consider the effect the SRA referral had on the claimant’s mental ill health. The question in “Appleford 1” was put in the following way (RB page 1095): “Do you believe that there is a link between the report to the SRA by Mesdames Russell and Lord in which they accused Mr Willis of fraudulent behaviour (he has now been fully exonerated of this)?[40]Dr Appleford confirmed that he was ‘largely reliant’ on the claimant’s account given at the assessment interviews in December 2020 after the SRA outcome had exonerated the claimant in October 2020 and after liability had been conceded by the respondents in November 2020. (RB page1096): “Mr Willis told me that his colleagues later made a complaint to the SRA that he was fraudulently claiming insurance. He said that they never told him this. He said that they also said that he was claiming motor expenses as business expenses. He told me that he felt that this was “hurtful”, and he said that these were “groundless allegations” of fraud and dishonesty. He said that this led to an eleven-month investigation which “totally and utterly exonerated me “. He said the SRA never even spoke to him. He told me that he found out at Christmas 2019 that rumours were being spread about financial irregularity. He said that there had been comments to the effect that colleagues had “no salary increase because Mike’s taken the money “. He experienced anxiety which he described as “constant feeling of worry about the future and the way things have happened around me. He mentioned that he was accused of “criminal dishonesty to my own professional body” and that was “absolutely devastating”. This felt “hurtful and upsetting”.[41]As a solicitor in practice for more than 30 years the referral to the SRA was a very serious matter and potentially very damaging to him professionally and personally. The subsequent investigation took almost a year leaving the claimant with serious allegations of financial misconduct hanging over him would have been an extremely worrying time. The claimant had understood that Mrs Lord and Miss Russell were accusing him of criminal dishonesty to his own professional body. We accept it would have been “absolutely devastating, hurtful and upsetting” for him. We accept the hurt feelings he experienced at the time tipped him over from injured feelings to personal injury damaging his mental health. The medical expert described the anxiety the claimant suffered as “a constant feeling of worry about the future and the way things have happened around him”. We accepted the evidence accurately reflects how the claimant was feeling about the SRA referral which he describes sent his mental health ‘spiralling down’.[42]At the same time as the claimant’s solicitors were asking questions of the medical experts the claimant had been asking questions about his PHI claim. In December 2020 he asked Mr Munday to confirm the medical reason why the insurer considered the claimant was incapable of working which supported his PHI claim. Mr Munday confirmed that from the fit notes and the regular health updates provided he had understood the claimant was “totally unable to work since July 2018 as a result of bowel cancer, complications from his illness and from treatment/surgery and more recently mental health difficulties as a result of his diagnosis, the complications and treatment”.[43]It was clear from that answer that the mental health difficulties the claimant was describing in his evidence to the tribunal was described differently to the insurer in the regular contemporaneous updates he provided. He told his insurer all his mental health difficulties were attributable to his cancer not to any of the admitted unlawful conduct or the lawful conduct of the SRA referral relied upon at this hearing to support his compensation claim. Detriment 1: Withholding management and accounting information relating to the first respondent in November 2019[44]On 19 November 2019, following a Legal Aid Authority Audit, the LLP received notices of a failed inspection in breach of the legal aid contract. The failures identified by the LLP included not fulfilling its duty solicitor slots allocated to the claimant and a failed peer review. The notices gave the LLP a period of 6 months to correct the failures.[45]Under the heading “withholding management and accounting information” (paragraph 134) the claimant says his feelings were injured because he was not provided with the notices when they were issued which were “necessary” for him to carry out his roles and responsibilities as a designated partner of the LLP. He says: “In late 2019- early 2020 the LLP failed a LAA peer review and received three LAA contract notices. The respondent did not provide me with this important information or any of the key documents until their former legal representatives disclosed documents on 7 October 2020. This is despite the fact I was a full equity member of the LLP and the failure of the peer review and contract notices could have been catastrophic for the LLP and me personally. The withholding of this important information caused me distress and concern about the management of the LLP and the future of both myself and the LLP”[46]The claimant did not see the notices that were issued to the LLP on 19 November 2019 until 7 October 2020 and could not have suffered any injury in November 2019 when the unlawful conduct occurred. The claimant saw the notices nearly a year after they were issued and knew the legal aid contract had continued and there had been no catastrophic consequences for the LLP or for him personally. Despite those known facts the claimant has describes injured feelings of distress and concern to support his compensation claim which are not supported by the Detriment 2: Removing the claimant from his roles as a Designated Member and Managing Partner (28 November 2019 – 13 December 2019)[47]On 28 October 2019, having sought legal advice about the suspected insurance fraud, Mrs Lord and Miss Russell exchanged WhatsApp Messages in a private group chat which did not include the claimant (RB page 759). The messages state: “I think we arrange a meeting of Des partners at which we agree by majority not to let mike work without a fit note, that we take back COLP, COFA, MLRO, GDPR, complaints etc and we agree tell him have taken advice and he is not entitled to profit share as discussed. I’ll draft an agenda and we’ll do it by the letter. We might not be able to get him out, but we can strip him of all power” “in fact I can see no reason why we cannot strip him of managing partner title either. That is by simple majority”.[48]Although the claimant did not see these WhatsApp messages until the disclosure process in October 2020, he refers and relies upon them in his witness statement as an aggravating feature of the unlawful conduct to support his claim that he suffered additional distress which increasing his hurt feelings. Under the section in his statement headed “Attempts to expel me” (paragraphs 119-133) he identifies this message as the beginning of the ‘expulsion process’ in paragraph 119 in which he says: “In a discussion about me, the respondent states: “We might not be able to get him out, but we can strip him of all power” Then continues “in fact I can see no reason why we cannot strip him of managing partner title either”.[49]The claimant’s account selected parts of the message which do not accurately reflect the full meaning. Mrs Lord and Miss Russell had legitimate concerns the claimant was involved in fraud they had told the claimant they were going to take legal advice and they intended to protect themselves and the firm by ensuring they were doing things properly (by the letter) going forward. They intended to arrange a partners’ meeting and had decided that by a simple majority they would agree not to let the claimant work without a fit note. If at that meeting the claimant’s absence was continuing, they intended to reassign the claimant’s roles and responsibilities as the designated member and managing partner accepting, they had no power to remove him from the firm.[50]Mrs Lord and Miss Russell accepted they should have taken over the claimant’s roles and responsibilities earlier. They had delayed because they felt manipulated into agreeing with the claimant that he could continue to hold those roles during his absence because of his position within the firm and because they were trying to be supportive. However, when they realised, they could be implicated in insurance fraud if they allowed him to do any work without a fit note, they took action to protect themselves and the firm.[51]Mrs Lord and Miss Russell expressed regret at some of the language they have used in these private messages they sent to each other at a time of partnership dispute. They admit they felt frustrated and stressed and never expected or intended the claimant to see those messages. They did intend the claimant to see the letter they sent dated 27 November 2019 which states: “Dear Mike We refer to the Limited Liability Partnership Agreement for GWB Harthills LLP made in 2015 (the LLP agreement). Whilst the agreement was never signed, it was attached as schedule 6 to the merger agreement forming the LLP and its terms have been agreed to by all the members and you yourself have positively asserted that its terms have been acted upon as binding between us. It therefore governs our relationship. meeting of Members on the 6th December 2019 at 2pm at the Rotherham Office to discuss whether you are physically and/or mentally unfit to carry on your duties and obligations as a Member under the LLP Agreement. Whilst you are entitled to attend the meeting and make representations to the Members, we do not consider that on a proper construction of the LLP Agreement you are entitled to vote on the matter as it directly concerns you.[52]The claimant agrees he was expecting a partners’ meeting to be arranged after the October 2019 meeting to discuss his fitness to work and to update him on any management matters that had occurred since the last meeting. He was not expecting it to be arranged formally by letter served by a process server known to the claimant. The claimant describes this as an aggravating feature of the unlawful conduct. He says it caused additional hurt feelings because it was ‘humiliating’ for him because the process server suggested “it would not be good news” which he understood to mean that the respondents had discussed the contents of the letter with the process server.[53]Mrs Lord explained a process server was used following legal advice to ensure a proper process was followed to manage the absence. The suggested motive that she had shared the content of the letter with the process server to humiliate the claimant had never been put to her and was unsupported by any other evidence.[54]The claimant as an experienced lawyer knows process servers are often used when parties are in dispute to ensure effective service of notice of meetings or court proceedings. From October 2019, he knew Mrs Lord and Miss Russell suspected he was acting in bad faith/fraudulently in relation to his sickness and PHI claim and he was involved in a partnership dispute with his partners who had taken legal advice. Those were the material circumstances the claimant knew about before he received the letter from the process server inviting him to a partners’ meeting. He knew from the letter the meeting would consider whether he should be deemed unfit to carry out his duties as a designated member. We do not accept the claimant’s account implying Mrs Lord and Miss Russell had shared the contents of the letter with the process server which was never put to them and was very unlikely. They used a process server to ensure effective service of the notice of a partners’ meeting. They did not share the contents of the letter with the process server to humiliate the claimant. On the balance of probabilities, we find the claimant did not suffer any humiliation or additional distress. Was the Claimant intending to return to work before the admitted discrimination?[55]In the claimant’s witness statement signed on 25 September 2022, the contents were sworn to be the truth and make the repeated assertion that in November 2019, the claimant felt well enough to and would have returned to work in January 2020, but for the admitted discrimination: “On 27 November 2019, two days after I notified the Respondents’ of my intention to return to work (please see page 553) I was informed that the second and third respondents intended to vote on whether I should be expelled from the first respondent because I was mentally and /or physically unfit to carry out my duties and obligations as a member of the First Respondent (please refer to pages 660-661 of the bundle)”. He continues “I fully intended to return to work early in the New Year (following my routine ‘3’ month post operation scan) and my medical records support the fact that I would have been fit to return to work had it not been for the respondent’s attempts to expel me and the significant damage this caused to my mental health. I had anticipated that a partners meeting would be arranged so that the Respondents could update me on management matters and for us to discuss my planned return to work (this would have taken place as usual at my home at a time that suited all parties).[56]Page 553 is the supporting evidence the claimant refers to which is the email he sent to his partners on 25 November 2019 stating: “I hope to have my drain removed soon and my infection is reducing so we could meet later next week. I have every intention of returning when it is appropriate. I see that the draft accounts for 2018-2019 have been put on hold. I do not understand the reason why as they will only be draft and at this stage, they do not have to identify individual breakdown-the overall performance of the firm and the Net Profit would be the starting point and we already have a baseline figure. Do I have your agreement to request Sarah let us have that? We also need to lodge accounts professionally, so they are needed. The partnership agreement needs clarifying. Finally, for the record- if any of my partners found themselves in my situation of having a life changing illness, and I dearly hope that will never be the case, then, I would wish they share to the fullest extent to any partnership monies-it would never have entered my mind to do otherwise as I regard this as a key element of being a supportive partnership”.[57]The email did not state the claimant was well enough to or planned to return to work in January 2020. It confirms there was ongoing uncertainty about any return to work. It confirms the claimant was continuing to be involved in the financial management of the firm. The claimant continues to express his disappointment and frustration with Mrs Lord and Miss Russell’s decision not to support him having both PHI benefit and share “to the fullest extent” any partnership monies during his sickness absence.[58]The claimant’s account of the injury to feelings caused by the letter is set out at paragraph 131 of his witness statement: “The first and second respondent had not had the decency to ask me how my health was or to notify me that they were considering my fitness to carry out my duties. As I have mentioned above at the time my mental and physical health were improving as my blog entry 13 November 2019 illustrated referring to me having walked 3KM that day and “keeping mentally active”. In these circumstances I found the suggestion that I was mentally or physically unfit to perform my role to be highly offensive and unprofessional. It was also very distressing coming out of the blue as it did”[59]The claimant suggests his email to the partners and the blog message he posted confirm his fitness to work even though they completely contradict the fit notes provide by his GP declaring he had been and continued to be physically unfit to perform any work.[60]Mrs Willis refers to the impact of the letter of 27 November 2019 in her witness statement. At paragraph 8 she describes it in this way “to put the shock and distress into perspective, it eclipsed the upset we felt when the claimant first received his cancer diagnosis”. At paragraph 11 she says “the claimant’s mental health went further downhill when he discovered the respondents had reported him to the SRA and alleged, he had engaged in fraudulent activity. This was a very cruel blow for him which took an immediate toll on his mental health. It was incredibly shocking to see and deeply upsetting for me and our children. The claimant is a highly respected man within his family and working community. The claimant felt incredibly humiliated by these unfounded allegations of dishonesty which he was later fully exonerated by the SRA”[61]On 29 November 2019, the day after the claimant (MW) received the 27 November 2019 letter which the claimant has repeatedly treated as his ‘expulsion’ from the firm, he made an unscheduled telephone call to Mr Munday (MM). We have set out in full the relevant parts of the agreed transcript to accurately record this evidence before making our findings of fact (CB pages 1005 -1009). Page 1004: MW: Sorry we weren’t due to speak until I think January. But there’s queries that I wish to just run past you if I may. MM: Yeah. By all means. Carry on. MW: Obviously, I’ve been off work for some few months, and I had my operation four weeks ago, which was successful but unfortunately, I had an infection and was then back in hospital and still have a drain coming out of my chest and various bits and bobs. But there is talk at work that they are going to ask me to leave. MM: Okay. MW: Because you know, I can’t do my job. MM: Yes. MW: And I just- I didn’t know and I couldn’t see the answer in the policy document, what would happen to my insurance if effectively work were to get rid of me if you like? MM: We are- the policies are designed to look at generic duties. So, we’re not looking at who your employer is, or the availability of work, it is whether you can do the duties of your occupation. MM: Is it--you know we’re just looking at can you do the job, it doesn’t matter where it is or who it’s for, it’s your ability to do the role. MW: Basically, the suggestion is that I’m physically or mentally unfit to carry out my duties and obligations as a member under the agreement i.e. being the managing partner. MM: Yes. MW Obviously, no decisions have been made yet, but this has been flagged up to me. I’m just looking through the policy document. You know the benefit ceases when you’re no longer incapacitated. You’re no longer suffering a loss of earnings to justify payment. MM: Yes MW: I’ve been back to the consultant twice and I’ve got to go again possibly next week for them to review my situation. But certainly, it’s been problematic this time after the operation so. Really then, in the circumstances of what you’re saying shall I speak to you again in January as originally planned? Because you know I don’t quite know what’s afoot, but I am concerned that the firm is going to want me to go because they say I can’t carry out my duties and obligations within the firm. MM: Yeah. MW: And certainly, as things are medically, that’s probably true (laughing). MM: Yeah. MW: You know, I can’t really argue with that. Whatever the duties are as a bogstandard criminal lawyer going to police stations at night. MM: No. MW: Or as the managing partner, I’m afraid I wouldn’t be able to do any of. MM: Any of those duties. No MM: But no, I mean it wouldn’t have an effect. It’s not something that I’d turn around and say oh, you haven’t got a job anymore so I’m going to stop your benefit. You Know. MM: We will look at it to say well, okay, you lost that role but were looking at your ability and the medical evidence at the moment shows that you still can’t do that role, so we’ll carry on paying you. MW: Yes. Yes. Well, that’s all okay. Obviously gives me a bit of reassurance because I’m not quite - it’s kind of with no prior discussion as to whether, I’ve been in hospital for several weeks and I’m obviously in recovery mode at the moment, so I was a little bit surprised when I was made aware of this. So, I thought I’d seek that clarification. So certainly, as things presently stand at the moment with me not being fit to work in any shape or form things remain as they are and obviously, I’ll speak to you in January or if anything changes in the meantime. MM: Yeah. No that’s fine. And as I say, it’s the period of incapacity which is in the page 1 of the terms and conditions. MW: Yeah. Okay. I’ll have a look.[62]On 29 November 2019 (the day after he received the letter dated 27 November 2019) the claimant is confirming to Mr Munday that he agrees he is medically unfit to carry out his duties and obligations within the firm, he laughs about the situation because he accepts it is true. He can’t argue with it because he knows his PHI benefit is paid by the insurer because he is incapacitated and suffering a loss of earnings which justifies the PHI payment. In his account to the tribunal now he says he found that suggestion “highly offensive and unprofessional and very distressing coming out of the blue as it did”.[63]In his call to Mr Munday, he makes no reference the ‘expulsion’ letter referring to ‘talk at work’ and expecting to be asked to leave because he had been unable to work in any “shape or form” for a long time. The claimant is eager to persuade Mr Munday there was unlikely to be any change of circumstances or any improvement in his health because of the complications with his cancer treatment. In his account to the tribunal, he says his health was improving and would have returned to work in January 2020 had he not been expelled which were substantial changes of circumstance which would have affected his PHI benefit. We find the claimant has presented a fundamentally contradictory account to support his claim for compensation.[64]Before the claimant made the telephone call, he had time to think about the letter and what he wanted to say to Mr Munday. He was being very careful about the information he shared with Mr Munday so as not to arouse any suspicion. By the end of the call the claimant knew the only way his PHI benefit would continue to be paid by the insurer was if he continued to provide medical evidence supporting his incapacity. He knew his fit note was due to expire on 2 December 2019. If he continued to be medically incapacitated and left the firm the insurer had made it clear he would be expected to find work as a solicitor effectively starting again from the bottom.[65]While the claimant cannot change what he said/did at the time, he had the opportunity in his account to the tribunal to set the record straight now, knowing we would be listening to the call and reading the transcript. If the claimant had returned to work in January 2020, he would have only received his monthly drawings as a partner of £5,000 for working full time. By not returning to work he knew he was better off financially because he would receive PHI benefit of £7,000 per month and his full profit share. At the time of the call, he knew Mrs Lord and Miss Russell were concerned he was involved in insurance fraud. He did not disclose those concerns to Mr Munday presumably because that would have prompted further enquiry.[66]Contrary to the claimant’s account which was unsupported by the undisputed transcript we find the claimant had no intention of returning to work before the admitted discrimination. He has given a deliberately false account at this hearing to bolster his claim for compensation. On 29 November 2019, he had confirmed to the insurer that his cancer related absence to continue to the next review in February 2020.He was not ‘highly offended’ by the suggestion he should be deemed unfit and had agreed it was ‘true’ but presents a contrary position to support his claimed losses.[67]Having carefully considered the position we find the claimant was presenting a false account at this hearing to try to mislead the tribunal into make a finding of fact he knew was untrue (but for the Claim 1 discrimination, the claimant would have returned to work on or around January 2020”).If the claimant had been transparent with Mrs Lord and Miss Russell about what he was saying to his insurer, he would have had to admit he agreed he should be deemed unfit and could not retain his roles and responsibilities which should be reassigned to them in his absence. The claimant was not being transparent with the Insurer or with the respondents or with the tribunal.[68]After his call to Mr Munday on 29 November 2019, the claimant had no intention of participating in any meetings with the respondents or agreeing he should be deemed unfit. Having decided it was not in his interests to participate or attend the meetings he decided he would not engage in any way to deliberately frustrate the process.[69]On 3rd December 2019 the claimant spoke to his GP Dr Evans. He refers to this consultation in his witness statement under the heading “depression and acute stress reaction”. At paragraph 155 he says: “I spoke with my GP Dr Evans and explained that I was feeling very stressed about the letter I had received from the respondents regarding the proposed expulsion (please refer to page 1280 of the bundle)”.[70]The GP record (page 1280) dated 3 December 2019 15:06: states “has been expelled from his firm has sought legal advice but obviously V upset. Having BUPA counselling and seeking help at Cavendish Centre. Fit note issued not fit for work. Diagnosis: Carcinoma Metastatic NOS: Duration 2 December 2019-20 January 2020”.[71]The claimant’s account to the GP was inconsistent with his earlier account to Mr Munday. He informed his GP he has already been expelled and that he had sought legal advice which suggests his solicitors were involved very early in the process although they did not engage in the process until 6 January 2020. Dr Evans was completely reliant on the claimant’s account and attributed the upset the claimant was describing to the expulsion that she believed had already happened by the date of the consultation on 3 December 2020. We found the claimant’s account to Dr Evans was not reliable or accurate because the claimant knew he had not been expelled. The inference we draw is that the claimant was deliberately inaccurately reporting events to Dr Evans to gain her sympathy and provide a reason to issue a fit note. Although the claimant was reporting a workrelated event as the cause, he must have requested that Dr Evans recorded the reason was related to his cancer to support his continuing absence from 2 December 2019 to 20 January 2020. This is significant because work related mental health difficulties were not subsequently picked up as the cause from the fit note by the insurer or by the medical expert when the fit notes were being considered for different purposes.[72]On 4 December 2019, Mr Mike Jones (the partner who was not a designated partner) sent the claimant his written objections to the proposed resolution to deem the claimant unfit to work confirming his intention to vote against it as a friend and ally of the claimant. It was made clear to the claimant that Mr Jones had decided to vote against the proposed resolution before the partners’ meeting.[73]On 6 December 2019, Mr Jones attended the partners meeting at the Rotherham office with Mrs Lord and Miss Russell. The claimant did not attend or attempt to contact the members with his views on the proposal or explain why he was not attending the meeting.[74]Following that first partners meeting a second letter was sent by Mrs Lord and Miss Russell inviting the claimant to the rearranged partners meeting. Clause 13.3(j) of the LLP agreement confirms that if a partnership meeting is not quorate within 1 hour of the notified start time the meeting “shall be adjourned until the same time the following week. If at such adjourned meeting the appropriate quorum is not present within 1 hour of the start time of the meeting those persons present shall constitute a quorum for the purposes of this agreement”.[75]In accordance with that clause by a letter dated 6 December 2019 the second partners meeting was arranged for 13 December 2019 at 2pm. The letter states: “Dear Mike, We are sorry that you were unable to attend the meeting on 6 December 2019 at 2pm. As a consequence of your non-attendance, we were not quorate therefore in accordance with 13.1.3(j) of the LLP Agreement the meeting has been adjourned until 13 December 2019 at 2pm in the Rotherham Office”.[76]On 13 December 2019, Mr Jones attended the partners’ meeting at the Rotherham office with Mrs Lord and Miss Russell. The claimant did not attend or contact the members about the meeting. The meeting proceeded in the claimant’s absence. Again, in evidence the claimant refers to this meeting as an “expulsion meeting” even though he told Dr Evans he had already been expelled by the letter dated 27 November 2019.[77]On the same day the claimant attended an appointment with Dr Evans. At paragraph 158 of his witness statement, he says “I explained that I was suffering from low mood, sleeplessness, an upset stomach, skin conditions, ulcers, night sweats, irritability, nausea, extreme worry about the effect of stress on my physical, health a sense of bereavement in respect of the premature loss of my career, the way my work partners had treated me and the loss of direction and motivation”.[78]The GP record states: “Problem: cannot sleep-insomnia (new). History: Not surprising considering circumstances at work-has meeting today so will know more. Feels like a bereavement as worked there for >30 years. Not sleeping despite relaxation tapes, seeing counsellor, and trying acupuncture at Cavendish. Discussed ongoing low mood and uses anti-deps if needed. Wife has stopped job to support him. Allow himself to grieve cannot rush the process inc activity again to try and reduce stress”.[79]As this was a follow up meeting after the claimant’s ‘expulsion’ it was understandable that Dr Evans would treat the symptoms the claimant described attributable to the premature loss of his career akin to a bereavement recognising the need for the claimant to process that loss after 30 years of work. The claimant knew that he had not been expelled and was continuing to inaccurately report work events to his GP.[80]On 16 December 2019, the claimant was provided with the detailed minutes of the meetings of 6 and 13 December 2019 so he knew exactly what had been discussed and decided in his absence. In his witness statement (paragraph 127) when he refers to these minutes, he only comments on the parts referring to the SRA referral: “I noted that the minutes referred to me being contacted by the SRA in connection with improperly claiming business expenses whilst absent from work. This came as a further complete shock to me. The wholly unjustifiable allegations in respect of my honesty and integrity and the fact that the respondents had reported me to the SRA without asking me or allowing me the opportunity to make representations about these matters was incredibly upsetting. Their actions sent me into a downward spiral from a mental health perspective and I became very unwell”[81]The meeting minutes of 6 December 2019 identified Mrs Lord and Miss Russell’s ongoing concerns about ‘fraud’. Mrs Lord explained how concerns about the claimant’s business expenses had come to light and confirmed that until then she was unaware the claimant had received reimbursement for those expenses. Mrs Lord and Miss Russell confirmed they had taken legal advice and had reported their concerns to the SRA. Mr Jones confirmed that he knew the SRA report had been made and had already told the claimant about it (confirming that the claimant knew about the SRA referral before he saw these minutes) .Miss Russell confirmed she had called the meeting to discuss the claimant’s health to sit down with the claimant and “find out when he is going to be well and when he is hoping to be back”. Mr Jones raised the question of expulsion and Mrs Lord and Miss Russell made it very clear in the minutes that it was not an expulsion meeting but had been arranged to decide whether the claimant should be deemed unfit to enable the partners to reassign his roles and responsibilities during his sickness absences. Miss Russell went through the LLP’s Quality Procedures Manual to identify each of the claimant’s roles and responsibilities that needed to be reassigned while he remained unfit to work. She confirms her understanding that the insurer would not have permitted the claimant to claim PHI benefit and work and the firm could not allow the claimant to work without a fit note to avoid the firm and members being implicated in insurance fraud. In the minutes she describes they were “in an incredibly vulnerable position. We need to know where we stand. We need to take those roles off him and dive them up between us”.[82]The minutes of the meeting of 13 December 2019 confirm there was a further detailed discussion about the difficulties caused by the claimant’s absence in relation to each of the roles he held as a designated member of Criminal Defence Solicitor/Higher Court Advocate, Duty Solicitor, Business Continuity Manager, Compliance COLP role, Compliance COFA, Credit Controller, Data Protection Partner, Fire Safety, Health and Safety Officer, IT partner, Managing Partner. Mrs Lord expressed her concerns in relation to the claimant’s role as Credit Controller dipping in and out of managing the firm’s finances which was “counterproductive”. Mrs Lord and Miss Russell give examples of the difficulties they had been experiencing with the claimant retaining the delegated responsibilities without performing the roles.[83]Miss Russell explained the roles needed to be performed because (page 681) “the buck needs to stop with somebody with specific responsibilities. We cannot have one person trying to do things when they are unwell”. After detailed discussion a unanimous resolution was passed by Mr Jones, Mrs Lord and Miss Russell deeming the claimant unfit and reassigning his roles to Mrs Lord and Miss Russell. It was also agreed Miss Russell would need to take steps to inform Companies House of the change in managing partner to confirm the claimant was no longer a person of significant control. It is important to note that Mr Jones (the claimant’s ally) also voted for the resolution which was passed unanimously and not by a simple majority as Mrs Lord and Miss Russell had anticipated.[84]Given that those undisputed detailed minutes have been available to the claimant since 16 December 2019 explaining the members rationale and decision confirming the claimant had not been expelled it was surprising the claimant has maintained his account that he believed he had been expelled. The evidence he gives about this admitted unlawful conduct to support his injury to feelings is all given under the heading “Attempts to expel me from the First Respondent”. He describes the expulsion process started with the What’s App message of 28 October 2018 and ended on the 7 January 2020. At different times in his account, he refers to an expulsion by letter dated 27 November 2019 then at the December meetings later described as attempts to expel him without explaining how those inconsistencies are explained in the light of the undisputed contemporaneous[85]In a partnership/LLP expulsion is the process of termination of the members position within the firm with a defined date communicated in words or actions a partner/designated member could reasonably understand as a termination on a particular date. The claimant having left the LLP in March 2021 was familiar with the process the LLP is required to follow when a designated member leaves the LLP whether by way of retirement or expulsion. The departing member becoming an outgoing members and creditor of the LLP until all liabilities are settled. Although the letters of 27 November and 6 December arranging the partners’ meetings and the detailed minutes of the meetings of 6 December and 13 December 2019 make it clear that the claimant had not been expelled, the claimant invites the Tribunal to find that at the time he genuinely believed he had been expelled. The evidence does not support that finding of fact. We find the claimant did not genuinely or reasonably believe he had been expelled to support the injury to feelings he claims he suffered attributable to this.[86]The findings we make about this detriment are supported by the unchallenged contemporaneous evidence. All the members had decided on 13 December 2019 to unanimously deem the claimant medically unfit and to reassign his roles and responsibilities to the other members while the claimant’s absence continued. The members’ decision was supported by the GP fit notes which confirmed the claimant’s remained unfit to work and that his long-term absence would continue. In those circumstances the members unanimously agreed to reassign his roles and responsibilities to Mrs Lord and Miss Russell. Although Mr Jones had initially objected to the proposal, he was persuaded it was necessary to deem the claimant unfit and to reassign his roles and responsibilities to Mrs Lord and Miss Russell who were able to take over those specific responsibilities in the best interests of the LLP. It was a common-sense decision made by the members acting in good faith in an open transparent and inclusive way. The claimant had been invited to all the meetings and could have participate by providing information to help the members make a different decision if he had genuinely wanted to return to work. The easiest way of doing that was to confirm he was fit to return to work and to resume his roles and responsibilities. On the balance of probabilities, we find the claimant was not highly offended by this and did not suffer any injured feelings. Detriment 3 Removing (13 December 2019) and reinstating (22 January 2020) the claimant as a Person with Significant Control of the First Respondent (PSC).[87]After the meeting on 13 December 2019, Ms Russell completed and signed form LLPSC07 (notice of ceasing to be an individual with significant control (PSC) of a limited liability partnership). The purpose of the form is to inform Companies House when a person is no longer a person of significant control. The form requires the person signing the form to have contacted the individual before filing the form. All the designated partners are individuals with significant control of the LLP but only the claimant was on the public register as PSC. As the managing partner he had always been on the register and had never added Mrs Lord or Miss Russell. They were unaware that they should have also been registered and had wrongly assumed only the managing partner was a PSC.[88]After the partners’ meeting on 13 December 2019, Miss Russell filed form LLPSCO7 on 16 December 2019, removing the claimant as PSC. When the claimant’s solicitors intervened on 6 January 2020 and identified the error steps were taken to immediately reinstate him. He was registered alongside Miss Russell and Mrs Lord on 22 January 2020. Although the admitted detriment is framed as if the reinstatement is part of the unfavourable treatment that was obviously an error. The unfavourable treatment was the removal of the claimant from the register from 13 December 2019 for a period of just under 6 weeks.[89]In the ET3 Mrs Lord and Miss Russell (page 48 paragraph 20) confirm Miss Russell had completed the form in error believing only the managing partner of the should be identified on the register. The grounds of resistance confirm the position: “briefly and when updating its return to Companies House the respondents changed its return so that the claimant was not shown as a person of significant control. An amendment was needed because in his filing the claimant had omitted to include Mrs Lord and Miss Russell as persons of significant control. When the claimant raised this as an issue the respondents took advice and reinstated the claimant as PSC. The change was an administrative matter and only because of the respondents genuinely held belief that the change in return was necessary”.[90]The claimant knew that the partners had unanimously passed a members’ resolution reassigning his management role to Mrs Lord and Miss Russell. He knew that as the managing partner he had only registered himself at Companies House supporting the respondent’s belief. In evidence the claimant does not describe any injured feelings only the facts he relies upon about the act which are not in dispute. He says “it was not correct that I was no longer a person with significant control of the respondent. Further Miss Russell signed and filed this form at Companies House without my knowledge or consent despite the clear warning in the signature box which states “you must not send this form to us in respect of an individual unless that individual has confirmed that they have ceased to be a person of significant control”. At paragraph 30 he refers to being restored as a person of significant control following his solicitors’ intervention on 6 January 2020 but does not describe the effect of temporarily being removed from the register.[91]It was not clear if the claimant was inferring Miss Russell had deliberately incorrectly filled out the form and that error was an aggravating feature of the act causing him to suffer additional injury. He has not identified the injury or the additional injury to support the claim. Having seen the form, the warning the claimant refers to is at the side of the signature box in small text and is not immediately apparent. Miss Russell confirmed in her unchallenged evidence that it was a stressful time, they had taken on new management responsibilities and were unfamiliar with the registration process and she signed the form in error without first obtaining the claimant’s agreement. We accepted it was an error on Miss Russell’s part. She had not taken sufficient care filling out the form out of ignorance not malice or spite. Once the error was pointed out it was admitted and[92]We considered Mrs Willis’ account about this. She describes the claimant was visibly upset linking the upset to the SRA referral describing and how the claimant felt betrayed because he could not understand “why the Second Respondent had willingly signed a declaration that was false, yet he had been reported to the SRA by them for acts he had not committed”. Her evidence was consistent with the claimant’s belief it was a deliberate act, but we have found it was an error. Mrs Willis describes the claimants feeling of upset and betrayal at the way the form was signed linking his hurt feelings to the SRA not to the claimant’s temporary removal from the register.[93]We concluded that the reason the claimant has not identified any hurt feelings about this detriment is not because he is being stoic about it, but because he knew it was temporary and done in error and corrected and the claimant did not suffer any injury to feelings. Mrs Willis describes the claimant’s feelings of betrayal by Miss Russell’s linking his hurt feelings to the SRA referral which was not unlawful admitted discrimination. On the balance of probabilities, the claimant has not identified or proved he suffered any injured feelings. Detriment 4: Removing him from the First Respondent’s management and decisions making processes.[94]Although the claimant chose not to communicate with his partners in relation to any of the partnership meetings arranged in December 2019, he did choose to communicate with them about the partnership returns which needed to be filed by January 2020. On 6 December 2019 (RB page 554), Ms Russell had emailed the claimant about the 2018/2019 accounts suggesting they were prepared based on the agreement made on 17 April 2019, that the claimant would receive his profit share less 6 months drawings and his permanent health payments (grossed up) for the period November 2018 to March 2019.[95]On 17 December 2019 (RB page 555), Miss Russell sent an email to Ms Fields (the LLP accountant and the claimant’s personnel accountant) confirming the resolution that had been passed by unanimously by the members on 13 December 2019. She confirmed the LLP had agreed the claimant was deemed unfit to fulfil his role as a member. Miss Russell confirmed that while the claimant’s absence was continuing, he would not be managing the firm. Miss Russell confirmed she would request information about the PHI payments the claimant had received in 2018/2019 so they could be included in the accounts. She accepted that if that information was not provided by 19 December 2019, the accounts would have to be prepared on the assumption that the claimant had received £7000 PHI benefit per month since November 2018. The actual figures could then be inserted later if that assumption was incorrect.[96]On 18 December 2019 (RB page 556 RB), the claimant refused to provide the information requested confirming that the income protection policy was personal to him and that no deductions should be made to the allocated profit costs. In his email he states: “in the absence of any agreement to the contrary the draft LLP agreement entitles me to a full share of profit for the year 2018/2019 and for each year thereafter. As the policy is personal to me the information related to it is confidential to me and as those payments are tax free, they are not relevant to the draft account figures”.[97]On the same date, the claimant emailed Ms Fields to persuade her that the accounts should be prepared without any deductions for PHI payments. The claimant was using his close working relationship with the accountant, his interpretation of the LLP agreement and his refusal to share information about his PHI benefit to ensure the accounts were prepared in way that was most beneficial to his position in the current financial year and for future years. In contrast in Miss Russell’s communication with the accountant she was less forceful, she accepted she was making assumptions which might be wrong and might need to be corrected.[98]Despite Miss Russell’s attempts to limit the claimant’s continued involvement in the management of the finances of the firm, the claimant continued to have a proactive role which contradicts with his account at this hearing that he believed he had already been expelled from the firm by the letter dated 27 November 2019.[99]On 19 December 2019, because of the time constraints and the claimant’s refusal to provide any information about his PHI benefit Miss Russell agreed that Ms Fields should prepare the accounts as the claimant had proposed allocating him his full profit share without any deductions for PHI payments.[100]In his evidence (paragraph 134) the claimant suggests his feelings were hurt because ‘accounting’ information was withheld from him. The contemporaneous evidence shows that assertion was not true. It was the claimant who was withholding financial information from the respondents. He was very proactively engaged in the preparation of the accounts and had by 19 December 2019 secured his financial position with the LLP and with Aviva ensuring payment of PHI until at least the next review planned in February 2020.[101]On the balance of probabilities, we were not satisfied the claimant suffered any hurt feelings. Detriment 5: taking steps to expel the claimant as a member of the First Respondent from 19 December to 7 January 2020[102]On 19 December 2019(RB pages 690-691) Ms Russell and Mrs Lord wrote to the claimant to give him notice of a meeting to discuss and to vote upon expulsion. The letter identifies clause 13 of the LLP agreement because the expulsion of a partner is a major decision a partnership can make which requires a meeting a vote and the unanimous agreement of all the designated members.[103]Clause 13 of the LLP agreement expressly provides the designated members must unanimously approve any major decisions affecting the LLP which includes appointing or removing a designated member, changing the business premises, and borrowing money (13 (c)(e)(m)). A designated member could stop the other designated members from making any major decisions about the LLP simply by not voting for it. In Claim 2 we saw some examples of decisions the claimant had blocked by using his power of veto. He refused to agree to the CBIL loan urgently needed by the LLP and to refused to agree relocation to new premises when the existing premises were deemed to be unsafe (paragraph 293 C2 Judgment page 1188). Although designated members could stop major decisions being made clause 15 of the LLP agreement requires each member to “show the utmost good faith to the LLP and the other members”.[104]The letter states: “We have written to you previously to confirm that on the 13 December 2019 a resolution was passed by the members under Clause 20.1.1(j) that in the reasonable opinion of the members you are not physically or mentally fit (whether or not certified as such by a medical practitioner) to carry on your duties and obligations as a member under the LLP Agreement. meeting of Members on 31 December 2019 at 2pm at the Rotherham Office to discuss and vote upon your expulsion from GWB Harthills LLP under Clause 20.1.1(j) as detailed above. The vote on expulsion requires the approval of the Designated Members under clause 13.1.6(e) but whilst you are entitled to attend the meeting and make representations to the Designated Members’ we do not consider that on a proper construction of the LLP Agreement you are entitled to vote on the matter as it directly concerns you.”[105]At paragraphs 129-132 of the claimant’s witness statement, he describes the effect of receiving this letter: “129. I received a further letter again delivered to me by a process server, inviting me to an expulsion meeting on 31 December 2019. This letter confused me as I believed I had already been expelled from the First Respondent. The Respondents later claimed that they had removed my roles and responsibilities but that they had not expelled me from the First Respondent.130. Due to my ill-health I did not attend the meeting on 31 December 2019, and it was adjourned to take place on 7 January 2020 (presumably because the meeting on 31 December 2019 was not quorate).131. If the respondents genuinely believed that I had committed any wrongdoing in respect of my expenses and/or my PHI claim I would have expected them to seek to expel me under clause 20.1(a) or 20.1 (f) of the LLP Agreement rather than clause 20.1 (j).132. The Respondent’s also took the most aggressive course of action possible to attempt to remove me from the First Respondent. The correct process would have been to disclose any concerns about me in writing so that I could prepare properly for such an important meeting, we could then consider and discuss any concerns and if a dispute or difference arose, we could have attempted to settle it by mediation. However, the peremptory and very aggressive route chosen by the Respondent’s, predictably and perhaps deliberately ruined my career and hard-earned reputation. It is hard for a solicitor to survive allegations of dishonest and fraudulent behaviour that has been levied against them, however ill-founded and malicious those allegations have proven to be.”[106]As an experienced managing partner, the claimant was more knowledgeable of the terms of the LLP agreement than either Mrs Lord or Miss Russell. He is critical of their lack of understanding suggesting that Mrs Lord and Miss Russell as solicitors should also have been able to easily understand the LLP agreement. His evidence that he was ‘confused’ is rejected based on the findings made. The claimant has always known that he could not be expelled unless he voted for his expulsion. He was not attending any of the partners meeting to deliberately frustrate the process while he was proactively engaging with Miss Russell and the accountant to ensure the LLP accounts were prepared in the way most favourable to him.[107]On the same day as he received the ‘expulsion’ letter the claimant had secured the allocation of his profit share into his current account and confirmed he expected the same entitlement for future years. The account the claimant gives that he did not know his roles and responsibilities had been reassigned was not true. The minutes he received 3 days before this letter made that very clear. The respondents did believe that the claimant was acting fraudulently had had committed wrongdoing. His suggestion that the respondents had not previously disclosed their concerns to him is untrue. The route the respondents used to discuss and vote on expulsion was to arrange a partners’ meeting to discuss and vote on expulsion. It was not a ‘peremptory’ or ‘very aggressive’ and was stopped before any discussion ever took place let alone a vote. As soon as the claimant chose to engage with the respondents and communicate his disagreement the process stopped. Subsequently he was unable to resume his career at any time up to his retirement due to his ill-health and because he did not want to return to work.[108]We agreed with the claimant that allegations of dishonest and fraudulent behaviour made maliciously would be an aggravating feature which could cause additional distress. However, we had found Mrs Lord and Miss Russell were genuinely and legitimately concerned the claimant was engaging in fraudulent behaviour and had acted in good faith.[109]On 30 December 2019 the claimant saw Dr Evans and he refers to this at paragraph 162 of his statement. He says: “my GP prescribed antidepressant medication for me as I was feeling increasingly low spirited and anxious (please refer to page 1278)” Page 1278 is the GP record. It identifies the problem: cannot sleep-Insomnia (review). It records the history: “Tried ½ Zoplicone but drowsy next day so not keen. Has been stripped of roles but has expulsion meeting tomorrow”.[110]On 31 December 2019 (page 694-695 RB) Ms Russell and Mrs Lord wrote to the claimant, confirming the arranged meeting had not proceeded in the claimant’s absence and had been rearranged for 7 January 2020.The claimant refers to his solicitors sending a letter on 6 January 2020, to the respondents raising serious concerns about their discriminatory behaviour and unlawful attempts to expel him. He acknowledges the letter was effective immediately and permanently stopping the process on 7 January 2020 (pages 168-178 RB). He says that following that intervention the attempted expulsion was put on hold and he was restored on the register as a PSC. He also says he had hoped to return on or around 20 January 2020 upon the expiry of his sick note however he was “unable to resume his role at that time because of the devastating impact of the respondents’ discriminatory actions including their report to the SRA and their attempts to expel me” (paragraph 31).[111]The claimant’s solicitors had identified the terms of the LLP agreement relating to expulsion had pointed out that the claimant could not be expelled unless he voted for his expulsion. They summarised the history of the claimant’s cancer related absences, confirming that the claimant relied upon the fit notes supplied to confirm his unfitness to work. They did not assert, as the claimant now asserts, that but for the alleged discrimination the claimant would have returned to work. The respondents treated the allegations made by the claimant’s solicitors very seriously accepted their interpretation of the LLP agreement took corrective action and agreed steps to obtain a medical report to help them manage the claimant’s ongoing absence.[112]The claimant was aware that although his solicitors’ intervention had been successful it could not stop the SRA investigation which was continuing to have a devastating impact on his health. On 22 January 2022, the claimant saw a different GP, Dr Pinninty who confirmed the claimant was unfit to work for 3 months from 22 January 2020-22 March 2020. Dr Pinninty diagnosed “Acute stress reaction: Carcinoma” linking the stress symptoms to the cancer not to any work-related event. There is no reference in the GP notes to the claimant reporting the ongoing SRA investigation.[113]In July 2020, Dr Pinninty was asked to provide a report to the claimant’s solicitors in which she refers to her consultation with the claimant on 22 January 2020. Her report states: “Initial Diagnosis My impression on 22 January 2020 was of a reactive depression ie a depressive episode seemingly triggered by unfair treatment at work and the frustration of his inability to return to work as patient would have desired. Causation Mental health presentations are usually multi-factorial and I note his cancer diagnosis was a significant diagnosis. However, these seems to be a significant step down in December 2019 in his mental health from being very low-grade tiredness and manageable symptoms to a diagnostic depression and this seems to coincide with the “workplace difficulties that have been reported to us”[114]On 21 February 2020, Mr Munday chased up the update the claimant had promised in the call on 29 November 2019. The claimant responded on the same day confirming the reason for his ongoing absence was continuing was related to his cancer not work-related mental health difficulties. He states: “I met my consultant on the 31 January 2020.The results of the first ‘3’ month scan, were clear of cancer although they did reveal damage to my liver that is continuing to repair. I have attached herewith my latest fit note which runs until 22/3/20”.[115]In the claimant’s update to his insurer, he does not disclose the work-related mental health difficulties he had reported to his GP in December or the SRA report, which would have prompted further enquiries. The inference we draw from this is that the claimant limited the information he gave his insurer to the cancer to ensure consistency with the information provided in the fit note.[116]The difficulty for the claimant is that he relies on his subjective evidence of injury to feelings as at this hearing to support his claim for non- pecuniary loss based on his version of past events which was unreliable and was not accepted by the tribunal. His account was not supported by the finding of facts. He says that when he received the first letter 27 November 2019, he believed that he had already been expelled (we found that was not true), that he had deliberately been prevented from participating in the meetings (we found that was not true), that the respondents did not have legitimate concerns about fraud/financial misconduct (we have found that was not true). He says they took the most aggressive route (we found that was not true). He says that but for the discrimination he would have returned to work in January 2022 (we have found that was not true). If the claimant was (as he now suggests) fit to return to work before when the first letter was issued, it is surprising he did not simply return to work and resume his roles.[117]After 7 January 2020, the only ongoing issue which prevented the claimant from returning to work with the respondents was the fact that they had reported him to the SRA, and he was under investigation for suspected financial misconduct until October 2020. It was the SRA outcome that the claimant was concerned could ruin his “career and hard-earned reputation”. It was the SRA referral that made the allegations of “dishonest and fraudulent behaviour” which remained outstanding and was continuing to hurt his feelings towards the respondents and was damaging his mental health.[118]We found there was only one unsuccessful attempt made by the respondents to start an expulsion process on 19 December 2019 which was stopped on 6 January 2020 as soon as the claimant engaged in the process. All planned meetings in January 2020 were cancelled on 7 January 2020. That attempt had got no further than arranging a partners’ meeting to discuss and vote on expulsion. The claimant knew that as soon as he objected the planned meeting was stopped and his complaints of discrimination were treated seriously.[119]The claimant has given different accounts of his understanding of the ‘expulsion’ depending on the purpose it serves. Having seen the ‘expulsion’ letter he does not tell the insurer on 29 November 2019 that he has already been expelled so as not to arouse any suspicion but 3 days later tells his GP he had been expelled to ensure a fit note was issued. He was using the term ‘expulsion’ to his GP not because he truly believed he had been expelled but because it fit with what he was telling his insurer. We find the claimant did not genuinely believe he had been expelled by the letter dated 27 November 2019.[120]The claimant’s description of hurt feelings in relation to this detriment is completely reliant on his account of the expulsion being accepted by the Tribunal. We found that account was untrue. On the balance of probabilities, we were not satisfied the claimant has suffered any injured feelings. Detriment 6: Excluding the claimant from a partners’ meeting on 24 January 2020[121]This detriment was pleaded at paragraph 121.6 of the claim form (RB page 39) as “The claimant was deliberately excluded from a Partner Meeting on 24 January 2020” and has been admitted in those same terms. It is agreed the process was stopped and that no partners meetings took place in January 2020. The claimant cannot claim he suffered injured feelings for being ‘excluded’ from a meeting that never took place.[122]The injury to feelings relies upon the claimant seeing a WhatsApp message exchange between Mrs Lord and Miss Russell referring to the cancelled scheduled meeting on 24 January 2020 as “dodgy as fuck”. The claimant says that when he saw this message in October 2020 it made him feel “anxious and hurt” because he believed the purpose of the cancelled meeting “was to discuss him and his future in his absence”.[123]At the time the claimant saw the message he knew he had been invited to every meeting arranged to try to discuss his absence. For the discussions that had taken place in his absence he was provided with the detailed minutes, so he knew exactly what his partners had discussed in his absence. On the balance of probabilities, we were not satisfied the claimant has suffered the injured feelings of anxiety and hurt he describes. Indirect Discrimination: practice of having meetings in Rotherham office and not at the claimant’s house[124]The agreed provision criterion or practice (PCP) of arranging partners meeting at the claimant’s home was not a practice that would put disabled persons who share the claimant’s disability at a group disadvantage. The requirement to prove group disadvantage to prove indirect discrimination is set out in section 19 (2) (b) Equality Act 2010. Although the requirement was not met indirect disability discrimination has been conceded by the respondents.[125]The claimant subjective evidence of hurt feelings is that Mrs Lord and Miss Russell were taking all steps to ‘prevent his participation in meetings making it difficult for him to attend in person making him feel like he was no longer welcome at partnership meetings’. It was not in the respondents’ interests to make it difficult for the claimant to attend/participate because if he had attended, they would have arranged fewer partners meetings because the meetings would have been quorate. It was as we have found in the claimant’s interest not to attend to frustrate the process. He decided when he would engage in the partners meeting and how he would engage with them.[126]After the SRA report had been made the claimant would never have agreed to allowing Mrs Lord or Miss Russell into his home. In his second claim he agreed he could not have had any face-to-face contact with them he would not have wanted or allowed them in his home which remained his position up to his retirement in March 2021.[127]On the balance of probabilities, we were not satisfied the claimant has suffered any injured feelings. Failing to make reasonable adjustments as would have enable me to work from home continue with my management roles and/or return to work on a phased basis.[128]At this hearing the claimant confirmed that during the Claim 1 admitted discrimination period he was unfit to perform any work. In Claim 2 that same admission had resulted in the claimant agreeing the duty to make reasonable adjustments involving a return to work could not be engaged and it followed that there could not be any failure to make reasonable adjustments.[129]Despite those agreed facts the claimant claims compensation for injury to feelings caused by the respondents’ failure to make reasonable adjustments in the Claim 1 period. He says (paragraph 137) that “had these adjustments been made as it is admitted it would have been reasonable to, and had the respondents’ not attempted to expel me I consider that I could have returned to work in January 2020 and that I would have been able to work until my planned retirement date in June 2023”.[130]He relies upon the concession made by the respondent while accepting the duty to make reasonable was not engaged while he remained unfit to work. He does not identify any injured feelings except for saying he would have returned to work in January 2020 and then continued to work until June 2023. The tribunal have not made that finding of fact. On the balance of probabilities, we were not satisfied the claimant has suffered any injured feelings. The respondents’ conduct throughout the case[131]In the claimant’s witness statement (paragraphs 176-185) he identifies aggravating features of the respondents’ subsequent conduct of the case referring to correspondence exchanged between the parties’ solicitors. In the second claim that same allegation was a pleaded detriment which had failed. The tribunal had found that in litigation correspondence exchanged between the parties’ solicitors may at times be combative. Having had the opportunity to examine the evidence in more detail in the second claim, we do not find it was an aggravating feature of the respondents’ conduct which causing the claimant to suffer any additional distress.[132]The claimant also relies upon WhatsApp messages exchanged between the Mrs Lord and Ms Russell as evidence of aggravating features of the respondents’ conduct because he says the comments were offensive discriminatory and spiteful. He only saw the messages in October 2020 following disclosure and not when they were exchanged. It was accepted these were private messages exchanged between Mrs Lord and Miss Russell which they never intended the claimant to see.[133]From the messages sent at the time of the admitted discrimination the claimant has identified the words he found upsetting: “liar” “being fully paid out by insurers. Basically, a fraudster”, “greedy nasty piece” and “that absolute fucking- robbing bastard!” (messages 15 November 2019). “We account for every last penny, and he robs us blind” (28 November 2019)[134]We accepted the evidence of Mrs Lord and Miss Russell expressing regret and embarrassment about the language used was genuine. They explain it in the following way: “the reality of our situation was that we were extremely stressed and felt upset and disempowered by Mike. We shared our frustrations with each other intermittently which I found comforting. I now regret the language we used in the heat of the moment. It was never our intention that those private messages would be shared or seen by the claimant as they were considered private conversations venting emotion in what was believed to be a private forum”.[135]None of those messages were seen by the claimant at the time of the admitted acts of discrimination and the messages could not have had the effect of making any of the admitted acts of unlawful discrimination more distressing for the claimant. The respondents had communicated their feelings that they though the claimant was trying to benefit financially from insurance fraud and by not deducting his PHI payment from the LLP accounts.[136]We do not find the messages were an aggravating feature which increased the effects of the admitted acts of discrimination on the claimant. Evidence of Mrs Willis[137]We read Mrs Willis’ statements and take from her account that she supports the claimant’s account. She is however largely reliant on the claimant account about the admitted acts and cannot give any direct evidence. Unfortunately, we have found the claimant was not a reliable historian. We do not attach much weight to Mrs Willis’ evidence and have made our findings of fact on the direct evidence of the claimant attaching more weight to the undisputed contemporaneous documents.[138]There were 2 psychiatric injuries diagnosed by Dr Appleford in his report dated 12 January 2021 (Appleford 1 pages 1031 to 1119). He identifies “Acute Stress Reaction” and a “Moderate Depressive Episode”. The diagnosis is based on the GP medical records that refer to mental health issues from the beginning in December 2019, and the mental health diagnosis made in fit notes from January 2020 (see paragraphs 21.11 and 21.13 (page1086).[139]The diagnosis of ‘Acute Stress Reaction’ (paragraph 21.15) is made under F43.0 in the ICD -10 Classification of Mental and Behavioural Disorder described as “a transient disorder of significant severity which develops in an individual without any other apparent mental disorder in response to exceptional physical and/or mental stress which usually subsides within hours or days”. The stressors identified can include “an unusually sudden and threatened change in the social position and or network of the individual such as bereavement or domestic fire”. The claimant’s fit note issued on 22 January 2020 was for two months gives a diagnosis of “Acute stress reaction. Carcinoma.”[140]The diagnosis of a “Moderate Depressive Episode” is made based on the subsequent symptoms experienced by the claimant from January 2020 ICD F32.1. For depressive episodes of all three grades of severity (mild, moderate, and severe) a duration of at least 2 weeks is usually required for diagnosis. The claimant fit note issued on 22 March 2020 to 22 June 2020 made a diagnosis of “depressive disorder”.[141]After identifying the conditions Dr Appleford is asked to consider the causation question put to him by the claimant’s solicitors in the following way (see question 5 at page 1095): “Do you believe that there is a link between:(1) Mesdames Russell’s and Lord’s attempt to expel Mr Willis from the First respondent: and(2) The report to the SRA by Mesdames Russell’s and Lord’s in which they accused Mr Willis of fraudulent behaviour (he has now been fully exonerated of this): and/or(3) The removal of Mr Willis’s role as managing partner and responsibilities:(4) Any wider work-related issues and his mental health condition(s)? If so, to what extent do you feel there is a link, and would you say that any workrelated issues have contributed materially to, or caused, Mr Willis’s mental health condition(s) Dr Appleford’s opinion was (page 1096): “In considering this question I am largely reliant on Mr Willis’ account as described in the body of this report. With regard to each of the issues mentioned above I would note that: (1) Mr Willis told me that on receiving a letter from his colleagues via a process server in which they wanted him to accept that he was unfit to perform the role as a member of the LLP and which he said used the wording that is contained in the capacity expulsion paragraph of their agreement he said: “I think I dropped off a cliff”. He felt “the whole of my life was being ripped away. He was concerned regarding loss of income. He said that he was “absolutely in shock”. (2) Mr Willis told me that his colleagues later made a complaint to the SRA that he was fraudulently claiming insurance. He said that they never told him this but that he found out in December 2019.He said that they also said that he was claiming motor expenses as business expenses. He told me that he felt that this was “hurtful”, and he said that these were “groundless allegations” of fraud and dishonesty. He said that this led to an eleven-month investigation which “totally and utterly exonerated me”. He said the SRA never even spoke to him. He told me that he found out at Christmas 2019, that rumours were being spread about financial irregularity. He said that there had been comments to the effect that colleagues had “no salary increase because Mike’s taken the money”. He experienced anxiety which he described as “constant feeling of worry about the future and the way things have happened around me. He mentioned that he was accused of “criminal dishonesty to my own professional body” and that was “absolutely devastating”. This felt “hurtful and upsetting”. (3) Mr Willis told me that he has not seen his colleagues since the meeting in October 2019. He said they “stripped me of all my roles” in the meeting that took place in December 2019. He said that they have now accepted that they have discriminated against him and that they “weren’t entitled to do that “. He told me his colleagues took him off The Companies House Register as a person of significant control and said that he had signed to agree this. He told me there was no direct contact until July of this year. He said that they wanted involvement in issues involving an ex-partner. He said that there had been regular communications since July 2020. He said that prior to this his colleagues “basically excluded me”. He said that they told staff that he had “stepped down from all my roles” (4) Mr Willis has reported concerns regarding his future, as a result of these events. He had intended to return to work and was not planning retirement at this stage. He has come to feel that his professional reputation has been damaged. He feels that this would prevent him from working in the Yorkshire, Derbyshire or Nottinghamshire regions. He misses the “collegiality of the legal community”. He worries about the financial implications and the impact upon his future including his finances in retirement. I would also note that Mr Willis’ account and the information in the available records suggests that the onset of his mental health problems followed the notification by his colleagues of their intentions to remove him from the partnership. In my opinion therefore it seems likely on balance of probabilities that the work-related issues have materially contributed to the onset of Mr Willis’ recent mental health problems”[142]Answer (3) above corresponds to Detriment 2: Removing the claimant from his roles as a Designated Member and Managing Partner (28 November 2019 – 13 December 2019) and our findings of fact can be found at paragraphs (47-87). The claimant described this event to Dr Appleford as “stripping him of his roles”. We found it was the members passing a unanimous resolution to reassign the claimant’s roles and responsibilities to other members during his sickness absence. While the claimant has accurately reported his removal on the register as a person of significant control, he has not disclosed that he was reinstated 6 weeks after removal. The rest of that paragraph deals with the claimant’s report of work-related events which were detriment complaints raised in the second claim which failed and are not part of the admitted unlawful treatment.[143]Answer (1) above corresponds with Detriment 5; Taking steps to expel the claimant from 19 December to 7 January 2020 (see findings of fact paragraphs 102-121). None of the findings of fact we have made support the account the claimant gave to Dr Appleford. In his account to Dr Appleford he puts the past events in this way: “Mr Willis told me that, on receiving this (27 November) letter “I think I dropped off a cliff”. He said that he intended to go back to work. He felt, “The whole of my way of life was being ripped away”. He was concerned regarding loss of income. He said that he was “absolutely in shock” because everything had been good until that point and his colleagues had been supportive. He said that he had a good Practice Manager and that there were good systems in place. They were planning to bring in new partners. He had felt well enough to return to work, and he had continued to undertake some of his roles whilst away from work. Their system had worked well, and nobody had raised any concerns”.[144]The claimant’s reaction to the letter on 29 November 2019 more closer in time is more accurately reflected in our findings of fact (paragraph 62). Those findings were inconsistent with the account the claimant gave to the medical expert. We found the claimant did not intend to go back to work which was inconsistent with the account the claimant gave to the medical expert. The claimant had secured his financial position in the most advantageous by 19 December 2019 by refusing to disclose any information about his PHI benefit to the respondents. He failed to disclose the true facts to the medical expert (paragraph 100). The claimant reported that nobody had raised concerns which was untrue and inconsistent with the legitimate concerns raised by the respondents before any of the admitted unlawful conduct (paragraph 29-30). The claimant had reported to the insurer he was not undertaking any of his roles (in any shape or form) during his ill-health absence (paragraph 62) but gives a different account to the medical expert. We have found the claimant is very capable of changing his account depending on the purpose it serves.[145]In his second report Dr Appleford was asked some questions by the respondent’s solicitors who had read the claimant’s cancer blogs and were surprised by the conclusion reached that the claimant had not experienced any mental health condition prior to his “Acute Stress Reaction”. They provided Dr Appleford with the claimant’s cancer blog entries from 29 July 2018-28 October 2019 and requested that he review them and consider whether it changed any of his opinions and findings in his first report.[146]Dr Appleford confirmed (page 1145 RB) that “Mr Willis’ account to me did not include details suggesting the development of a depressive disorder prior to the work- related issues in November 2019…. Taken as a whole, it is my opinion on balance of probabilities that the entries suggest the presence of mild and intermittent symptoms but there is insufficient evidence to support the diagnosis of a moderate depressive episode at that time. In my opinion these symptoms are likely on balance of probabilities to represent episodes of adjustment disorder which are classified under F43.2 “adjustment disorders”.[147]At page 11512RB “If the information in Mr Willis’ blog (May 2019) is representative of his mental state at that time then his statement to me that there had been no mental health problems by this point would not be correct”[148]The claimant’s reporting of his mental health difficulties prior to the admitted acts of discrimination was factually incorrect. If the respondent’s representatives had not asked further questions the first report would never have been[149]In his conclusion at page 1152RB, Dr Appleford recognises that it is for the Employment Tribunal to make the findings of fact about the past events. Having considered the evidence disclosed by the respondents he concludes that “If the Employment Tribunal accepts that Mr Willis has experienced episodes of adjustment disorder prior to November 2019 then it would be my opinion on balance of probabilities that the events from 27 November 2019 served to exacerbate his symptoms, leading to the development of a moderate depressive episode”.[150]We accept that conclusion and find the claimant did experience episodes of adjustment disorder prior to November 2019 which he did not disclose to Dr Appleford. The claimant’s account of past events in relation to the injury to feelings and personal injury and his reporting of his injuries was unreliable.[151]In his third and final report dated September 2021, the claimant’s solicitors asked Dr Appleford some follow up questions in relation to the second claim and events in the period 17 April to 8 March 2021.The respondents are not liable to compensate the claimant for lawful conduct in this period. The third assessment was carried out on 31 August 2021. The claimant provided his account of the legal proceedings and the complaints in that period. That evidence was not relevant to the tribunal deciding the remedy issues in Claim 1.[152]The claimant confirmed that he had not attended the psychological counselling sessions Dr Appleford had recommended in his first report. Dr Appleford had suggested 12-20 sessions of CBT at a cost of £120-£150 for each session (unlikely to exceed £3000) to treat the symptoms of depression. The claimant confirmed he had decided to wait until the case was concluded.[153]The claimant’s solicitors asked Dr Appleford to comment on the extent to which the events during the period 17 April 2020 and 8 March 2021 had exacerbated Mr Willis’s existing moderate depressive episode and /or mirrored the same. Dr Appleford’s opinion was that: “Mr Willis has described continuing depressive symptoms. His account to me is that he has become more depressed since the time of my first assessment. I found him to be depressed on examination, but I would note that his scores on the Beck Depression and Anxiety Inventories whilst in the range associated with moderate depression and anxiety, respectively, had reduced when compared to the scores obtained at my first assessment. It is my opinion on balance of probabilities, that Mr Willis remains depressed. Mr Willis has alleged continuing discrimination by his former colleagues. I am aware that it will fall to the Employment Tribunal to determine the facts in this case. However, in my opinion and on balance of probabilities, Mr Willis had developed a depressive illness by early 2020.If the Employment Tribunal accepts Mr Willis’s account that these were continuing acts of discrimination during the period from 17 April 2020 to March 2021 then it is my opinion, on balance of probabilities that these have served to maintain and exacerbate his depressive symptoms. Mr Willis’ continuing tendency to ruminate on the work-related issues, the ongoing pressures of litigation and his concerns regarding his financial situation are likely on balance of probabilities to have been additional maintaining factors”.[154]The claimant’s solicitors also asked questions about the measures that were being taken to treat the claimant’s mental health impairment including Cognitive Behavioural Therapy (CBT). Dr Appelford confirmed the antidepressants treatment the claimant was taking. He also confirmed the claimant “had not engaged in specific psychological therapy to address his depressive disorder such as Cognitive Behavioural Therapy”. Dr Appleford did not say one of the measures the claimant required to treat the symptoms of his depression was full time care from his wife.[155]The answer he gave identifying the claimant’s decision not to engage in CBT was important because Dr Appleford’s first report (paragraph 21.54) explained the general prognosis for an episode of depression if treated using standard treatment such as antidepressants and cognitive behavioural therapy. Around 70 % of patients will recover within a year. Around 20% may remain depressed for 2 years and around 12% 7% and 6% may remain depressed at 5, 10 and 15 years respectively. If the claimant had used CBT as Dr Appleford had suggested in January 2021, he could have expected to a 70% chance of recovering from that episode within a year.[156]The claimant’s solicitors ask about the future prognosis and whether the condition could be permanent. Dr Appleford (paragraphs 21.58-21.61 RB page 1100) opinion was that: “Mr Willis’ account and the information contained within the medical records suggests he has been depressed since January 2020. My assessment is that he remains depressed a year to date. It is difficult to predict when Mr Willis will make a recovery from his depression. In his case, it is likely on balance of probabilities that the ongoing proceedings and uncertainty regarding his future will serve to prolong his depression. In short, his recovery maybe dependent upon satisfactory resolution of the proceedings, and upon Mr Willis’ ability to make an adjustment to the change in his situation following the conclusion of the proceedings. If he does not return to work and/or if his financial situation is altered as a result, he will need to make emotional and practical adjustments to this. He will also need to resolve his negative feelings regarding the way he perceives that he has been treated. He is likely to require psychological support such as Cognitive Behavioural Therapy to assist him to do this. Depressive episodes are usually not permanent conditions. But by virtue of having experienced an episode of depression there will be a risk of recurrence”.[157]His opinion on how long the mental health condition would persist (paragraph 21.73) was that: “It is likely on balance of probabilities that the ongoing proceedings and uncertainty regarding his future will serve to prolong his depression. His recovery may be dependent upon satisfactory resolution of the proceedings and upon Mr Wills’ ability to make an adjustment to the change in his situation following the conclusion of the proceedings”.
Conclusions
[158]For the reasons we have set out above we were not satisfied that any of the injury to feelings or personal injury was attributable to, arose from, or can be apportioned in any way to the unlawful conduct conceded by the respondents in Claim 1. In so far as any injury to feelings or personal injury has been proven we have found the injury was attributable to the respondents’ lawful conduct for which the respondents are not liable to pay any compensation to the claimant.[159]For the same reasons all the cost of care, it is claimed was provided to the claimant, as a result, of his personal injury, is not attributable to, did not arise from and cannot be apportioned to the unlawful actions conceded by the respondents in Claim 1. For the same reasons the special damages claimed are also not recoverable. The costs claimed for CBT treatment have not yet been incurred by the claimant because he has decided to wait until the outcome of these proceedings.[160]Two key assertions the claimant has made to support his compensation claim have been found to be untrue. The claimant would not have returned to work on or around January 2020 and the claimant did not genuinely believe he had been expelled by the letter dated 27 November 2019. These were false assertions the claimant has made knowing them to be untrue in another attempt to mislead the tribunal to support his compensation claim. This was unreasonable conduct of these proceedings by the claimant.[1]The claimant in these proceedings, Mr Willis, has applied on 20 July 2023 for reconsideration under rule 70 of the Employment Tribunals Rules of Procedure 2013 of the three substantive judgments of the Tribunal:(1) the Liability Judgment in Claim 2 (case no 1803135/2021) sent to the parties on 3 May 2022;(2) the Costs Judgment in Claim 2, (1802068/2020), also sent to the parties on 21 December 2022.[2]The grounds are the same for each of the three judgments: that new evidence has become available since the dates of the relevant hearings which was not available, and the existence of which could not have been known, at the time of the hearings. The claimant says that the new evidence is relevant to the issue of dishonesty and the findings of the Tribunal, which I interpose were highly critical of the claimant, in respect of his claiming Income Protection Benefit (IPB) under an insurance policy with Aviva whilst still being entitled to profit share as a partner in the first respondent firm, GWB Harthills LLP. The claimant contends that the new evidence would have had an important substantial influence on the Tribunal’s findings had it been available, and it is therefore in the interests of justice for the judgments to be reconsidered.[3]The new evidence consists of(1) letters from Aviva’s solicitors, Mills & Reeve, dated 15 December 2022, 9 May 2023 and 10 July 2023 relating to the claimant’s claim for and entitlement to IPB; and(2) a letter from an Investigation Officer at the Solicitors Regulation Authority (the SRA) dated 12 May 2023 concerning possible disciplinary action against the claimant in his capacity as a solicitor.[4]In summary of the new evidence, the letters from Mills & Reeve set out Aviva’s considered position that although the claimant had not been entitled to be paid IPB when continuing to receive profit share and was therefore now required to repay the IPB paid to him totaling, including insurance premiums, just over £282,000, the overpayments had resulted from a misunderstanding about the claimant’s circumstances regarding profit share. The decision of the SRA’s Investigation Officer was that the claimant had believed that he was entitled to receive profit share and IPB at the same time if the benefits were paid into his pension fund and there was insufficient evidence to prove, to the required standard, a breach of the SRA’s rules.[5]Rule 70 of the Employment Tribunals Rules of Procedure 2013 provides that a Tribunal may reconsider any judgment where it is in the interests of justice to do so. Rule 71 states that the application for reconsideration must be presented in writing within 14 days of the date on which, relevantly, the written reasons for the judgment were sent to the parties. Rule 72(1) provides that where the Employment Judge dealing with the application considers that there is no reasonable prospect of the judgment being varied or revoked, the application shall be refused. Otherwise, the Tribunal shall require a response to the application from the other parties and the application shall then be dealt with in accordance with rule 72(2). By rule 72(3), the initial consideration under rule 72(1) shall be, where practicable, by the Employment Judge who chaired the original tribunal panel but, in these proceedings, it is not practicable because of ill-health for Employment Judge Rogerson to deal with it and I have substituted myself as the Employment Judge for this purpose.[6]I have carefully read the claimant’s applications and the new evidence. I accept that the new evidence did not exist when the Tribunal made its original decisions. I accept that although the claimant has made the applications substantially outside the time limit in rule 71, he made the applications within a reasonable time of when he became aware of the new evidence, meaning I should exercise my discretion to extend time.[7]I have decided that I should refuse the applications under rule 72(1) of the Employment Tribunals Rules of Procedure 2013 because there is no reasonable prospect of the judgment being varied or revoked. My reasons are these.[8]The Tribunal made its findings about the claimant’s conduct in claiming IPB (and I accept that those findings were material to the judgments which are the subject of the claimant’s applications for reconsideration, although there were additional grounds for the findings about his honesty) based on the extensive evidence it heard and saw, both witness and documentary, during lengthy full merits hearings at which the parties were represented by experienced counsel and for the reasons set out in detail in its written decisions. The new evidence on which the claimant relies is not evidence of primary fact. It consists of after-the-event assessments by an insurance company and a regulatory body, reached without formal judicial process or taking evidence at a hearing in the way the Tribunal did. I accept that those carrying out the assessments in the new evidence have taken a more benign view of the claimant’s conduct than did the Tribunal. But having regard to the Tribunal having made its findings after a full and comprehensive judicial process, there is no reasonable prospect that the Tribunal will vary or revoke its judgments because of this new evidence. I therefore refuse the claimant’s applications under rule 72(1).[9]Based on Mr Burns KC’s opening submissions on their behalf, the respondents now say that the claimant acted unreasonably in conducting the proceedings as follows:a. The respondents’ decision to resist Claim 1 was upheld in part by the claimant’s withdrawal of certain complaints and their dismissal. The respondents acted reasonably in defending the claims and then conceding parts of Claim 1 on a pragmatic and sensible basis.b. The claimant valued his claim at just short of £3 million plus legal costs and refused the respondents’ proposal of an independent mediation to resolve the dispute.c. In December 2020 the respondents’ offer of about £250,000 was rejected as ‘derisory’, yet at the remedy hearing the claimant valued his non-pecuniary losses at only £80,000.d. The claimant’s conduct was unreasonable and disproportionate and dismissive of any of the constructive attempts made in the interests of all the parties to bring early closure to these proceedings in January 2021 at a time when the claimant had decided that he wanted to leave the partnership.e. The claimant’s remedy claim was based on false assertions and evidence. The claimant gave a deliberately false account to the Rogerson Tribunal to bolster his claim for compensation. He claimed that he felt highly offended by the respondents’ discriminatory comments knowing this to be false and when he had privately agreed they were true.f. The claimant’s claim and evidence that ‘but for the Claim 1 discrimination, the claimant would have returned to work on or around January 2020’ was a deliberately false account to try to mislead the Rogerson Tribunal into making a finding of fact he knew was untrue. The claimant knew that he was giving false evidence that he had been expelled from the LLP in another attempt to mislead the Rogerson Tribunal to support his compensation claim. Hearing[10]I heard the application remotely by CVP on 1 December 2023. The claimant appeared in person, having previously been represented by solicitors and counsel, and provided written and oral submissions. The respondents were represented, as before, by Mr Andrew Burns KC, who also provided written and oral submissions. I am grateful to both of them. References to page numbers are to the agreed bundle of documents for this hearing.[11]The circumstances in which, with the agreement of the parties, I heard the application sitting alone in place of the Rogerson Tribunal appear fully in the Tribunal’s recent correspondence with the parties and case management orders (97-115) and need no further explanation here. Background history[12]The proceedings have a considerable history which I must summarise to provide context.[13]The claimant, Mr Willis, is a solicitor who was until his retirement from the partnership on 8 March 2021 a partner/designated member of the first respondent firm of solicitors, GWB Harthills LLP, with offices in South Yorkshire specialising in legal aid work. Immediately prior to the events in question, he was the firm’s managing partner. The other partners/designated members were the second and third respondents, Ms Russell and Ms Lord5.[14]There have been two sets of proceedings between the parties in the Employment Tribunal. This is Claim 1, case no 1802068/2020, presented to the Tribunal on 16 April 2020. Very broadly, Claim 1 relates to matters between October 2019 and April 2020. It was, when presented, a complaint of unlawful disability discrimination within sections 13, 15, 19, 20/21 and 45 of the Equality Act 2010, harassment within section 26 and victimisation under section 27. It concerned the respondents’ alleged efforts to expel the claimant from the partnership, the removal of his management responsibilities, a report about him to the Solicitors’ Regulatory Authority (“the SRA”) and the withholding of profit share. In Claim 1, there have been three separate judgments of the Tribunal:a. A liability consent judgment of Employment Judge Maidment dated 6 January 2021 (10-11);b. A remedy judgment of the Rogerson Tribunal dated 21 December 2022, as mentioned at paragraph 1 above (14-59); andc. A costs judgment of the Rogerson Tribunal also dated 21 December 2022 (60-82). refusing the claimant’s application for a costs order. This 5 There was also a fixed-share partner, Mr Jones, but he was not a designated member and is not a party to the proceedings. judgment also dealt with costs in Claim 2, in which the claimant was ordered to pay to the respondents' costs of Claim 2 to be assessed but capped at £210,000.[15]The claimant presented Claim 2, case no 1803135/2021, to the Tribunal on 7 June 2021. By then, he had retired from the partnership on 8 March 2021. It was also a complaint of unlawful disability discrimination, harassment and victimisation, broadly concerning the claimant’s alleged continuing exclusion from the management and decision-making of the firm, the respondents’ questioning of his integrity in respect of income protection payments, the withholding of his profit share and the circumstances of his retirement from the firm. In Claim 2, which related to the period from April 2020 to June 2021, there were two judgments of the Rogerson Tribunal:a. A liability judgment (rejecting at paragraph 3 all the claimant’s extant claims of unlawful discrimination, victimisation and failure to make reasonable adjustments in that case, the claimant having withdrawn his other complaints which the Tribunal duly dismissed), dated 3 May 2022; andb. As mentioned above, a costs judgment dated 21 December 2022.[16]The only remaining matter in Claim 1 is this application for costs. Except for the assessment in the County Court of the costs awarded by the Tribunal, Claim 2 is concluded, and it is unnecessary at this point to say anything more about the Tribunal’s decision in the claim6.[17]The proceedings in Claims 1 and 2 arise out of a partnership dispute between the parties. The judgments of the Rogerson Tribunal provide detailed findings of fact about the history to which reference should be made. However, in brief, the events began in mid-2018 when the claimant was diagnosed with bowel cancer. He underwent lengthy and demanding medical treatment and surgery and was unable to undertake any fee-earning or management and other responsibilities for the firm.[18]The claimant had a policy of Permanent Health Insurance (“PHI”) with the insurer, Aviva. As he was unfit to work, he claimed PHI income replacement benefits under the policy from November 2018. The parties agreed that he would not receive his partnership profit share, as he was claiming PHI benefits, and he ceased to take drawings from the firm.[19]In October 2019, the position changed. After consulting accountants and Aviva, the claimant asserted that the firm was not entitled to withhold his profit share, even though he was receiving PHI benefits. Ms Russell and Ms Lord fundamentally disagreed, and formed the view that in taking this stance, the claimant was implicating them in insurance fraud. They thought that he could not have both PHI benefits and profit share. The ensuing dispute led to 6 I understand that the claimant has appealed against the Rogerson Tribunal’s decisions in both Claim 1 and Claim 2. Claims 1 and 2 and subsists to this day. The Rogerson Tribunal made detailed findings of fact about the dispute at paragraphs 95-137 of its Claim 2 liability judgment which it is unnecessary to repeat.[20]In late October 2019 Ms Russell and Ms Lord privately resolved to take steps to remove the claimant’s management responsibilities from him. They exchanged confidential WhatsApp messages to this effect which spoke about the claimant in derogatory and regrettable terms and which the claimant saw for the first time during disclosure in October 2020 (see paragraphs 47 and 133 of the Rogerson Tribunal’s remedy decision). Separately, they made a report to the SRA about the claimant reimbursing himself alleged work-related expenses when he was not working.[21]On 27 November 2019 Ms Russell and Ms Lord wrote to the claimant inviting him to a partners’ meeting on 6 December 2019 at the Rotherham office to discuss whether he was physically and mentally unfit to carry on his duties and obligations as a member under the firm’s LLP agreement. The claimant did not attend the meeting which was rearranged for 13 December 2019. Again the claimant did not attend and the meeting proceeded in his absence. He received copies of the minutes of both meetings later the same day. Ms Russell and Ms Lord resolved to remove the claimant from his various roles with the firm, including Managing Partner, and to inform the Registrar of Companies that he was no longer a person with significant control of the firm (see paragraphs 75-83 of the Claim 1 remedy decision).[22]The claimant was not expelled from the firm at the meetings on 6 and 13 December 2019. The Rogerson Tribunal commented adversely on the claimant’s contention that he believed at the time that he had been expelled (paragraphs 84-85 of the Claim 1 remedy judgment), and I will return to this later in this decision.[23]On 19 December 2019 Ms Russell and Ms Lord wrote to the claimant giving him notice of a partners’ meeting on 31 December 2019 to discuss and vote upon his expulsion from the firm. The meeting did not proceed that day and was adjourned to 7 January 2020. The day before, however, 6 January 2020, the claimant’s solicitors wrote to the respondents asserting that the claimant’s treatment was discriminatory and that there was no power under the LLP agreement to expel him. The respondents did not proceed with the threatened expulsion and on 22 January 2020 retracted the notice to the Registrar of Companies about significant control. The claimant remained a partner and designated member. The respondents did not, however, restore the claimant to his managerial roles with the firm. They allocated profit share to his current account with the firm and accounted for tax on his behalf but did not permit any partner to take drawings because of the effect of the pandemic on the firm. They maintained throughout, in any event, that they were entitled to withhold from profit share the amount of the PHI benefits the claimant had received from Aviva.[24]In April 2020 the claimant presented Claim 1. This related to the events between October 2019 and January 2020. As already mentioned, it was, when presented, a complaint of unlawful disability discrimination within sections 13, 15, 19, 20/21 and 45 of the Equality Act 2010, harassment within section 26 and victimisation under section 27. It concerned the respondents’ efforts to expel the claimant from the partnership, the removal of his management responsibilities, the report about him to the Solicitors’ Regulatory Authority (“the SRA”) and the withholding of profit share.[25]Initially the respondents fully contested the claim, which after a case management hearing in June 2020 was listed for an eight day full merits hearing beginning on 6 January 2021. I understand the claimant’s schedule of loss valued the claim, including past and future loss of profit share, at over £3 million.[26]With the parties’ agreement, the Tribunal listed the case for a Judicial Mediation in September 2020 but the respondents withdrew from the process, asserting there was no prospect of settlement. However, following a change of solicitors, on 24 November 2020 the respondents made an open partadmission of the claim. The Rogerson Tribunal attributed this change of position to the involvement of new solicitors and described it as “sensible and pragmatic”. Following discussions between the parties before the hearing, during which the claimant agreed to withdraw his other allegations in the case, the Tribunal (Employment Judge Maidment, sitting alone) issued the consent judgment of 6 January 2021 reflecting what the respondents had admitted in the letter of 24 November 2020, and made case management orders for a remedy hearing.[27]As it did not appear in the consent judgment, I note that the letter of 24 November 2020 (447-450) included the following wording: “The respondents admit that the above-admitted acts of discrimination caused the loss claimed in the second paragraph 120.2 and paragraph 120.4 of the Particulars of Claim, namely: a Injury to his health and feelings to be assessed b Financial loss (if any) to be assessed c Interest (if any).”[28]The 6 January 2021 consent judgment (10-11) was in the following terms: “JUDGMENT 1. On the basis of admissions made by the respondents in their representative’s letter of 24 November 2020 and by consent it is declared that:a. The claimant’s complaints of discrimination arising from disability (Section 15 of the Equality Act 2010) are well founded and succeed in respect of i. The claimant’s removal from his role as designated member and managing partner of the first respondent ii. The taking of steps to expel him as a member of the first respondent iii. Removing and reinstating the claimant as a person with significant control of the first respondent iv. Removing the claimant from the first respondent’s decision making and management processes v. Withholding from him management and accounting information relating to the first respondent vi. Excluding the claimant form a partners meeting in January 2020.b. The claimant’s complaints of indirect disability discrimination (Section 19 of the Equality Act 2010) are well founded and succeed in respect of the practice of holding partnership meetings at the first respondent’s Rotherham office.c. The claimant’s complaints of a failure to make reasonable adjustments (Section 20 of the Equality Act 2010) are well founded and succeed in respect of a failure to allow the claimant to work from home, continue with his management roles and/or return to work on a phased basis.d. The second and third respondents are liable for the aforementioned acts of unlawful discrimination as agents of the first respondent which is treated as having done their acts. 2. The claimant’s remaining complaints are hereby dismissed upon his withdrawal of them. For the avoidance of doubt, no breach of contract claim was brought by the claimant in these proceedings and the claimant has stated a wish to reserve his right to bring such a complaint. 3. This matter shall proceed to be listed for a remedy hearing and to hear an application by the claimant for his costs in bringing these proceedings.”[29]The Tribunal listed the remedy hearing for 2 June 2021. It did not proceed because of CVP connection issues. It is impossible to know now what might have happened had it proceeded at that time. Meanwhile, the claimant had retired from the firm on 8 March 2021. He presented Claim 2 on 7 June 2021. The parties agreed that Claim 1 remedy would be held over until liability had been decided in Claim 2.[30]The Claim 2 liability hearing before the Rogerson Tribunal proceeded in November 2021. The Tribunal issued its decision (with reasons extending to 89 pages) in April 2022. The outcome was disastrous for the claimant, whose claims were dismissed on their merits or following withdrawal by him.[31]Following this, in October 2022 the Rogerson Tribunal dealt with remedy in Claim 1 and the claimant’s and respondents’ applications for costs in Claims 1 and 2 respectively; the Tribunal promulgated its decisions in December 2022. In each case the outcome was just as unfavourable for the claimant. In Claim 1, he was awarded no remedy for the admitted acts of unlawful discrimination, and his application for costs was rejected. In Claim 2, the respondents’ application for costs on the basis of his unreasonable conduct of the proceedings succeeded7 and a costs order was made, with the amount to be decided by detailed assessment in the County Court but capped at £210,000. False evidence to the Tribunal: paragraphs 9e and f above[32]In support of their application for a costs order, the respondents assert that the claimant’s remedy claim was based on false assertions and evidence. 7 The respondents also contended that the claim had no reasonable prospect of success within rule 76(1)(b), but the Tribunal did not find it necessary to decide the point. They say that the claimant gave a deliberately false account to the Rogerson Tribunal “to bolster his claim for compensation”. They say that he claimed he felt “highly offended” by the respondents’ discriminatory comments knowing this to be false and something that he privately agreed was true.[33]The respondents say that the claimant’s claim and evidence that ‘but for the Claim 1 discrimination, the claimant would have returned to work on or around January 2020’ was a deliberately false account to try to mislead the Rogerson Tribunal into making a finding of fact he knew was untrue. They contend that the claimant knew that he was giving false evidence that he had been expelled from the LLP in another attempt to mislead the Rogerson Tribunal to support his compensation claim.[34]The respondents do not invite me to make findings of fact that the evidence which the claimant gave to the Rogerson Tribunal was untrue or that he based his claim on assertions that he knew were false. Instead, they rely on the express findings of the Rogerson Tribunal in the Claim 1 remedy decision to such effect. At paragraphs 55 to 86 the Rogerson Tribunal made findings about the claimant’s alleged wish to return to work before the admitted discrimination, and at paragraphs 102 – 120 are the findings about the attempts to expel him. The following paragraphs relied on by the respondents are particularly material (emphasis added): “66. Contrary to the claimant’s account which was unsupported by the undisputed transcript we find the claimant had no intention of returning to work before the admitted discrimination. He has given a deliberately false account at this hearing to bolster his claim for compensation. On 29 November 2019, he had confirmed to the insurer that his cancer related absence to continue to the next review in February 2020.He was not ‘highly offended’ by the suggestion he should be deemed unfit and had agreed it was ‘true’ but presents a contrary position to support his claimed losses. 67. Having carefully considered the position we find the claimant was presenting a false account at this hearing to try to mislead the tribunal into make a finding of fact he knew was untrue (but for the Claim 1 discrimination, the claimant would have returned to work on or around January 2020”). If the claimant had been transparent with Mrs Lord and Miss Russell about what he was saying to his insurer, he would have had to admit he agreed he should be deemed unfit and could not retain his roles and responsibilities which should be reassigned to them in his absence. The claimant was not being transparent with the Insurer or with the respondents or with the tribunal. ……. 120. … The claimant’s description of hurt feelings in relation to this detriment is completely reliant on his account of the expulsion being accepted by the Tribunal. We found that account was untrue. ….. 160. Two key assertions the claimant has made to support his compensation claim have been found to be untrue. The claimant would not have returned to work on or around January 2020 and the claimant did not genuinely believe he had been expelled by the letter dated 27 November 2019. These were false assertions the claimant has made knowing them to be untrue in another attempt to mislead the tribunal to support his compensation claim. This was unreasonable conduct of these proceedings by the claimant.”[35]These findings go beyond an assessment of credibility. They are findings that the claimant gave evidence that he knew was untrue: first, that he believed he had been expelled in November 2019; second, that he would have returned to work in January 2020 had it not been for the admitted discrimination. I will return to this in my conclusions on the application. Settlement discussions: paragraphs 9a to d above[36]During the proceedings, there were discussions between the parties on a without prejudice save as to costs basis about the basis of the claim and defence and possible settlement. I have copies of the correspondence in the hearing bundle. The respondents contend that the claimant conducted the proceedings unreasonably by not engaging with settlement proposals.[37]Specifically, the respondents assert that their decision to resist Claim 1 was upheld in part by the claimant’s withdrawal of certain complaints and their dismissal. They say that they acted reasonably in defending the claims and then conceding parts of Claim 1 on a pragmatic and sensible basis.[38]The respondents say that the claimant valued his claim at just short of £3 million plus legal costs and refused the respondents’ proposal of an independent mediation to resolve the dispute. They say that in December 2020 their offer of about £250,000 was rejected as ‘derisory’, yet at the remedy hearing the claimant valued his non-pecuniary losses at only £80,000.[39]The respondents assert that the claimant’s conduct was unreasonable and disproportionate and dismissive of any of the constructive attempts made in the interests of all the parties to bring early closure to these proceedings in January 2021 at a time when the claimant had decided that he wanted to leave the partnership.[40]Before I describe the conduct of the settlement discussions, I make two preliminary observations.[41]First, the respondents’ application for costs relates exclusively to Claim 1, and to the period from 6 January 2021. However, as will emerge, the discussions about settlement, at least until late in the proceedings, ranged wider than Claim 1, and the respondents refer to earlier settlement discussions in support of their assertion that had the claimant properly and reasonably engaged with their settlement proposals at that time, the proceedings need not have continued after January 2021.[42]Second, I have seen the findings of the Rogerson Tribunal at paragraphs 30 to 49 of its December 2022 costs decision. They made findings about the reasonableness of the parties’ conduct of the proceedings in the context of the claimant’s application for Claim 1 costs asserting the respondents had acted unreasonably within rule 76(1)(a). They found, at paragraph 48, that: “the respondents and their solicitors’ conduct of these proceedings throughout has been reasonable and proportionate. From the evidence we have seen the claimant’s conduct was unreasonable and disproportionate and dismissive of any of the constructive attempts made in the interests of all the parties to bring early closure to these proceedings in January 2021 at a time when the claimant had decided that he wanted to leave the partnership.”[43]I give due respect to these findings. However, I am hearing a different application which asserts that the claimant acted unreasonably in his conduct of the proceedings, which was not an application before the Rogerson Tribunal. I am not bound by the Rogerson Tribunal’s findings. I will make my own findings and reach my own conclusions on the respondents’ application, including whether the claimant acted unreasonably within rule 76(1)(a) and if so, whether I should exercise my discretion to make a costs order.[44]At all times the parties were represented by solicitors and counsel and all correspondence was between representatives.[45]On 6 January 2020, accompanying their initial open letter about his treatment, the claimant’s solicitors wrote to the respondents on a without prejudice and subject to contract basis (298-300)8. They asserted the claimant’s distress at his treatment whilst undergoing treatment for cancer and his concern at the loss of his career with the firm he had built up over 35 years. They said that the claimant, with the right support and reasonable adjustments, had hoped to work until retirement at age 65. They asserted that the treatment had caused personal injury and had irreparably damaged the relationship of trust and confidence between the parties. They proposed settlement terms including the claimant leaving the firm on a date to be agreed, payment of accrued profit share of £436,000 and repayment of capital of £75,000, £44,000 compensation for injury to feelings and a compensation payment for loss of his role of “at least £2.5 million”, based on future loss of profit share until retirement at age 65. I do not know if the respondents replied to these proposals. I have no relevant correspondence in the bundle.[46]On 26 August 2020 (302-305), ahead of the listed Judicial Mediation in Claim 1, and after the claimant had served his formal Schedule of Loss, the respondents’ then solicitors challenged the claimant’s valuation of his claim, which they asserted amounted after grossing-up to over £3million. They proposed that the claimant should retire from the firm and receive a payment equivalent to the profit share he would have received had he worked throughout the period of his absence, less the PHI benefits he had received, and repayment of his capital of £75,000, amounting to an estimated figure of £210,000. The claimant made no formal response, but the respondents withdrew from the Judicial Mediation, asserting that the parties were too far apart for there to be any realistic hope of settlement.[47]I interpose that it was to be a constant refrain in the settlement discussions that the respondents required PHI benefits received by the claimant to be deducted from any profit share paid to him, and I will return to this. 8 Although the letter was marked “without prejudice” rather than “without prejudice save as to costs” basis, neither party has objected to my seeing it.[48]On 22 October 2020 the respondents’ new solicitors put forward settlement terms (306-308). These were in settlement of Claim 1, and fell into two parts: first, a payment of £40,000 for injury to feelings; second, the claimant would remain a member of the firm; he would continue to receive his profit share as a member of the firm and the parties would enter into mediation with a CEDR accredited mediator about reasonable adjustments, the roles and responsibilities of the designated members, updating the terms of the LLP agreement and the treatment of the PHI benefits the claimant had received.[49]On 3 November 2020 the claimant’s solicitors (312-3) rejected the offer as “derisory”. They asserted (in very strong terms, including, by way of example, the words “professionally humiliated”) the harm that the respondents had caused the claimant and contended that it was inappropriate to make an offer on the basis that he would remain a member of the firm. They reiterated the proposals in the letter of 6 January 2020 and invited the respondents to reconsider their offer based on his ceasing to be a partner.[50]On 4 November 2020 the respondents’ solicitors (314-5) suggested that discussions about the claimant ceasing to be a member of the firm should take place through mediation and proposed a stay of the proceedings to enable CEDR mediation to take place on all matters between the parties. There were then discussions between representatives about the preparation of financial information to assist in the process, including a proposal of a without prejudice meeting of the parties and representatives if the claimant would not agree to mediation (316-320).[51]On 13 November 2020 the respondents’ solicitors proposed (321-2) a payment of £40,000 for injury to feelings and payment of the claimant’s legal costs for Claim 1 and arrangements for him to receive his full profit share to retirement. The claimant’s solicitors responded on 18 November 2020 (323-4) in terms that the claimant would have been prepared to enter into mediation if the offer had been made earlier, but he had now incurred costs in preparing for the final hearing that was only two months away and there was no purpose in settlement discussions when the parties were too far apart.[52]Finally on 15 December 2020 the respondents’ solicitors proposed (329-333) payment to the claimant of unpaid profit share (after the deduction of PHI payments received by him) totalling over £150,000 (supported by detailed calculations) plus the return of capital of £78,750 and £40,000 for nonpecuniary losses. This was subject to the claimant agreeing to the firm taking out two loans (one of which was a Coronavirus Business Interruption Loan) to fund the lump sum payments. The respondent’s solicitors also tentatively suggested an alternative based on the claimant retiring but receiving sums equivalent to the profit share he would have received as if he had not retired, to age 65, but as far as I am aware, nothing more was heard of this.[53]On 17 December 2020 the claimant’s solicitors again rejected the proposals as “derisory”(334-5). They asserted that they were not prepared to put forward any counterproposals as the parties were too far apart. They disputed the contention that PHI payments should be deducted from profit share.[54]This ended, without agreement, the first stage of settlement discussions. By now, the respondents had made, on 14 November 2020, their open partconcession of Claim 1 and on 6 January 2021 the Tribunal issued the consequent consent judgment. At this point, therefore, the respondents had admitted some of the claimant’s allegations in Claim 1 and the claimant had withdrawn the rest of his allegations in the claim.[55]Following the consent judgment of 6 January 2021, the claimant’s solicitors wrote to the respondents’ solicitors again on 28 January 2021 (339-341). They contended that the claimant’s position as a member of the firm was becoming increasingly untenable. They stated that the claimant had received confirmation from Aviva that his PHI claim had been properly made and that he had been transparent about the circumstances. They also stated that a detailed psychiatric report on the claimant confirmed that on the balance of probabilities, the respondents’ attempt to expel him and their discriminatory and unlawful actions had caused his current mental health state. They proposed a settlement package involving an agreed termination date before the end of February 2021; a payment of £482,325 as the balance of the claimant’s profit share net of tax; repayment of the claimant’s capital of £75,000 plus interest of £7,500; a compensation payment of £1.75 million gross (to include an injury to feelings award); and payment of legal fees.[56]The respondents’ solicitors replied on 9 February 2021 (342-3). They stated that the profit share could not be agreed. Their position remained that PHI payments must be deducted. They confirmed that the respondents were unable to fund the payment of a lump sum from a Coronavirus Business Interruption Loan. Finally, on 19 February 2021, the respondent’s solicitors advised (345) that as the parties were too far apart, there was no purpose in further negotiations. As far as I am aware there were no further negotiations until June 2022, by when the position in the proceedings was very different. In April 2022 the Rogerson Tribunal had promulgated its decision dismissing Claim 2, and in May 2022 the claimant had appealed that decision[57]On 1 June 2022 (346-351) the claimant’s solicitors initiated further settlement discussions by suggesting the parties’ counsel meet informally to see whether there was a possibility of settlement. In a lengthy letter, they set out the claimant’s position in relation to the various heads of loss. These included:a. Past profit share, which they valued at approximately £623,923.b. Future profit share, valued at £918,345 and involving an assessment of the chance that the claimant would have remained a designated member until retirement. They asserted that counsel had agreed as part of the process leading to the consent judgment in January 2021 that profit share, past and future, would form part of the Claim 1 remedy calculation.c. Injury to feelings, valued at £35,000.d. Aggravated damages of £10,000, referring to the disparaging comments made by the respondents about the claimant. including describing him as “the one with cancer”, “withered old man”, “scrote” and the like..e. Personal injury damages of £22,000 and care costs of £90,000.[58]The respondents’ solicitors replied on 8 June 2022 (352-357). They asserted that the parties were too far apart for settlement discussions between counsel to be productive, although they agreed that counsel should discuss what issues remained as part of Claim 1 remedy. They set out the respondents’ position about the claimant’s heads of claim:a. They asserted that no profit share should be awarded, as the Rogerson Tribunal had decided in Claim 2 that the withholding of profit share had not been discriminatory, and no loss of profit share arose from the admissions in Claim 1 which would concern non-pecuniary loss only.b. They disputed that the claimant had an arguable breach of contract claim for profit share, arguing that whilst the Rogerson Tribunal had found in Claim 2 no implied term of the LLP agreement that permitted withholding of profit share, the claimant had agreed in 2018 that for as long as he received PHI benefits, he should not also receive profit share.c. They noted that the claimant had reduced his claim for injury to feelings from £45,000 to £35,000 and invited him to reconsider his position.d. They challenged the claimant’s claims for personal injury and care costs, whilst not putting forward any counteroffer.[59]In their letter of 15 June 2022 (364-5) the claimant’s solicitors valued his Claim 1 non-pecuniary losses at around £157,000 plus interest. (They also said that his claim for costs in Claim 1 was £194,575.) They reiterated that the claimant was entitled to profit share until retirement although they conceded that any claim for future profit share must await the outcome of his Claim 2 appeal.[60]On 28 June 2022 (367-372) the respondents’ solicitors offered a payment of profit share of £195,761 (the figure was after deduction of PHI payments from what would otherwise have been profit share of £405,683), £20,000 for general damages, and offset of these payments against 80% of their Claim 2 costs (£222,156.84), abandoning their claim for the modest balance in their favour.[61]Correspondence between solicitors about possible settlement continued. The claimant rejected the respondents’ offer on 8 July 2022 (373-377), proposing a global settlement (including profit share) of £478,836 after tax and the withdrawal of the respondents’ application for Claim 2 costs.[62]On 13 July 2022 (378-380) the respondents rejected the claimant’s proposal but offered £15,000 for injury to feelings, £20,000 for personal injury and £7,500 for care costs, resulting in a total offer of £42,5000 for Claim 1, and now excluding any claim the claimant might make for breach of contract for profit share (in respect of which a separate offer was made, which I do not need to describe) and costs applications. This was the first time that either party had proposed a settlement confined to Claim 1 remedy. The offer was stated to be time-critical and open for acceptance until 21 July 2022, due to the need to lodge counsel’s brief for the remedy hearing. On 20 July 2022 (384), the claimant’s solicitors rejected the offers for Claim 1 and profit share.[63]On 23 August 2022 (385) the claimant’s solicitors proposed settlement of Claim 1 for £56,121.05, the higher figure being referable to the figure for care costs. The respondents’ solicitors rejected this, their position now being that the figure of £42,500 would not be increased but the settlement must reflect legal costs incurred since the time for its acceptance had passed. Finally (384-398), the position was reached between solicitors in early September 2022 where the settlement figure of £42,5000 was agreed but the respondents required this to be reduced by £22,000 for their legal costs, meaning a net payment of £20,000. The claimant rejected this, and there matters rested without settlement. The Claim 1 remedy hearing duly proceeded in October 2022.[64]I will consider whether the claimant acted unreasonably in these settlement discussions when I come to my deliberations below. Relevant law[65]The parties are largely agreed on the relevant law. I will summarise it briefly.[66]Rule 76(1)(a) of the Employment Tribunals Rules of Procedure 2013 provides for the Tribunal to make a costs order on the ground that a party 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.[67]In this case the respondents say that the claimant acted unreasonably in his conduct of the remedy proceedings in the ways set out at paragraph 9 above, and It is common ground that the Tribunal must apply a two-stage process: first, it must decide if the claimant’s conduct reached the threshold of unreasonable conduct under rule 76(1)(a); second, if so, whether to exercise its discretion to make a costs order against the claimant, and if so, in what amount (Vaughan v London Borough of Lewisham 2013 IRLR 713, at paragraph 5).[68]The task of the Tribunal in exercising its discretion is to look at the whole picture of what happened in the case and decide whether there has been unreasonable conduct by the claimant in conducting the case and if so, to identify the conduct, what was unreasonable about it, and what effect it had. However, there is no requirement for a precise correlation between the conduct and the costs incurred (Yerrakalva v Barnsley Metropolitan Borough Council 2012 ICR 420, following McPherson v BNP Paribas (London Branch) 2004 ICR 1398).[69]In the Employment Tribunals, costs orders are the exception rather than the rule (Yerrakalva; Gee v Shell UK Limited 2003 IRLR 82).[70]There is no point of general principle that if a party has lied, even about a central contention in the case, that will inevitably result in an award of costs against that party. The Tribunal must always examine the context and look at the nature, gravity and effect of the lie in determining the unreasonableness if the alleged conduct (Arrowsmith v Nottingham Trent University 2012 ICR 159). Whilst a party who pursues a claim which he knows is dishonest can expect a Tribunal to find unreasonableness where a party is shown to have been dishonest in respect of their claim (Nicolson Highlandwear v Nicolson 2010 IRLR 858), the conclusion is fact-sensitive and does not involve the application of some legal principle (Daleside Nursing Home v Mathew UKEAT/10519/08).[71]In Daleside, the Employment Appeal Tribunal overturned as perverse a Tribunal’s refusal to make a costs order where the claimant’s lie was at the heart of her claim, but emphasised, as the Court of Appeal observed in Arrowsmith, that the decision was based on the facts of the particular case and established no principle of law.[72]Where a costs order is sought based on dishonesty, the party must be given a proper opportunity to address the contention of bad faith (Treska v Master and Fellows of University College Oxford UKEAT/0298/16). However, the circumstances in Treska were very different to this case; the claimant had had no warning, and no opportunity to make representations, about the Tribunal’s finding of bad faith. In this case, the respondents made the basis of their application clear from the outset, founding it on the Rogerson Tribunal’s findings that he gave false and untrue evidence.[73]Unreasonable refusal to enter into settlement negotiations or to accept a settlement offer may amount to unreasonable conduct, especially where the party persists in unsustainable allegations (Kopel v Safeway Stores PLC 2003 IRLR 753).[74]The purpose of a costs order is compensatory, not punitive. Whilst the Tribunal is not obliged to take into account a party’s means in deciding whether to make a costs order (Vaughan), it should not make an award which the party has no means of paying and should consider capping the award (Herry v Dudley Metropolitan Borough Council 2017 ICR 610). Submissions for the respondents[75]Mr Burns KC says that the respondents rely on the claimant’s unreasonable refusal to settle from mid-2020 onwards.[76]He contends that the respondents pointed out fundamental flaws in the claimant’s remedy claim in their early without prejudice save as to costs letter of 26 August 2020 (302-305) and made an initial attempt to settle in much better terms than the claimant achieved by proceeding to a hearing.[77]He says that in the letter of 22 October 2020 the respondents offered a settlement of £40,000 for Claim 1 non-pecuniary losses on the basis that the claimant remained a member of the LLP entitled to a continuing profit share (306-308). The respondents had therefore made offers on the alternative bases that he left or remained a member of the firm. The claimant rejected this latest offer as ‘derisory’ (312-313) in his letter of 3 November 2020. Mr Burns says that the claimant ought to have engaged with these attempts to settle, and his failure to do so was unreasonable.[78]Then, he says, the respondents proposed CEDR mediation (314-315) and a roundtable settlement meeting (321-322). Neither ADR route was accepted by the claimant.[79]Finally, on 15 December 2020 the respondents proposed to pay unpaid profit share (less PHI payments already received) totalling over £150,000 plus capital of £78,750 and £40,000 for non-pecuniary losses (329-333).This offer (over £250,000 and designed to settle Claim 1 and the yet-to-be -issued Claim 2) was rejected on 17 December 2020 also as ‘derisory’ (334-335).[80]Although the claimant initially refused to make a counter-offer, he did make an offer to settle on 28 January 2021 (339-341) for £482,325 of profit share, £82,500 capital, £1.75 million compensation and £115,000 of legal costs (with the respondents paying all the claimant’s tax on all payments). His valuation of Claim 1, Mr Burns says, was ludicrous and unreasonable. Mr Burns accepts, however, that the respondents’ position was that PHI payments must be deducted from profit share, a position that the claimant never accepted. He acknowledges that neither side’s position about this was correct, as it transpired.[81]Interposing at this point, I have already said that an intractable issue between the parties was whether the claimant was entitled to receive both profit share and PHI benefits. The claimant’s position was that he was, the respondents’ that he was not and any payment of profit share should be reduced by the PHI benefits he had received. I have also already said that the Rogerson Tribunal fond that there was no implied term of the LLP agreement that the respondents could withhold profit share, and that view is reflected in correspondence from Aviva’s solicitors, Mills & Reeve, to the effect that the claimant was entitled to profit share and should repay to Aviva PHI payments made to him to which he was not entitled (350-347). This suggests that overpayment of PHI benefits was a matter between the claimant and Aviva, and the respondents should pay profit share to him without deduction.[82]Mr Burns submits that it was unreasonable for the claimant to refuse to compromise Claim 1 for a generous £250,000 payment and instead insist on a fanciful settlement of over £2.4 million. That sum was totally unrealistic and based on a dishonest assessment of the claim by the claimant. That unreasonable behaviour perpetuated a claim that should have settled in 2020 and resulted in all the costs that are claimed in the respondents’ schedule of costs (beginning 6 January 2021).[83]Mr Burns submits that the claimant’s unreasonable stance during this period would of itself justify an order for costs.[84]Mr Burns says that the claimant compounded his unreasonable conduct in his response to the respondents’ further reasonable attempts to settle in mid2022. In an attempt to save the substantial hearing costs of the Claim 1 remedy hearing in October 2022, the respondents offered a settlement on 28 June 2022 of £215,716 for Claim 1, to be largely offset against 80% of the respondents’ Claim 2 legal costs (367-372). That generous offer would have saved the need for substantial additional costs incurred by both parties in late 2022. It was rejected on 8 July 2022 (373-377) with the claimant proposing a settlement of £478,836 after tax and the respondents withdrawing their (successful) application for Claim 2 costs.[85]The respondents made further offers in July 2022 which were rejected by the claimant, who thereafter offered to settle the non-financial heads of Claim 1 only (for £55,121 (378-380)) which was of no utility as the remedy hearing would still have to go ahead. There was further discussion about a partial settlement but no progress before the October 2022 hearing.[86]Mr Burns submits that the late disclosure of the recording of the claimant’s telephone conversation with Mr Munday of Aviva revealed that the claimant was lying about his intention to return to work. Mr Burns directs me to paragraph 67 of the Rogerson Tribunal’s Claim 1 remedy judgment, which he describes as “extraordinary”. He observes that the claimant’s case that he believed he had been expelled in November and December 2019 was directly contradicted by the contemporaneous documents: from those documents, as the Rogerson Tribunal found, he cannot have believed that. His claim for compensation was based on what the Rogerson Tribunal found were lies. Submissions for the claimant[87]The claimant’s written submissions are very lengthy, extending to almost 50 pages. I do not criticise him for that, but I intend no disrespect by summarising only his main points, here and in my conclusions.[88]The claimant reminds me that following Yerrakalva, I should look at the whole picture in deciding whether his conduct was unreasonable and if so, what was unreasonable about it and what effect it had.[89]The claimant contends that the respondents were found in the consent judgment of 6 January 2021 to have taken unlawful steps to get rid of him. These included attempts to expel him from the firm, removing him as a person with significant control, excluding him from meetings and financial information, not allowing him to return to work on a phased basis and holding partners’ meetings in the office instead of at his home. He says that Ms Lord said in evidence that from November 2019, there was no way back for him. Because the November 2019 letter copied the language of clause 20 of the LLP meeting regarding expulsion, he thought that he had been expelled. He had also believed that counsel had agreed in January 2021 that Claim 1 remedy would include the amount of the loss of profit share, not whether he was entitled to claim it at all.[90]The claimant contended that the Rogerson Tribunal had misunderstood the position regarding his health in later 2019/early 2020. The fit note for his absence had been for recovery from cancer; the mental health issues had not then been diagnosed. His consultant was never going to decide about his recovery until an appointment 31 January 2020. He had always believed he would be able to return to work and that was his motivation. There was nothing sinister in what he told Mr Munday on 29 November 2019; he was in a post-operative condition at that point but was intending to return to work but he believed after getting the letter that the respondents wanted rid of him.[91]As to settlement, he understood that the discussions in 2020 were not part of the claim for costs which began from January 2021. But he submitted that the respondents did not participate in settlement discussions in 2020. They withdrew from judicial mediation. He did not accept the respondents were entitled to blame their former lawyers; the fact was that they did not engage with him.[92]The claimant submitted that his solicitors were trying to reach a global settlement, that was why the settlement figures were so large. The profit share figure was over £700,000 but the respondents were offering profit share only if PHI was deducted from it which was not acceptable to Aviva (434-435 and 458-460).There was no provision in the LLP agreement allowing a reduction on profit share. (I have commented on this aspect at paragraph 81 above.)[93]The claimant accepted there were settlement offers in summer 2022 but there were offers to and fro and the lawyers were at loggerheads. He disputed that he had been unreasonable, what had taken place was part of a normal negotiation process. Deliberations and
Conclusions
[94]I begin with some preliminary observations. First, the respondents’ application for a costs order is based only on the claimant’s unreasonable conduct of the proceedings under rule 76(1)(a). The respondents do not contend that the claimant’s case (or any part of it) had no reasonable prospect of success under rule 76(1)(b).[95]Second, although in his written and oral submissions the claimant repeatedly invited me to do so, I cannot go behind the Rogerson Tribunal’s findings about the truthfulness of the claimant’s case and his evidence at the remedy hearing. The Rogerson Tribunal rejected the claimant’s evidence that he believed he had been expelled at the meetings in December 2019, and the claimant’s explanation for that belief which he has given in this hearing (paragraph 89 above) is immaterial. I will not consider whether the Rogerson Tribunal may have misunderstood the evidence about the claimant’s health (paragraph 90 above). Nor is it material to my deliberations that the SRA or Aviva reached a different view about the claimant’s conduct regarding PHI benefits. I will decide whether the claimant’s conduct of the proceedings was unreasonable in the ways contended for by the respondents, and that consideration is based on the Rogerson Tribunal’s findings. But as I have already said, whilst I pay due regard to them, I am not bound by the Rogerson Tribunal’s findings about the reasonableness of the claimant’s conduct in terms of this application for costs.[96]Third, in assessing whether the claimant acted unreasonably in his conduct of the proceedings, and especially regarding settlement, it is important, in my judgment, to assess the reasonableness of his conduct at the various points in the proceedings when settlement discussions took place, without the benefit of hindsight. When assessing this, I will look at the overall context, including the approach of the respondents and the overall and wider dispute between the parties.[97]I begin, then, with the question whether the claimant’s conduct of the proceedings reached the threshold of unreasonableness in rule 76(1)(a).[98]I start with the settlement discussions. There were three phases of settlement discussions:(1) August to December 2020;(2) January/February 2021, and(3) June to September 2022.[99]Mr Burns says that the claimant acted unreasonably in this first phase of settlement discussions. He says that the respondents alerted the claimant to fundamental flaws in his remedy claim as early as 26 August 2020. They made settlement proposals on the alternative bases that he left or remained a member of the firm. They proposed mediation (314-315) and a roundtable settlement meeting. Finally, on 15 December 2020 they proposed to pay unpaid profit share (less PHI payments already received) totalling over £150,000 plus capital of £78,750 and £40,000 for non-pecuniary losses. This offer (over £250,000 and designed to settle all matters) was rejected on 17 December 2020 as ‘derisory’.[100]Mr Burns says that the claimant acted unreasonably in failing to engage with these settlement proposals and in putting forward an unreasonable valuation of the claim. He submits that it was unreasonable for the claimant to refuse to compromise Claim 1 for a “generous” £250,000 payment and instead insist on a “fanciful” settlement of over £2.4 million. That sum was totally unrealistic and based on a dishonest assessment of the claim by the claimant. That unreasonable behaviour perpetuated a claim that should have settled in 2020 and resulted in the costs claimed in the respondents’ schedule of costs (beginning 6 January 2021).[101]In my judgment there is some force in what Mr Burns says. Whilst I acknowledge that the claimant was seeking a global settlement whereby he would leave the firm, the value of £2.5million which he placed on his claim for future loss of profits arising from his discriminatory treatment was unrealistic. There was little evidence in what followed of any realistic wish to settle. The respondents’ proposals were rejected as “derisory”. The claimant refused to participate in mediation.[102]But on the other hand, the respondents themselves withdrew from judicial mediation in August 2020 on the ground there was too much between the parties. Experience says that even where there appears to be much between the parties, mediation may find a way through. In my judgment, the respondents cannot properly criticise the claimant for declining to participate in mediation when they had themselves done the same thing. The claimant was seeking a global settlement based on him leaving the firm. Even if the figure the claimant put upon it was unrealistically high, this was nonetheless potentially a claim of high value made up of several components and involving contentious issues of causation. The respondents did not put forward any offer in respect of the claimant’s claim for future loss of profit share; further, the respondents offered payment of accrued profit share only on the basis that PHI benefits should be deducted from the amount due, which the claimant reasonably assessed would be unacceptable to Aviva. Mr Burns’s criticism of the claimant for rejecting a “generous” offer of £250,000 in December 2020 when, by the time of the remedy hearing, the non-pecuniary loss was only £80,000 is, I find, unfair. The proposal in December 2020 was a global offer including profit share, repayment of capital and injury to feelings, and the two figures cannot fairly be compared as Mr Burns seeks to do.[103]Taking matters overall, I do not find that the claimant acted unreasonably in the settlement discussions during 2020.[104]Turning then to the position in early 2021, the respondents had partconceded the claimant’s claim, leading to the consent judgment of 6 January 2021. I infer that the respondents made their admissions because they believed (or were advised) that they were likely to be unsuccessful at trial; a finding of unlawful discrimination might have adverse professional consequences for Ms Russell and Ms Lord and would not be conceded lightly.[105]The claimant made a settlement offer on 28 January 2021 for £482,325 of accrued profit share, £82,500 capital, £1.75 million (a somewhat reduced figure) compensation and £115,000 of legal costs (with the respondents paying the claimant’s tax on all payments). I note that the offer was global and not confined to Claim 1, and Mr Burns accepts that the respondents’ position remained that PHI payments must be deducted from profit share, a position that the claimant never accepted. Mr Burns acknowledges that neither side’s position about this was correct, as it transpired.[106]Although I would not adopt his description of it as “ludicrous”, I agree with Mr Burns that the figure of £1.75million “compensation” was unrealistic. But I note that there was one offer from the claimant and one response from the respondents at this point, with no common ground. The respondents then withdrew from negotiations. There were no further settlement discussions until June 2022, after claim 2 had been decided. I do not find any unreasonable conduct by the claimant at this point.[107]Finally, I come to the position in summer 2022. Mr Burns says that the claimant compounded his unreasonable conduct in his response to the respondents’ further reasonable attempts to settle.[108]In my judgment, however, the parties entered into serious settlement efforts at this point. By this stage, the claimant was no longer pursuing any claim for future loss of profits. The position was reached where the parties agreed that their efforts would focus on Claim 1 remedy only. The parties came perilously close to settlement; indeed, they eventually agreed the figure of £42,500 for non -pecuniary losses, but the settlement foundered on the respondents’ requirement that their costs incurred since the expiry of their time-limited offer should be deducted from that figure. I understand why the respondents adopted that position, but I am unable to conclude that the claimant’s rejection of that final position was unreasonable.[109]For these reasons, I find that the claimant did not act unreasonably for the purposes of rule 76(1)(a) in his engagement with the issue of settlement of these proceedings. I am aware that I have reached a different conclusion about the claimant’s conduct of the proceedings to that expressed by the Rogerson Tribunal at paragraph 48 of the costs decision, quoted at paragraph 8 above, but the issue of whether the claimant had acted unreasonably was not before the Rogerson Tribunal at that point. It is an issue that I have had to decide, and I have reached a finding accordingly.[110]I move on then to the respondents’ contention that the claimant acted unreasonably in pursuing a remedy claim that was based on false assertions and evidence.[111]By way of reminder, Mr Burns says that the claimant gave a deliberately false account to the Rogerson Tribunal to bolster his claim for compensation. He claimed he felt highly offended by the respondents’ discriminatory comments, which related to his ability to work, knowing this to be false because he had privately agreed (in the conversation with Mr Munday) that the comments were true.[112]Mr Burns submits that the late disclosure of the recording of the claimant’s telephone conversation with Mr Munday of Aviva revealed that the claimant was lying about his intention to return to work. Mr Burns directs me to paragraph 67 of the Rogerson Tribunal’s Claim 1 remedy judgment, which he describes as “extraordinary”. The claimant’s claim and evidence that ‘but for the Claim 1 discrimination, the claimant would have returned to work on or around January 2020’ was a deliberately false account to try to mislead the Rogerson Tribunal into making a finding of fact he knew was untrue. Paragraph 67 was in the following terms: “67. Having carefully considered the position we find the claimant was presenting a false account at this hearing to try to mislead the tribunal into make a finding of fact he knew was untrue (but for the Claim 1 discrimination, the claimant would have returned to work on or around January 2020”). If the claimant had been transparent with Mrs Lord and Miss Russell about what he was saying to his insurer, he would have had to admit he agreed he should be deemed unfit and could not retain his roles and responsibilities which should be reassigned to them in his absence. The claimant was not being transparent with the Insurer or with the respondents or with the tribunal.”[113]Mr Burns says that the claimant’s case that he believed he had been expelled in November and December 2019 was directly contradicted by the contemporaneous documents: from those documents, as the Rogerson Tribunal found, he cannot have believed that. Mr Burns says that the claimant knew that he was giving false evidence that he had been expelled from the LLP in another attempt to mislead the Rogerson Tribunal to support his compensation claim.[114]As I have mentioned, the claimant in his submissions said that the Rogerson Tribunal had misunderstood the evidence about his medical position and intention to return to work. He contended that he had believed he had been expelled because the wording used by the respondents in their letter of 24 November 2019 was that of clause 20 of the LLP agreement which dealt with expulsion.[115]As I have already said, I cannot go behind the Rogerson Tribunal’s findings. I understand that the claimant disagrees with the Rogerson Tribunal’s conclusions, but the Rogerson Tribunal was the arbiter of fact and reached its conclusions after hearing the evidence. They found that the claimant cannot genuinely have believed that he had been expelled in November or December 2019. They found that the claimant had not suffered injury to feelings or psychiatric injury when he was admitting to Aviva that he was unable to work. These were important components of the claimant’s remedy claim and the Rogerson Tribunal found that the claimant lied in his evidence about them. Based on those conclusions, I find that the claimant acted unreasonably within rule 76(1)(b) in giving evidence at the remedy hearing in this case that was deliberately untrue about important components of his remedy claim.[116]I move on then to the second issue, which is whether I should exercise my discretion to make a costs order based on the claimant’s unreasonable conduct of the proceedings as I have found it to have been and if so, in what amount or for what period. I have a broad discretion what to do, and I have considered the nature and extent of the unreasonable behaviour, what effect it had (recognising that there is no need for a precise correlation) and the overall context.[117]The relevant factors, in my judgment, are these:(1) the Employment Tribunal is largely a costs-free jurisdiction;(2) the respondents had submitted to judgment in respect of acts of admitted unlawful disability discrimination against the claimant;(3) the claimant was entitled to pursue a claim for consequent remedy;(4) the remedy claim was not in any sense unarguable: the respondents had attempted to remove the claimant from the firm and there was expert evidence in support of the psychiatric injury he contended he had suffered. The Rogerson Tribunal found that the claimant had embellished his evidence by lying as to the effect the treatment had upon him and his intentions regarding returning to work.[118]Having regard to all these factors, and that there is no requirement for a precise correlation between the unreasonable conduct and the costs incurred, I have decided that I should make a costs order but that it should be confined to counsel’s fees incurred by the respondents for the remedy hearing before the Rogerson Tribunal. The Rogerson Tribunal’s key findings were about the claimant’s untrue evidence at the remedy hearing, and I find that a proper and proportionate costs sanction should be in the form of counsel’s fees incurred for and at that hearing.[119]I know from the copy fee notes in the hearing file that counsel’s fees from 1 August 2022 were £32,500. These fees were for preparation for and attendance at the hearing and in principle, subject to any arguments about proportionality, those are the fees which fall within the costs order I have made. VAT should be deducted as the respondents can recover that.[120]The claimant’s ability to pay is not an issue. I need say little about it. The claimant, I am told, has not yet been paid his accrued profit share, which I infer from correspondence may amount to over £400,000. He will be liable to repay to Aviva the PHI benefits he received, and in addition, there is an existing costs order in respect of Claim 2, limited to £210,000. The claimant also has an unpaid liability for his own legal costs. These are substantial liabilities which may extinguish unpaid profit share. However, although there is an unresolved dispute between the parties about the value of the claimant’s property, there is sufficient equity in the property on any showing to allow the claimant to utilise the equity to raise funds to pay the limited amount of the costs I have ordered.[121]There is one final matter. The application for a costs order included the respondents’ costs of resisting the claimant’s earlier Claim I costs application. Mr Burns has not pursued this part of the application during this hearing and made no submissions about it. He has not explained if, and in that event why, he says the claimant acted unreasonably in pursuing his application for Claim 1 costs. I conclude from this that this aspect of the application is not pursued, but it may assist the parties if I say that I would not have been prepared to make a costs order against the claimant in this respect. I would not have regarded the claimant as having acted unreasonably In seeking costs for pursuing a claim which the respondents part-conceded, and I have not found that the claimant acted unreasonably in his engagement with settlement.[122]The costs order is therefore limited to counsel’s fees for preparation for and attendance at the Claim I remedy hearing in October 2022. Outcome[123]I make a costs order, accordingly, limited to the amount of counsel’s fees reasonably and properly incurred from 1 August 2022 in preparation for and attendance at the Claim 1 remedy hearing. As the amount of those fees exceeds the limit in rule 78(1)(a) of £20,000 for summary assessment in the Employment Tribunal, it will be necessary for there to be a detailed assessment under rule 78(1)(b). The Rogerson Tribunal made a costs order in Claim 2 for detailed assessment in the County Court. I have considered whether I should make the same order so that the costs can, if possible, be assessed together, but I have concluded that the detailed assessment should be by an Employment Judge. That process will be quicker and will avoid expense and should be straightforward, having regard to the limited costs order I have made. I invite the parties, however, to agree the amount of counsel’s fees and advise the Tribunal within 21 days of when the Tribunal sends this decision to them, in which event I will issue judgment for that amount. Alternatively, a detailed assessment will be needed.
Conclusions
[1](1802068/2020), also sent to the parties on 21 December 2022.[2]Except that the claimant relies on one piece of what he says is new evidence and prays in aid my recent judgment on the respondents’ Claim 1 remedy costs application, the applications are substantially the same as the claimant made on 20 July 2023 and which I dismissed on 4 August 2023 under rule 72 (1) as there was no reasonable prospect of the judgments being varied or revoked. The claimant says that it is in the interests of justice to reconsider the judgments in the unusual circumstances of the cases where new evidence is available that undermines the key findings that have been made.[3]In his July 2023 applications the claimant relied on what he said was new evidence, summarised in paragraphs 3 and 4 of my judgment of 4 August 2023. In my judgment I said this: “The Tribunal made its findings about the claimant’s conduct in claiming IPB based on the extensive evidence it heard and saw, both witness and documentary, during lengthy full merits hearings at which the parties were represented by experienced counsel and for the reasons set out in detail in its written decisions. The new evidence on which the claimant relies is not evidence of primary fact. It consists of after-the-event assessments by an insurance company and a regulatory body, reached without formal judicial process or taking evidence at a hearing in the way the Tribunal did. I accept that those carrying out the assessments in the new evidence have taken a more benign view of the claimant’s conduct than did the Tribunal. But having regard to the Tribunal having made its findings after a full and comprehensive judicial process, there is no reasonable prospect that the Tribunal will vary or revoke its judgments because of this new evidence. I therefore refuse the claimant’s applications under rule 72(1).”[4]The only new evidence on which the claimant relies in support of these present applications appears at paragraph 62 of the applications. It consists of a letter from Aviva’s solicitors, Mills & Reeve, expressing Aviva’s apology for what is described as a “misunderstanding” on Aviva’s part about the claimant’s entitlement to profit share. I make the same assessment and reach the same conclusion, as set out above, about this new evidence as I made and reached in August 2023 about the new evidence on which the claimant then relied.[5]The claimant also suggests that parts of my Claim 1 remedy costs judgment cast doubt on the earlier decisions. They do not. I made my decision specifically in respect of the respondents’ applications for Claim 1 remedy costs, after hearing submissions directed to that issue. I made clear in my judgment that I did not (indeed could not) go behind the earlier findings of the Rogerson Tribunal in the judgments they gave.[6]I have considered at the first stage of the process for reconsideration under rule 72(1) whether there is any reasonable prospect that the Tribunal will vary or revoke its judgments because of the new evidence on which the claimant relies. I find that there is not. As I concluded in my earlier judgment about the material relied on by the claimant in July 2023, and for the same reasons, there is no prospect that the Tribunal will vary or revoke its decision, and it is material that the claimant now makes substantially the same applications as he made then. The applications otherwise repeat at length the claimant’s contentions that the Rogerson Tribunal made the wrong decisions. It is in the interests of justice that there is finality in litigation and the claimant cannot properly now seek to reopen and reargue the proceedings (or substantially repeat the applications which he made previously and which were rejected). Under tule 72(1), therefore, I refuse the claimant’s applications for reconsideration.[7]The claimant has also applied for a stay of the Claim 2 costs order pending the applications for reconsideration. However, as I have refused the applications, the request for a stay falls away and is refused.
Conclusions
[1]The claimant, Mr Willis, applies by letter dated 15 February 2024 for reconsideration under rule 71 of the Employment Tribunals Rules of Procedure 2013 of part of my decision in this case, issued on 8 February 2024. He also applies for a stay of the Tribunal’s costs order in the proceedings, sent to the parties on 21 December 2022, pending the application for reconsideration.[2]In the decision which is the subject of this application, I refused under rule 72(1) of the Employment Tribunals Rules of Procedure 2013 the claimant’s applications for reconsideration of the Rogerson Tribunal’s Claim 1 (1802068/2020) remedy and Claim 2 (1803135/2021) liability and costs judgments as there was no reasonable prospect of the judgments being varied or revoked. In consequence, I refused the claimant’s application for a stay of the Claim 2 costs order pending the application for reconsideration. The claimant’s current application is confined to the decisions I made in respect of the Claim 2 costs order and the application for a stay.[3]The claimant asks me to reconsider my decision not to reopen the costs order because it would be “grossly unfair for costs of £210,000 to be ordered in the absence of the appropriate assessment by the Employment Tribunal”.[4]The nub of the application is at paragraph 3. The claimant says that “I am asking the Tribunal to deal with the claim 2 costs matter in the correct and fair manner so as to enable an appropriate and correct decision can be made compensate (sic) with the impact of such an order on me and his family”.[5]The claimant asserts that the costs order was wrong, for several reasons he states. In summary, he says that the Rogerson Tribunal:(a) failed to apply the correct process and made the errors identified in Oni v Unison UKEAT/0370/14;(b) erred in law in making an order that he pay all the respondents’ costs without any formal consideration or review of the costs claimed;(c) failed to follow correct practice and procedure;(d) failed properly to consider his ability to pay;(e) did not take properly into account his disability or make reasonable adjustments.[6]I have considered at the first stage of the process under rule 72(1) whether there is any reasonable prospect that I will vary or revoke my 8 February 2024 decision. I find that there is not.[7]The “interests of justice” test for reconsideration under rule 71 confers a broad discretion. However, an application for reconsideration is not a vehicle for a party to reopen or reargue a case because he believes the Tribunal made the wrong decision. Although the claimant asserts at paragraph 3 of the application that he is not seeking “a second bite of the cherry”, this is clearly what he in fact is doing, as underlying the application is the claimant’s continued contention that the Rogerson Tribunal made the wrong decisions. There must be finality in litigation and it is not in the interests of justice in this case for the claimant repeatedly to seek to reopen and reargue the proceedings because he believes the outcome was wrong. If, as he clearly does, the claimant believes that the Rogerson Tribunal erred in law in making the costs order, his remedy is by way of appeal to the Employment Appeal Tribunal.[8]I have no reason to believe that the decision I made to refuse to reconsider the Rogerson Tribunal’s costs order, for the reasons that I made it, was incorrect. There is no reasonable prospect that I will vary or revoke the decision. Under rule 72(1), therefore, I refuse the claimant’s application for reconsideration.[9]The claimant has also applied for a stay of the costs order pending the outcome of the application for reconsideration. As I have refused the application, the request for a stay falls away and is refused.[1]The claimant’s application for costs dated 12 March 2021 relates to the Claim 1 (1802068/2020). Liability for the admitted disability discrimination was declared in the terms agreed by the parties on 6 January 2021.[2]It was agreed that the Tribunal would decide Claim 1 Remedy then Claim 1 claimant’s costs application dated 12 March 2021 and then Claim 2 respondents costs application dated 1 June 2022. Claimant’s cost application[3]In deciding the claimant’s application, the Tribunal considered the following information:3.1 The application for costs dated 12 March 2021 and schedule of costs claimed of £195,000.3.2 The respondent’s response to the claimant’s application for costs dated 9 April 2021.3.3 Mr Cordrey’s written submissions and the documents he refers to from the cost bundles (C1 and C2).3.4 Mr Burns written submissions and the documents he refers to from C1 and C2.3.5 The application is made on 3 grounds3.5.1 The respondents breached the Employment Tribunal Case Management Orders dated 2 July 2020 (Rule 76(2))3.5.2 The respondents’ response to the claim had no reasonable prospects of success (Rule 76(1)(b))3.5.3 The respondents’ acted disruptively and unreasonably in the way in which the proceedings were conducted (Rule 76(1)(a)[4]We will make our findings of fact on each ground to determine whether the threshold has been met for the Tribunal to consider exercising its discretion to order costs applying the guidance in Yerrakalava -v- Barnsley Metropolitan Borough Council 2012 ICR 420 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 behaviour by the claimant in bringing(or the respondent in defending) and conducting the case and in doing so, to identify the conduct what was unreasonable about it and what effect it had”
Findings of Fact
[5]Claim 1 was lodged on 16 April 2020. The claimant brought complaints of direct disability discrimination, harassment, victimisation, discrimination arising from disability and a failure to make reasonable adjustments.[6]By an ET3 lodged on 23 May 2020 the respondents denied all claims against them. During the period from the issue of the claim until 7 October 2020 the respondents were represented by BLM LLP.[7]After a preliminary case management hearing on 29 June 2020 a judicial mediation hearing was listed for 2 September 2020. Case Management Orders were made on 2 July 2020[8]Between July 2020 and 28 August 2020 steps were taken to agree the disclosure of documents and schedules of loss and there was some slippage with the case management orders (3.2 and 4.2) for preparation for the judicial mediation. The respondents’ solicitors’ response refers to the correspondence between the parties explaining why the counter-schedule was late and the difficulties associated with agreeing the documents before judicial mediation. None of that slippage was to blame for the vacating the judicial mediation which was vacated because it became clear to the parties that the gap between them was so vast that judicial mediation was unlikely to succeed.
[65]Mr Cordrey has quoted a very small part of paragraph 49 which we have highlighted below setting out in full the relevant paragraphs 49-51 of the judgment to provide the context to explain how the tribunal assessed the credibility of the witness evidence:49. “The tribunal found that Mrs Lord and Miss Russell gave their answers to questions in a straightforward, direct and open way and those answers were supported by the contemporaneous documents. In contrast, at times, the claimant gave very unsatisfactory evidence, and his answers did not accurately reflect the events or his views at the time. The tribunal found the claimant was evasive at times and his evidence was misleading and contradicted by the contemporaneous evidence. In the written closing submissions Mr Burns has identified some of the evidence the claimant gave on key issues to try to persuade the tribunal that the claimant was not a credible witness and reluctantly invited the tribunal to find that the evidence shows the claimant had been dishonest.50. The tribunal appreciated that it was a seriousness of its task of evaluating the quality of the evidence provided to assess the credibility and truthfulness of the witness evidence. It made that assessment after making all the findings of fact, by stepping back and considering the totality of the findings it had made in the round. At the ends of its deliberations the tribunal could see some force in Mr Burns submission. It was a difficult decision to make given the serious consequences it will no doubt have for the claimant personally and for his reputation after more than 20 years as a practising solicitor. However, by bringing these allegations to a hearing the claimant had decided the complaints he has made should be open to that level of scrutiny and be decided by the tribunal on the evidence provided by both parties. He also affirmed that the evidence he gave to the Tribunal was the truth.51. The tribunal considered whether the unsatisfactory evidence the claimant gave could be explained as a mistake or misremembering, because this was a particularly difficult time for the claimant because of his ill-health. The difficulty for the tribunal was that neither of those explanations can be made to fit with the unsatisfactory evidence. The claimant has during this difficult time been very proactive in making informed decisions on any disputed matters. His interaction with other (the respondents the insurers the accountants the HMRC solicitors), demonstrate his ability to assert his position to use arguments and select information to persuade, to stand his ground when he disagrees to provide detailed counterarguments and to deflect blame onto others, all while he was suffering with ill-health. Unfortunately, and very reluctantly we agreed with Mr Burns, that the claimant was not a truthful witness and that he has attempted to mislead the Tribunal in some material aspect, by the evidence he gave which is referred to in the findings of fact made. For those reasons where there were any material disputes of fact the tribunal were persuaded that the respondents’ witness evidence was far more credible and reliable than the claimant’s evidence and should be preferred and accepted”.52. After quoting that small part of the judgment highlighted above the submission point Mr Cordrey made was (paragraph 44) that “before finding that any of these aspects of the claimant’s evidence contributes to a view that the claimant engaged in unreasonable conduct or support a conclusion that his claim had no reasonable prospect of success, the Tribunal must be sure that the unsatisfactory nature of his testimony is not explained by his diagnosed mental health conditions. He relies upon and refers to the claimant’s evidence at this hearing as given in his costs witness statement (CB 1042) that: “Unfortunately, I struggled to follow and coherently answer the questions asked of me by the respondents’ barrister and the tribunal. The tribunal makes comments in the judgment of my verbal responses whilst not taking into account the mental health symptoms I was suffering from at that time (and prior to the hearing) including brain fog, confusion, short term memory issues insomnia difficulty in following complex questions requiring detailed complex answers, not having the skills to think through my answers prior to responding, nor the adverse effects of physical and mental fatigue of such an ordeal and the anxiety from which is exacerbated in stressful situations. I am aware this may seem like an easy excuse but there is nothing easy about the cancer medication and its effects chemotherapy, acute stress reaction acute anxiety stress and continuing depression. I invite anyone to imagine the impact on how they might express themselves their memory concentration and recall if they had been through half the things, I have been through in the past five years”.53. Although the paragraphs of the reasons quoted above explains in detail why the tribunal had concluded the claimant was not a truthful witness, none of that detailed reasoning has been addressed in the submissions or the claimant’s costs witness statement in which the tribunal is invited to reconsider its assessment. The claimant has been found to have lied on multiple occasions in his evidence to attempt to mislead the tribunal. He was not a reliable historian. The evidence showed how the claimant was engaging and interacting with others. He was proactively and forcefully making informed decisions on any disputed matters. He was using arguments/counter arguments and information to persuade and influence the outcome in the way that was most advantageous to him. When the respondents had raised genuine concerns that the claimant was engaging in insurance fraud the claimant was dismissive of those concerns. He was able to stand his ground and make decisions about the information he disclosed to others and the information he concealed from others in the way that was most advantageous to his position. He was able to deflect blame onto others when it suited his purpose. All these behaviours were sustained over a long period of time demonstrating the claimant had all the skills to think through and respond to situations as and when they arose to analyse and assess complex information before responding to it in the way that was most favourable to his position at that time. There was no evidence his cognitive ability was impaired in the way the claimant now suggests trying to retrospectively explain/excuse the adverse findings of fact that have been made. While we can and do accept the past 5 years have been a very difficult time for the claimant in relation to his cancer and his mental ill-health, we do not accept the implication made that anyone else in his situation would have behaved in the same way. As we noted in our judgment the difference for the claimant was that “by bringing these allegations to a hearing the claimant had decided the complaints he has made should be open to that level of scrutiny and be decided by the tribunal on the evidence provided by both parties. He also affirmed (should be corrected to on oath) that the evidence he gave to the Tribunal was the truth”.54. There is an obligation for any witness giving evidence to a court or tribunal under oath or by way of affirmation to tell the truth, whether the evidence they give undermines or supports the case being brought. The claimant has not asserted that his ability to tell the truth was impaired by his disabilities of cancer or depression. The claimant has not explained how any of the mental health symptoms he describes affected his ability to give a truthful answer to any of the questions he was asked at the hearing. Before assessing the credibility of the witness evidence, the tribunal had the opportunity of hearing and seeing evidence spanning a lengthy period starting with the time when the claimant was diagnosed with cancer in 2018 to his retirement in March 2021. Our detailed findings of fact have shown that throughout this period the claimant was proactively making informed decisions in relation to the partnership, his insurance, and his finances. He was influencing the outcomes to ensure they were in his best interests. He used his assertiveness, his position of authority, argument, persuasion, information, intransigence, and blame as tools in his armoury to control outcomes. The claimant’s inability to tell the truth was not excused or explained by the symptoms he describes of “brain fog, confusion, short term memory issues, insomnia”. The tribunal took very seriously its task of assessing credibility especially when dishonesty was alleged and great care in assessing the evidence before making its findings of fact. We took a step back to look at the total picture before reaching the conclusion that the claimant had been dishonest and lied on multiple occasions to try to mislead the tribunal and obtain relief to which he was not entitled. From our observations the claimant appeared to be functioning well throughout the proceedings and witnesses to not require any particular skill to answer question truthfully. We also note that when Mr Burns made his submissions drawing the tribunals attention to the inconsistencies in the claimant’s account inviting the tribunal to find the claimant was dishonest. Mr Cordrey did not respond to that submission or suggest as he now does that the claimant had difficulty understanding the questions or in giving his answers. The tribunal did not observe and was not alerted to any difficulty. The tribunal was offered no explanations in closing submissions to explain the inconsistencies in the claimant’s evidence.55. Mr Cordrey sets out the parts of the claimant’s costs witness statement he relies upon to provide the alternative ‘context’ to the tribunal findings of fact in relation to the PHI payment schedule, withholding profit share, the entitlement to both PHI and profit share, the lack of transparency, the nil tax returns and accusing the respondents of wrongly paying his tax on profit share. His general point in relation to the ‘context’ provided on those matters is that it now supports the tribunal finding there was nothing unreasonable or untoward about the claimant’s conduct. He submits that the claimant has throughout his PHI claim reasonably relied on Aviva’s advice and guidance (inferring the insurer is at fault).56. We were referred to the cases of Arrowsmith and Howman which we considered. In both cases the claimants were found to have acted unreasonably by bringing proceedings founded on lies. Ms Arrowsmith had made a claim of sex discrimination as an agency worker against Nottingham Trent University for allegedly refusing her application for a permanent post on the grounds she was pregnant. At the hearing of her claim the witnesses for the respondent denied having any knowledge or suspicion of her pregnancy until after completion of the interview and selection process. The employment tribunal preferred their evidence to the evidence given by the claimant of earlier conversations with two members of the interview panel and dismissed the claim. The costs application made by the respondents relied upon the unreasonable conduct of the claimant in bringing the proceedings based on a series of untruths. The application succeeded and the claimant was ordered to pay £3,000 even though she was unemployed and no longer in receipt of statutory maternity pay. The Court of Appeal held that the question for the tribunal in considering making a costs order under the rules was whether on the particular facts of the case any of the grounds for making a costs order that “such consideration is fact sensitive exercise and while a lie on its own would not necessarily be sufficient to found an award of costs it was for the tribunal to examine the context, nature, gravity and effect of the lie in determining the unreasonableness of the alleged conduct”.57. Mr Howman had made an unsuccessful complaint of unfair dismissal. The tribunal in that case had found that Mr Howman must have known that his claim of unfair dismissal never had a chance of success in light of the irrefutable evidence which fundamentally contradicted the assertions he had made to support his claim. The tribunal had found that Mr Howman’s claim was misconceived finding that at an early stage he had information upon which a reliable assessment could have been made as to the prospects of success. Although both cases were brought under the previous cost rules, they were helpful in identifying the importance of focussing on the findings of fact already made at the liability stage to examine the nature gravity and effect of the lies in determining the unreasonableness of the conduct was unreasonable.58. The claimant’s case was materially dependent on advancing multiple assertions which were found to be untrue and on irrefutable evidence which fundamentally contradicted the assertions he had made. In bringing the complaint alleging unfavourable treatment by the respondents in continuing to question of his honesty and integrity in applying for and receiving income protection (PHI) and accusing him of misleading his insurers the claimant was inviting the tribunal to find he had been honest and transparent. In paragraph 94 of the findings of fact we set out the parties’ respective positions before making the relevant findings of fact that are now relied upon by the respondents: “The issue of transparency was relevant to the alleged detriment/unfavourable treatment of the respondents continuing to question the claimant’s honesty and integrity in applying for and receiving income protection (PHI), accusing him of misleading his insurers and the allegation of withholding profit costs…. The claimant views the continuing questioning by the respondents as an “extremely serious allegations” which were in his view completely unjustified because he was being “completely transparent with Aviva and with the respondents” and had “provided all documentation Aviva had required”. The respondents do not accept that the claimant had been completely transparent with them or with the insurer. They believed the claimant was selective about the information he disclosed to them and deliberately supressed material facts /information from the insurer which they believed could have implicated them in potential dishonesty/insurance fraud and was the reason why they sought appropriate assurances from the claimant that what he was requesting them to do was acceptable to Aviva”.59. The respondents have identified the findings of fact made that they rely upon to support a finding that the claimant has in bringing and conducting these proceedings acted unreasonably Paragraph 79. The tribunal found the claimant’s PHI payments schedule was misleading and self-serving it was created to present an artificial argument to support the case presented at this hearing that the claimant personally paid the premiums which was untrue. Paragraph 106. The tribunal found the claimant’s position on the leaded detriment of “withholding profit share” was and has been fundamentally contradictory to his own evidence and the undisputed facts. Paragraph 116. At this time the respondents did not know the claimant had not provided the partnership accounts and his tax return to Aviva. The claimant was being deliberately selective about the information he disclosed to the respondent to attempt to secure their ‘compliance’ to his request to pay his profit share into his pension pot. He was also being selective about the information he disclosed to Aviva about his payment if tax. As at, January 2020, the claimant was not being completely transparent with Aviva or with the Respondent. Paragraph 125. … The inference the tribunal draws from this evidence is that the claimant was deliberately supressing this information from the insurer. Paragraph 259. At all times up until the claimant’s retirement on 8 March 2021 the claimant knew his full profit share had been allocated to his current account and had not been withheld yet has continued to present a case fundamentally contradictory to the evidence. Paragraph 260. In light of those incontrovertible facts (known to the claimant) it was difficult for the tribunal to understand why the second claim was presented in June 2021 alleging that as a designated member he was subjected to unlawful discrimination in January 2020 when he knew his profit share had not been withheld from him. Paragraph 266. The claimant has continued to unfairly blame the first respondent’s accountant for ‘wrongly’ paying his tax when he knew it was paid correctly on his unpaid profit share with his knowledge and approval. His case was fundamentally contradictory to the evidence and his evidence at this hearing was untruthful and misleading. Paragraph 268. Unfortunately, the overall impression the tribunal had of the claimant was that he was not a truthful witness he was not completely transparent and have given misleading evidence to hide the true facts they were unhelpful to his case. 60. With those findings of fact in mind we considered the context, nature gravity and effect of the claimant’s conduct to decide if it was unreasonable. The nature and extent and scale of the claimant’s deception was extreme because he was attempting to mislead the tribunal to obtain relief knowing he was not entitled to it because he was not telling the truth. We agreed that misleading a court or tribunal is one of the most serious findings of unreasonable conduct by a party and particularly egregious for a party who is a solicitor. 61. We do not find the unsatisfactory nature of the claimant’s testimony is explained by the claimant’s diagnosed mental health conditions. We do not accept the evidence in the claimant’s costs witness statement which is in our view an undisguised attempt to challenge the findings properly made by the tribunal. In so far as it is relied upon to place a different ‘complexion’ on the findings of fact we prefer the certainty of the findings of fact made after careful examination of the evidence. 62. We are satisfied that the respondents have shown the claimant’s conduct in bringing and conducting these proceedings was unreasonable conduct crossing the threshold of unreasonable conduct required to make a costs order. We have not gone on to consider the alternative ground of 76(1) (b) that the claim had no reasonable prospects of success because it was not necessary to. 63. As to whether we should exercise our discretion to make a costs order having found unreasonable conduct by the claimant we are not persuaded that the fact that the claimant is a disabled person by reason of his cancer and by reason of depression is a reason for not making a costs order which is otherwise just. We are not persuaded that because a strike out or deposit order was not applied for a costs order should not be made. It is difficult to see how the Tribunal could have ordered a strike out or deposit order if the respondents had raised an allegation that the claimant was telling lies without examining the evidence and there were disputes of fact. Having seen the without prejudice save as to costs correspondence it was unlikely the claimant would have taken any costs warning letter seriously however well drafted and would most likely have complained that the respondents’ solicitors were sending aggressive correspondence questioning his honesty and integrity. Ability to pay. 64. The claimant’s evidence that the value of his house has not risen substantially for 20 years was implausible. The claimant had purchased his for £850,000 20 years ago and is suggesting a realistic value for the property if sold is £950,000 giving him a share of £475,000. The valuation he has provided shows the property has increased by £100,000 in 20 years. The claimant could not explain how that valuation could be correct and we do not accept it is realistic or reliable. We preferred Mr Burns more realistic estimate based on Zoopla valuation showing a value of £1.47 million - £2.2 million based on the House Price Index which does factor increases over time in a more realistic way. This was another blatant attempt by the claimant to ‘hoodwink’ the tribunal about the true value of his half share of the capital asset to try to avoid a costs order. His conduct in attempting to rely on an estimate he knows is not truly representative of the value goes against the claimant and in favour of the making a costs order. 65. The capital value of the home and the claimant’s half share provides him with sufficient means to pay a costs award. The claimant is not intending to sell his home to repay his other debts of loans from family and friends where there is no time scale for repayment or his outstanding legal costs of £50,000 which he will have to settle soon. He will use his unpaid profit share to settle his own legal costs. The value of his unpaid profit share is yet to be agreed. In March 2021 the respondents had estimated the value based on the LLP’s projected profits at just under £340,000. We were satisfied the claimant has the means in his capital asset (1/2 share of home) and unpaid profit costs to pay a costs award.[66]In deciding the amount of costs, we know the claimant has paid his own costs of £195,000 which he has agreed are reasonable and proportionate in relation to the first claim which settled before a liability hearing. Mr Cordrey invited the tribunal to cap any costs awarded at the amount awarded to the claimant in respect of his costs application in relation to Claim 1 but as that application has failed the cap must be set in a different way. Mr Burns suggests a cap of £210,000 even though the actual costs incurred by the respondents exceed £277,000. We have decided a reasonable and proportionate sum to cap the respondents’ costs is £210,000. The costs should be assessed on the standard basis by way of a detailed assessment in the County Court. The costs are not immediately payable as there may be some delay while the unpaid profit costs value is decided, and we suggest no earlier than March 2023 which will hopefully give enough time after the LLP accounts for 2020/2021 to be approved in January 2023. The claimant also has alternative means that will not involve the sale of his home given his equity share in his home whether he does so by way of equity release or a charge on the property.[67]Although this is not the outcome the claimant had wanted, we hope that by having finality in these proceedings the claimant can now take the steps he has been advised to take to help him recover given that the ongoing proceedings were serving to prolong his depression.