Tribunal Judge Jack, acting as an Employment JudgeDate 19 June 2024
JUDGMENT
[1]The claimant’s complaint of breach of contract in relation to SQE examination fees is not well-founded and is dismissed.[2]The respondent’s complaint of breach of contract in relation to a QLTS course fee is not well-founded and is dismissed.[3]The respondent’s complaint of breach of contract in relation to the claimant’s failure to return a key fob is well-founded.[4]The claimant shall pay the respondent £42.00 as damages for breach of contract.
REASONS
[1]The claimant was employed by the respondent from 17 August 2021 to 17 February 2023. Early conciliation took place from 3 February 2023 to 1 March 2023. The claim was presented on 7 March 2023, alleging breach of contract and detriment suffered for asserting employment rights. The response included a breach of contract counterclaim. The complaint of detriment was dismissed by EJ Elliott, following withdrawal by the claimant.[2]There was a case management hearing before EJ Elliott on 25 May 2023. EJ Elliot formulated the issues for determination by the tribunal as follows: The claim (16) What were the terms of the contract between the parties as to the payment of SQE fees? The claimant says that there was an oral agreement with the senior partner Sheata Karim made in the firm’s board room and that no one else was present at that meeting. The claimant’s case is that her original contract of employment from August 2021 was varied by a letter from Sheata Karim dated 11 October 2021 and was further varied by an oral agreement in October 2022. (17) Was a binding contract formed as to the payment of SQE fees? (18) It is not in dispute that the claimant did not sign terms and conditions dated 15 September 2022. (19) Was any such binding contract breached on 15 November 2022 when the claimant says Ms Karim indicated to her that the respondent would not pay the SQE fees? The Employer’s Counterclaim (20) Is the respondent entitled to recover from the claimant the sum of £1,690 paid to the Qualified Lawyers Transfer Scheme for the SQE2 course? (21) Has the claimant failed to return to the respondent an office key fob belonging to them, at a value of £35 + VAT? The claimant accepts that she has the key fob and said she would return it to the respondent and the respondent will then say whether this part of the counterclaim is pursued. Remedy (22) If the claim or counterclaim succeeds, the issue of remedy will fall to be determined.
Remedy
[3]At the start of the hearing, I asked if the counterclaim in respect of the key fob had been resolved. It had not. The parties agreed that the existing list of issues should stand with the addition of the following in respect of remedy: The claimant seeks an ACAS uplift relying in particular on paragraphs 4 and 9 of the ACAS Code of Practice on Disciplinary Procedures.[4]I had the following documents:4.1 the Respondent’s bundle of 255 pages (referred to as RB);4.2 the Claimant’s bundle of 125 pages (referred to as CB);4.3 the witness statement of Ms Sheta Karim, dated 21 September 2023;4.4 the witness statement of Linda Hayes, dated 21 September 2023;4.5 the witness statement of Dr Simon Ashley, dated 18 October 2023;4.6 the witness statement of Miss Sophie Ashley, dated 19 October 2023;4.7 a short recording, which I refer to in more detail below;4.8 a Note for the Final Hearing from the claimant.[5]Dr Simon Ashley attended the hearing by phone from Antigua and Barbuda. Citizens or residents of Antigua and Barbuda can give evidence from Antigua and Barbuda by video link in UK tribunals. Dr Ashely is not a citizen or resident of Antigua and Barbuda. Having regard to the Presidential Guidance on Taking Oral Evidence by Video or Telephone from Persons Located Abroad, and the fact that permission had not been sought from Antigua and Barbuda to give oral evidence from that state, I explained that Dr Ashely was unable to give evidence. That did not however prevent him acting as the claimant’s representative, questioning witnesses and making submissions on her behalf. Linda Hayes did not attend the hearing.[7]I explained that I would take the witness statements of Dr Ashley and Linda Haynes into account, but the fact that they were not available to be cross examined would be likely to affect the weight that I gave to them.[8]A preliminary issue arose. Mr Mahmood submitted that a fair hearing was not possible as: the respondent’s witness statements were served before the claimants; the claimant’s bundle was served only after the respondent’s witness statements had been finalised, and the documents at CB/82-85 had previously not been seen; the claimant had disclosed a covert recording of a meeting on 2 November 2022 only after the respondent’s evidence had been finalised. The claimant said that she had initially disclosed a note of the meeting on 2 November 2022 and not the recording itself, as she did not intend to rely on the recording. The claimant said that the documents at pages 82 to 85 of her bundle had been disclosed before she sent the respondent the claimant’s bundle. My assessment was that the central issue in the case was whether there had been an oral agreement between the claimant and Ms Karim and, if so, what its terms were. This agreement was said to have been reached on 6 October 2022. The two people in the room at the time that agreement was said to have been reached were here and could give evidence. Ms Karim could, if so advised, be asked about any documents which she had not addressed in her witness statement at the start of her evidence. And, if necessary, I would be able to take the points made by the respondent into account when deciding how much weight to give to particular items of evidence. I considered that it was possible to have a fair hearing, and that as the two most important witnesses were present, the hearing should proceed.[9]The parties each made short oral closing submissions at the end of the hearing. I limited the time each party had to make closing submissions to 10 minutes, because of the lateness of the day by the time evidence concluded. Mr Mahmood was concerned that the claimant had put in written submissions before the start of the hearing (the claimant’s Note for the Final Hearing) whereas the respondent had not. I therefore gave both parties the opportunity to make further closing submissions in writing, an opportunity both parties took.
Findings of Fact
[10]The claimant began her employment with the respondent on 17 August 2021. She was initially employed as a paralegal under a contract dated 28 July 2021. Her salary was £26,000.[11]On 7 October 2021 Ms Sheata Karim, senior partner, wrote to the claimant offering her a trainee solicitor role. She was subsequently employed as a trainee solicitor. Her job title changed, but all other terms and conditions of her employment contract (including her salary) were said to be unchanged.[12]Ms Karim’s letter of 7 October 2021 also said that the respondent would pay the examination fees for the Solicitors Qualifying Examination (SQE) provided that the claimant continue to work for the respondent for a period of time after she had qualified. The period of retention would be specified in a new employment contract that would be issued to closer to the time she qualified as a solicitor (CB/73).[13]The claimant wrote to the respondent on 8 October 2021 in response to this letter, seeking a salary review (RB/96).[14]Ms Karim wrote to the claimant on 11 October 2021 with a further version of her letter of 7 October, revised to take account of the claimant’s letter (RB/98-99). This version of the letter (unlike the earlier version) said that there would be a salary review in January 2022. It said: “I further confirm that Grayfords will fund the examination fees for the SQE, on the condition that you remain working at the firm for a specified period of time upon qualification, which will also qualify you for an increase of your hourly rate and therefore a guaranteed salary rise. We discussed that there can be a provision for you to leave earlier upon repayment of your fees. Closer to the time, we will issue you with a new employment contract, which sets out the terms and conditions for Grayfords paying your examination fees and period of retention time at the firm post qualification.”[15]It also said: “ … you will be entitled to ‘study leave’ allowing you to prepare and attend the SQE exams.”[16]On 12 October 2021, the claimant accepted the offer made in the letter of 11 October, by signing it (RB/99).[17]The claimant says that prior to 12 October 2024 she and Ms Karim agreed that the respondent would pay the claimant’s SQE examination fees and study materials (including SQE1 books and a course), that she would have study time of one full day a week during work hours and that her salary would be the market rate for in London for trainee solicitors and that the period of retention would be determined in the future (claimant’s witness statement, paragraph 9). I do not accept that this was agreed. It goes well beyond what is set out in the letter, and the best evidence of what was agreed prior to 12 October 2024 is the letter of 11 October 2024 itself, which was changed to reflect requests made by the claimant, and which both parties signed.[18]The respondent paid for the claimant’s SQE books, which were ordered on 8 November 2021 (CB/75).[19]The claimant’s salary was increased with effect from 1 January 2022 to £28,000 (RB/101).[20]The claimant says that this increase was lower than she had expected and that she and Ms Karim agreed orally that the respondent would pay her examination fees without the claimant being committed to a period of retention (Claimant’s witness statement, paragraph 21). Having heard the oral evidence of both the claimant and Ms Karim I am not satisfied, on the balance of probabilities, that this was agreed. The letter of 11 October 2021 was not revisited, and there is no evidence that the claimant asked that it should be revisited.[21]The respondent paid £1,558 for the claimant’s SQE1 examination, the relevant invoice being dated 17 March 2022 (RB/198).[22]The claimant was paid a discretionary bonus of £1,000 on 5 August 2022.[23]The SQE exams were postponed to August, and following technical difficulties with the exams, the fees of £1,558 paid by the respondent were refunded to the respondent.[24]On 15 September 2022 Ms Karim wrote to the claimant. Her letter refers to the Qualified Lawyers Transfer Scheme (QLTS) course, which is preparation for the SQE2 examinations. Ms Karim said: “… further to Grayfords funding the examination fees for the SQE and the materials to prepare for SQE1, we now agree, as per your request, to fund your preparation for SQE2 by booking the QLTS basic course for £1,690 under the condition that you will be attending the course outside of working hours, apart from 1 hour studying time each morning. As previously agreed, all the above is binding on condition that you remain working at the firm for 12 months post qualification. We discussed that there can be a provision for you to leave earlier upon repayment of SQE fees, preparation materials and any courses booked and paid by Grayfords in relation to SQE.” (RB/109.)[25]The claimant sent an email on 21 September 2022 in which she said that it was previously agreed that only the exam fees would have to be repaid and not preparation materials and courses. She said that her understanding had been that all costs except the exam fees would be paid outright by the respondent. She also said that it was difficult for her to sign a 12-month retention period on her existing salary as well as being liable for these costs (RB/112).[26]On 5 October 2022 the claimant received her SQE1 exam results and had failed the first attempt.[27]On 6 October 2022 the claimant and Ms Karim met. Ms Karim said that the claimant’s results changed nothing and that Grayfords would continue to support her SQE in the way they had done to date (claimant’s witness statement, paragraph 42).[28]I cannot infer on that basis that the respondent agreed in this meeting to support her SQE without the need for a retention agreement. Paragraph 43 of the claimant’s witness statement contains legal analysis rather than evidence about what Ms Karim said. Having had the benefit of having heard oral evidence from both the claimant and Ms Karim, and taking into account the contemporaneous documents, I am not satisfied on the balance of probabilities that Ms Karim agreed in the meeting of 6 October 2022 to fund the claimant’s fees regardless of whether the claimant agreed to a retention period. I say that having taken into account all of the relevant material in the claimant’s witness statement and not only the paragraphs just mentioned. Further, that Ms Karim said that the claimant’s results changed nothing and Grayfords would continue to support her SQE in the way they had done to date is consistent with the agreement of 12 October (that the respondent would pay the claimant’s SQE fees on condition that she remain at the firm for a period post qualification) remaining in place.[29]On 7 October 2022 the claimant booked onto SQE exams (CB/80).[30]On 13 October 2023 the respondent paid £1,980 for the claimant’s SQE2 course (RB/199).[31]On 10 November 2022 the claimant asked for the SQE exam invoice to be paid today, and Ms Karim replied that it should not be paid today (CB/82-83).[32]On 10 November 2023 the claimant paid £1,622 herself to re-sit the SQE1 exams (RB/202).[33]On 15 November the claimant and Ms Karim met in person. A note was taken by Linda Hayes. The claimant had suffered a recent family bereavement and had been asked if she wanted to reschedule the meeting. She had declined. The claimant said “I have realised that I should have spoken to you in person I just assumed that it was all agreed before”. The claimant’s having said “I just assumed that it was all agreed before” (which the claimant agrees having said) undermines her case that it had been agreed on 6 October 2023 that her fees would be paid regardless of whether or not she committed to a retention period. If that had been agreed, there would have been nothing else to discuss and no need to speak again to Ms Karim.[34]Ms Karim replied that it was not agreed as the claimant had needed to sign a retention period and she was not happy to sign. She said that nothing had changed in terms of the claimant’s employment, and that “I have made a decision that I will not pay for your SQE going forward but everything that Grayfords paid so far, you do not need to pay back if you decide to leave” (RB/118). Towards the end of the meeting Ms Karim read out the letter of 11 October 2021 and asked the claimant if she was trying to challenge the letter. The claimant replied “Not at all” (RB/119).[35]The claimant was asked to agree to a 12-month retention period in writing. She was not however offered a new employment contract at the same time, and the letter of 15 September 2022 did not refer to a guaranteed salary rise when she qualified. The claimant was not willing to agree to a 12-month retention period in the absence of an agreement as to what her salary post qualification would be. So the claimant did not sign the letter of 15 September 2022 to accept the terms outlined in the letter. Once it was clear that the claimant would not agree in writing to a 12-month retention period, the respondent was not willing to continue paying SQE fees.[36]The claimant resigned on 17 November 2022, giving three months’ notice.[37]The claimant sent a grievance email on 4 January 2023 at 18:02 (CB/93). This did not refer to fees not having been paid.[38]A grievance meeting took place on 5 January 2023, which was recorded. The claimant said that she agreed to sign a retention agreement, but asked for some expectation to be given in terms of salary and what the retention agreement would look like. She continues that Grayfords were unable to give her those expectations. The transcript continues “So we agreed that we can sign a retention agreement” (RB/178, transcript number 256). There is a dispute between the parties about whether the transcript is accurate. The respondent says that the transcript is accurate. The claimant says that it is not accurate and that what she said that that couldn’t sign a retention agreement. The parties each said that they were happy for me to listen to the short portion of the recording that had been sent to the Tribunal, and for me to treat it as evidence. In my judgment the transcript is accurate i.e. that claimant said that she could sign a retention agreement. I consider that this passage of the transcript is accurate and, read as a whole, undermines the claimant’s case that there was an oral agreement on 6 October 2022 that the respondent would pay her fees even if she did not sign a retention agreement.[39]The grievance meeting ended early because connections problems led to difficulties with the claimant hearing and being heard. On 7 February 2023, in the context of discussions about the timing of the resumed grievance meeting, the claimant asked for her grievance to be addressed in writing.[40]The claimant sent a detailed letter regarding her grievance on 9 February 2023 (RB/143-146) This did not refer to her fees not having been paid.[41]On the same day, 9 February 2023, the respondent responded to her grievance.[42]Clause 26.1 of the claimant’s contract of employment states: “On the termination of the Employment (however arising) or at the reasonable request of the Firm at any time the Employee shall immediately return to the Firm:• All Firm credit cards, security cards, and other property of, or relating to, the business of the Firm in his/her possession or under his/her power or control.” (RB/90)[43]The respondent’s letter of 9 February 2023 required the claimant to return the firm’s property comprising of laptop, telephone, and the full set of office keys including fob and alarm fob by 14 February 2023.[44]The respondent booked a courier to collect the respondent’s property from the claimant’s home on 17 February 2023. The respondent returned the laptop and phone but did not return the fob.[45]The claimant came to the respondent’s offices on 7 March 2023 (accompanied by the police) and collected her property. The claimant did not however return the fob. On the same day the claimant informed ACAS that the fob would be left with her concierge for the respondent to collect at any time it wished by courier.[46]The respondent paid £35 plus £7 VAT (i.e. £42) to replace the claimant’s key fobs: invoice dated 22 May 2023 (RB/200).
The Law
[47]Article 3 of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994/1623 (‘the Order’) provides that proceedings may be brought before an employment tribunal in respect of a claim by an employee for damages for breach of a contract of employment or any other contract connected with employment, providing that the claim is not one to which article 5 applies, and the claim arises or is outstanding on the termination of the employee's employment. (Article 5 of the Order does not apply to the claimant’s claim, as the respondent rightly concedes.)[48]Article 8 of the Order sets out the circumstances in which an employment tribunal can entertain a complaint in respect of an employer’s contract claim.[49]Section s. 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 concerns the effect of a failure to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures. In proceedings before an employment tribunal relating to a claim by an employee under the jurisdiction conferred by the Order, if it appears to the tribunal that the claim to which the proceedings relate concerns a matter to which the ACAS Code of Practice on Disciplinary and Grievance Procedures applies, the employer has failed to comply with that Code in relation to that matter, and that failure was unreasonable, the tribunal may, if it considers it just and equitable in all the circumstances, increase any award it makes to the employee by no more than 25%.[50]An agreement to agree will not be a binding contract if its terms are so uncertain that they cannot be enforced.[51]An agreement between two parties to enter into an agreement in which some critical part of the contract matter is left undetermined is no contract at all: May & Butcher v R [1934] 2 K.B, HL. In an employment context, Minter v Julius Baer Investment Management Inc London [2004] EWHC 2472 (Ch) paragraph 76 states that “A purported contract which incorporates certain specific terms but also purports to incorporate others which still remain to be “worked out” and agreed is not something which can be regarded as amounting to a contract at all. It is no more than an agreement to agree”. An agreement which lays down criteria for determining matters which are left open may however be binding: Openwork Ltd v Forte [2018] EWCA Civ 783, CA, at [24]–[28], [30]–[33]. Further, an agreement is not incomplete where it provides machinery for resolving the matters left open: Anderson v London Fire and Emergency Planning Authority [2013] EWCA Civ 321, CA.[52]The claimant relies on course of dealing principles. If two parties have made a series of similar contracts each containing certain conditions, and they make another one without expressly referring to those conditions, it may be that those conditions ought to be implied. Conditions will not necessarily be incorporated into a contract by reason of the fact that the parties have, on previous occasions, dealt with each other subject to those conditions: McCutcheon v David MacBrayne Ltd [1964] 1 W.L.R. 125, HL. But they may be incorporated by a “course of dealing” between the parties where each party has led the other reasonably to believe that they intended that their rights and liabilities should be ascertained by reference to the terms of a document which had been consistently used by them in previous transactions: Provimi France SAS v Stour Bay Co Ltd [2022] EWHC 218 (Comm). (See Chitty on Contracts, 35th edition, 16-015.)
Conclusions
[53]Was a binding contract formed as to the payment of SQE fees? And if there was a binding contract regarding the payment of SQE fees, did the respondent breach it?[54]The claimant’s employment contract as a trainee solicitor was, except for her job title, the same as her earlier contract as a paralegal. It did not mention SQE fees.[55]There may however have been another contract connected with the claimant’s employment regarding the payment of SQE fees. The starting point is obviously the agreement recorded in the letter of 11 October 2021, which both parties signed. This said that the respondent would fund the claimant’s examination fees for the SQE, on condition that she remain at the firm after she qualified “for a specified period of time”. However the period of time was not specified. It also said that working at the firm post qualification would qualify the claimant for a “guaranteed salary rise”, although the amount of the increase in salary was not specified. It was also explicitly envisaged that there “can” be a provision for the claimant to leave before the end of the retention period, subject to her repaying her SQE examination fees. There was not yet any such provision because it was explicitly envisaged that the respondent would provide the claimant with a new employment contract, which would set out the terms and conditions for the respondent paying the SQE examination fees, and which would specify the length of the retention period. A contract cannot simply be “issued”. It has to be agreed. So this was an agreement to agree. Critical parts of the contract were left undetermined: how long the period of retention would be; by how much the claimant’s salary would increase on qualification; and what provision there would be allowing the claimant to leave before the end of the retention period if she repaid the SQE examination fees. There were no criteria for determining these matters and no machinery for resolving them. This was, then, an agreement to agree and not a binding contract.[56]The claimant says that the letter of 11 October 2021 was supplemented or varied by an oral agreement that her SQE fees would be paid without her entering into a retention agreement. For the reasons given above, I am not satisfied on the balance of probabilities that there was any such agreement.[57]The claimant also says that there was a course of conduct which supplemented or varied the agreement recorded in the letter of 11 October 2021. The respondent paid for her SQE books in or shortly after November 2021, her SQE1 examination fees in or shortly after March 2022 and her QLTS course fees in October 2023, in each case without there being a retention agreement in place. But this is not a case of a series of similar contracts containing certain conditions followed by another contract which does not explicitly refer to those conditions.[58]Further, even if the agreement recorded in the letter of 11 October 2021 had been a binding contract regarding the payment of SQE fees, the respondent did not breach it. The agreement was explicitly that the respondent would pay SQE fees provided that the claimant remained at the respondent post qualification. The claimant resigned before she had qualified, and so did not remain at the firm for a period post qualification.[59]The claimant’s claim for damages in respect of SQE fees fails.[60]The issue of remedy therefore does not arise. For completeness, however, the claim for an ACAS uplift would have failed even if the claimant’s claim for breach of contract had succeeded. The claimant was not subject to a disciplinary process in respect of her complaint that her SQE fees had not been paid (as she conceded in cross examination). And her grievance did not relate to the failure to pay her SQE fees. The breach of contract claim to which these proceedings relate therefore does not concern a matter to which the ACAS Code of Practice on Disciplinary and Grievance Procedures applies. That is, s. 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 would not have applied even if the claimant’s claim for breach of contract had succeeded.[61]The respondent’s breach of contract claim in respect of fees for the QLTS course fees also fails. The letter of 11 October 2021 was agreed but there was merely an agreement that, when the claimant’s new employment contract was agreed when she became a solicitor, there could be a provision enabling the claimant to leave before the end of the as yet unspecified retention period, if she repaid her SQE fees. The letter of 15 September 2022 envisaged that there could be similar provision regarding the repayment of course fees. But the claimant did not agree to this letter, and even if she had agreed to this letter, there was never in fact a new employment contract requiring repayment of the LQTS fees. There was no contract requiring the repayment of the QLTS fees.[62]The respondent’s breach of contract claim in respect of the key fob succeeds. The claimant’s contract required her to return the respondent’s property on the termination of her employment and at the reasonable request of the respondent at any time. The claimant’s employment came to an end, and the respondent’s letter of 9 February 2023 was a reasonable request that she return the respondent’s property. She was contractually required to return the fob. The claimant failed to return it. The respondent paid £42.00 to replace it. So the claimant should pay the respondent £42.00 as damages for breach of contract in respect of the key fob.
Conclusions
[1]The claimant shall pay to the respondent costs in the sum of £ 410.00.[2]The claimant’s application for a preparation time order is dismissed.
Conclusions
[1]Following a one-day full merits hearing on 14 February 2024, the Reserved Judgment dated 13 March 2024 was sent to the parties on 22 March 2024. I dismissed the claimant’s complaint of breach of contract in respect of SQE fees, dismissed the respondent’s complaint of breach of contract in respect of QLTS course fees, and upheld the respondents complaint of breach of contract in respect of the claimant’s failure to return a key fob. The claimant was ordered to pay the respondent £42.00 as damages. The respondent applied for costs on 4 April 2024.[3]On 11 April 2024, at my request, the Tribunal Office wrote to the claimant inviting her to give reasons why the application for a costs order should not be granted, by 30 April 2024.[4]The claimant’s response to the costs application was sent to the tribunal on 29 April 2024. The claimant annexed to her response a small number of documents.[5]On 14 May 2024 I received a copy of the claimant’s application for a preparation time order. The application had been sent to the tribunal on 17 April 2024.
Background
[6]The claim was presented on 7 March 2023, alleging breach of contract and detriment suffered for asserting employment rights. The response included an employer’s contract claim for QLTS course fees and failure to return a key fob.[7]A preliminary hearing took place before EJ Elliott on 25 May 2023. Much of the hearing was taken up discussing and identifying the issues in the case. EJ Elliott recorded that the respondent had given the claimant a costs warning. Directions were made. In particular each party was to send the other a list “a list of all documents that they wish to refer to at the final hearing or which are relevant to any issue in the case”. The parties were to exchange witness statements on or before 14 September 2023. The complaint of detriment was dismissed following withdrawal by the claimant. A full merits hearing was listed for one day on 28 September 2023.[8]On 23 August 2023 the respondent’s contract claim was accepted. EJ Elliott directed that the original claim and the employer’s contract claim would be heard together, and that the case remained listed for hearing on 28 September 2023.[9]Disclosure took place. In particular, the parties exchanged written records of a meeting on 22 November 2022. However the claimant did not disclose the existence of the covert recording of that meeting, from which her written document had been prepared, until 19 September 2023, after the accuracy of her written record was challenged, and after the respondent’s evidence had been finalised. She then delayed sending the recording to the claimant on the basis that she intended to exhibit the recording to her witness statement.[10]On 19 September 2023, the claimant applied for a postponement of the hearing on 28 September 2023. Her grounds were that she was unable to secure legal representation and her health situation had deteriorated and she had been advised to have an urgent MRI scan. At 11:41 on 19 September 2023 the claimant asked the respondent to confirm when they would be in a position to exchange statements, but at 15:26 the same day she emailed the respondent saying that they would have seen her email to the Tribunal regarding a postponement and that she was at this stage unsure whether she would be in a position to exchange witness statements at 4 pm on 21 September for health reasons (claimant’s bundle, p.22). The claimant did not mention to the Tribunal that her witness statements were not yet ready for exchange.[11]On 21 September 2023, in a two page letter headed postponement application the claimant said that she only became aware on 19 September that the Free Representation Unit would not be able to find her a representative. With respect to her health she said that “This is ultimately a private matter though my doctor can provide a letter if absolutely necessary” (claimant’s bundle p. 16-17).[12]Also on 21 September 2023, the claimant responded to the respondent’s application for her claim to be stuck out and applied for the response and counterclaim to be struck out and/or for a deposit order. The application was seven pages long and supported by a bundle of 36 pages (claimant’s bundle p. 23-66).[13]Also on 21 September 2023, the respondent sent the claimant their witness statements (password protected). The claimant did not send the respondent her witness statements.[14]On 26 September 2023 EJ Adkin refused the first postponement request with the following reasons: “The Claimant has had notice of the hearing for months. I am not satisfied that a further delay is likely to lead to her being able to obtain legal representation. As to the medical grounds, I have not got medical evidence before me from a medical practitioner which suggests that the Claimant is unable to participate in the hearing, giving a timescale in which it would be realistic to list a postponed hearing.”[15]Following this, on 26 September 2023, the respondent sent the claimant the passwords to its witness statements.[16]On 27 September 2023 the claimant sent a second application for a postponement of the final hearing listed the next day. This stated that she had now been offered an appointment for an urgent MRI scan on the day of the hearing, which she needed to attend. She sent supporting medical evidence to the Tribunal but not to the respondent: a letter from her GP and confirmation of her appointment letter for her MRI brain scan. She said that as the documents contained confidential patient information she had forwarded them to the Tribunal Judge marked as strictly private and confidential. These documents have since been made available to the respondent and are in the claimant’s bundle at page 106 and following. Her GP’s letter, dated 27 September 2023, stated that she was currently suffering gastrointestinal problems, chronic anaemia causing fatigue and visual problems. This letter specifically stated - and I accept - that she was not physically or mentally well enough to attend the Tribunal on 28 September 2024.[17]The Tribunal wrote to the parties on 27 September 2023 stating that the second application for a postponement would be dealt with at the start of the hearing on 28 September 2024.[18]The respondent’s representative and the respondent’s witnesses attended the hearing. The claimant did not. She attended her appointment for an MRI head scan at 12:30 at Croydon University Hospital. As I have said, I accept that she was not physically or mentally well enough to attend the Tribunal on 28 September 2024[19]EJ Knowles postponed the final hearing. EJ Knowles said in the record of the hearing on 28 September 2023 that “The Claimant should be aware of the risk she faces in respect of costs, particularly in the light of the situation in relation to statements” (paragraph 50).[20]In accordance with EJ Knowles’ Case Management Order, the claimant provided a response to that Order on 12 October 2023. She said that her statements had been essentially ready but time had been lost leading up to the deadline due to various faults on the respondent’s part (paragraph 45, respondent’s bundle, p. 223). Attached to her response is a letter from her GP dated 2 October 2023 (claimant’s bundle, p. 225) which now stated that as a result of her significant health issues she was currently not physically or mentally well enough to attend the tribunal “and it has also meant that she has felt too unwell to prepare for the tribunal”.[21]In accordance with EJ Knowles’ Case Management Order, the respondent provided a response to that document on 19 October 2023.[22]The claimant has been a litigant in person throughout these proceedings. At the full merits hearing her father presented her case. However prior to these proceedings she had completed the Bar Professional Training Course, and was employed by the respondent as a trainee solicitor. She is not an employment law specialist. She has now qualified as a solicitor.
The Law
[23]Rule 76(1) and (2) of the Employment Tribunal Rules state:(1) A Tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that— (a) a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; (b) any claim or response had no reasonable prospect of success; or (c) a hearing has been postponed or adjourned on the application of a party made less than 7 days before the date on which the relevant hearing begins.(2) A Tribunal may also make such an order where a party has been in breach of any order or practice direction or where a hearing has been postponed or adjourned on the application of a party.[24]Rule 77 states: A party may apply for a costs order or a preparation time order at any stage up to 28 days after the date on which the judgment finally determining the proceedings in respect of that party was sent to the parties. No such order may be made unless the paying party has had a reasonable opportunity to make representations (in writing or at a hearing, as the Tribunal may order) in response to the application.[25]Rule 84 states: In deciding whether to make a costs, preparation time, or wasted costs order, and if so in what amount, the Tribunal may have regard to the paying party’s … ability to pay.[26]The following propositions may be derived from the case law: a) In the Tribunal costs orders are the exception rather than the rule. The Tribunal's power to order costs is more sparingly exercised and is more circumscribed by the Tribunal's rules than that of the ordinary courts (Yerrakalva v Barnsley Metropolitan Borough Council and anor 2012 ICR 420, CA). b) There are three stages in the exercise when an Employment Tribunal considers an application for a costs or time preparation order. The Tribunal must(i) consider whether one of the preconditions for making such an order in Rule 76 has been established;(ii) consider whether the Tribunal should exercise its discretion to make an award of costs: and(iii) assess the amount of any award. (Abaya v Leeds Teaching Hospital NHS Trust UKEAT/0258/16 EAT.) c) The preconditions in Rule 76 are the same whether a party is represented or not. However, it is appropriate that litigants in person usually should be judged less harshly in terms of their own conduct than those who are professionally represented: AQ Ltd v Holden [2012] IRLR 648, EAT. d) The term ‘vexatious’ has the meaning given by Lord Bingham in Attorney General v Barker [2000] 1 FLR 759 QBD at paragraph 19 (and cited with approval in Scott v Russell [2013] EWCA Civ 1432 CA at paragraph 30): “...the hallmark of vexatious proceedings is in my judgment that has little or no basis in law (or at least no discernible basis); that whatever the intention of the proceeding may be, its effect is to subject the defendant to inconvenience, harassment and expense out of all proportion to any gain likely to accrue to the claimant; and that it involves an abuse of the process of the court, meaning by that a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process.” e) “Unreasonable” has an ordinary, everyday, objective, meaning: Dyer v Secretary of State for Employment EAT 183/83. f) In McPherson v BNP Paribas [2004] ICR 1398 CA, at paragraph 40, Mummery LJ said this: “ … the tribunal must have regard to the nature, gravity and effect of the unreasonable conduct as factors relevant to the exercise of the discretion, but that is not the same as requiring [the applicant for costs] to prove that specific unreasonable conduct by the applicant caused particular costs to be incurred. … the tribunal's discretion [is not limited] to those costs that are caused by or attributable to the unreasonable conduct of the applicant.” g) In Yerrakalva v Barnsley MBC [2012] ICR 420 CA, at paragraph 41, Mummery LJ gave further guidance on the correct approach: “The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the Claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had. The main thrust of the passages cited above from my judgment in McPherson's case was to reject as erroneous the submission to the court that, in deciding whether to make a costs order, the employment Tribunal had to determine whether or not there was a precise causal link between the unreasonable conduct in question and the specific costs being claimed. In rejecting that submission I had no intention of giving birth to erroneous notions, such as that causation was irrelevant or that the circumstances had to be separated into sections and each section to be analysed separately so as to lose sight of the totality of the relevant circumstances”. h) The test for reasonable prospects of success is whether the claim or defence had no reasonable prospect of success, judged based on the information that was known or reasonably available at the start of proceedings. The mere existence of factual disputes in the case, which could only be resolved by hearing evidence and finding facts, does not necessarily mean that the tribunal cannot properly conclude that the claim had no reasonable prospects from the outset, or that the claimant could or should have appreciated this from the outset. That still depends on what the claimant knew, or ought to have known, were the true facts, and what view the claimant could reasonably have taken of the prospects of the claim in light of those facts: In Radia v Jefferies International Ltd UKEAT/0007/18 EAT, paragraphs 67 and 69. i) For the purposes of Rule 76, each separate statutory cause of action is a complaint. The correct approach is therefore to assess whether each separate statutory cause of action has no reasonable prospects of success: Opalkova v Acquire Care Ltd EA-2020-00345-RN, EAT, paragraph 15. j) Costs awards are compensatory, not punitive: Lodwick v Southwark London Borough Council [2004] ICR 884, CA. k) Under Rule 84 of the ET Rule, the tribunal may, but is not obliged to have regard to the paying party’s ability to pay in deciding the mount of any costs order. A tribunal had, however, to act judicially in deciding not to do so and if it chose not to have regard to means it should have a reason for doing so and say what the reason was. However, where the costs award may be substantial, the tribunal must proceed with caution before disregarding the paying party’s means: Doyle v North West London Hospitals NHS Trust [2012] ICR D21, EAT. l) If there is a realistic prospect that the claimant might at some point in the future be able to afford to pay a substantial amount, it is legitimate to make a costs order in that amount so that the respondent is able to make some recovery when and if that occurred: Vaughan v Lewisham LBC [2013] IRLR 713, EAT. Analysis and Conclusion[27]Both the respondent’s application for costs and the claimant’s application for a preparation time order were made within the period of 28 days after the judgment finally determining the proceedings.[28]The respondent seeks costs in the amount of £2719.53. The claimant had the opportunity to make written representations before I decided whether or not to make a costs order.[29]The claimant seeks a preparation time order in the amount of £2,665.00 The respondent did not have the opportunity to make written representations in respect of the claimant’s application for a preparation time order time. Having reviewed that application I was not minded to make a preparation time order and providing the respondent with the opportunity to respond would have increased costs and been disproportionate. Rule 76[30]The respondent argues that the claimant’s claim for breach of contract had no reasonable prospects of success. My assessment is that a hearing with oral evidence was required to determine that claim. Judging the reasonable prospects on the basis of the information that was known or reasonably known at the start of the proceedings, I do not consider that the claimant’s breach of contract claim had no reasonable prospects of success.[31]The claimant completed the Bar Professional Training Course and was employed by the respondent as a trainee solicitor before the events in issue. She is not an ordinary litigant in person.[32]The claimant failed to disclose the existence of the covert recoding until 19 September 2023. That was a breach of the Tribunal’s orders – which required disclosure of all documents relevant to the issues in the case. It was also unreasonable. Someone who was already legally qualified and had worked as a trainee solicitor should have understood that her disclosure obligations extended to all documents relevant to the issues and not only to documents which she planned to rely on. Only when a dispute arose about the competing written records of the meeting arose did she disclose its existence, and even then she said that it would be exhibited to her witness statement and seems to have thought that that would be sufficient. It is no answer that the claimant had disclosed the written record of the meeting that she planned to rely on, or that she did not initially plan to rely on the recording itself. (The claimant continues to argue that since she had disclosed her written record of the meeting, she did not fail to comply with her disclosure obligations regarding the recording. That is incorrect.)[33]The claimant applied on 19 September 2023 for a postponement of the full merits hearing on 28 September 2023. She considered whether or not to supply medical evidence, but decided not to. On 21 September 2023 (7 days before the hearing) she said that “This is ultimately a private matter though my doctor can provide a letter if absolutely necessary”. When the tribunal rejected her application, stating that it was not supported by medical evidence, she was able to obtain medical evidence which stated in terms that she was not well enough to attend the hearing. The failure to obtain medical evidence earlier was unreasonable. In saying this I take into account the fact that the claimant is legally qualified and could not reasonably have expected the tribunal to postpone the hearing without evidence to support her assertions. Had she obtained medical evidence earlier it may very well be that the respondent would have been spared the expense of attending the hearing on 28 September 2023.[34]The claimant failed to send the respondent her witness statements on 21 September 2023. This was a breach of the deadline in the Tribunal order, as extended by the parties agreement, and also unreasonable. The GP’s letter of 2 October 2023 states that her significant health issues had meant that “she has felt too unwell to prepare for the tribunal”. However the claimant has told the tribunal that her statements had been essentially ready. Further, she was well enough to do significant work on her case on 21 September 2023. She prepared a two page letter in support of the postponement application she had made two days earlier, and prepared a carefully crafted seven page response to the respondent’s application for her claim to be stuck out and application for the response and counterclaim to be struck out and/or for a deposit order, supported by a bundle of 36 pages. She was not too ill to finalise her witness statements on 21 September 2023, but chose to concentrate on other matters.[35]When the claimant did obtain medical evidence, she sent it to the Tribunal but did not did not share it with the respondent. That was unreasonable (and ultimately she has had no objection to sharing a lightly redacted version of that evidence with the respondent). The claimant says that it was unreasonable of the respondent not to accept the need for an adjournment despite knowing that she was unwell and unable to attend. Given that the respondent did not have sight of her medical evidence either before or indeed at the hearing on 28 September 2024, I do not accept that. As I have said, it was unreasonable of the claimant not to send her medical evidence to the respondent prior to the hearing on 28 September 2023 (or a redacted version of it), when she sent it to the Tribunal.[36]The failings in respect of disclosure and exchange of witness statements are significant and serious and that is so despite the fact that they did not prevent the respondent ultimately succeeding. They clearly caused the respondent expense in e.g. pursing the disclosure issue. The respondent attended a hearing which may very well have been postponed had the claimant obtained medical evidence in a timely manner. The respondent was also put to the expense of preparing written submissions after the hearing on 28 September 2024, addressing the disclosure issue and the sequential exchange of witness statements. Time was spent at the beginning of the full merits hearing which took place on 14 February 2024 on the issue of whether a fair trial was still possible, given the history in respect of disclosure and witness statements (see the Judgment dated 13 March 2024 at paragraph 8).[37]The claimant argues that the employer’s contract claim had no reasonable prospects of success. In fact it succeeded, in respect of the failure to return the key fob. And focusing on the part of the employer’s breach of contract claim that related to QLTS course fees, by the end of the full merits hearing this was pursued without much vigour and the respondent made clear that it could succeed only if I made findings supportive of the claimant’s case. But my assessment is that a hearing with oral evidence was required to determine that part of the claim, and that it was not unreasonable to bring the claim in the first place. Judging the reasonable prospects on the basis of the information that was known or reasonably known at the start of the proceedings, I do not consider that the breach of contract claim had no reasonable prospects of success.[38]The claimant makes a number of assertions about the conduct of the respondent and its representative in her application for a time preparation order which, on the material before me, I consider to be mere assertion. I have not seen correspondence from the respondent which I consider to have been unreasonable or vexatious. There is no evidence before me on the basis of which I could find that the claimant was intimidated into withdrawing her detriment claim. The preliminary hearing on 25 May 2023 was needed to clarify the issues, and not due to the respondent’s intransigence.[39]The claimant’s application for a preparation time order therefore fails.[40]With respect to the respondent’s application for a costs order, I have found that the claimant acted unreasonably in the way that part of the proceedings have been conducted.[41]I must next consider whether to exercise the discretion to make an award of costs, and assess the amount of any award.[42]It is clear from the claimant’s response to the costs application that she understood the three stage process. She gave detailed submissions as to why none of her conduct met the s. 76 threshold and was aware that, should the Tribunal reach a different conclusion, it would need to move onto the next two stages of the exercise i.e. whether the tribunal’s discretion should be exercised in favour of costs and, if so, how much those costs should be. She decided not to address the next two stages of the exercise, requesting that she be able to reserve her right to provide submissions on the final two stages should the Judge decide that the first threshold has been crossed (claimant’s response to the cost application, paragraph 26 & 27). My own assessment is that she has already had a reasonable opportunity to make representations in writing in response to the application for a costs order. On 11 April 2024 the Tribunal Office wrote to the claimant inviting her to give reasons why the application for a costs order should not be granted by 30 April 2024. She did not take the opportunity to address the next two stages, but did not suggest that she had been unable to do so in the time available. Discretion[43]The failings identified above in respect of disclosure and exchange of witness statements are significant and serious.[44]The claimant completed the Bar Professional Training Course and was employed by the respondent as a trainee solicitor before the events in issue. She is not an ordinary litigant in person. She makes the point that she is not an employment law specialist. But none of the failings identified above involve points of employment law. They are general matters regarding e.g. the need to comply with Tribunal orders and disclosure obligations.[45]The claimant was given costs warnings, including by EJ Knowles.[46]In the light of this I consider that it is appropriate to make a costs order. Amount[47]In the light of the respondent’s cost schedule I estimate that the time spent by the respondent’s representative on the disclosure issue and related applications, attending the hearing on 28 September 2023, drafting related submissions on whether a fair trial was still possible, and the time spent on these issues at the hearing on 14 February 2024 to be 10 hours. The representative’s chargeable hourly rate is £41.00. So the total amount should be £410.[48]The claimant had the opportunity to provide details about her means, but chose not to take it. In any event, £410 is not a large sum. The claimant is now a solicitor. Even if she is currently unemployed, there is a realistic prospect that she will in the future be able to afford this amount.