Miss Z E Zaremba v Cawingredients Ltd: 2501060/2016
EMPLOYMENT TRIBUNALS
Case No 2501060/2016
Between
Miss Z E ZarembaClaimantCawingredients LtdRespondent
Before
Employment Judge ArullendranMr E Legard (instructed by Counsel) for claimantMr C Rajgopaul (instructed by Counsel) for respondentDate 24 July 2018
JUDGMENT
on the grounds that they have no reasonable prospect of success.
REASONS
[1]The issue to be determined by this Tribunal was whether to list the claimant’s claims for a full merits hearing or whether they should be struck out on the grounds of having no reasonable prospect of success.[2]The parties provided the Tribunal with a joint bundle of documents consisting of 162 pages. The respondent provided a further authorities bundle consisting of six authorities and an extract from Chitty on Contracts. The claimant provided copies of the decisions in Industrious Limited –v- Horizon Recruitment Limited, Glasgow City Council –v- Dahhn UK EATS/0024/15 and an extract from Chitty on Contracts consisting of pages 285 to 295.[3]The claimant provided a witness statement from Mark Foster of Jacksons Law Firm as the solicitor with conduct of the claimant’s case at the time the parties entered into a settlement agreement (February 2017). Mr Foster attended the Tribunal to affirm his witness statement, however it was agreed by the respondent that the contents of Mr Foster’s statement would be taken as read and there would be no cross examination by the respondent. As Mr Foster’s evidence is not in dispute, I did not require him to affirm his evidence on oath, particularly as he is an officer of the court.[4]The claimant’s representative had requested a number of reasonable adjustments to be made by the Employment Tribunal prior to today’s hearing in order to assist the claimant with her attendance at this hearing. All of the requested adjustments were fulfilled by the Employment Tribunal and I made enquiries of the parties at the beginning of the hearing as to whether the claimant wished to leave the hearing room at the time I would be delivering my Judgment, as she had requested, or whether she would prefer to receive reserved decision in the post so that both parties could receive the decision at the same time. After taking instructions, Mr Legard indicated that the claimant preferred to receive a reserved decision and the respondent had no object to the same.[5]The original hearing which was chaired by Employment Judge Wade was convened to hear the claimant’s claims of unfair dismissal and disability discrimination exactly one year ago, 3 to 17 February 2017. It is common ground that the hearing in 2017 did not continue after 6 February 2017 as the parties had asked Employment Judge Wade to issue a consent Judgment on the basis that the parties has settled the claims, the terms of which were not provided to the Tribunal at that time.[6]It is common ground that Employment Judge Wade issued a consent Judgment in the following terms “these proceedings will stand dismissed without further order on 20 February 2017 unless either parties make prior application” and that the claimant made an application on 17 February 2017 to vary the terms of the consent Judgement and requested that the date for the dismissal of the proceedings to be altered to 13 March in place of 20 February 2017.[7]A copy of the settlement agreement can be seen at pages 42 to 47 of the bundle. At paragraph one of the settlement agreement it states “the respondent agrees to provide and pay, without any admission of liability, and the claimant agrees to accept:1.1 the holding of a discussion (“discussion”)1.2 a verbal apology (“apology”)1.3 the sum of £30,000.00 (thirty thousand pounds) “Sum”; And a written reference (“reference”) in full and final settlement of these proceedings which brings these claims of unfair dismissal, disability discrimination and personal injury…”.[8]At paragraph 2 of the agreement it states that “the discussion will be based on the points set out in the discussion schedule and will be held immediately before the apology. The apology will be given on behalf of the respondent by Richard Harrison at the claimant’s solicitor’s office at noon on 9 February 2017 in the presence of the claimant and Stacey West of Jackson Law Firm only…” Under the section of the settlement agreement with the heading “discussion schedule” the agreement states “to be conducted between the claimant and Richard Harrison only”. The schedule then sets out a number of issues which were to form the basis of the discussion between the parties.[9]The claimant and Mr Harrison from the respondent company attended the offices of the claimant’s solicitor on 9 February 2017, as agreed. However, the discussion did not take place because Mr Harrison insisted that he wanted a third party to be present in the meeting room during the discussion. The claimant’s position was that this was contrary the agreement which had been reached on 6 February that the discussion would be held between the claimant and Mr Harrison only and, following the completion of the discussion, the claimant’s solicitor would enter the room and would remain present whilst Mr Harrison apologised to the claimant.[10]It is clear from the uncontested statement of Mr Foster and the file notes he refers to in his statement, which are reproduced in their redacted form in the Tribunal bundle at pages 49 to 54, that attempts were made to resolve the issue about who should be in attendance during the discussion. It appears that this was a lengthy process which involved Mr Harrison contacting the respondent’s solicitors, and, although Mr Harrison eventually agreed that he would conduct the discussion without a third party being present, the claimant was so upset by the events that she felt unable to conduct the discussion that afternoon and requested that it be rearranged for another day and Mr Harrison was amenable to this.[11]The situation appears to have deteriorated between the parties after the 9 February 2017 as Mr Harrison expressed his reluctance to meet with the claimant without a third party being present and the claimant’s insistence upon the discussion taking place in a meeting room without the presence of a third party and with the door to the meeting room being closed.[12]On 24 April 2017 the respondent’s solicitors applied to the Employment Tribunal to have the claimant’s claims dismissed and the claimant’s solicitor responded by applying to have the claimant’s claims reinstated to be heard at a full merits Hearing. Mr Jamie Morgan of Counsel provided a skeleton argument dated 6 June 2017 on behalf of the claimant and the respondent submitted a reply arguing that the Tribunal had no jurisdiction to hear the claimant’s complaints because they had been compromised in accordance with section 203 of the Employment Rights Act 1996 and section 147 of the Equality Act 2010. The matter came before Employment Judge Garnon on 17 July 2017 and he ordered that a public preliminary hearing be listed for the purposes of determining whether the claim should be struck out or reinstated and this is the matter which comes before me today. A copy of Employment Judge Garnon’s orders can be seen at pages 155 to 260 of the Tribunal bundle.[13]Neither party called any witness evidence before me, with the exception of the written statement of Mr Foster, and both sides presented skeleton arguments, in addition to making oral submissions, the contents of which are not reproduced in full here but have been considered in their entirety.[14]The parties agree that the statutory requirements of section 203 of the Employment Rights Act 1996 and section 147 of the Equality Act 2010 have been complied with and the only argument is whether the settlement agreement entered into by the parties on 6 February 2017 was a valid agreement. The parties agree that the relevant case law that applies is that of Industrious Limited –v- Horizon Recruitment Limited EAT 0478/09 and Glasgow City Council –v- Dahhan EATS/0024/15. It is common ground that, in order for the statutory requirements of settlement agreements to be met, the settlement contract must be enforceable as a matter of common law.[15]I note that the submissions made on behalf of the claimant today differ greatly with those made by Mr Jamie Morgan of Counsel in his skeleton argument of June 2017 and Mr Legard has indicated that he relies upon his own skeleton argument and refers only to paragraph 39 of Mr Morgan’s skeleton argument. I also note that Employment Judge Garnon made some criticisms of Mr Morgan’s skeleton argument in the reasons given for his Order of 17 July 2017 and this may account for the change in the arguments being presented on behalf of the claimant today.
The Law
[16]The claimant relies on paragraph 17 of the Judgment in Glasgow City Council –v- Dahhan with regard to whether the Employment Tribunal can be released from the responsibility of determining a claim before it where a settlement has been reached between the parties. In particular, the claimant relies on the finding that “the significant of that, in my view, is that, absent a qualifying settlement agreement being valid in both form and substance, the Employment Tribunal cannot dismiss the claim on the basis that it has settled”. The claimant also relies on the case of Hennesy –v- Craigmyle and Company Limited and ACAS (1986) IRLR 300, CA in which an argument arose as to whether the Tribunal had jurisdiction to consider if the agreement itself had been made in circumstances which would have rendered it voidable at common law. The Employment Appeal Tribunal proceeded on the assumption that economic duress was a ground capable of rendering a contract voidable. The respondent agrees in submissions that the approach in Hennesy is the correct approach to be followed.[17]The claimant submits that the reasons why a contract can be voidable may be wider than that held in the EAT case of Glasgow City Council –v- Dahhan and that the grounds on which a Tribunal might set aside a settlement agreement are not limited to misrepresentation, economic duress or mistake but can include any other grounds capable of invalidating the agreement. The claimant submits that the four obligations under paragraph 1 of the settlement agreements were interdependent and must be read as a whole and if one of the terms was not fulfilled then the others would fall and therefore the agreement would fail. The claimant submits that further negotiations were required in order to conclude a valid agreement between the parties, such as those set out in the respondents skeleton argument relating to whether the door to the meeting room had to be closed or could be left open or whether somebody could be sitting in view of the open doorway etc., and that this demonstrates that the parties only had an agreement to agree, which is no agreement at all. The claimant submits that the uncertainty regarding the terms for the discussion are such that it renders the agreement between the parties invalid and the Employment Tribunal cannot impose its own terms of reasonableness in order for that discussion to take place.[18]The claimant submits that the respondent’s assertion that the claimant need only return the signed schedule in order to receive the £30,000.00 settlement payment misses the point in that the discussion and the apology were vital elements in the settlement agreement.[19]The claimant submits that to strike out would be an injustice to the claimant as the civil court would not have the ability to adjudicate the discussion between the parties, they would not be able to order specific performance and the claimant could not be compensated in damages for the failure by the respondent to undertake the discussion and the apology which places the claimant in a very difficult position.[20]The claimant submits that the settlement contract is voidable at common law for lack of certainty and requests that the Tribunal set aside the settlement and reinstate the claims to the Tribunal for a full hearing.[21]The respondent submits that the claimant has changed the focus of her submission and that in the written skeleton the focus is on a breach of the terms of settlement and that the oral submissions made by Mr Legard now focus on the uncertainty of the term relating to the discussion and the argument that this makes the contract void or voidable. However, the respondent submits that the claimant has not said what it is that makes the terms surrounding the discussion uncertain.[22]The respondent relies on the extracts at tab seven of the authorities’ bundle which consists of extracts from Chitty on Contracts and submits that the parties’ subjective view must be ignored and the question of whether the settlement agreement is valid is an objective question. The respondent submits that the terms regarding the discussion prior to the apology as part of the settlement are not uncertain in that the discussion is to take place between the claimant and Mr Harrison and can be done in any part of the claimant’s solicitor’s offices. And the additional condition of whether the door remains open or closed during that discussion does not make it uncertain.
Conclusions
[23]The respondent disagrees with the claimant’s submission that the four elements at paragraph one of the settlement agreement are contingent on each other. The respondents submit that the agreement does not say that the four elements are contingent.[24]The respondent relies on paragraph 13-040, page 1036 to 1037 of Chitty on Contracts, which states that a contract will be held to be condition if the nature of the contract or the subject matter or the circumstances of the case lead to the conclusion that the parties must, by necessary implication, have intended that the innocent party would be discharged from further performance of his obligations in the event that the term was not fully and precisely complied with. Otherwise a term of a contract will be considered to be an intermediate term. “Failure to perform such a term would ordinarily entitle the party not in default to treat themselves as discharged only if the effect of breach of the term deprives him of substantially the whole benefit which it was intended that he should obtain from the contract”. The respondent submits that the claimant had not been deprived from substantially the whole benefit of the contract as she could sign and return the schedule to the respondent in order for the £30,000.00 to be paid to her upon receipt of the same. Therefore, the term relating to the discussion is only an intermediate term.[25]The respondent submits that the claimant has misrepresented the basic law of contract in asserting that the settlement contract is voidable at common law because the agreement is conditional upon one party fulfilling a specific condition and has failed or refused to do so. The respondent submits that this is simply wrong and the claimant has not cited any authority for that proposition. The respondent submits that where a particular term or condition in a contract has not been fulfilled that term will constitute a repudiatory breach of contract entitling the innocent party to elect either to bring the contract to an end, or to affirm the contract, and either event leads to a claim of damages. However, it does not make the contract voidable.[26]The respondent submits that all of the cases dealing with the issues in this case, such as Industrious Limited, Dahhan and Hennesy consider whether matters which occurred prior to or at the time of entering into the agreement render the agreement void or voidable at common law (for example a mistake, misrepresentation, economic duress and the lack of legal capacity). Therefore, the respondent submits that the settlement agreement was binding when it was entered into because none of those matters existed in this case at that time which might render it void or voidable. The respondent submits that if the civil courts found that the respondent had committed a repudiatory breach of contract and that the claimant had accepted that breach then the claimant would be discharged from her future obligations, not her past obligations, and therefore the proceedings would have been settled up to the date of the acceptance of the repudiatory breach. The respondent submits that none of the authorities begin to suggest that the provisions of the legislation give the Tribunal jurisdiction to start determining whether a contract settling the dispute, which was binding when it was entered into and is not void to voidable at common law, was subsequently properly performed by the parties and, if it was not, what the consequences of that none performance are. The respondent submit that this would be an enormous and unwarranted extension of the Tribunals jurisdiction because it would have to determine that a valid agreement had been properly entered into and accorded with the statutory requirement but then have to go on to determine how the contract had subsequently been performed and the effects of such a performance.[27]With regard to the claimant’s argument that the contract is voidable at common law for lack of certainty, the respondent submits that this submission is wrong as a lack of certainty in a contract would mean that there was no binding contract at all, not that it was otherwise binding but was voidable. As the parties agree that the settlement agreement complies with the relevant statutory provisions, the respondent submits that this is the end of the matter for the Employment Tribunal jurisdiction and asks that the claims be struck out.[28]In the alternative, the respondent submits that Mr Harrison from the respondent company is not prepared to agree to the additional conditions that the claimant wishes to impose on the discussion but remains ready and willing to conduct the discussion with the claimant alone at the claimant’s solicitor’s offices provided that someone else can see the room. Therefore, the respondent’s submission is that it is the claimant who is in breach, not the respondent. In any event, the respondent submits that the requirement to have a third party who can see into the room where the discussion takes place could not be said to amount to a breach of the settlement agreement, but even if it is, judged objectively, the respondents submits that it is not repudiatory breach and so the claimant’s remedy would be in damages in the civil courts and she would not be discharged from her performance of her other obligations under the settlement agreement and therefore the proceedings would remain settled.
Conclusions
[29]My starting point is the settlement agreement which was drafted and concluded by the parties on 6 February 2017, a copy of which can be seen in the Tribunal bundle at pages 42 to 47. I note that this is the type of agreement which is often seen in the Employment Tribunal and is commonly executed by both employment practitioners and ACAS. It is not uncommon for parties to agree elements in a settlement which cannot be ordered by an Employment Tribunal, such as an apology and or a discussion, nor are they always capable of enforcement by way of specific performance. However, it is often these terms which are more important to one or both parties in comparison to the monetary settlement as it is often these solutions which go to the heart of the matter to be remedied.[30]It is clear to me that the parties in this case intended to reach a settlement on 6 February 2017 in order to bring the Tribunal proceedings to an end, which at that time were to be conducted by a full Tribunal chaired by Employment Judge Wade. There is no question in my mind that the parties intended to enter into a binding agreement with each other and they intended to create legal relations, using professional and qualified representatives to draw up the settlement agreement. It is also clear to me that the parties intended to create a workable agreement and that the individual terms of the settlement agreement were sufficiently clear for the parties to enter into performance of the terms on 9 February 2017 when Mr Harrison attended the claimant’s solicitor’s offices in order to undertake the discussion and provide the apology, as previously agreed.[31]The fact that the discussion did not take place on 9 February, along with the subsequent apology, is, in my view, a separate issue. It does not go to the heart of whether the parties had entered into a valid agreement on 6 February, some three days earlier. It is common ground that the breach of a validly executed agreement is not something that would be actionable in the Employment Tribunal and it is a matter that would have to be enforced through the civil courts.[32]The question, therefore, is whether on 6 February 2017 there was a matter which had the effect of voiding the agreement. The terms of the settlement agreement are clearly set out and I can see no ambiguity on the second page of the agreement relating to the discussion which would be conducted by the claimant and Richard Harrison and, on the first page of the agreement, that Stacey West of Jackson Law Firm would be present at the time that the apology would be given by Mr Harrison to the claimant. Looking at the whole agreement objectively, the settlement agreement was not a contract to make a contract, as submitted by the claimant. This was the final contract setting out the settlement terms between the parties, not an agreement in principle with the terms to be agreed upon at a later date. I find that the fact that there is a dispute between the parties as to the specific performance of the term relating to the discussion does not mean that there was uncertainty in the terms specifically relating to the settlement agreement on this point on 6 February as the term, as it is set out, is capable of being performed and the parties clearly intended to perform in on 9 February 2017 without any further discussion or negotiation. I do not find that it is so vague or uncertain that no definite meaning can be given to it without adding further terms. Looking at it objectively, it is quite clear that the claimant and Richard Harrison were to meet immediately before the apology at the claimant’s solicitor’s offices and that the matters to be covered in the discussion were those set out in the discussion schedule.[33]I agree with Mr Rajgopaul’s submission that the relevant case law deals with matters which occurred prior to or around the time of the settlement agreement was entered into which made it void or voidable and that in such cases the substantive case can be relisted by the Tribunal for a merits hearing. There is no evidence in front of me which suggests that either party was induced into entering the settlement agreement on 6 February 2017 by way of misrepresentation, economic duress, lack of legal capacity or mistake, or indeed any other ground which might render the agreement voidable at common law. As such, the issues which arose in the cases of Industrious Ltd, Dahhan and Hennesy do not arise in this case. The fact that the settlement terms may be interdependent would not render the agreement void or voidable so long as the terms are sufficiently certain, as they are here. Whether or not the terms have been performed goes to the question of breach and enforcement, not whether the agreement is void or voidable.[34]Having made the above findings, I find that the settlement agreement was valid and that all of its terms were clear. Therefore, the settlement agreement dated 6 February 2017 is a contract which is an enforceable contract as a matter of common law, in addition to meeting the statutory requirements for settlement agreements in the Employment Rights Act 1996 and the Equality Act 2010.[35]As such, the failure to carry out the terms set out in section 1.1 of paragraph 1 of the settlement agreement would amount to, prima facie, a breach of contract but this would not render the contract void or voidable as the breach took place after the contract had been validly agreed and entered into by the parties. Therefore, the breach of contract is a matter that does not fall under the purview of the Employment Tribunal, either under the Employment Rights Act 1996 or the Equality Act 2010, and the proper course of action is for the settlement agreement to be enforced through the civil courts.[36]Under the circumstances, I have no option but to strike out the claimant’s claims as having no reasonable prospect of success. EMPLOYMENT JUDGE ARULLENDRAN[1]This hearing was conducted on paper with the consent of the parties, the respondent having made an application for costs and wasted costs in a letter dated 5 March 2018.[2]I have considered the e-mail correspondence from the respondent’s representative dated 5 March 2018 with its enclosures and the e-mail correspondence from the claimant’s representative dated 6 April 2018 with its enclosures. I have also considered the documents and correspondence available on the Employment Tribunal file as referred to in the respondent’s application and the claimant’s reply.[3]The claimant’s application to have her substantive claim reinstated to the Employment Tribunal list for a full merits hearing was struck out on the grounds of having no reasonable prospect of success, in a reserved Judgment dated 21 February 2018, on the grounds that her claims had been compromised in a settlement agreement dated 6 February 2017. The respondent seeks to make three applications for costs, all argued in the alternative- i) The respondent’s costs incurred from 1 February 2017 to the conclusion of the preliminary hearing on 5 February 2018 in the sum of £17,895.10. ii) The respondent’s costs from 17 February 2017 onwards in the sum of £15,170.58. iii) Wasted costs for an unspecified period and for an unspecified sum.[4]The background to the proceedings and the events leading to the preliminary hearing of 5 February 2018 are set out very clearly in the letter from the claimant’s representative in reply to the application for costs, dated 6 April 2018, at pages 1 to 4. I note that the background as set out by the claimant’s representative is both accurate and presented in an objective manner which is in keeping with the overriding objective, whereas the background as set out in the respondent’s application dated 5 March 2018 provides a subjective view, with the writer seeking to promote solely the respondent’s position, rather that setting out a balanced or objective assessment of the proceedings.[5]The facts in this case are that the claimant submitted an application for unfair dismissal and disability discrimination on 24 August 2016 against the respondent company. It is common ground that the claimant has Asperger’s Syndrome and a psychiatric illness which, on occasion, has manifested itself in self harm. The substantive hearing was compromised by the parties on 6 February 2017 and it was agreed between the parties that there would be a discussion between the claimant and Mr Harrison of the respondent company on 9 February 2017, which would then be followed by a verbal apology and the payment of £30,000.00. It was also agreed that the respondent company would provide a reference in the terms set out in the settlement agreement. In light of the settlement agreement between the parties, Employment Judge Wade issued a consent Judgment on 6 February 2017 which stated “these proceedings will stand dismissed without further order on 20 February 2017 unless either party makes prior application.”[6]It is common ground that the discussion between the claimant and Mr Harrison, and the apology which was supposed to have been given after the discussion, did not take place on 9 February 2017 because Mr Harrison initially objected to being in a room with the claimant, without a third party being present, in order to carry out the terms of the agreement relating to the discussion. A copy of the settlement agreement was shown to Mr Harrison and it was pointed out to him that the agreement stated that the discussion was to take place between the claimant and Mr Harrison only and that the claimant’s solicitor would be present at the time the apology would be given by Mr Harrison to the claimant. Mr Harrison spoke to the respondent’s solicitors about the terms of the settlement and he eventually agreed that he would carry out the discussion with the claimant, however, by this point the claimant was extremely distressed and was unable to continue with the discussion and apology that afternoon and it was agreed between the parties that further arrangements would be made for the terms of the settlement to be carried out at a later date.[7]It is common ground that the parties were unable to agree a new date for the terms of the settlement to be carried out and it is the claimant’s position that her representatives were informed by the respondent’s representative that Mr Harrison was extremely reluctant to meet with the claimant alone because he was concerned that the claimant may take steps to harm herself. It is clear from the Tribunal file that an extension was granted for the date by which proceedings would be dismissed in order for the parties to conclude the terms of the settlement agreement and attempts were made by Employment Judge Wade to facilitate a settlement, however it was not possible to arrange mediation between the parties because the claimant did not feel well enough to take part in such a process.[8]The claimant’s representative obtained a risk assessment and a copy of this was sent to the respondent’s representative on 1 March 2017, along with proposed dates and times for the terms of the settlement agreement to be concluded. However, the response from the respondent’s representative stated that Mr Harrison did not wish to be in a room alone with the claimant and that he has concerns for the claimant, as well as his own safety. I note that the claimant’s representative also sought advice from the claimant’s GP in relation to this specific issue.[9]As no arrangements had been made between the parties for the terms of the settlement agreement to be carried out by the end of March 2017, the claimant made an application to the Employment Tribunal on 29 March 2017 requesting for the proceedings to be reinstated to the Tribunal list. This resulted in preliminary hearings to take place on 19 May 2017, 22 May 2017 and 17 July 2017. It is common ground between the parties that the respondent offered an alternative settlement agreement on 7 December 2017 which was an attempt to re-negotiate the original settlement agreement, however, this was not acceptable to the claimant because the written apologies referred to in the later agreement were insubstantial and did not compare with the terms of the verbal apology which had originally been agreed in February 2016. It is the claimant’s position that she continues in her willingness to meet with Mr Harrison in order to carry out the terms of the settlement agreement. It appears to be the respondent’s position that Mr Harrison will not meet with the claimant alone in order to carry out the terms of the discussion and has sought to change the terms of the agreed settlement by suggesting that either a third party is present or the door to the meeting room is left open with a third party having sight of the parties whilst they are taking part in their discussion.[10]The respondent submits that the claimant’s conduct in continuing with her claim, having had her £30,000.00 offer of settlement met by the respondent on 26 January 2017, was unreasonable. The respondent further submits that the claimant’s conduct in challenging the validity and effect of the settlement agreement, the terms and effects of which were clear and in particular in light of the advice on the effect of the warranty given by her, was unreasonable. The respondent also submits that the claimant’s claim from 6 February 2017 onwards, having entered into a settlement agreement, had no reasonable prospects of success and that costs should be awarded on this basis. In the alternative, the respondent submits that, if the claimant seeks to blame her solicitor for some or all of her claim, then it seeks a wasted costs order against the claimant’s solicitors on the ground that their conduct has been unreasonable and/or negligent.[11]The claimant submits that the term “unreasonable” should be given its ordinary meaning as set out in the case of Dyer -v- Secretary of State for Employment UKEAT/183/83; the question to be asked by the Tribunal is whether, in all the circumstances of the case, the claimant conducted the proceedings unreasonably, as set out in the case of McPherson -v- BNP Paribas (London branch) 2004 IRLR 558.[12]The claimant submits that the effect of the claimant’s disability is such that she finds it very difficult to understand how the respondent can breach the terms of the settlement agreement and escape liability. The claimant further submits that the Consent Judgment should be considered in the context of the claimant’s disability and that the wording of the Judgment is not final on any reasonable view and the claimant could not reasonably be expected to know that she would be unable to continue with her claim if the respondent failed to fulfil the settlement terms. The claimant submits that it cannot, on any reasonable view, be said to have conducted her claim unreasonably, taking into account her disability and the respondent’s breach of the settlement agreement, along with the uncertainty created by the Consent Judgment. The claimant submits that, although the Tribunal held that from 6 February 2017 onwards the claimant’s claims had no reasonable prospect of success, this was far from certain prior to the preliminary hearing of 5 February 2018 and it is notable that the respondent did not issue any warning that it would seek costs on the basis that the claims had no reasonable prospect of success from 6 February 2017 onwards and, therefore, the claimant’s belief that her claims had a reasonable prospect of success is understandable.[13]The claimant submits that the costs sought by the respondent before 6 February 2017 are in appropriate as they pre-date the settlement agreement and it is illogical that a party would enter into settlement agreement with the view that the agreed terms would not be legally binding. The claimant submits that the costs the respondent seeks between 6 February and 24 April 2017 can also be distinguished as they cover a period during which the parties were attempting to fulfil the settlement terms.[14]The claimant asks that the Tribunal considers the nature, gravity and effect of the claimant’s conduct in the context of her personal circumstances and the developments in her claim and argues that there is no suggestion that the claimant has acted vexatiously in continuing with her claim. Further, or in the alternative, in the absence of a costs warning letter in respect of the claimant’s claims having no reasonable prospect of success, the respondent’s culpability in failing to carry out the terms of the settlement agreement and the claimant’s inability to pay any costs claimed are other factors for the Tribunal to consider and the claimant submits that the Tribunal should exercise its discretion to withhold from making a costs order against her in this regard.[15]The claimant submits that she has not sought to blame her solicitors and there is no basis for the respondent suggesting that the claimant’s solicitor’s conduct in representing the claimant has been unreasonable and or negligent. The claimant relies on the three-stage test as set out in the case of Ridehalgh -v- Horsefield 1994 EWCA Civ 40 and submits that this application must fall at the first hurdle as the representative has not acted improperly, unreasonably or negligently. The Law[16]Rule 76 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, schedule 1 provides “(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 the proceedings (or part) have been conducted; or(b) any claim or response had no reasonable prospect of success….”[17]I refer myself to the guidance of Gee -v- Shell UK Limited 2002 IRLR 82 in which it was stated that the first principle is that costs in the Employment Tribunal is still the exception rather than the rule. In terms of the procedure to be adopted by this Tribunal, the two-stage process was set out in the case of Kriddle -v- Epcot Leisure Limited 2005 EAT/0275/05:(i) a finding of unreasonable conduct and, separately(ii) the exercise of discretion in making of an order for costs.[18]In the case of Barnsley Metropolitan Borough Council -v- Yerrakalva 2011 EWCA Civ 1255 guidance was given on the question of causation and I refer myself specifically to paragraphs 40 to 42 of that Judgment in which it was decided that the vital point in exercising the discretion to orders costs was 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.[19]I refer to the case of Marler -v- Robertson 1974 ICR 72 in which it was held that the definition of a hopeless claim is where and employee brings a claim not with the expectation of recovering compensation but out of spite to harass the employer or over some improper motive. I note that this is a serious finding to make against an applicant, for it would generally involve bad faith on his or her part and one would expect that discretion to be sparingly exercised.[20]With regard to the application for wasted costs, I refer to Rule 80 of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013, schedule 1, which provides “(1) A Tribunal may make a wasted costs order against a representative in favour of any party (“the receiving party”) where that party has incurred costs(a) as a result of any improper, unreasonable or negligent act or omission on the part of the representative or(b) which, in light of any such act or omission occurring after they were incurred, the Tribunal considers it unreasonable to expect the receiving party to pay. Costs so incurred are described as “wasted costs”.”[21]I refer to the case of Isteed -v- London Brough of Redbridge UK EAT/0442/14 and in particular to paragraph 5 which highlights a three-stage test to be applied when determining whether wasted costs should be contemplated. The test is to ask the following questions(i) has the legal representative of whom the complaint is made acted improperly, unreasonably or negligently?(ii) If so, did such conduct cause the applicant to incur unnecessary costs?(iii) If so, in the circumstances is it just to order the legal representative to compensate the applicant for the whole or any part of the relevant costs?[22]I refer myself to the case of Ridehalgh -v- Horsefield and another (1994) SH205 which sets out the definitions for “improper” and “unreasonable”. In short, improper covers, but is not confined to, conduct which would ordinarily be held to justify disbarment, striking off, suspension from practice or other serious professional penalty and unreasonable is described as conduct that is vexatious, designed to harass the other side while other than advance the resolution of the case.
Conclusions
[23]The starting point in this application is whether the claimant acted unreasonably in making an application the Employment Tribunal for her substantive claim to be reinstated to the Tribunal list after the parties had failed to carry into effect the terms of the settlement agreement. The situation that the claimant found herself in was that she had compromised her substantive claims by entering into a settlement agreement with the respondent on 6 February 2017 with the expectation that the terms of the settlement would be carried into effect on 9 February 2017. However, it was Mr Harrison from the respondent company who initially refused to conduct the discussion in accordance with the terms set out in the settlement agreement and by the time he agreed to meet with the claimant she was unable to take part in the discussion to due to her medical condition. Subsequently, it is clear from the correspondence I have seen between the parties representatives that the claimant has made several attempts to rearrange the discussion meeting, but it is the respondent who has taken the stance that the discussion meeting cannot take place in accordance with the terms set out in the settlement agreement without further conditions being imposed, such as the presence of a third party or the door to the meeting room being left open. I note that the claimant and her representatives have made considerable efforts to facilitate the holding of the discussion meeting by obtaining medical advice and a risk assessment, however the respondent has refused to accept the contents of the risk assessment, preferring to rely on its own subjective opinions without obtaining any medical evidence or carry out a risk assessment of its own. In all the circumstances, the respondent’s position appears to be quite intransigent and offensive as there appears to be no objective basis for Mr Harrison’s view that the claimant or he would be at any risk of harm during the discussion.[24]Having received a copy of the Consent Judgment dated 6 February 2017 from the Employment Tribunal, I find that it was reasonable for the claimant to conclude that she could make an application to the Employment Tribunal before 20 February 2017 if she did not want the proceedings to be dismissed for any reasons. As the terms of the settlement agreement had not been carried into effect and as further discussions between the parties between February and the end of the March 2017 had not resulted in a resolution, I find that it was reasonable for the claimant to make an application for her claim to be reinstated to the Employment Tribunal list for a full merits hearing to take place.[25]The respondent has made much about the availability of the £30,000.00 settlement payment and the fact that it contends that three apologies have been offered to the claimant in writing. However, I understand from what was said at the hearing on 5 February 2018 that the financial settlement was not the most important aspect for the claimant and that the discussion and verbal apology from Mr Harrison were of particular significance, if not more important, to the claimant. Therefore, I find that the respondent’s suggestion that three apologies had been offered to the claimant in writing have no bearing on the breach of the terms of the settlement agreement, particularly as the three alleged written apologies predate the settlement agreement. In the circumstances, I find it was not unreasonable conduct on the part of the claimant to make an application for her claim to be reinstated to the Employment Tribunal list, given that the respondent was trying to renegotiate the terms of the settlement and was referring to matters that predated the settlement agreement in an effort to argue that it had complied with its obligations. Looking at the whole picture of what happened in this case, I find that there has not been unreasonable conduct by the claimant in the brining or the conducting of the case.[26]I note that there is very little case law which deals with the enforcement of settlement agreements, however there is case law which makes it clear that a claim can be reinstated to the Employment Tribunal list for the substantive matter to be heard in full where there has been misrepresentation, economic duress, lack of legal capacity or mistake, or any other ground which might render a settlement agreement voidable at common law. In this case, it was arguable that there might have been a misrepresentation by the respondent which induced the claimant to enter into a settlement agreement if the respondent never had the intention of facilitating a discussion between Mr Harrison and the claimant in the specific terms as set out in the settlement agreement. I note that the arguments raised by the claimant at the hearing on 5 February 2018 were that terms of the settlement agreement were not certain because the respondent had sought to change the way in which the discussion was to be facilitated, i.e. whether a third party should be present and or whether the door to the meeting room had to be left open. It is common ground that such matters cannot be enforced by the civil courts by way of specific performance and, therefore, I find that it is not unreasonable for the claimant to try and argue that the terms of the settlement agreement were not valid, in the circumstances, and request that it be restored to the list for a full merits hearing.[27]Whether an application has a reasonable prospect of success or not must be taken at its highest as first revealed by the application and response. The parties clearly knew that the civil courts could not award specific performance in terms of the discussion between the claimant and Mr Harrison and the apology, plus the respondent was seeking to impose new conditions for the agreed discussion to take place. Under the circumstances, there was uncertainty between the parties from 9 February 2017 onwards in terms of the performance of the terms of the settlement agreement and, therefore, it could not be said that the was no reasonable prospect of success at the time the claimant made the application for her claim to be reinstated to the Employment Tribunal list. For the sake of clarity, I note that the respondent had set out the wrong test by claiming that the claim had no prospect of success, as opposed to no reasonable prospect of success, and this is not what was decided by the Tribunal on 5 February 2018, contrary to what is written on page 3 of the respondent’s application dated 5 March 2018.[28]In all the circumstances, I find that the respondent’s application for costs, pursuant to Rule 76 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, schedule 1, is not well founded and it is dismissed.[29]With regard to the respondent’s application for wasted costs, I note that the respondent makes this application in the alternative and only if the claimant seeks to blame her solicitor for some or all of the conduct of her claim, which she has not. I also note that the respondent has failed to provide any details of how the claimant’s solicitor is said to have behave unreasonably and/or negligently in the proceedings.[30]I note that that “negligent” needs to be understood in an untechnical way to denote a failure to act with the competence reasonably to be expected of ordinary members of the profession and that this includes advice, acts or omissions in the course of professional work which no member of the profession who was reasonably well informed and competent would have given or done or omitted to do.[31]The questions to be answered by this Tribunal are has the legal representative acted improperly, unreasonably or negligently and, if so, did such conduct cause the applicant to incur unnecessary costs? It is then necessary to consider whether, in the circumstances, it is just to order the legal representative to compensate the applicant for whole or any part of the relevant costs.[32]I note that the claimant has not waived her right to legal privilege, which she is entitled to maintain. However, I am conscience of the force of the argument that even if the claimant’s case was lost on every point, this does not indicate that the case was hopeless or dishonest or that it was brought in any way to harass the respondent or to run up costs. A party is entitled to representation and a representative is entitled to, and is obliged to, represent where proper instructions are provided and I can see nothing in the respondent’s application dated 5 March 2018, or in the Employment Tribunal file in front of me, which would suggest that the claimant’s representative has behaved improperly, unreasonably or negligently. Therefore, I find that the respondent’s application for a wasted costs order, pursuant to Rule 80 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, schedule 1, is not well founded and it is dismissed. CONSEQUENCES OF NON-COMPLIANCE
Conclusions
[1]Failure to comply with an order for disclosure may result on summary conviction in a fine of up to £1,000 being imposed upon a person in default under s.7(4) of the Employment Tribunals Act 1996.[2]The Tribunal may also make a further order (an “unless order”) providing that unless it is complied with, the claim or, as the case may be, the response shall be struck out on the date of non-compliance without further consideration of the proceedings or the need to give notice or hold a preliminary hearing or a hearing.[3]An order may be varied or revoked upon application by a person affected by the order or by a judge on his/her own initiative.