Ms A Zawistowska v Rethink Professional Services Ltd: 3201981/2020
JUDGMENT
The respondent’s application for an award of costs is dismissed.REASONS
[1]This hearing was listed to consider the respondent’s application for an award of costs against the claimant.[2]The application was made on alternative grounds:2.1 the claims brought by the claimant had no reasonable prospect of success against the first respondent (rule 76 (1) (b)); and/or2.2 the claimant acted unreasonably in pursuing her claims (rule 76 (1) (a) that the claimant behaved vexatiously and/or unreasonably in bringing these proceedings or in their conduct. The documents[3]The Tribunal heard evidence from the claimant and the first respondent’s solicitor, Miss Hamnett. They both provided witness statements.[4]The following documents were also provided:4.1 a costs hearing bundle4.2 schedule of costs4.3 respondent’s skeleton argumentThe facts
[5]The claimant initially worked for Lebara Service Centre Ltd (‘Lebara’) (‘second respondent’) having been recruited by Rethink Professional Services Ltd (‘Rethink’) (‘first respondent’). The claimant is a lawyer, trained in Sweden, and works as a technology lawyer and data protection lawyer. The claimant worked as a Data Protection Officer for Lebara between 16 May 2018 and 5 March 2020. The claimant was earning £11,000 per month when her contract was terminated.[6]When her contract was terminated, the claimant contacted ACAS, as is required of a potential claimant to the employment tribunal. The claimant believed that she had reasonable grounds to pursue her claims against both prospective respondents and discussed her claims with ACAS. The claimant was issued with ACAS certificates on 2 July 2020 (Rethink) and 23 July 2020 (Lebara).[7]The claimant presented a claim to the employment tribunal on 31 July 2020 against both respondents, claiming unlawful deduction from wages, holiday pay and breach of contract.[8]The claimant is a litigant in person, although from time to time, when she considered she needed assistance, the claimant engaged counsel through the direct access scheme.[9]The claimant and the respondents were sent a notice of the claim dated 27 August 2020; that document informs the parties: ‘Rule 92 of the 2013 employment tribunal rules of procedure provides: ‘where a party sends a communication to the tribunal …it shall send a copy to all other parties, and state that it has done so (by use of “cc” or otherwise)….’’[10]A preliminary hearing was held on 13 November 2020. The claimant attended that hearing unrepresented. At that hearing the claimant was informed, by the employment judge, that the claim for loss of earnings that she was making exceeded the statutory cap (of £25,000) applicable in the employment tribunal for breach of contract claims. In response to this information the claimant withdrew her claim in the employment tribunal so that she could present a claim in the civil courts. A judgment was subsequently issued that the claimant has withdrawn her claim for breach of contract, and under employment tribunal rules of procedure rule 52, has expressed at the time of withdrawal a wish to reserve the right to bring such a further claim. Accordingly, the claim of breach of contract was not dismissed on withdrawal.[11]At that hearing other claims were dismissed and directions were made for a final hearing of the remaining claims, to be held on 12 and 13 May 2021. The directions made at that hearing included that: ‘by 30 April 2021 each party shall serve on the other and on the Tribunal a skeleton argument on the question of whether the claimant was an employee, a worker, or neither.’[12]On 23 April 2021 the claimant settled her claim against Lebara, through ACAS. This agreement was subject to a confidentiality clause. On the same day the claimant sent an email to the employment tribunal: ‘I would like to withdraw the above claim under the case number 3201981/2020. Please advise if I need to submit any form to confirm that.’ (80)[13]Rethink at all material times was represented by Clark Willmott LLP. The claimant did not copy this letter to the Rethink’s solicitors. The claimant was aware that correspondence should be copied to the other party but thought that because she was just asking a question about the tribunal procedure, to be followed by a claimant when withdrawing a claim, it was unnecessary to copy this email. Therefore, the claimant’s decision not to copy her question to Rethink’s solicitors resulted in them not knowing at the same time as the tribunal that the claimant wanted to withdraw her claim against the company.[14]On the understanding that the claim against it in the employment tribunal was proceeding to a hearing, due to start on 12 May 2021, the solicitors continued to prepare for the hearing as well as attempting to negotiate a settlement with the claimant of all claims brought against its client.[15]In an email dated 28 April 2021 at 9.28, after discovering for themselves that the claimant had settled the claim with Lebara, Rethink’s solicitors asked the claimant to either withdraw the claim against both respondents or to apply to the tribunal to amend the claim brought against Rethink, if a claim against it was still being pursued. They also warned the claimant that its client might claim costs against her if she did not reply soon because it was still preparing for the hearing (134).[16]In a series of emails exchanged on 29 and 30 April 2021, the claimant and Rethink continued to attempt to negotiate a settlement. The clamant responded to a ‘final’ settlement offer making a counter-offer of a sum that exceeded an amount that could be ordered by an employment tribunal (136,141). At this time, the claimant was in the process of packing up and moving home and accepts that she did not deal with the emails she received from the solicitors promptly, only replying to them in the evening.[17]On 29 April and 30 April 2021, the solicitors reminded the claimant that her skeleton arguments needed to be filed in the employment tribunal, in compliance with orders against Rethink (137, 138, 142). The claimant mistakenly thought that Rethink’s solicitors were aware that the employment tribunal claim against the company had been withdrawn and did not understand why they were still preparing skeleton arguments for the hearing.[18]Therefore, in an email dated 30 April 2021 sent at 22.16 the claimant confirmed to Rethink’s solicitors that the claim had been withdrawn ‘so there is no need to proceed with the case’ (140). In a second email sent at 22.28 on that day the claimant informed the solicitors that she would shortly be pursuing a claim in the civil courts and invited Rethink to accept her previous offer of settlement terms by 7 May 2021.[19]The tribunal office sent a letter to the parties (dated 29 April) confirming the withdrawal of the claim against Rethink. However, this letter was not received by the Rethink’s solicitors when it was sent. It is unclear why, but it appears that a copy of the letter was sent to them via an incorrect email address.[20]Rethink’s solicitors contacted the employment tribunal on 30 April 2021. The Tribunal office confirmed the claim had been withdrawn and sent Rethink a copy of the claimant’s letter of withdrawal, this time to the correct email address.[21]By then Rethink’s solicitors had been actively preparing for a hearing for a week (including drafting skeleton arguments and instructing counsel) for a final hearing that had already been cancelled by the tribunal on 23 April 2021.[22]The solicitors had not received an ‘earlier email’ from the claimant informing them that the claim had been withdrawn, therefore the respondent replied to her, on 1 May 2021: ‘Please forward us the notice of withdrawal and the email in which you told us you had withdrawn your case against Rethink. My emails made it clear we did not know you had withdrawn your case and were expecting to incur fees from counsel which have now been incurred’ (142)[23]On 3 May 2021 the claimant replied suggesting that they look for the email in its ‘spam folder’ (143). The solicitors repeated the request for a copy of the email referred to by the claimant asking: Why not simply send me the email you sent to all parties? If you're unable to do this then inferences will be drawn. My client’s position is reserved. Indeed you've offered no explanation as to why you allowed us to prepare skeleton arguments and instruct counsel. My emails made it clear we were preparing for a hearing, a hearing you now say you'd withdrawn against both Respondents (I still don't know when the claim was withdrawn). Why not simply give a straightforward answer last week when asked what your intentions were? Kindly forward me the email in which Clarke Willmott was notified by you that you were withdrawing your claim. In the meantime, I'll ask our IT team to investigate. I will also contact the Tribunal. (144)[24]In an email addressed to the tribunal, but not copied to the solicitors, dated 5 May 2021 the claimant wrote: ‘… I would like to clarify that I would like to withdraw the case without dismissal of the claims.…’[25]Rethink made an application for costs on 30 June 2021: The First Respondent submits that the tribunal has discretion to order costs on two grounds:1.2.1 the claims brought by the Claimant had no reasonable prospects of success against the First Respondent (rule 76(1)(b)); and/or1.2.2 the Claimant acted unreasonably in pursuing her claims (rule 76(1)(a)). 1.3 The First Respondent further submits that the tribunal should exercise its discretion to award costs, having regard to the following considerations:1.3.1 the nature and extent of the Claimant’s unreasonable conduct and of the misconceived nature of her claim;1.3.2 the fact that the Claimant is legally qualified and has had the assistance of a barrister; and1.3.3 the Claimant’s means. 1.4 The costs sought are solicitor’s fees of £15,500 and counsel’s fees of £2,855 plus VAT in each case…[26]In preparing for this costs hearing the claimant requested 5 PDF documents should be included in the bundle. One of these documents was an email dated 28 April 2021 sent at 9.28. addressed to Ms Hamnett, which states: Hi Emma, Thank you for the advice and this is correct. The claim has been fully withdrawn.[27]Miss Hamnett did not receive this letter. Had she received it the solicitors would not have had cause to write to the claimant concerning the preparation of skeleton arguments on 29 and 30 April 2021. The solicitors carried out an extensive search of its electronic records and were satisfied that the letter was not received.[28]The claimant has not provided a copy of this document in her sent email folder or any other evidence that the letter was sent by her to Rethink’s solicitors.The applicable law
[29]Rule 74(1) provides that: ““Costs” means fees, charges, disbursements or expenses incurred by or on behalf of the receiving party (including expenses that witnesses incur for the purpose of, or in connection with, attendance at a Tribunal hearing)”.[30]Rule 75(1)(a) provides that: “A costs order is an order that a party (“the paying party”) make a payment to…another party (“the receiving party”) in respect of the costs that the receiving party has incurred while legally represented or while represented by a lay representative”.[31]Rule 76(1) provides that: “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; or(b) any claim or response had no reasonable prospect of success”.[32]Rule 84 provides that: “In deciding whether to make a costs…order, and if so in what amount, the Tribunal may have regard to the paying party’s… ability to pay”.[33]The Tribunal has a duty to consider making an order but has discretion as to whether or not to actually make an award. The authorities give guidance that the above provisions lay down a two stage test. The tribunal must first consider whether the threshold for making a costs order under rule 76(1)(a) or (b) has been established. Then, the tribunal must consider whether it is appropriate, in all of the circumstances, to make a costs order. The tribunal’s discretion is broad and unfettered.[34]If those two requirements are satisfied, the tribunal must consider what amount of costs should be payable.[35]Where a tribunal identified the aspects of the claimant’s conduct that were unreasonable, the tribunal should stand back and look at all the factors that have to be taken into account when assessing the appropriate level of costs. That involved the balancing of the amount of costs incurred by the unreasonableness of the conduct or the misconceived part of the claim against the other parts of the claim, and by taking account of the need, if any, for the respondent to be compensated by way of a costs order.[36]Unreasonableness has its ordinary meaning and should not be taken by tribunals to be the equivalent of vexatious (Dyer v Secretary of State for Employment (UKEAT/183/83)). Submissions[37]Rethink submitted that the claimant has behaved vexatiously and/or unreasonably in bringing these proceedings and/or in their conduct. The tribunal should bear in mind that claimant is a lawyer and a well remunerated professional who (at times) has proved that she is well able to navigate tribunal litigation. The claimant ought not to have conducted the claims in the way that she has.[38]The claimant presented her claims against Lebara and Rethink in the Employment Tribunal, before later recognising that it was not the best jurisdiction for her breach contract claim which exceeded the £25,000 statutory cap. The claimant then proceeded to withdraw all of her claims against Rethink, in stages, with the intention of pursuing them in another court. This jurisdiction shopping is both unreasonable and vexatious and the claimant, not Rethink, should bear the costs for it.[39]The claimant has also acted unreasonably and/or vexatiously in failing to inform Rethink that she withdrew her claims on 23 April 2021, with the result that Rethink continued to incur costs in preparation for a final hearing for a further 7 days before realising the true position. The claimant kept negotiating with Rethink while failing to inform the company that the case had been withdrawn. The claimant knew or ought to have known that such failure would lead Rethink to incur significant costs, yet she did nothing to prevent this from happening.[40]The effect of the claimant’s conduct has been to put Lebara to considerable time and expense, which it should be entitled to recover. The Tribunal is invited to exercise its discretion to award costs. Ignorance is not an excuse in this case. Further, the evidence suggests that the claimant is able to pay the costs sought: namely solicitor’s fees of £17,463 and counsel’s fees of £2,855.[41]The claimant submitted that she had not behaved unreasonably and the costs application by Rethink was unfounded, because in employment tribunal proceedings each party met its own costs associated with the proceedings, including legal costs.[42]The claimant is legally trained in Sweden and works as a technology lawyer but she is not an employment lawyer and has no special knowledge of employment law. The claimant had not been aware of the procedure to withdraw a claim and had attempted to contact the tribunal to find out. The claimant accepts now that her letter asking the tribunal how to withdraw the claim should have been copied to Rethink, but she was asking a question about the procedure and did not think that was necessary. That conduct was not so unreasonable that it should end in an award of costs. At worse there had been misunderstanding between the claimant and Rethink about the status of the proceedings.[43]The claims had merit and the claimant had continued discussions after 23 April because she was reasonably been trying to settle both the employment tribunal claim and the alternative claim she proposed to bring in a civil court. The claimant had not misled Rethink at all. As far as the claimant was aware any alternative civil proceedings concerned the same matter and would not have incurred duplication of costs or effort by Rethink. In any event, complaints about ‘jurisdiction shopping’ were not made in the original application for costs. The claimant informed Rethink the claim was withdrawn and did not immediately appreciate that Rethink did not know. The suggestion that the email dated 28 April 2021 sent at 09.28 was not sent at all is a very bold allegation. There is no evidence that the email was not sent to the respondent or that the claimant was engaging in sharp practice in her dealings with them. The application for costs should be dismissed.The conclusions
[44]The respondent made an application for costs on the basis that the claimant had acted vexatiously in bringing and in the conduct of these proceedings, or had otherwise acted unreasonably in the way in which they were conducted, and also on the basis that the claims had no reasonable prospect of success.[45]The Tribunal considered whether the threshold for making a costs order under rule 76(1)(a) or (b) has been established. In considering whether the claimant was acting vexatiously or unreasonably, the Tribunal bear in mind that the claimant is a litigant in person and although she is a lawyer she is not an employment lawyer.[46]The premise of this application is that the claimant knew or ought to have known about the statutory cap applicable in breach of contract cases in the employment tribunal. Had the claimant known in advance that her claim exceeded the statutory cap the claimant might have chosen to present her case in the courts and not to present a claim in the employment tribunal at all. As a litigant in person the claimant is not expected to have any special knowledge of employment law. The claimant gave evidence, which the Tribunal accepted that she did not know anything about the statutory cap until at the case management hearing held on 13 February 2021, when the Judge mentioned it. After that date she considered she was acting reasonably by withdrawing the claim so that she could pursue the full amount she considered was due in the courts. The Tribunal considers that the claimant acted reasonably by not pursuing the breach of contract claim in the employment tribunal upon becoming aware of the statutory cap.[47]The Tribunal considered whether the claimant acted vexatiously or unreasonably in conducting the proceedings by continuing to negotiate with Rethink after her claim had been withdrawn in the employment tribunal. The claimant made an error when she did not comply with rule 92. The purpose of that rule is to prevent this type of circumstance from happening. Failing to copy correspondence resulted in the respondent not knowing at the same time as the employment tribunal that the claimant intended to withdraw her claim or had withdrawn her claim. Although this was an error, applying the tribunal’s discretion, the tribunal did not find this failure was such that an award of costs should be made.[48]The respondent is concerned that the claimant may have created an email for the purpose of these proceedings. The Tribunal has not received a satisfactory explanation from the claimant as to why an email that should ordinarily have been in her email sent folder was not sent to the Rethink’s solicitor on request. It is clear that the email was not received, but that does not mean that it was not sent. In the circumstances the Tribunal do not go as far as to find that the claimant had behaved unreasonably by reference to this document.[49]The claimant considered that it was reasonable to continue to pursue her breach of contract claim in the courts, which she was entitled to do, but, at the same time, to negotiate with Rethink in respect of the whole claim. The Tribunal bear in mind that the claimant is a litigant in person and do not consider this to be an unreasonable approach to her case. Having considered her overall conduct of the proceedings, the Tribunal does not find that the claimant conducted the claim vexatiously or unreasonably.[50]At the first hearing, the hearing was listed to determine the claimant’s employment status which can be a complex matter of fact and/or law. It is not reasonable to conclude that the claimant had no prospects of success in the circumstances where a tribunal had identified the legal and factual issues in advance of the hearing.[51]Having considered all the circumstances the Tribunal concludes that the claimant has not behaved unreasonably or vexatiously in bringing and in the conduct of these proceedings, or that the claims had no reasonable prospect of success. Accordingly, the respondent’s application for an award of costs is dismissed.