J & J Fashions Ltd v Johnson [1993] UKEAT 586_91_2607

EAT
J & J Fashions Ltd v Johnson
[1993] UKEAT 586_91_2607 · 1993-07-26

JUDGE J HULL QC:

This is an application by Ms Johnson who complained to the Industrial Tribunal held at Newcastle upon Tyne. Her complaint was heard on 29th April and 20th June 1991. The Tribunal found that Ms Johnson was unfairly dismissed and the Employers were ordered to pay Ms Johnson a compensatory award, we do not go into the facts.Apparently, after that, Counsel who was then acting for J & J Fashions Limited, the employers, advised them that they had an appeal that should be prosecuted and gave them that advice on at least one and I think two occasions. Much more recently, the employers, who were still pursuing their appeal changed their Counsel, and although they do not tell us what advice they received, clearly it cannot have been very favourable advice, that was only on the 16th July. Thereafter apparently there were telephone calls between the parties and the question whether the appeal should go on was being discussed.It has been suggested to us that the appeal was not being prosecuted in good faith but was being used as a big stick to beat the employee, saying "well whatever happens you will not get your costs, you will therefore, whatever happens, suffer, so you had better compromise on some favourable basis or other".We have not heard anything that makes us think that the appeal was not being prosecuted in good faith, whether it was or was not likely to succeed is a quite different matter about which we are not qualified to say anything. At any rate that being the state of affairs and there having been, certainly, a number of conversations, on Wednesday 21st July, that is to say just last week, Ms Johnson's solicitors sent a fax, an urgent communication, just after mid-day in the following terms, so we are told by the employer's solicitors:
"Upon perusing the grounds of appeal enclosed, it is manifestly clear to us that there is no merit in your client's Appeal. We would therefore invite you at this stage to abandon the Appeal, failing which we will be seeking an Order for Costs against you. We await hearing from you by return."
and according to the Solicitors for the employers they at once, having received this letter, got in touch with their clients, there were difficulties in getting instructions, but they did get instructions the very next day and wrote on Thursday, as they say "by return":
"We thank you for your letter of 21st July. We enclose a copy of our letter today to the Employment Appeal Tribunal. [that is withdrawing the appeal] We should say that our instructions were received from our clients at 11.30 am today. . . . .
As our clients are withdrawing the Appeal, it follows that your client has succeeded in full. We imagine that she will consent to this outcome. Please would you write a letter to the Employment Appeal Tribunal appropriately. For the avoidance of doubt, we do not expect you to seek an order for costs given that we have complied with your stipulated requirements."That was what the employers' Solicitors wrote. They were stimulated by this letter from Ms Johnson's Solicitors to seek instructions and then to write withdrawing the appeal. We are told by Mr Bloomfield, Counsel for Ms Johnson, that in fact there was a great deal going on, there were telephone conversations and so forth. But if a letter is written like that, saying "we invite you to abandon the appeal and if you do not we shall ask for costs", it seems to all of us that it would be intolerable that an application for costs should then go ahead when the appeal is abandoned in precise accordance with the invitation which is made. Unless it can be established that something like fraud or deceit has taken place which has led to that letter, it was an open invitation to take a certain course with a penalty which would follow if that course was not followed. To insist on that penalty in costs when that course is followed is, in our view, something which should not be done and we think it would be intolerable to the ordinary conduct of litigation if, where an offer like that has been made and accepted, we were then to proceed to make an order for costs. We think it would destroy the good faith which ought to exist between solicitors and, indeed, we think it would be irrational for us to act on such a basis. It may very well be that that letter of the 21st July should in fact not have been sent or was incautious; if so, Ms Johnson will have to ask her solicitors why it was written and what they propose to do about it. In our view it would not be possible in those circumstances for us to order costs.We would say that we are very conscious that appeals are sometimes made which are wholly without merit and are abandoned at the last moment and this Tribunal has, on many occasions, held that such conduct is unreasonable conduct and entitles the successful party to complain of unreasonable conduct and to ask for costs. Nothing we say is intended to detract from that. There is an enormous distance between such circumstances and circumstances in which, as a result of negotiations, an appeal is withdrawn. Here the terms, at any rate with regard to costs, were spelled out. The stipulations were complied with and therefore we do not think we can make any order for costs.