Francois v Castle Rock Properties Ltd (t/s Electric Ballroom) (Practice and Procedure : Costs) [2011] UKEAT 0260_10_0504

EAT
Francois v Castle Rock Properties Ltd (t/s Electric Ballroom) (Practice and Procedure : Costs)
[2011] UKEAT 0260_10_0504 · 2011-04-05
[1]This is an appeal by Mr James Francois (“the Claimant”) against part of a judgment of the Employment Tribunal sitting at London Central (Employment Judge Warren presiding) dated 2 April 2009.[2]The Claimant brought claims of unfair dismissal, race discrimination and victimisation against Castle Rock Properties Limited (“the Respondent”). He was successful in his claim of unfair dismissal. The Tribunal made a compensatory award in the sum of £970.50, of which £532 represented loss of earnings for 4 weeks. The Claimant also brought claims of race discrimination and victimisation which were unsuccessful. The Tribunal made an order for costs against him in the sum of £250.[3]His appeal is brought essentially on two grounds: firstly, that the Tribunal ought to have awarded a sum to compensate him for delayed receipt of compensation for loss of earnings; and secondly, that the Tribunal ought not to have made an order for costs against him in the sum of £250.[4]Today the Claimant has been represented by Mr Ohringer. The Respondent has notified the Tribunal that it does not intend to be represented, having regard to the relatively small sums in issue. We have, however, an Answer from the Respondent drafted by counsel setting out the grounds on which the Respondent opposes the appeal. The Tribunal Proceedings[5]The Claimant was employed part-time by the Respondent as a security person with effect from April or May 2007. On 29 March 2008 he was on duty at the Electric Ballroom, a night club in Camden. The police carried out a covert licensing visit. Some time later, on 8 May 2008, the police alleged that the Claimant had taken cash to allow two police officers to jump the queue during the covert visit. On 27 May 2008 the Claimant was dismissed for that reason. On 23 September 2008 an internal appeal was dismissed.[6]The Claimant’s case was heard by the Tribunal between 17 and 19 February 2009. At the hearing the Claimant was represented without charge by Miss Francois, a solicitor with some limited experience of employment advocacy (not, we are told, a relative of the Claimant). The proceedings were completed on 19 February. Oral reasons were given. The formal judgment with written reasons was promulgated on 2 April 2009.[7]As we have said, the unfair dismissal claim was successful. It is not necessary to set out the Tribunal’s reasons in any detail; suffice it to say that the Tribunal found the Respondent’s investigation to have been inadequate and its appeal process to have been seriously flawed. There was no evidence before it that the Claimant was actually guilty of gross misconduct.[8]The Tribunal’s award for loss of earnings represented just 4 weeks loss. The Tribunal appears to have concluded that the Claimant either had or ought to have obtained equivalent alternative employment within 4 weeks.[9]The Claimant’s representative asked the Tribunal to award interest. The Tribunal said nothing in its reasons on that question. The reason why no interest was awarded is, however, plain. The Tribunal took the view that there was no power to award interest on a compensatory award for unfair dismissal. The Tribunal has confirmed as much by letter dated 22 February 2010.[10]On the first day of the Tribunal proceedings there were some procedural issues. The Tribunal dealt with these in its written reasons in the following way:
“3. The Claimant sought leave to add a claim that the Respondent's failed to provide written payslips contrary to Section 8 of the Employment Rights Act 1996 - this will be a new claim. There was no evidence whatsoever given to the Tribunal to justify why it was said that it was not reasonably practicable to have presented that complaint in time and leave to amend was therefore refused. 4. A considerable amount of time was taken up on the first day of the hearing dealing with objections by the Claimant to prevent the Respondent from relying upon supplemental witness statements served during the week before the Tribunal. Those witness statements consisted entirely of rebuttal evidence responding to matters which the Claimant had raised for the first time in his witness statement and which could not have been reasonably anticipated by the Respondent. The Claimant also applied to prevent the Respondent from relying on documents served after the conclusion of the inspection process. Namely, minutes of the meeting of 23 July (the appeal meeting); A notice to all security staff concerning dress, a signing in sheet for the day of the incident in question and an agency invoice and sheet from the wages records. The latter documents, having been posted to the Claimant on 27 January 2008. 5. It transpired that the Claimant's representative at the Tribunal had in fact attended with the Claimant at the appeal hearing and had herself made notes of the meeting held on 23 July (the appeal Hearing) which had not been produced in the disclosure process at all. 6. All of the documents were permitted to be viewed and relied on by the Respondents. The Claimant was offered time and the representative asked for 15 minutes adjournment to consider the minutes of the meeting of 23 July and to take instructions on them. This request was granted.”
[11]At the conclusion of the hearing the Respondent sought an order for costs. The Tribunal dealt with this in its written reasons in the following way:
“44. The Respondent's sought an order for their costs on the basis that the claim had been conducted unreasonably and that the race discrimination claim has been misconceived. That the claim should have been dealt with in one day but turned into a three day case. That prior to the hearing on the first day, the Respondent's had offered to settle the matter by offering £1,500 in settlement of the case. The Claimant's representative accepted that she was slow in presenting cases, that she needed time but did not consider that - that meant acting unreasonably or disruptively and that it would be unfair to award costs. Considerable time was in fact lost on the first day about the production of documents and the like. Further time was lost to enable the Claimant to arrange photocopy. All in all the tribunal considers that the Claimant's representatives conduct was unreasonable and seriously added to the length of the hearing. The Tribunal are only prepared to make an award of £250 to be paid by the Claimant to the Respondent as a contribution towards the Respondent's costs.”
Interest and late receipt of compensation[12]It is plainly established, by authority binding on the Appeal Tribunal, that there is no power to make an award of interest as such within a compensatory award for unfair dismissal. See Nelson v British Broadcasting Corporation (No 2) [1980] ICR 110 at 128. That this was the law was recognised in UCATT v Brain [1981] ICR 542 at 552B-F (Donaldson LJ) and Caledonian Mining Co Ltd v Bassett [1987] ICR 425 at 433F-H (Popplewell P). In these latter cases Donaldson LJ and Popplewell P called for Tribunals to be given a statutory power to award such interest. But no such power has ever been conferred in unfair dismissal cases.[13]It follows that the Tribunal was plainly right not to award interest as part of its compensatory award for unfair dismissal.[14]In an interesting argument Mr Ohringer submits that, even if the Tribunal had no power to award interest as such, it had a power to include as part of its compensatory award a sum to reflect late payment of loss of earnings. He further submits that the Tribunal ought to have done so of its own motion.[15]He founds his argument principally on Melia v Magna Kansei Ltd [2006] ICR 410 . In that case the employee was unfairly dismissed in 2001. The Tribunal awarded him both past and future loss of earnings as part of his compensatory award. It discounted the future loss of earnings by 2.5% for accelerated receipt; but it made no equivalent adjustment to the past loss of earnings for delayed receipt. It was held by the Employment Appeal Tribunal that it should have done so. The Court of Appeal upheld the Appeal Tribunal in this respect. In a judgment with which Smith LJ and Wilson LJ agreed Chadwick LJ said:
“41. In my view, the appeal tribunal were entitled to reach that conclusion on the facts of this case. The task which an employment tribunal is set by section 123(1) is to assess the compensatory award in such amount as it considers just and equitable in all the circumstances, having regard to the loss sustained by the complainant in consequence of the dismissal. In a case where the loss sustained by the complainant in consequence of the dismissal includes a loss of past earnings as well as a loss of future earnings, it seems to me just and equitable to treat the two losses in a consistent way. If loss of future earnings is to be discounted to reflect the early receipt of that money, so loss of past earnings should be increased to reflect the late receipt of that money. That, as it seems to me, is a conclusion to which the appeal tribunal were entitled to come; having in mind the overall requirement that the compensatory award should be an amount which the tribunal considers just and equitable. 42. It is important to keep in mind that interest is not awarded on the amount of the compensatory award. Rather, the tribunal takes into account in deciding what the amount of the compensatory award should be the fact that full compensation requires a recognition that money which is paid later than it should have been gives rise to a loss. In that context interest is a measure of the loss of the use of the money which the recipient should have had earlier. 43. It may be necessary, in a future case, to consider whether that approach should be adopted in circumstances in which the tribunal is not also awarding compensation for future loss. But in the present case the unfairness of the employment tribunal’s approach is very striking, and, as it seems to me, that was an unfairness which the appeal tribunal were entitled to redress.”
[16]Mr Ohringer also refers to the judgment of Staughton LJ in Marshall v Southampton Health Authority [1991] ICR at 153C-D, where he suggested a similar approach in the context of a discrimination case at a time when there was no statutory power to award interest in such cases.[17]Mr Ohringer says that the time has come to take up the suggestion of Chadwick LJ in paragraph 43 of his judgment. He accepts that it is not the routine practice of Tribunals even to this day to make any form of award for delayed receipt. He submits that it should be the routine practice; and that the Tribunal erred in law in failing to make an allowance for delayed receipt in this case. He argues that a Tribunal should take evidence from a claimant to ascertain the financial consequences of late receipt – for example, in terms of the interest he has had to pay in servicing debt or (if not in debt) the interest he might have earned. He accepts that no such evidence was adduced in this case.[18]We do not think the Employment Tribunal can be criticised in this case for failing to make any allowance for delayed receipt. The case was not argued before it in this way. It had no evidence on the subject. It cannot be presumed that a claimant suffered loss by reason of delayed payment of loss of earnings; it will depend on evidence. We do not think the Employment Tribunal was required to call for evidence or consider of its own motion the making of an allowance for delayed receipt. The period between dismissal and hearing was no more than a few months and the sum involved on any view very small. Moreover, it has often been said that the calculation of a compensatory award should not become unduly elaborate or refined. Put shortly, we see no error of law in the Employment Tribunal’s judgment or reasons.[19]We do not think this appeal provides an appropriate vehicle for considering whether, in an unfair dismissal case, any form of compensation for delayed receipt can or should be made in circumstances where the Tribunal is not also awarding compensation for future loss. The matter was not argued below. No relevant evidence was taken and therefore no relevant findings were made. This ground of appeal is therefore rejected. The point is an interesting one; but it must await decision another day, in a case where the ground has been adequately laid in the hearing before the Tribunal. Costs[20]On this part of the case Mr Ohringer’s submissions may be summarised as follows.[21]Firstly he submits that the Tribunal erred in law, or failed to give sufficient reasons, in characterising the conduct of the Claimant’s representative as unreasonable. In particular, he submits that the Tribunal did not make sufficient allowance for the inexperience and limited resources available to persons who are acting not-for-profit or who are inexperienced. They may indeed be slower and less focussed than experienced legal representatives. They may be prone to misjudge the value of a particular point. Nevertheless they provide invaluable assistance to lay claimants. He relies upon the decisions of the Court of Appeal in Gee v Shell UK Ltd [2003] IRLR 82 and Lodwick v Southwark London Borough Council [2004] ICR 884 .[22]Secondly, he submits that the Tribunal erred in law in failing to consider, clearly and separately, whether it was appropriate to make an order for costs. He points out that unreasonable conduct is a gateway to the making of an order for costs. Whether to make such an order remains a matter of discretion.[23]In answer, the Respondent submits that clear reasons for the decision were given. The Respondent refers to paragraphs 4 and 5 of the Tribunal’s reasons and submits that the Claimant’s representative was unreasonable in resisting admission of documents. The Respondent submits that the inexperience of the Claimant’s representative was nothing to the point.[24]The Tribunal made the order for costs in the exercise of powers under rule 40(2) and (3) of the Employment Tribunal Rules 2004 , which provide:
“40(2) A tribunal or Employment Judge shall consider making a costs order against a paying party where, in the opinion of the tribunal or Employment Judge (as the case may be), any of the circumstances in paragraph (3) apply. Having so considered, the tribunal or Employment Judge may make a costs order against the paying party if it or he considers it appropriate to do so. (3) The circumstances referred to in paragraph (2) are where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived.”
[25]In Gee v Shell UK Ltd [2003] IRLR 82 Sedley LJ stated: “It is nevertheless a very important feature of the employment jurisdiction that it is designed to be accessible to people without the need for lawyers, and that – in sharp distinction from ordinary litigation in the United Kingdom – losing does not ordinarily mean paying the other side’s costs …. The governing structure remains that of a cost-free user-friendly jurisdiction in which the power to award costs is not so much an exception to as a means of protecting its essential character.” (See also Lodwick v Southwark Borough Council [2004] ICR 884 at paragraph 23).[26]We have looked with care at paragraph 44 of the Tribunal’s reasons. The Respondent’s argument for costs appears to have been advanced on a number of fronts. Although the Tribunal did not expressly deal with some of the arguments raised, it appears to have granted the application only on the basis that “the Claimant’s representative’s conduct was unreasonable”. It does not appear that the Tribunal found the Claimant’s conduct to have been unreasonable in any way.[27]It seems to have been argued that the Claimant’s representative was slow in her presentation of the case. She appears to have accepted this, while denying that her conduct was unreasonable or disruptive. The Tribunal has made no express finding as to whether her conduct in presenting the case was unreasonable by reason of slowness of presentation.[28]In our judgment clear and reasoned findings are required before an order for costs is made on the basis that a party’s representative acted unreasonably merely by reason of being slow in the presentation of the case. Parties will often be unable to afford professional representation by lawyers skilled in employment tribunal proceedings. It is inevitable that less experienced representatives may sometimes be slow in their presentation, or may slow the case down by taking points which might not be taken by a fully experienced representative. It does not follow that they have acted unreasonably; and it certainly does not follow that they should be expected to adhere to the standards expected of specialist advocates. Careful findings are therefore required if it is to be said that the representative acted unreasonably merely by being slow in the presentation of a case. The Tribunal should identify the delay and the cause of the delay and say why the conduct of the representative was unreasonable. If a representative had disobeyed a case management order (for example, a time limit on cross examination or a speech) or ignored proper guidance or a warning from the Tribunal, this may support a finding that the representative acted unreasonably. No such findings have been made by the Tribunal in this case.[29]The Tribunal stated that time was lost on the first day “about the production of documents and the like”. It seems from paragraphs 3-6 of its reasons that the Respondent sought to put in various statements and documents late as a result of seeing the Claimant’s witness statement. The Tribunal does not say whether it considered the opposition of the Claimant’s representative to the admission of further documents to have been unreasonable. It does not follow that because an inexperienced representative takes a point which an experienced representative would not take, the inexperienced representative has acted unreasonably.[30]The Tribunal also stated that time was lost “to enable the Claimant to photocopy”. No reasons are given as to why this should be laid at the door of the Claimant’s representative.[31]In the particular circumstances of this case we have reached the conclusion that there is no sufficient basis in the Tribunal’s reasons for making an order for costs. The order will be set aside.