Itulu v London Fire & Emergency Planning Authority (Practice and Procedure: Costs) [2016] UKEAT 0055_16_1107

EAT
Itulu v London Fire & Emergency Planning Authority (Practice and Procedure: Costs)
[2016] UKEAT 0055_16_1107 · 2016-07-11
[1]This is an appeal by Mrs Magdalene Itulu (“the Claimant”) against a Judgment of the Employment Tribunal sitting in London (South) - Employment Judge Elliott, Mr Plummer and Ms George - dated 25 June 2015 - whereby she was ordered to pay the sum of £1,900 in costs to the London Fire & Emergency Planning Authority (“the Respondent”). The Background Facts[2]The Claimant has been employed by the Respondent since 1991. She has brought various proceedings against the Respondent. The ones with which I am concerned were her fifth and sixth claims. They raised complaints of direct race discrimination, victimisation and unlawful deduction from wages. They were listed together for a seven-day hearing before the Employment Tribunal commencing on 29 September 2014. The Claimant had represented herself at earlier hearings, but at this hearing she was represented by a friend, Mr Supiya. He was not legally qualified.[3]Put shortly, the Claimant and her representative left the Employment Tribunal on the second day of the hearing after they were unsuccessful in certain procedural applications. When they left, the explanation that the Employment Tribunal recorded them as giving was as follows (paragraph 35):
“35. When the parties returned from this short break and Mr Supiya said that he and his client had deliberated and they considered there was an important principle at stake and the claimant did not believe it was in the interests of justice for her to proceed. He said that they were not walking out and that they held to their position as to the request for the adjournment, for the reasons given.”
[4]The Employment Tribunal, as it had warned the Claimant, proceeded with the hearing in her absence. It rejected an application by the Respondent to strike out the claim, for the Claimant had not been given notice of it before she left. It heard evidence and dismissed her claims by a Judgment dated 6 October 2014 with Written Reasons. Hearing the evidence and submissions had taken it into a third day of the hearing.[5]The Claimant sought to appeal against that Judgment, but her appeal was found to disclose no reasonable grounds (see the Judgment of HHJ Peter Clark given on 20 May 2015). In the meantime, the Respondent had applied for costs. The application for costs was heard on 24 June 2015 and resulted in the Judgment under appeal.[6]For a more detailed account of the background facts, I refer with gratitude to the Judgment of HHJ Peter Clark (see paragraphs 3 to 14 of the transcript). No useful purpose would be served by setting out those paragraphs again; I will take them as read. The Application for Costs[7]The Respondent’s application for costs was made on the basis that its total costs exceeded £40,000; but it expressly limited its claim to counsel’s fees for the hearing, which consisted of a brief fee of £7,500 and refreshers for the second and third days of £950 each. The Employment Tribunal summarised the application as being made on the basis that the Claimant’s actions in not withdrawing her claim but refusing to participate in the proceedings were wholly unreasonable. The Respondent also argued(1) that the Claimant had no real intention of pursuing the matter to a final hearing and the Employment Tribunal might conclude that she had been vexatious and(2) that the claim had no reasonable prospects of success.[8]At the Costs Hearing on 24 June 2015 the Claimant said orally that she had wished to continue with the proceedings. The Employment Tribunal recorded the following (paragraph 16):
“16. In relation to her absence from the hearing by leaving on 30 September 2014 the claimant suggested in her oral submission that Mr Supiya told her that the tribunal was biased against him because we did not grant his applications and that he could not continue. The claimant asserted that she had informed the tribunal of this and told the tribunal that she could not continue in person because she had a problem with her right hand and could not write and also because Mr Supiya had prepared the cross examination and she needed to take legal advice.”
[9]The Employment Tribunal, having checked its notes and recollections, said the following (paragraph 19):
“19. The claimant and Mr Supiya presented a united front at the tribunal on 30 September 2014. There was no suggestion by the claimant that she independently wished to take legal advice because Mr Supiya no longer agreed to represent her. There was no suggestion of bias at the time. The claimant did not say that she could not continue because of a medical condition. This would have been considered and taken into account had it been raised with us. The claimant did not tell the tribunal on 30 September 2014 that she could not carry on alone or that Mr Supiya no longer agreed to represent her.”
[10]The Employment Tribunal set out the relevant provisions of Rule 76 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (“the 2013 Regulations”) and referred in particular to Barnsley Metropolitan Borough Council v Yerrakalva [2012] ICR 420 CA.[11]In its conclusions the Employment Tribunal found that the Claimant’s conduct of the proceedings prior to the hearing was not unreasonable, but it found that the Claimant acted unreasonably in absenting herself from the hearing on 30 September 2014 when her applications for strike out and an adjournment were refused. It continued as follows:
“28. The claimant did not inform the tribunal at the time that Mr Supiya could no longer continue acting for her or that she could not continue on her own because of a medical condition. Had those matters been raised with us we would have addressed it [sic] in our reasons. Bias was not raised with us or with the EAT in the Grounds of Appeal. 29. The claimant and Mr Supiya presented a united front to us on 30 September 2014. There was no suggestion that Mr Supiya was leaving the claimant unrepresented.”
[12]The Employment Tribunal also found that up to the moment when she decided to absent herself from the proceedings it could not find that the claim had no reasonable prospects of success. However, once the Claimant decided to leave the Respondent’s case unopposed, the position changed. The Employment Tribunal said (paragraph 31):
“31. … Once the claimant left the tribunal and left the respondent’s case unopposed, it clearly could not have any reasonable prospect of success. Instead of withdrawing the claimant left the respondent to call all of its witnesses, which required using day 3 and calling the witnesses who were not present on day 2.”
[13]The Employment Tribunal directed itself correctly that even if the threshold for making an award of costs was met it still had a discretion whether to make an award. For reasons set out in paragraphs 32 to 34, not the subject of appeal, it decided it would make an award. It then turned to the amount of the award. It considered the Claimant’s means. Again, there is no appeal against this aspect of its reasoning. It concluded by saying (paragraph 43):
“43. Given our finding that the claimant’s unreasonable conduct was absenting herself on day 2 of the hearing when her adjournment application was not granted, we award the costs claimed for days 2 and 3. This is £950 per day for two days in the total sum of £1,900.”
Relevant Law[14]Rule 76 of the Employment Tribunal Rules of Procedure , which are found in Schedule 1 to the 2013 Regulations , provides as follows:
“(1) A Tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that - (a) a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or (b) any claim or response had no reasonable prospect of success.”
[15]In Yerrakalva Mummery LJ said the following:
“41. The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had. The main thrust of the passages cited above from my judgment in [ McPherson v BNP Paribas (London Branch) [2004] EWCA Civ 569 ] … was to reject as erroneous the submission to the court that, in deciding whether to make a costs order, the employment tribunal had to determine whether or not there was a precise causal link between the unreasonable conduct in question and the specific costs being claimed. In rejecting that submission I had no intention of giving birth to erroneous notions, such as that causation was irrelevant or that the circumstances had to be separated into sections and each section to be analysed separately so as to lose sight of the totality of the relevant circumstances.”
Ground 1[16]On the Claimant’s behalf Mr Halliday first submits that the Employment Tribunal did not give sufficient reasons for its decision. He says that it was bound to make findings as to the explanation that the Claimant gave at the Costs Hearing for absenting herself at the original hearing. Since this explanation was not addressed, the Employment Tribunal’s Reasons did not comply with the standard laid down in Meek v City of Birmingham District Council [1987] IRLR 250 CA. The Employment Tribunal was bound to make a finding as to whether her lay representative had refused to continue acting for her and as to whether she was or was not in a position to represent herself because she could not write or because she had not prepared for cross-examination. In the absence of a finding that her excuse was untrue, it failed to explain why it found her conduct to have been unreasonable.[17]On the Respondent’s behalf Ms Thomas points out that the Claimant was saying to the Employment Tribunal that she had actually informed the Employment Tribunal at the original hearing that she could not continue in person for the reasons in question. Her case was that it was unreasonable to award costs against her when she had actually informed the Employment Tribunal of her problems. This is how the Employment Tribunal understood her point. It dealt with it in paragraph 19 of its Reasons.[18]I reject the first ground of appeal, for the following reasons. On the findings of the Employment Tribunal at the original hearing, the Claimant and her chosen representative absented themselves in circumstances where an application for an adjournment had been refused and the Claimant had been told that the hearing might proceed in her absence. The explanation given by the Claimant’s representative was no more than that the Claimant did not believe it was in the interests of justice for her to proceed. Departing from an Employment Tribunal in these circumstances, leaving the case to proceed or be disposed of in her absence, was plainly unreasonable conduct both by the Claimant and her representative.[19]If the Claimant had suggested to the Employment Tribunal that she wished to proceed in the absence of her chosen representative, the position might have been different. I put it no higher than “might”. The Claimant would still face the difficulty that she and her chosen representative had conducted themselves unreasonably. But she would have at least have made it plain that she wished to continue. The Employment Tribunal would then have been able to case manage the position. It is not unusual for an Employment Tribunal to give time to prepare a cross-examination, and it is difficult to suppose that her inability to take notes would have been an insuperable problem, not least because there was a note taker present for her and arrangements could have been made for her to have notes taken by others.[20]In my judgment the Employment Tribunal did not err in law in concluding that the real question was whether the Claimant indeed informed the Employment Tribunal of the explanations that she gave the following year. It found that she did not, that the Claimant and her representative presented a united front and that their conduct in absenting themselves when interlocutory applications did not go their way was plainly unreasonable.[21]It is clear from the Employment Tribunal’s Reasons that it was sceptical about what the Claimant said at the Costs Hearing. On its finding, she was not truthful in her account of what happened at the original hearing. But it did not need to make a definitive finding about her newly given explanations, and in reality, given that these explanations were produced orally at the Costs Hearing, it would have been extremely difficult for it to hear evidence and reach a decision on that question. The Employment Tribunal did not, in my judgment, need to do so. If the Claimant had disagreed with her representative and wished to continue at the original hearing, it was for her to make it plain. She did not. She left without giving any explanation beyond what I have set out. That was plainly unreasonable, and it was then inevitable that the Employment Tribunal would in one way or another have to dispose of the case in her absence. Ground 2[22]On the Claimant’s behalf Mr Halliday submits that the Employment Tribunal failed to take into account factors that it was bound to consider or reached a perverse conclusion in three respects.[23]Firstly, he submits that the only result of the Claimant absenting herself was that the costs liability of the Respondent reduced; it did not increase. Effectively, a seven-day hearing was reduced to a four-day hearing. The effect of the unreasonable conduct was plainly a relevant factor (see Yerrakalva at paragraph 41).[24]I reject this submission. On the question of causation, the Employment Tribunal’s reasoning appears from the passage that I have cited in paragraph 31. It was unreasonable for the Claimant and her representative to absent themselves from the hearing. In their absence the claim was doomed to failure, but they took no steps to withdraw it. They left the Employment Tribunal to dispose of it, which involved the Respondent calling its witnesses and taking the case into day three. I see no error of law in this reasoning. It is true that the case would have taken longer if the Claimant and her representative had participated, but a hearing would then have been required to deal with a case that they were putting forward responsibly. Once they ceased to put forward a case but left the Employment Tribunal to dispose of the case, they cannot complain at having to pay the Respondent’s costs wasted by that course of action.[25]Secondly - and here I revise the order of Mr Halliday’s submissions - he submits that any costs after the Claimant absented herself were caused by the Employment Tribunal’s decision to proceed with the hearing, not by her conduct. The Employment Tribunal was entitled to dismiss the claim without hearing further evidence (see Rule 47 of the 2013 Regulations and Roberts v Skelmersdale College [2003] ICR 1127 CA). Alternatively, it could have acceded to the Respondent’s application to strike out the claims. Either way, it was the Employment Tribunal’s own decision to proceed that was the cause of the wasted costs, not the Claimant’s conduct.[26]Again, I reject this submission. I will assume, since this assumption is in the Claimant’s favour, that Rule 47 applies in circumstances such as these where the Claimant attends the hearing with her representative and they then leave. I make that assumption; I should not be regarded as making any decision as to the ambit of Rule 47. But, on any view, Rule 47 gives the Employment Tribunal a wide discretion. It seems to me in this respect to have the same effect as the Rule considered in Roberts , although it is drafted in somewhat different terms. The Claimant can have no complaint that the Employment Tribunal chose to continue with the hearing. It had read its way into the papers on the first day. There is a public interest in the open determination of claims of race discrimination, and the Respondent had brought to court some witnesses and could bring others the following day. Moreover, the Employment Tribunal had warned the Claimant that it might take this course. To my mind, the need to dispose of the case one way or the other was the result of the Claimant’s actions. It cannot sensibly be said that it was the sole result of the Employment Tribunal’s decision. Nor can the Claimant complain that the Employment Tribunal proceeded with the claim rather than striking it out. She had not been put on notice of a striking out application before she absented herself, and the Employment Tribunal was wise to proceed rather than accede to an application about which the Claimant did not know.[27]Thirdly, Mr Halliday submits that the refresher fee for the Respondent’s counsel for the second day of the hearing had in any event been extended prior to the decision of the Claimant to absent herself. This, he submits, cannot be attributed to the Claimant’s conduct. Again, the effect of the unreasonable conduct was a relevant factor that the Employment Tribunal did not take into account.[28]Ms Thomas answers this submission by reference to Yerrakalva . She accepts that the refresher fee would have already been incurred but points out that there does not have to be a precise causal link between the unreasonable conduct in question and the specific costs being claimed.[29]On this part of the case I prefer Mr Halliday’s submission. The Employment Tribunal had been careful to restrict its criticism of the Claimant to the moment on the second day when she absented herself from the Employment Tribunal hearing. By that time the refresher for the second day had been incurred. The Employment Tribunal did not explain why it awarded the refresher for the second day. It is possible that it had some specific reason for doing so but also possible that it simply overlooked that the £950 for the second day had already been incurred. Given the Employment Tribunal’s decision that the unreasonable conduct was absenting herself on day two, it would be bound at the very least to give some reasoning for awarding an item of costs incurred prior to that date. I appreciate that the link between an award of costs and the unreasonable conduct need not be a precise one, but, if there is no causal link, the Employment Tribunal needs to give some explanation of its reasoning.[30]The sum involved is small. I must apply Jafri v Lincoln College [2014] EWCA Civ 449 in deciding how to dispose of the appeal. I consider that since the £950 was incurred prior to the commencement of the Claimant’s unreasonable conduct, on a proper appreciation of the facts and the law, the Employment Tribunal ought not to have awarded it. I do not think that this is a case where remission is justified. I think I can and should in the circumstances take the robust view to which Underhill LJ referred in Jafri . After an application for costs under Rule 34A(2A) of the Employment Appeal Tribunal Rules 1993 for payment of fees incurred in respect of the appeal. Costs[31]I have before me an application on behalf of the Claimant for payment of £1,600 in Employment Appeal Tribunal fees. The principles are set out in Horizon Security Services Ltd v Ndeze and Anor UKEAT/0071/14 and Look Ahead Housing & Care Ltd v Chetty and Anor [2015] ICR 375 EAT. The starting point is that where an appeal is successful the fees ought to be paid, but in a case where an appeal is only partly successful a discretion has to be exercised with more care. Langstaff P in Chetty said the following:
“53. … What the court centrally has to assess is whether it was necessary to incur the expense in order to bring the appeal - this includes asking whether the appeal, as in the present case, could have been avoided by the appellant taking reasonable steps, or was made more likely to proceed by the behaviour of the respondent to it; it should then recognise the fact, if it be the case, that an appeal has largely failed or for that matter largely [succeeded] in deciding, in its discretion, exercised reasonably, whether it should award the full extent of the payment made by way of fees, or whether it should moderate that amount to a reasonable extent. A reasonable extent includes making no award at all, though in circumstances in which an appeal has been partly successful this would have to be carefully justified and is likely to be rare.”
[32]In this case the appeal has succeeded in part. I have reduced the award of costs from £1,900 to £950. It has, however, far from succeeded in full. I rejected arguments relating to the question of whether the Claimant’s conduct was reasonable, and I rejected two grounds of the appeal that might have resulted in the full amount being extinguished. It seems to me important to take those matters into account. I also take into account that the original Notice of Appeal, while it did draw a distinction between day two and day three, was very wide ranging, made allegations of lack of procedural fairness and apparent bias and necessitated a hearing under Rule 3(10) at which the real issues in the appeal were crystallised.[33]It seems to me that the Claimant ought to have the bulk of her costs because it was necessary for her to incur expense in order to bring the appeal, but I think also that in the exercise of my discretion I ought to recognise that the appeal has not been fully successful and that originally it was put on extremely wide grounds necessitating a hearing prior to this hearing for the real issues in the appeal to be crystallised. I shall reflect that by making an award of fees in the sum of £1,000.