SQR Security Solutions Ltd v Badu (Practice and Procedure: Review) [2016] UKEAT 0329_15_1404

EAT
SQR Security Solutions Ltd v Badu (Practice and Procedure: Review)
[2016] UKEAT 0329_15_1404 · 2016-04-14
[1]The Respondent, SQR Security Solutions Ltd, appeals from the Judgment of Employment Judge George promulgated on 1 July 2015, referred to as “the Reconsideration Judgment”, by which he refused reconsideration of the quantum Judgment of the Employment Tribunal promulgated on 2 March 2015 (referred to as “the Remedy Judgment”). I refer to the parties as they were before the Employment Tribunal. The appeal is resisted. The Respondent appears by Mr Matthew Winn-Smith of counsel. The Claimant appears by Mrs Harriet Gore of counsel. Neither counsel appeared at the Remedy Hearing.[2]The original action was brought by the Claimant on the grounds of unlawful race discrimination and unfair dismissal. The Tribunal in its Liability Judgment promulgated on 28 November 2014 found that the Respondent had on the grounds of the Claimant’s race harassed and unlawfully discriminated against him and had victimised him by dismissing him on 19 March 2014. There is no appeal against those liability findings.[3]At the Remedy Hearing the Claimant produced previously undisclosed evidence relating to his search for alternative work or employment. The Employment Tribunal dealt with this at paragraph 4 of the Remedy Judgment, referring to a large number of documents not disclosed in advance or copied that the Claimant sought to rely on. It appears also from paragraph 4 that counsel then instructed by the Respondent had the opportunity to look at those documents, and although criticism of the Claimant was expressed in relation to the failure to disclose sooner, expressed himself to be content to continue having had the opportunity to see them. The Tribunal referred to the fact that it was not taken to every document and took into account only those documents that it was in fact taken to.[4]The Claimant gave evidence. His evidence included evidence that he was offered work by three companies - G4S, Far Sight Security and Beaufort House - but that all three offers had been withdrawn without any explanation. At paragraph 19 of the Remedy Judgment the Tribunal accepted that evidence and went further, referring to the fact that the Claimant raised the prospect of the Respondent having provided poor or unhelpful references as a means of explaining why those work offers were withdrawn. The Tribunal, although making no finding as to that, expressed difficulty in believing that three job offers having been made, no requests for references were made of the Respondent, a previous employer in the security industry. That evidence of the Claimant was not foreshadowed in his witness statement or indeed in the documents that he had provided at the beginning of the Remedy Hearing.[5]Following the Remedy Hearing, the Respondent investigated these claims and sought to adduce new evidence by way of an application for reconsideration based on the interests of justice and referring to the new evidence obtained. The application was rejected by Employment Judge George in his Reconsideration Judgment under Rule 72(1) on the basis that he considered that there was no reasonable prospect of the Remedy Judgment being varied or revoked, for the reasons he gave. It is that conclusion that the Respondent seeks to challenge on this appeal. The New Evidence[6]The new evidence comprises email correspondence with the three companies referred to above at the Remedy Hearing as having offered the Claimant work. The evidence consists of the following:(1) So far as concerns G4S, emails indicate that the Claimant was interviewed by G4S but was not offered work. In addition, he did not, according to the correspondence, list the Respondent as a former employer in his CV, and accordingly G4S did not approach the Respondent for a reference and did not even know that the Respondent was a former employer of the Claimant.(2) So far as concerns Far Sight Security, the correspondence indicates that the company has no record of the Claimant applying for a job and has no record of any work being offered. It has been demonstrated in the course of today’s hearing however, that that is inconsistent with a document that was before the Tribunal at the Remedy Hearing and shows that there was at the very least an offer of work by “Paul” of Far Sight Security in an email dated 2 October 2014.(3) So far as concerns Beaufort House, the correspondence indicates that this company did not offer the Claimant any work but did offer him the opportunity of attending an interview. The offer is dated 29 April 2014 to attend an interview on 2 May 2014, some six weeks after the Claimant’s dismissal. The correspondence goes on to indicate that the Claimant failed to attend that interview and that there was no further communication between the Claimant and Beaufort House.[7]The correspondence accordingly indicates that there was no offer of work by G4S or Beaufort House and in relation to all three companies no request for references made of the Respondent. There is nothing in the additional material to suggest that Far Sight Security withdrew its offer of work, albeit that was the evidence given by the Claimant.[8]The Respondent submits that this new information puts the Claimant’s evidence at the Remedy Hearing in serious doubt and affords strongly arguable grounds for the Remedy Judgment to be reconsidered in accordance with its reconsideration application. The Reconsideration Judgment[9]Employment Judge George dealt with the approach to fresh evidence by reference to Ladd v Marshall [1954] 1 WLR 1489 and Wileman v Minilec Engineering Ltd [1988] IRLR 144 and set out the test to be applied for receiving fresh evidence on reconsideration. No criticism is made of his self-direction of law; rather, it is the application of those principles to the facts that is in dispute.[10]The Employment Judge summarised the new evidence and, without finally determining the issue, accepted prima facie that the evidence could not have been adduced earlier and was apparently credible. The issue under Rule 72(1) was whether there was no reasonable prospect of the Remedy Judgment being varied or revoked so that the application should be refused without a hearing. Employment Judge George concluded that the new evidence was relevant to the question of mitigation of loss and the period of future loss. At paragraphs 9 to 11 Employment Judge George held in relation to the new evidence as follows: “9. The employment tribunal did not make a finding that the respondent had given bad or untruthful references about the claimant. Nor did the employment tribunal rely upon that assertion by the claimant (which the respondent was effectively unable to respond to because of the time at which it was made) when drawing its conclusions on those 2 issues. The employment tribunal did conclude that the claimant had been made three job offers which had been withdrawn without explanation. The evidence which the respondent now seeks to introduce by way of reconsideration would, had it been available, have had the potential to change that factual finding. However the question is whether the evidence would have been likely to have an important influence on the result of the case which would only be the case were it likely to have an important influence on our conclusions on the two issues to which it is relevant. 10. There is a possibility that the evidence would have affected the employment tribunal’s view of the credibility of the claimant. However, in the cases of G4S and Far Sight, were the tribunal to accept the evidence that the claimant was unsuccessful at interview with G4S and had either not had work offered by Far Sight or had had any informal offer of work withdrawn because of unavailability of work, that would not have been likely to affect its conclusion that the claimant has made reasonable attempts to seek work. The unavailability of work with G4S and Far Sight would, in fact, have supported that conclusion. In the case of the e-mail from Mr Offei-Adjei of Beaufort House, there is no reasonable prospect that that piece of evidence alone, when set against the rest of the evidence of mitigation of loss, would be likely to have an important influence on the tribunal’s conclusion on that issue, even taking into account the possibility that the claimant’s credibility might have been affected.[11]So far as future loss in concerned, the period of 26 weeks was arrived at taking into account evidence that such work as was believed to be available to the claimant prior to the date of the remedies hearing appeared to be at a lower rate of pay, the hours were unknown and there was some evidence that some employers started new employees at a lower, probationary rate of pay. The employment tribunal did not have available to it strong evidence that work at an equivalent rate of pay would have been available at a specific future point but reached a conclusion about when, on the balance of probabilities, the claimant’s loss would be extinguished based upon all the evidence. There is no reasonable prospect that evidence which, if accepted, tended to suggest that work that the employment tribunal believed to have been offered to the claimant by G4S or Far Sight was not in fact available to him but that he had failed to attend for one interview would have an important influence on the tribunal’s conclusion about the period of that loss, taking into account that that period was decided upon as a matter of judgment based on several factors.” 11. Accordingly, Employment Judge George found that there was no reasonable prospect of the new evidence altering or having an important influence on the conclusions in the Remedy Judgment because:(i) the Tribunal had not made a finding that the Respondent had given bad or untruthful references about the Claimant, and the Tribunal had not relied upon the assertion to this effect made by the Claimant;(ii) while the evidence may have affected the Tribunal’s evaluation of the credibility of the Claimant, the failure at interview with G4S and the lack of work with Far Sight did not support a finding that the Claimant had failed to mitigate his loss;(iii) the email from Beaufort House showing that the Claimant had failed to attend an interview was outweighed by other evidence that the Claimant had attempted to mitigate his loss;(iv) so far as concerned future loss, the Tribunal had taken into account evidence that such work as was believed to be available before the Remedy Hearing appeared to be at a lower rate of pay and for unknown hours.[12]The Tribunal had to make a decision on the balance of probabilities about when it thought the Claimant might be back in comparable work or employment, and the decision on the relevant period was a matter of judgment based on several factors. The Appeal[13]There are expressed to be three grounds of appeal, although essentially there is one principal ground with consequences that flow from that ground identified in grounds 2 and 3 of the Notice of Appeal. The principal ground is that the Judge failed to take account of the wider effect of the new evidence on the credibility of the Claimant and how that might impact on the Tribunal’s findings. What flows from that, the Respondent contends, is that the Judge was wrong to find that there was no reasonable prospect that the evidence would affect the decision on mitigation or have an important influence on the outcome of the issues in question when set against the rest of the Claimant’s evidence. The issues in question are mitigation and future period of loss. The Applicable Legal Principles[14]As already indicated, the well established test for determining whether fresh evidence should be admitted was laid down by Lord Denning in Ladd v Marshall at page 1491 as follows:
“… To justify the reception of fresh evidence or a new trial, three conditions must be fulfilled: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible.”
[15]In Wileman the Employment Appeal Tribunal considered whether in the context of employment proceedings it was sufficient for an applicant seeking to adduce fresh evidence simply to show that it was relevant or whether, as identified by Lord Denning in Ladd v Marshall , it was also necessary to show that the fresh evidence would probably have an important influence on the result of the case. The EAT concluded that both had to be established.[16]Mr Winn-Smith submits that the three conditions were all satisfied in this case and that the Employment Judge erred in refusing the application for reconsideration. So far as the first and third conditions are concerned, he relies on the Employment Judge’s finding that these were satisfied at least on a prima facie basis. The Employment Judge accepted that the evidence was apparently credible and that it could not realistically have been obtained before the hearing given that the Respondent was not alerted to the possibility that the Claimant would claim to have had three job offers withdrawn or that this might be connected with the Respondent’s behaviour until this emerged during the course of evidence at the Remedy Hearing itself. The application failed solely on the basis of the second condition. In answering the question whether the evidence if given would probably have an important influence on the result of the case, the Employment Judge erred. The evidence, if given, is likely to have a significant influence on the outcome because it suggests that the Claimant was less than frank with the Tribunal, especially in the context of findings in the Remedy Judgment that his job search was not as assiduous as it was argued to be by his representative and that he had claimed for travel expenses that were not all attributable to the search for work. It would have impacted, at least arguably, on the Tribunal’s assessment of credibility as a whole. He submits that the point is even stronger if it is subsequently concluded, as it might be, that the Claimant deliberately misled the Tribunal. If accepted it is likely to affect the assumptions on which the Tribunal’s conclusions as to mitigation and future compensation were based, as well as having a bearing on the injury to feelings award.[17]Mrs Gore’s response to these points is as follows. First, she submits that this is not a Ladd v Marshall case at all. The Respondent had the opportunity to seek an adjournment and the opportunity to cross-examine on the point now raised but failed to do so. She submits that this is an afterthought introduced by a new representative and that if the point was to be pursued at all it should have been pursued by way of an appeal in respect of the findings on credibility and not by way of reconsideration. Secondly, if this is a Ladd v Marshall case, the documents do not satisfy the credibility condition. She makes a series of forensic points by reference to the documents that mean they should be treated with caution: the Respondent did not ask relevant questions, the documents are inconsistent in some respects and there are errors in relation to dates (in particular in the Butler email which refers to employment with Ladbroke Security Ltd until September 2014, which could not possibly have been the case). Thirdly, she says that the reconsideration application was limited to a direct challenge to the two issues, mitigation and future loss, and did not encompass injury to feelings or any of the other matters. There was no need for the Tribunal to take account of the impact of the wider credibility issues that might arise from the fresh evidence accordingly. Fourthly, if the Tribunal was required to take account of those wider credibility issues, she submits in any event that they did so adequately in the Reconsideration Judgment at paragraphs 6, 9, 10 and 11. Her global submission is that the Employment Judge was entitled to ask what difference a few emails would make especially in the context of the credibility issues she has identified and the large volume of evidence that was available in relation to mitigation and future loss. The new evidence is of relatively minor significance in context and could not have undermined the conclusions and the assumptions on which the Tribunal based the award of compensation. In those circumstances, it was open to the Employment Judge to reach the conclusions he did, and no error of law arises. Conclusions[18]I deal first with points one and two made by Mrs Gore. The Employment Judge in the Reconsideration Judgment accepted that conditions one and three of the Ladd v Marshall test were satisfied. No Respondent’s Notice or cross-appeal has been pursued by the Claimant. In those circumstances, it is not open to the Claimant to seek to go behind those findings, and I cannot see how the Employment Appeal Tribunal can address those matters on the appeal. It seems to me that I am bound to proceed on the basis that conditions one and three were satisfied, as the Employment Judge found. The critical issue is, accordingly, whether there is any error of law in the Employment Judge’s conclusion that condition two was not satisfied, because the Employment Judge failed to have regard to the wider effect of an adverse credibility finding in relation to the Claimant on the remedy issues at stake.[19]So far as the third point is concerned, the letter seeking reconsideration is, as Mrs Gore submits, confined to the issues at paragraphs 19 to 22 of the Judgment and in particular the question of loss of earnings and, inferentially, mitigation and future loss of earnings. That, in my judgment, means that the Respondent is not entitled to reopen the injury to feelings award, as Mrs Gore submits. No challenge was made to that in the reconsideration application, and indeed there is no reference to it at all. However, that does not entail that the wider impact of the credibility of the Claimant in relation to issues of mitigation and future loss of earnings is excluded from consideration. It seems to me to be implicit in the application that the question of the Claimant’s credibility on a wider basis would inevitably fall for consideration if the new evidence was to be admitted.[20]That leads, then, to the central issue in the case: the question whether there was a failure to have regard to a material consideration. Mrs Gore relies on paragraphs 6 and 9 of the Employment Judge’s Reasons as indicating that he did have regard to that wider credibility impact. I cannot read those paragraphs in the way she reads them. It seems to me that paragraph 6 concerns the credibility of the new material itself and does not address the Claimant’s credibility. So far as paragraph 9 is concerned, far from indicating that the Tribunal was looking at the matter by reference to wider credibility implications, it seems to me that the statement made by the Tribunal in paragraph 9 suggests that it was confining its consideration to that paragraph.[21]Having looked at the Judgment as a whole and bearing in mind the points made by Mrs Gore on the Claimant’s behalf, I have concluded that the second condition in Ladd v Marshall is satisfied here and that the Employment Judge erred in law in concluding that there was no reasonable prospect of the original decision being varied so as to lead to the conclusion that there should be no reconsideration. My reasons are as follows.[22]First, I agree with the Respondent that this is a case in which the Claimant’s evidence was central to the issues to be determined at the Remedy Hearing. Considerable reliance was placed upon it by the Tribunal, and his evidence was accepted as genuine in the Remedy Judgment.[23]Secondly, however, reading the Remedy Judgment as a whole and in particular paragraphs 15 onwards, the Tribunal does appear to have had some doubts about the evidence presented by the Claimant. However, where it had doubts it gave the Claimant the benefit of them. This most obviously appears in relation to the expenses he claimed and the job search he had undertaken. So far as the expenses claim is concerned, the Claimant claimed £600 for travel expenses as a global figure, not broken down, and no receipts for travel were provided. The Tribunal concluded that the level of travel he described was probably not all attributable to the search for work, and ultimately it reduced the amount to £100. So far as the job search is concerned, the Tribunal referred to “some evidence of a diligent hunt for alternative work”, leading to the conclusion that, “the Claimant was probably making sufficient applications”, and did not fail to mitigate his loss (paragraphs 15 and 18, Remedy Judgment).[24]Thirdly, it is clear that the Tribunal regarded the evidence in relation to job offers from G4S, Far Sight Security and Beaufort House as significant. In the Remedy Judgment it accepted that those three offers were both made and withdrawn. It concluded that it was highly unlikely that someone in the Claimant’s position, who had no alternative source of income, would just turn down the opportunity to work, and it rejected the Respondent’s arguments to that effect. As I have already indicated, it referred to the Claimant’s assertions that the offers were withdrawn because the Respondent provided poor or unhelpful references and continued:
“20. … we find it hard to believe that three job offers were made, as evidenced by the documentation, and no requests for references were made by those employers to a previous employer in the security industry. Be that as it may, none of the [prospective] employers gave reasons for the withdrawal and that fact gives us cause for concern. … we are sure that [counsel for the Respondent] will advise his clients about the definition of victimization … and about how to deal with such requests in the future.”
[25]The new evidence, if accepted, demonstrates that no offers were made by G4S or Beaufort House and that no requests for references were made of the Respondent nor were any poor references given by them. The Employment Judge accepted that the new material had the potential to change the factual findings made and as a matter of possibility that they could affect the Tribunal’s view of the credibility of the Claimant (see paragraphs 9 and 10). However, the Judge concluded that even if the evidence demonstrated that the Claimant was unsuccessful at interview with G4S and was not offered work by Far Sight, that would not have affected its conclusion that the Claimant made reasonable attempts to seek work. The Judge reasoned that the unavailability of work with these companies would have supported that conclusion. The Judge went on to say, in relation to the Beaufort House work, that there was no reasonable prospect that this piece of evidence alone when set against the rest of the evidence of mitigation of loss would be likely to have an important influence on the Tribunal’s conclusion on mitigation.[26]In my judgment, the Judge was wrong to isolate each piece of evidence in this way and should have looked at the evidence in its entirety and considered the effect that evidence might have on the remedy issues at stake. Although the Judge was entitled to say that in the case of G4S and Far Sight, even if the Tribunal accepted the fresh evidence, that would not have affected its conclusion that the Claimant did not get the work that was potentially being offered, and that the reasons for not getting that work may have been different, but the factual outcome would be unchanged, there was a failure to have regard to the wider credibility issue and the impact of the new evidence on that wider credibility question. If true, the evidence directly contradicted evidence given by the Claimant on oath, advanced to support his case of a genuine and diligent job search, and that wrongly accused the Respondent of undermining his attempts to find alternative employment. If as a result of the totality of the new evidence the Tribunal concludes that the Claimant deliberately misled the Tribunal in giving that evidence, it is difficult to see how that would not impact on the Tribunal’s assessment of the facts relevant to mitigation and future loss, which underpinned the assumptions it made when making its award. This is particularly so having regard to the doubts that the Tribunal appeared to have about the Claimant’s own evidence and also about the way in which the Respondent had been dealing with the Claimant in terms of possible victimisation.[27]In those circumstances, I have come to the conclusion that justice does require that the award of compensation in relation to loss of earnings should be reconsidered in the light of the new evidence and that Employment Judge George erred in rejecting this application under Rule 72(1). The appeal is accordingly allowed. I make clear that the reconsideration application is expressly limited to the issues of mitigation and future loss and therefore financial loss only and is to be considered by the Employment Tribunal on that basis. Moreover, nothing I have said in this Judgment is to be taken as any indication of my views on the ultimate outcome. The Claimant may have evidence or material that undermines the credibility of the emails relied on by the Respondent by way of new evidence. That is still to be investigated, and ultimately, it may be that the new evidence is proved not to have any material impact on the outcome. The only question at the stage at which Employment Judge George was addressing the matter was whether it had that potential. I have concluded that the evidence if accepted would probably have an important influence on the result of the case, but that is still to be determined. Costs[28]The Respondent, having succeeded on this appeal, applies for costs. The costs are sought first on the basis of Rule 34A(1), that the defence of this appeal was misconceived, that there was no real engagement with the arguments presented by the Respondent and that the points made in response to the appeal were wide of the mark. The second application is pursued under Rule 34A(2)(a), which allows the successful party to claim against the unsuccessful party to an appeal the fees incurred in pursuing that appeal.[29]So far as the first application is concerned, I am not persuaded that this is an appropriate case in which to order Rule 34A(1) costs. The normal rule in this Appeal Tribunal is that costs do not follow the event. There has to be evidence of improper, vexatious or unreasonable conduct in the bringing or conducting of proceedings by the paying party in order to justify a costs Order, and, moreover, the authorities make clear that it is necessary to show how the particular behaviour caused the costs in question. Not only has Mr Winn-Smith not produced any schedule of costs setting out the costs claimed, but there has been no attempt by him to identify what particular conduct has caused particular costs, and I am not persuaded that this is a case where it can be said that the defence of the appeal altogether was so clearly doomed to fail that it can be said to be misconceived. It is certainly true that some points made were points that ought not to have been pursued in the absence of a Respondent’s Notice of cross-appeal, but equally some points made by Mrs Gore for the Claimant have found favour, in particular the fact that the reconsideration application did not extend to any challenge to the injury to feelings award so that any successful appeal would not alter that outcome. Overall, looking at the nature of the response to the appeal, it seems to me that there were arguments that could properly be advanced albeit that they have ultimately proved unsuccessful, and in those circumstances I make no award under Rule 34A(1).[30]So far as Rule 34A(2) is concerned, this does not depend on impugning the conduct of the putative paying party. The presumption is that where a party is successful the fees for issue and hearing - namely £400 for issue and £1,200 for the hearing fee - will be paid by the unsuccessful party to the successful party, although the Tribunal retains discretion to consider the extent to which the party has been successful or unsuccessful and to consider all the circumstances including the paying party’s means. The Respondent has been successful, save in relation to injury to feelings. Neither side engaged with the other, whether before the appeal was issued or after it had been given permission to proceed to a Full Hearing, and, in those circumstances, it seems to me that the Respondent is, subject to the question of means, entitled to have at least some part of the issue and hearing fee paid.[31]I have heard from Mrs Gore about the Claimant’s current means. He is working on a zero-hours contract, averaging between 25 and 28 hours a week and taking home between £150 and £200 per week. He has three children and a wife who has modest earnings, approaching £180 a week, and he has outgoings in terms of rent of £900. No doubt he has other outgoings too. I also, however, have regard to the fact that he will in due course receive at the very least an award of £11,000 by way of injury to feelings and, I have little doubt, more so far as earning losses are concerned. It seems to me, having regard to his current limited means but also to the potential for future ability to discharge an Order, the fair approach to take in this case is to order that he pay half the issue fee and half the hearing fee: £800. I would hope that could be set off against the injury to feelings award.[32]Finally, Mrs Gore submits that Rule 34A(2) does not apply to this case and if the Employment Appeal Tribunal were minded to make any order it should reserve the question of appeal costs to the Employment Tribunal dealing with this matter. I do not accept that submission. First Rule 34A(2) does apply. Secondly, the question at stake is whether the issue and hearing fee in relation to the Employment Appeal Tribunal should be paid by the Claimant as the unsuccessful party. That is a matter that falls squarely within this Appeal Tribunal’s jurisdiction. Whether ultimately the question of costs arises again at the stage of the Employment Tribunal dealing with reconsideration is another matter. It may well be if the documents ultimately prove to be immaterial that the Claimant will seek his costs from the Respondent. My comments should not be seen to be encouraging him to do so, but that is a matter that may arise in the future. At this stage, this Tribunal is the proper Tribunal to address these costs, and accordingly the order I make is that the Claimant shall pay half of the issue and hearing fee incurred by the Respondent pursuant to Rule 34A(2)(a).