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Case Number 2502689/99~ cp EMPLOYMENT TRIBUNALS

BETWEEN

Applicant Respondent

Ms R Maclaverty AND 1 Mr Simon Loy, .; 2 EIW Ser\,ices (North East)

t/a Eversheds; DECISION OF THE EMPLOYMENT TRIBUNAL; /""

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i HELD AT Birminghan1 ON 29 September 2000j

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CHAIRMAN Mr C P Rostant

i ", DECISION ON AN APPLICA TIOr-l FOR COSTS

1 The decision of the chairman is that the second respondents are ordered to pay the~ applicant costs.

'I The decision as to what costs ought to be paid is reserved sav~ that the second

1 respondents are ordered to pay £30 referred to in paragraph 23 of the Extended Reasons.1,,--, i

1 EXTENDED REASONS: -

.1 The applicant was represented by Mr Aziz of Counsel. Both respondents were: represented by Mr Jones, solicitor.

2 The issue before me was whether or not the respondents should be required to paythe applicant's costs in respect of her expenses and costs incurred in responding to apreliminary application by the respondents that her complaint of sexual discriminationand unfair dismissal be dismissed on the grounds that a binding settlement, pursuant tosection 18 of the Employment Tribunals Act 1996 and section 203 of the EmploymentRights Act 1996, had been reached.

3 The applicant was pursuing a complaint of sex discrimination and unfair dismissalagainst the respondents and the matter was being dealt" with by the EmploymentTribunals in Newcastle. During in September 1999 it became apparent there had been

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ICase Number 2502689/99

communicated to a conciliation officer in connection with the performance of hisfunctions under this section shall not be admissible in evidence in any proceedings beforean employment tribunal, except with the consent of the person who communicated it tothat officer." The respondents took the view that they would now be unable to obtain MrNelson's evidence without the applicant's consent and'it was soon apparent to them thatthe applicant was refusing that consent. On 18 July, they wrote to the applicant sayingthat they took the view that the applicant's stance in refusing that consent was manifestlyunreasonable as it meant that they were denied access to a key witness. However, "inthese circumstances we cannot proceed with the preliminary hearing which is likely to bedetermined upon evidence to whi.ch, we have had no access. Accordingly, we have noalternative but to ask the tribunal to vacate the hearing, which we have done today." Onthe following day the respondents wrote to the tribunal saying that, although they

I remained in their view that the applicant had reneged upon the binding agreement, theywere withdrawing from the hearing on 27 July and had informed the applicant of that.

~ 11 The applicant then sought a hearing to determine whether or not the respondentsI ought to pay her costs in relation to the question of the preliminary hearing..

12 The tribunals powers in relation to costs are contained at Rule 12 of Schedule 1 ofthe Employment Rights (Constitution and Rules of Procedure) Regulations 1993.Rule 12(1) provides that where in the opinion of the tribunal a party has in bringing or

. conducting a proceedings acted frivolously, vexatiously, abusively, disruptly or otherwise; unreasonably, the tribunal may make an order for costs.!

\ 13 The applicant's contention is that the respondents have behaved frivolously,: vexatiously and otherwise unreasonable. Their conduct to these proceedings was

frivolous because, says Mr Aziz, they must have known that they never stood anyreasonable prospect of persuading a tribunal that a binding settlement had been reachedand he has referred me to documentation that passed between the parties which, he says,indicates that never was such a firm agreement. He invites me to draw the inference that

. --' on that basis their pursuing of the matter could only have been with the intention ofharassing the applicant and was, therefore, vexatious. Finally, he points to the long delayin the respondents realising their position and withdrawing proceedings and the nearnessof their withdrawal to the actual hearing and says that that must be unreasonable conductof these proceedings.

14 The respondents on the other hand say that they honestly believed that a bindingsettlement had been reached through the offices of ACAS and that without hearing fromthe parties concerned it is not open to me to decide what a tribunal would have decidedon that matter. They point to the fact that the respondents pursued the matter and incurred

;. costs themselves jn pursuit of the matter, apparently sincerely, and that that from that Ican conclude that not only was tbis not frivolous conduct but that it was not vexatiouseither. In respect of the late withdrawal, Mr Jones acknowledges that it may, at most,

" have amounted to poor judgment on the part of the respondents to rely on the applicantgiving permission for them approach Mr Nelson, but that that was not unreasonable andfurthermore he says the reason why Mr Ne1son was not approached until relatively late in

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Case Number 2502689/99

the day was the fact that the respondents honestly believed that the whole matter could besettled prior to these preliminary proceedings and that they were reluctant to incur costswhich might eventually be thrown away.

15 I have reviewed all of the evidence in front me and concluded that the applicanthas not satisfied me on the balance of probabilities that these proceedings were advancedfrivolously. I am somewhat troubled by the correspondence, which suggests that the ~issue of the terms of the reference may never have been finalised with the NewcastleACAS officer, and that it is at least possible, even on the correspondence from therespondents, that they might have had difficulty in pointing to a final agreement on allmatters constituting a settlement with the ACAS officer. However, the matter is not soclear cut that I am able to say now with any appropriate degree of certainty that thisapplication never stood any reasonable prospect of success and it is therefore not open tome to conclude tl)at it was launched frivolously nor indeed that it was pursued

\ , vexatiously. I am, however, deeply troubled by the manner in which the respondentshave conducted themselves once the decision to go forward on the basis of a preliminaryhearing had been reached.

16 I see no criticism to be made of the respondents conduct up to and including thehearing for directions in January. It was at that point that they quite properly sought topersuade the Regional Chairman in Newcastle that there ought to be a preliminaryhearing on this matter and he, in these circumstances, could have done little else otherthan to ag;:ee that such a hearing should take place and provide for that in his Orderflowing from that hearing for directions. However, matters take a different turnthereafter.

f 17 I am somewhat at a loss to understand why the respondents have taken the viewI that Mr Nelson's evidence is so crucial to their ability to persuade a tribunal that a

binding agreement has been reached. Without that evidence, in my view, the respondentsare simply in a position of adducing evidence within their own control, namely evidencefrom Mrs Williams, partner of the respondent flrIn of conduct of these matters, andhaving that evidence tested in cross-examination in the same way that the applicantwould have given evidence and had her evidence tested in cross-~amination. In additionto that evidence, there would have been the evidence of the correspondence passingbetween the parties. Mr Nelson's absence, \\'hilst meaning that it was not possible forhim to confinn the respondents point of view, also would mean that it was not possiblefor him to confirm the applicant's point of view. Save for the fact that the respondentshad the burden of proof resting on them, they were no worse fixed than the applicant intheir ability to succeed in the case once Mr Nelson was not going to be available.

! 18' Nevertheless it is apparent that at a relatively early stage, and certainly by; 7 February 2000, the respondents were contemplating calling Mr Nelson and who knows, but at that stage they had formed the view that his evidence wou]d be crucial to their

chances of success. In those circumstances, it appears to me extraordinary that they didnot address themselves to the provisions of section 18 of the Employment Tribunal Act atthat early stage. That section makes it absolute]y clear that an ACAS officer is forbidden

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Case Number 2502689/99

for giving evidence about negotiations for settlement unless the party with whom hecommunicated gives permission for that evidence to be given. I understand from MrJones that the respondents were taken aback by the applicant's refusal to give thatpermission once they sought it in late July. To my mind that demonstrates quiteextraordinary naivety on the part of the respondents. Why should the applicant givepermission for the respondents to obtain evidence which might be helpful to them in theircase against her? There is no earthly reason why the applicant should waive the right toconfidentiality that she had in those circumstances and the respondents had no earthlygrounds for assuming that she would, if indeed they addressed themselves to that aspectof section 18 at that stage which, I have to say, I greatly doubt.

19 It appears clear that no approach was made by the respondents to Mr Nelson until14 July, some two weeks or so before the hearing on 27 July. In consequence it was notuntil 18 July that they realised that Mr Nelson would not be available to them to give

~ evidence and at that point they decided to abandon their position. I have already' / commented that I do not follow why the respondents regarded Mr Nelson's evidence as

the crucial plank on which their ability to succeed rested, particularly as they could havehad no idea, without speaking to him, what he was going to say in tribunal. They mayhave hoped that he would confirm their understanding of the situation but they could not,by any means, be sure and they did not approach him for any sort of witness statementuntil 14 July. To my mind that was wholly unreasonable. IfMr Nelson was such acrucial plank to their case then, to my mind, they ought to have secured his evidence orfailed to secure his evidence and abandon ship 'much earlier in the proceedings. I take theview that they ought to have done that not later than one week after 7 February, by whichstage they must have adc;iressed their minds to the question of his evidence and thenecessity for him attending. I am unimpressed by the respondents' assertion that theywere attempting to save costs by settling the matter. . They may have been attempting tosave their own costs but the fact of the matter is that all the while that this preliminarywas in contemplation the applicant may have been incurring some costs in defending itand that could only have ceased when she was finally informed by letter of 18 July thatthe proceedings were not to be followed up.

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20 In considering the actions of the respondents, I have bom~ in mind that they are a. very reputable firm of solicitors packed full of experienced employment practitioners and

I have no doubt.that Mrs Williams, the partner, with conduct to these proceedings, has thekind of employment experience and expertise that would be indicated by her position inthe firm. I therefore take the view that decisions made by her and proceedings conductedby her must be viewed in a somewhat different light to the same decisions and conduct,for example of an unrepresented and unqualified party. In all the circumstances, I takethe view, that it would be appropriate to order that the respondents pay costs in themanner indicated above. Having delivered the above part of my decision, I then soughtsubmissions from Mr Aziz and Mr Jones on what amount of costs should be ordered, bearing in mind the limited powers of the tribunal in Regulations 12.

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~ Case Number 2:2689199-

2 I Mr Aziz sought costs of £ I 00 in relation to counsel's opinion about therespondents application on the preliminary grounds. He also sought costs in respect ofcounsel's fee of £ 150 for attending the interlocutory hearing in Newcastle on19 January 2000, and a further fee in respect of Mr Aziz's attendance here today.Finally, he sought costs in relation to his client's own work on this case for 40 hours onthe basis of a hourly charge rate allowable by the County Court for such mitigation workby a solicitor and also a nominal amount for his client's expenses.

""",,"c22 It is well established that the powers of the tribunal to award costs relate only to ~:.(JJ~,j)flegitimately incurred legal costs and other expenses incidental to the pursuit of a case. Inthis case, the legitimately incurred legal costs were all of counsel's fees but not, in myview, the applicant's own legal costs incurred, as it were, in employing herself as asolicitor outside of nonnal work-hours. The applicant's counsel did seek to pray in aid

r the EAT's decision in Wiggins Alloy v Jenkin [1981] IRLR 275 EAT, in suggesting that'-' the applicant, as a qualified solicitor acting for herself, was analogous to an in-house

solicitor. I take an entirely different view. The applicant is no different to any otherparty in person who has done the preparation work on a case themselves, save for the factthat she happens to be the possessor of legal qualifications. In my view, it would entirelywrong to describe the applicant's work on this case as legal expenses although I have nodoubt that she has done a large amount of work on her own behalf.

23 I then turn my attention to the counsel's fees. Of those fees I disallow the fees forthe atten4ance at the hearing of 19 January 2000. It will be seen from my decision abovethat I have taken the view that there was nothing frivolous, vexatiou.o; or unreasonablewith the respondents conduct in seeking a preliminary hearing and in raising that matterat the hearing for directions on 19 January 2000, making it inevitable that the tribunal, onthat occasion, would abandon the task of setting any further directions for the hearing ofthe substantive case. The respondents unreasonable behaviour does not commence until14 February 2000, by which time they ought to have, in my view, canvassed andunderstood the availability or lack of availability of Mr Nelson as a witness and madetheir decision about the progress of the case on that basis. I also take the view that it

'-- would be wrong to allow Mr Aziz's fee for attending today since this case is set down for

a hearing for directions as well as to consider the issue for costs and Mr Aziz would havehad to have been here in any case to deal with the directions part of the hearing. Nor amI aware that his brief is any larger because of the cost element of this matter and, in anycase, I am not satisfied that the defending of the application for costs by the respondentsis frivolous, vexatious or unreasonable in and of itself. That leaves the fee in relation tothe opinion and at this stage I am unaware, and Mr Aziz is unable to tell me, when thatopinion was commissioned, when it was received and when it was paid. I therefore donot know whether it falls to be considered as part of the costs incurred after 14 February.I am therefore prepared to reserve my decision on the actual amount of costs incurred andordered in this case subject to the receipt, within 14 days of today's hearjng, of a letterfrom the applicant explaining when she commjssjoned that opjnion, when she received it,and when she pajd for jt, together with documentary evidence in support of that Jetter. Acopy of that letter and documentary evidence ought to be sent to the respondents at thesame time and the respondents shall have a further 14 days, jfthey so wish, to comment

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Case Number 2502689/99

upon it. Upon which I will then proceed to make a decision in relation to costs for thatamount. I am, at this stage, however, prepared to order the respondents pay £30 to theapplicant by way of her reasonably incurred expenses in postage and photocopying overthe period from 14 February to 19 July 2000 inclusive.

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