Beattie v Jan De Vries Health Care Limited (Application for Costs) [2004] NIIT 477_04 (25 December 2004)
THE INDUSTRIAL TRIBUNALS
CASE REF: 477/04
APPLICANT: Clare Ruth Beattie
RESPONDENT: Jan De Vries Health Care Limited
DECISION ON AN APPLICATION FOR COSTS
The unanimous decision of the tribunal is that the sum of £1,500, together with any value added tax payable thereon, shall be awarded against the applicant in respect of the costs incurred by the respondent.
Appearances:
The applicant was not present and was not represented.
The respondent was represented by Mr Conor Hamill Barrister-at-Law, instructed by Wilson Nesbitt Solicitors.
REASONS
- Our decision was given orally at the end of the hearing of this costs application on 25 October 2004. The purpose of this document is to provide a written record of that decision. The following reasons are given in extended form.
- The applicant was not present and was not represented at the time and place fixed for the hearing. We decided to dispose of the application in the absence of the applicant, for the reasons, and in the circumstances, outlined in the next paragraph below.
- This is a case in which the applicant had claimed that the respondent is legally responsible for acts of discrimination which the applicant alleged had been carried out against her. She is represented in these proceedings, and has been represented throughout these proceedings, by a firm of solicitors, Thomas Taggart & Sons of Ballymoney. That firm was duly notified of the date and time fixed in respect of the application for costs. Even though that firm has unequivocally acknowledged (in correspondence dated 30 July 2004) that their client wishes to withdraw her Originating Application, the proceedings continue to be pending, and will still be pending until a tribunal chairman has issued a decision dismissing the proceedings. Accordingly, notification of the applicant's solicitors is adequate notification, in respect of the application for costs. There has been no contact between the solicitors for the applicant and the solicitors for the respondent since 6 August 2004, when the respondent's solicitors copied the applicant's solicitors with a letter of the same date in which the respondent's solicitors asked the Office of the Industrial Tribunals and Fair Employment Tribunal to fix a date, for the hearing of the application for costs, as soon as possible. In all the circumstances, we did not consider it appropriate to arrange for the applicant's solicitors to be telephoned for the purpose of enquiring as to the reason for their non-attendance at the hearing of the application for costs. We note that, if the applicant's solicitors did mean to attend, and if they consider that there was a good reason for their non-attendance, it may be open to the applicant to make an application, under Rule 13 of the 2004 Industrial Tribunals Rules of Procedure ("the Rules") for review of this decision.
Background
- On 19 February 2004, the applicant's Originating Application in these proceedings was presented. The respondent company is an incorporated body which has its registered office in Scotland. At paragraph 4 of the Originating Application, the applicant, in response to a question as to the place in which she did work for the respondent, stated the following: -
"Based at head office at [the company's registered office] with duties which involved work in other parts of Scotland and in London".
- At paragraph 11 of the Originating Application, the applicant identified the type of complaints which she wished the tribunal to decide, in the following terms:-
"1. Sexual harassment, [contrary] to Sex Discrimination Order (Northern Ireland) 1976 and European Law.
2. Victimisation".
- At paragraph 13 of the Originating Application, the applicant's describes her complaints in the following terms:-
"I commenced employment with the respondent on 25 July 2003. I did not have a contract of employment. At the outset when I was based in London I had to sleep in the same living accommodation as Jan De Vries and he constantly phoned me and bought me gifts. He told me he wanted to buy a flat for me in Troon so I could be based there closer to him and away from Edinburgh. I also was asked to stay at his house on 15/11/03. I was aware of Mr De Vries making inappropriate remarks to me from an early stage but I did not make an issue of this at the time. I sometimes had to work with Mr De Vries in London. He took me to dinner at the Hilton Langhan London on 18 November 2003 during which he started to talk about what he saw as his future with me and after which he kissed me on both lips for a prolonged period. I made my excuses and went to bed but I was very scared as there was no lock on my door and he was next door in the same building. I was unable to sleep for anxiety. On the morning of 19/11/03 he tried to kiss me again this time more forcefully, with his hands on either side of my face. I did not respond to his advances on either occasion. He ignored me thereafter, except that at dinner that night with other staff he made a joke before the whole group, and in my hearing, about jumping into bed with me. Since then I have started to have accommodation outlays charged against me, was told I would not be paid overtime and was not awarded days in lieu, was made to carry equipment to clients, was not kept in touch with what was going on, and had accusations made against me about many minor things, and indeed on 10/02/04 I had to go off on sick leave suffering from stress. I have not been able to return to work since".
- At paragraph 7 of the Notice of Appearance, the respondent denied all of the applicant's allegations; furthermore, the respondent's specified grounds for resisting the claim included the following:-
"The Respondent contends the Industrial Tribunal has no jurisdiction to hear this application under Articles 8 and 13 of the Sex Discrimination (Northern Ireland) Order 1976 as the applicant was not employed at an establishment in Northern Ireland. The applicant was employed and carried out her employment in London and Scotland. The Respondent therefore requests a Preliminary Hearing in this regard".
- On 27 April 2004, the respondent's solicitors served a Notice for Further and Better Particulars. In that Notice (especially at paragraphs 3 and 4) the respondent asked for details which would help to explain the basis upon which the applicant was contending that the acts complained of could be the subject of tribunal litigation in Northern Ireland.
- In May 2004, the case was listed for hearing, on two preliminary issues, the preliminary hearing being scheduled to take place on 2 August 2004. The two issues were as follows:-
"Whether a tribunal has jurisdiction to entertain the applicant's complaint of sexual discrimination in light of the positions of Article 13 of the Sex Discrimination (Northern Ireland) Order 1976 as regards her place of employment".
and
"Whether the tribunal has jurisdiction to hear the application in view of the time limits as set out in Article 76 of the Sex Discrimination (Northern Ireland) Order 1976".
- On 19 July 2004, a tribunal chairman granted an Order for Further and Better Particulars, requiring the applicant to furnish in writing to the respondent's representative all the particulars which were specified in the applicant's Notice of 27 April.
- On or about 9 July 2004, the applicant's solicitors provided responses to the Notice for Further and Better Particulars which had been served on 27 April. At paragraph three of the Notice, the respondent had asked the applicant to confirm whether or not she had ever carried out her employment with the respondent in Northern Ireland and also asked her to explain the basis upon which she contended that the tribunals in Northern Ireland had jurisdiction to hear the application. In response to that query, the applicant's solicitors provided the following details:-
"The applicant's contract of employment was entered into in Northern Ireland when Jan De Vries offered her a job on the spot when he met her after one of his lectures. He told her she could work for him and he would train her 'free of charge'. They subsequently met at Framar Health Lisburn Road, Belfast (where Mr De Vries and the respondent regularly hold clinics and seminars) to discuss the job on 4 December 2002, 30 January 2003 and 19 June 2003 and 16 July 2003 as well as corresponding by letter during this time. On 16 July 2003 he asked her to begin on 24 July 2003 when she would travel to London with him and help manage the London Clinic before going to Scotland to begin her work and training (to become 'the next Jan De Vries' and take over from him so that he could spend more time writing and teaching). The applicant also says that the 1976 Order should be interpreted to ensure her equality of arms and the right of access to a tribunal, which she would be denied if she had to travel to Scotland to pursue her claim.
- At point 4 of the Notice, the respondent had asked the applicant to specify the basis upon which she contended that the incidents alleged to have taken place were within the jurisdiction of Northern Ireland Industrial Tribunals. The response to that query was simply "See 3 above".
- On 27 July, the applicant's solicitors wrote to the Office of the Industrial Tribunals and Fair Employment Tribunal in the following terms:-
"Further to our fax transmission of today's date we have received our client's further instructions. Our client is prepared to concede that the correct jurisdiction in respect of this application is not Northern Ireland, but Scotland and in the circumstances we presume that the directions hearing scheduled for 2 August will not be proceeding, and, secondly, that it will not now be necessary for us to serve Replies or otherwise to comply with the Orders of the Tribunal dated 19 July 2004.
We are advising the Respondent's solicitors accordingly".
- In a letter dated 30 July 2004, to the respondent's solicitors, the applicant's solicitors explained the reason for the commencement of the proceedings in Northern Ireland in the following terms:-
"It was believed when we first took instructions that there might be a basis for issuing the IT1 in Northern Ireland. As time has gone on and further instructions were taken from the Applicant, we have accepted that Northern Ireland is not the correct jurisdiction. It was perfectly reasonable for us to adopt a certain view with regard to jurisdiction even if that view turned out not to be well founded. And of course this is a jurisdictional point which does not relate to the substance of our client's case".
- In the same letter, the applicant's solicitors also made the following comments:-
"We have to say there was nothing frivolous, vexatious or irresponsible in the manner in which our client elected to proceed. With a view to avoiding the parties and the Tribunal being put to the inconvenience of a directions hearing on Monday 2 August we indicated on 27 July that we have instructions to concede the jurisdictional point and we believe we were responsible in so doing.
Upon telephone enquiry from the writer you indicated that you would not be consenting to our withdrawal and instead would be seeking costs. We have not been put on formal notice at all with regard to this matter of costs. In the event that you persist with your intention we will have no option but to instruct counsel to appear on the applicant's behalf before the Industrial Tribunal on Monday. We take the view that by persisting you will bring about a situation where needless costs would have been expended in relation to an argument over costs. This argument with regard to costs in our view should not be before the Tribunal as there has been no frivolous or vexatious behaviour on the part of the applicant in relation to this matter. In the circumstances, we may have to instruct our Counsel to make an application for costs on Monday in which case use will be made of this letter in support".
Rule 14
- This application has been made pursuant to Rule 14. That Rule, so far as material, makes provision as follows:-
"14(1) Where, in the opinion of the tribunal, a party has in bringing the proceedings, or a party or a party's representative has in conducting the proceedings, acted … unreasonably, or a party's actions in bringing the proceedings have been misconceived, the tribunal shall consider making, and if it so decides, may make –
(a) an order containing an award against that party in respect of the costs incurred by another party;
(b) an order that that party shall pay to the Department the whole, or any part, of
[certain allowances]".
Issues and arguments in relation to liability for costs
- On behalf of the respondent, Mr Hamill made the following points. The respondent had incurred costs of £3,500 plus VAT as a result of the late withdrawal of the proceedings. That sum, according to Mr Hamill, was made up of £1,500 plus VAT for Counsel's fees and £2,000 plus VAT for solicitors' fees. The proceedings were misconceived. The applicant or her representatives had acted unreasonably in continuing them for so long. The tribunal should exercise its discretion by making an award of costs, because of the late withdrawal of the proceedings.
- In our view, in the context of liability for costs, the following issues have to be addressed:-
(1) Was the bringing of the proceedings misconceived?
(2) Did the applicant or her representatives act unreasonably in persisting with the proceedings until 27 July 2004?
(3) If the answer to issue (1) or issue (2) is in the affirmative, should the tribunal make an award of costs in respect of the costs incurred by the respondent?
Were the proceedings misconceived?
- In effect, these were proceedings brought under the Sex Discrimination (Northern Ireland) Order 1976 ("the 1976 Order"), in which the applicant alleged that the respondent had unlawfully discriminated against her contrary to Article 8(1) of the 1976 Order. However, as Article 8(1) makes clear, that provision applies only "… in relation to employment … at an establishment in Northern Ireland …". Article 13 of the 1976 Order (as amended) provides that, in the context of the Order, employment is to be regarded as being at an establishment in Northern Ireland "unless the employee does his work wholly outside Northern Ireland". Therefore, on the face of it, the Order obviously does not apply if the relevant employment is pursued wholly outside in Northern Ireland.
- It is true that, in their Replies to the Notice for Further and Better Particulars, the applicant's solicitors asserted that the 1976 Order had to be interpreted to ensure equality of arms and the right of access to a tribunal, which (according to the applicant's solicitors) the applicant would be denied if she had to travel to Scotland to pursue her claim.
- The references (in the Replies to the Notice) to equality of arms and to the right of access to the tribunal are clearly, references to the supposed requirements of Article 6 of the European Convention on Human Rights. However, Clydesdale –v- Driver & Vehicle Testing Agency [2002] NI 421 is clear authority for the proposition that Article 6 does not apply to substantive rules of law, such as those which are to be found in Article 8(1) of the 1976 Order, as amplified in Article 13 of that Order. (See Clydesdale, at 429). Therefore, it is obvious that there will be no breach of human rights obligations if Article 8(1) of the 1976 Order is construed as applying only in respect of employment carried out wholly or mainly in Northern Ireland.
- Against that background, and for those reasons, we are satisfied that the applicant's actions in bringing the proceedings were misconceived.
Did the applicant, or her representatives, in conducting the proceedings, act unreasonably?
- In our view, the applicant or her representatives did act unreasonably, in conducting the proceedings, by failing to withdraw them soon after they had been initiated. In our view, at the latest, the proceedings ought to have been withdrawn within one month after the date of presentation of the Originating Application.
Should an order for costs be made?
- In our view, it would not be appropriate to make an order for costs merely because misconceived proceedings have been brought. Lawyers often have to protect their client's position by commencing proceedings, in situations in which they have insufficient time to exhaustively check the legal position. The opposing party does not necessarily incur costs as a result, provided that any misconceived proceedings are withdrawn promptly, once the advisors have taken steps to consider the legal position thoroughly.
- However, in this case the misconceived proceedings were allowed to continue in being for a lengthy period. The implication of the applicant's solicitors letter of 30 July (with its reference to the proposition "… that there might be a basis for issuing [the proceedings] in Northern Ireland…") is that, even when proceedings were begun, the applicant's representatives were uncertain, at the very least, about the viability of the proceedings. It would have been appropriate in those circumstances for the applicant's legal advisers to speedily and thoroughly consider the legal context. If that had been done, the applicant's solicitors would speedily have discovered that, in the absence of human rights obligations, there clearly was no basis for pursuing an Article 8 complaint in Northern Ireland. If the human rights position had been adequately researched, the Clydesdale decision would speedily have come to their attention.
- In those circumstances, and for those reasons, the tribunal decided to make an award against the applicant in respect of the costs incurred, on or after 20 March 2004, by the respondent.
The arguments and the issues in relation to the amount of costs
- Paragraph (3) of Rule 14 contains provisions in relation to the amount of any order for costs made pursuant to that Rule. Rule 14(3) is in the following terms:-
"(3) An order containing an award against a party ("the first party") in respect of the costs incurred by another party ("the second party") shall be –
(a) where the tribunal thinks fit, an order that the first party pay to the second party a specified sum not exceeding £10,000;
(b) where those parties agree on a sum to be paid by the first party … the sum so agreed; or
(c) in any other case, an order that the first party pay to the second party the whole or a specified part of the costs incurred by the second party as assessed by way of detailed assessment (if not otherwise agreed)".
Paragraph (6) of Rule 14 provides as follows: -
"(6) any costs required by an order under this rule to be assessed by way of detailed assessment may be so assessed in the county court in accordance with such of the scales prescribed by county court rules for proceedings in the county court as shall be directed by the order".
- We told Mr Hamill that it would be helpful if a detailed bill, setting out details of the work done, and the time spent, and the hourly rates, were to be prepared. We also told him that we considered that it would be helpful if he were to make written submissions to the tribunal, setting out detailed arguments in relation to comparables, and in relation to the appropriate basis for calculating the amount of any order for costs. He was reluctant to follow either course of action, for what seem to us to be understandable reasons. He pointed out that, if he were to follow either course of action, there would be a delay in the final disposal of the proceedings and there might well also have to be a further hearing.
- Mr Hamill's arguments can be summarised as follows. Discrimination cases are complex. They are far more complicated than, say, personal injuries cases. The appropriate comparison was with High Court costs, rather than County Court costs. It was necessary for the respondent to engage a barrister in relation to the preliminary hearing. There might have been a conflict on the facts in relation to matters relevant in jurisdiction, or the applicant might have made allegations (which the respondent would contend would be false allegations) in relation to the harassment complaint, in the course of the preliminary hearing. In either situation, it would be necessary for the respondent to have a representative who was a skilled cross-examiner. He also pointed out that it was necessary, because of the seriousness of the allegations and because of the nature of the allegations, for the respondent to proceed with some detailed investigation and preparatory work in respect of the merits hearing, once it became obvious that the case was not going to quickly disappear. He drew our attention to the January 2004 edition of the Belfast Solicitors' Association Guide to High Court costs. He also drew our attention to the various County Court scales, including the scale which is applicable in cases brought in the County Court under discrimination legislation. He told us that, in 2003, the "A Factor" hourly rate allowed by the Taxing Master was £76, with a "B Factor" of 50% being allowed for most kinds of work. Mr Hamill also drew our attention to the guidelines provided by the English Court of Appeal in the case of Vento v Chief Constable of West Yorkshire Police [2003] ICR 318, at pages 335-336, where the English Court of Appeal gave guidance as to the three broad bands of compensation for injury to feelings, which ought to be recoverable in employment discrimination cases. Mr Hamill pointed to the seriousness of the allegations made in the Originating Application.
- It seems to us that, on the question of the amount of an order for costs, the following are the main issues:-
(1) What are general principles upon which costs should be awarded?
(2) How much should be allowed in respect of solicitors' costs?
(3) Should a fee in respect of Counsel be allowed?
(4) If so, how much should be allowed in respect of Counsel's fees?
The general principles in respect of the amount
- On behalf of the respondent, Mr Hamill has asserted that £3,500 worth of costs have been incurred by the respondent as a response to these proceedings. The implication of that assertion is that the respondent's solicitors intend to charge the respondent that amount in respect of costs. (The tribunal notes there can be an award in respect of costs which have actually been incurred, even if they have not yet been paid. However, there cannot be an award unless the costs have actually been incurred.)
- No written note of the costs incurred, specifying the precise work which has been done, or the dates and times on which it was done, has been provided to us. In the circumstances, we are therefore only willing to award costs of such an amount as we are satisfied must necessarily have been incurred, for the purposes of proportionately protecting any respondent's interests, in any case of this nature.
- Awards are compensatory, not punitive. We have discretion, under Rule 14(3), to award the respondent only a proportion of his costs. We consider that no award is due in respect of any period prior to the expiration of a period of one month after the date of presentation of the Originating Application. However, in respect of the period beginning then and terminating at the date of withdrawal of proceedings, we see no reason to award the respondent anything less than 100% of the costs referred to at paragraph 32 above. We accept that serious allegations were being made in this case and that it was necessary for work to be done on the merits issues, even in advance of the resolution of the preliminary issues, because of the nature and seriousness of the allegations.
The amount of solicitors' costs
- According to Mr Hamill, by the date on which withdrawal of the proceedings was intimated, the respondent's solicitors had served a Notice for Particulars, and a Notice for Discovery; they had sought an Order for Particulars; they had obtained an Order for Particulars; they had taken instructions generally; they had done work in relation to the general investigation of the merits of the claim; and they had prepared the bundle for the preliminary hearing. We accept the accuracy of those assertions.
- We have had regard to the various scales. In particular, we had regard to the Taxing Master's 2003 hourly rate and to the various County Court scales. Against that background, we consider that it is appropriate to allow a sum of £750 in respect of solicitors' work.
Should counsel have been instructed?
- After some hesitation, we concluded that it was appropriate for the respondent to have Counsel to represent it at the preliminary hearing. There was a need for a skilled cross-examiner to be present on behalf of the respondent, because of the considerations to which Mr Hamill has drawn our attention, as outlined above at paragraph 29.
The amount of costs in respect of counsel
- Mr Hamill told us that he had advised generally in relation to the case, as well as advising in relation to the preliminary issue, and he had kept his diary free for the preliminary hearing. We accept the accuracy of those assertions.
- We have had regard to various scales to which our attention has been drawn. We have considered all the circumstances of the case, and the context of the work which would have had to be carried out by any Counsel, in a case such as the present case, for the purpose of proportionately protecting the interests of any respondent during the relevant period. In particular, we have considered the amount of work which had to be carried out by a barrister; the complexity of the issues; the skill, specialised knowledge and responsibility required of Counsel; the importance of the matter to the respondent; and the nature and seriousness of the allegations which had been made by the applicant Having done so, we considered that it is appropriate to allow £750 in respect of Counsel's fees.
Value added tax
- We consider that the respondent is also entitled to any value added tax payable on the sums which are included within the overall total of £1,500.
Chairman:
Date and place of hearing: 25 October 2004, Belfast.
Date decision recorded in register and issued to parties:
