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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Hosie v North Ayrshire Leisure Ltd [2003] UKEAT 0013_03_0210 (2 October 2003) URL: http://www.bailii.org/uk/cases/UKEAT/2003/0013_03_0210.html Cite as: [2003] UKEAT 0013_03_0210, [2003] UKEAT 13_3_210

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APPEARANCES

 

 

 

For the Appellants	Mr A White, QC, Barrister Instructed by- UNISON Employment Rights Unit 1 Mabledon Place LONDON WC1H 9AJ
For the Respondents	Ms M MacDonald, Solicitor Of- Messrs Miller Samuel & Co Solicitors 5 Renfield Street GLASGOW G2 5EZ

 

 


 


LORD JOHNSTON:

 

1. This appeal is taken by the unsuccessful applicants before the Employment Tribunal in relation to a claim for sex discrimination against an order for costs which was made against them by the Employment Tribunal. The relevant part of the decision in the following terms:-

"It was apparent that the applicants in bringing and pursuing these applications acted with the support and advice of their trade union, UNISON. The Tribunal would not expect the applicants to have sufficient knowledge about the law in relation to sex discrimination to be able to make an assessment themselves of whether the applications had any reasonable prospect of success or not. The decision of the Employment Appeal Tribunal in the case of Beynon v Scadden makes it clear that it is appropriate for an Employment Tribunal to make an award of expenses against a party if it is satisfied that the conduct of the party's representative is within the terms of Rule 14(1). That decision was one made in relation to the rule on expenses contained in the 1993 Regulations in which the equivalent of Rule 14(1) made no reference to "a party's representative." The Employment Appeal Tribunal decided that for the purposes of the then applying rule on expenses a party had to take responsibility for the conduct of his representative. The new Rule 14 does make reference to "a parties' representative" but not in relation to the bringing or conducting of the proceedings being misconceived. The Tribunal did not consider it inappropriate to apply the principle enunciated in Beynon to that part of Rule 14(1) so that it found it itself able to conclude in the circumstances of this case that the bringing of the proceedings by the applicants has been misconceived.

The Tribunal found some support for its conclusion that the bringing of these proceedings has been misconceived from what occurred at the commencement of the hearing. As noted above, Mr McFarlane informed the Tribunal at the outset that each applicant sought an award for loss of earnings when each was competing with the other, among others, for the same position. The Tribunal could envisage that applicants in that situation might seek an award for loss of opportunity but it could not understand how each could seek an award for loss of earnings. Mr McFarlane went on to suggest that each applicant wished to complain of indirect discrimination. He did not volunteer on what basis it was said that there had been indirect discrimination. Following an adjournment he simply withdrew that part of the claim. These matters suggested to the Tribunal that there had been a lack of proper consideration on the part of Mr MacFarlane or UNISON prior to the hearing about the issues raised by these applications.

For these reasons the Tribunal decided that in the particular circumstances of this case it would be appropriate to make an award of expenses against the applicants. In terms of Rule 14(3)(a) and (c) the Tribunal has an option either to make an order that the applicants pay to the respondents a specified sum of expenses not exceeding £10,000 or the whole or a specified part of the expenses as taxed (if not otherwise agreed). As already noted, Ms MacDonald initially suggested an award of £2,000 but when asked about that figure indicated that the respondents would be happy to have an award of expenses as taxed."

 

2. The relevant rule is Rule 14(1) of the Employment Tribunals (Constitution and Rules of Procedure (Scotland) Regulations 2001 Schedule 1 which is in the following terms:-

"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 vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by a party has been misconceived, the tribunal shall consider making, and if it so decides, may make…"

 

3. It has to be recognised at once that this Rule amends the previous Rule which was Rule 12 of the 1993 Regulations, by adding in the words "or a party's representative" which did not previously feature, and, further, by adding in the phrase "or the bringing or conducting of the proceedings by a party has been misconceived". Thus there has been a fairly radical alteration to the Rule previously applying, in respect to which a certain amount of case law had built up. We were told that this is the first time this Rule in its amended form has been considered by the Employment Appeal Tribunal. It also has to be noted in terms of Regulation 2(2) of the Employment Tribunals (Constitution and Rules of Procedure (Scotland) Regulations 2001, "misconceived" is defined as including "having no reasonable prospects of success".

 

4. Mr White, Q.C., appearing for the appellants, in approaching the question of the interpretation of the new Rule 14(1), emphasised before us that Parliament had deliberately created, in his submission, a jurisdiction which, save in exceptional circumstances, an order for costs for expenses should not be imposed on an unsuccessful party. He quoted from Kovacs v Queen Mary and Westfield College [2002] IRLR 414, a passage from Chadwick LJ in the following terms:-

"The inference, as it seems to me, must be that Parliament was satisfied that the power to make orders containing an award of costs, subject to the restriction referable to conduct, gave proper recognition to the need to ensure (i) that, in connection with the determination of employment rights, a party – and, in particular, an employee – could have recourse to a tribunal without being deterred by the potential liability for the other party's costs which is a feature of litigation in the courts, and (ii) that that immunity was not abused."

 

5. He also referred us to Gee v Shell UK Ltd [2003] IRLR 82 where Scott-Baker LJ stated at paragraph 22:-

"… is a jurisdiction where an order for costs is very much the exception rather than the rule."

 

In the same case, Sedley LJ stated at paragraph 35:-

"It is nevertheless a very important feature of the employment jurisdiction that it is designed to be accessible to people without the need of lawyers, and that – in sharp distinction from ordinary litigation in the United Kingdom – losing does not ordinarily mean paying the other sides costs. … The governing structure remains that of a cost free user-friendly jurisdiction in which the power to award costs is not so much an exception as a means to protecting its essential character."

 

6. Mr White went on to submit that, effectively, the new rule was in three limbs and pointed to the fact that, in the present case, the order for costs had been made by the Employment Tribunal on the third limb, that is to say, on the issue of misconception. However, he pointed out that in applying this Rule or this part of the Rule, the Employment Tribunal had relied upon what was said to be the conduct of the parties' representative, not anything in the minds of the appellants themselves. In this respect the Tribunal had extended the reasoning of Beynon v Scadden [1999] IRLR 700 to the new addition to the Rule. Mr White's position was that whatever may have been the correctness of Beynon in relation to the old Rule, it was nothing to the point with the regard to the new one which had to be separately construed against the narrow interpretation for which he contended. Thus, he submitted, the Tribunal had made an error of law by applying an issue of conduct of a representative to the third branch or limb of the Rule.

 

7. He went on to submit that, in any event, if he was wrong about that, the Tribunal had not properly investigated the real test which should have been whether there was any reasonable prospects of success. Either way, the Tribunal accordingly made an error of law and the decision should be quashed.

 

8. Ms MacDonald, appearing for the respondents, submitted that the Tribunal had correctly applied the tests against the background of Beynon. The issue was, whether or not, in all the circumstances, that the appellants could reasonably have been seen to have any prospects of success and the Tribunal had accordingly exercised its discretion on a valid basis. She referred us to a decision of this Tribunal, namely, Stubbings v Ministry of Defence which was unreported but dated 23 March 1988 in which this Tribunal emphasised the very high test to be applied by this Tribunal if it is to interfere with an order of costs before the Employment Tribunal exercising its discretion.

 

9. In seeking to resolve this matter, we must observe, firstly, that we do not consider the case of Beynon to be relevant to the issue now facing this Tribunal as the proper interpretation of the new Rule 14 because of the substantial change in wording. As a matter of statutory construction the insertion of the words "parties' representative" must have had a purpose in the minds of the draughtsman and against the background of the narrow interpretation which Mr White urges upon us, which we accept, we consider its purpose, given the existence of Beynon in relation to the old Rule, which would apply conduct of a representative to any aspect of the Rule, the intention of the draughtsman was to restrict the issue of conduct of the representative to only the limb to which it is attached. In other words, it is relevant for a Tribunal to consider how a party's representative has conducted the proceedings as part of the question as to whether or not the tests established by the adverbs in the second branch of the Rule is met. It accordingly follows that we do not consider that it is relevant to consider the conduct of a representative in relation to the third limb. The proper test in this respect must be, looking at the matter objectively, did the applicant's case have any reasonable prospects of success, either at the time of conception or during the course of its currency. We consider that the phrase "or conducting of the proceedings" in the third limb, raises a difficulty as a matter of construction but we consider that, properly understood, it must be meant to embrace a notion that, even if a case had reasonable prospects of success at the start, it may develop in such a way as those prospects of success disappear. Thus it is possible for the Tribunal to consider the issue not only at the time of inception, but also during the currency of the case right up to its conclusion. The question is not directed to issues of fault or blame, but simply imposes an objective assessment of all the circumstances of the case.

 

10. If this approach is correct it is plain that the Tribunal misconstrued the test to be applied to the third limb, having not even addressed the issue of no reasonable prospects of success.

 

11. In these circumstances the decision cannot stand nor would it be appropriate for us to remit the matter back for further consideration, given that a decision has been reached, which might cause the Tribunal to prejudge the issue if it is being reconsidered.

 

12. In these circumstances we will allow this appeal and quash the decision on costs.