Appeal No. EAT/0296/03 MA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 15 October 2003

Before
HIS HONOUR JUDGE RICHARDSON
MR A HARRIS
MISS D WHITTINGHAM

WEIR VALVES & CONTROLS (UK) LTD	APPELLANT

MR J B ARMITAGE	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR R MOORE
(of Counsel)
Instructed by:
Messrs Cobbetts Solicitors
Ship Canal House
King Street
Manchester M2 4WB	
For the Respondent	MR W McCARTHY
(of Counsel)
Instructed by:
Messrs Ramsdens Solicitors
Ramsdens Street
Huddersfield HD1 2TH	

HIS HONOUR JUDGE RICHARDSON

1	This is an appeal against a decision of an Employment Tribunal sitting in Leeds on 5 and 10 February 2003.  The Employment Tribunal struck out the Appellant’s Notice of Appearance and proceeded to hear the Respondent’s application for unfair dismissal without any participation from the Appellant.  The Employment Tribunal awarded the statutory maximum compensatory award which was £52,600.  The Appellant contends that the Notice of Appearance should not have been struck out.

2	The Respondent, an employee with 34 years service, was dismissed by the Appellant for redundancy with effect from 8 July 2002.  On 3 October 2002 he presented an Originating Application to the Employment Tribunal claiming compensation for unfair dismissal.  His application was supported by two typed pages of grounds of appeal, together with a copy of a letter dated 28 June 2002 which he had written in support of an internal appeal.  He criticised the way in which selection criteria had been applied to him.  He criticised his selection for redundancy when he might have returned to his old department to replace Neil Wardman who was willing to volunteer.  He disputed that a redundancy existed at all in his current department when he said “work was brought back in from contractors and new employee was subsequently taken on”.  These were points of substance, well set out in the Originating Application.

3	On 30 October 2002 the Appellant, represented by solicitors, entered a Notice of Appearance.  This too was supported by typed grounds which are reasonably detailed.  The grounds confirm the existence of a redundancy programme and set out the manner in which consultation was arranged with different work groups.  They explained the criteria for selection and denied that the Respondent’s selection was unfair.

4	On 7 November the Employment Tribunal gave directions.  By paragraph 4 of those directions it was provided:

4	“Witness statements of all witnesses upon whose evidence the parties intend to rely at the hearing (including that of the applicant) shall be exchanged at the same time but no later than 14 January 2002.  Witness statements shall contain all the evidence of the witness and shall stand as his or her evidence-in-chief.  Supplementary questions will only be allowed at the hearing upon the party wanting to ask supplementary questions showing good reason for not including particular evidence in the witness statement.”

Subsequently, the hearing was set for 5 February 2003.

5	The Respondent complied with paragraph 4.  He served his witness statements on 13 January 2003.  We have read them.  They are succinct.  The Respondent’s own statement, a single page, is less detailed than his Originating Application.  It adds nothing to his Originating Application.  Three supporting statements were testimonials.  A final statement from Mr Wardman expands a little on the Originating Application as it concerns him.  His statement names the persons he asked about voluntary redundancy.

6	Most regrettably, the Appellant did not comply with paragraph 4.  The Appellant’s solicitor did not begin to prepare witness statements until 21 January 2003.  By letter dated 24 January 2003 he served four statements.  This was 10 days after the time laid down in the Directions.  A final witness statement was served on 31 January 2003; 17 days after the time laid down in the Directions.

7	It should be pointed out, however, that the Respondent had most of the witness statements 9 or 10 days before the hearing and the last witness statement several days before the hearing.

8	This failure to comply with paragraph 4 was compounded in two ways.  Firstly, the Appellant’s solicitor read the witness statements that had been given to him by the Respondent.  The Order of the Employment Tribunal was an order for the statements to be exchanged at the same time.  Good practice by a solicitor unable to exchange witness statements, but receiving witness statements from a litigant in person, would have been to leave the statements unopened or even return them.  Nor did the Appellant’s solicitor apply to the Employment Tribunal for an extension of time, or ask the Respondent if he was prepared to grant one.

9	The Appellant’s solicitor’s conduct was cavalier and must have left the Respondent with a most unfortunate impression.  The Respondent wrote to the Employment Tribunal complaining that what had happened was unfair and gave the Appellant an unfair advantage.  The Employment Tribunal replied that the matter would be dealt with at the outset of the hearing.  When the hearing began the Employment Tribunal gave notice to the Appellant to show cause why the Notice of Appearance should not be struck out.

The Rules of Procedure

10	Procedure before Employment Tribunals is governed by the Employment Tribunals (Constitution & Rules of Procedure) Regulations 2001.  Paragraph 10 of those Regulations states that the overriding objective of the Rules in the Schedules is to enable Tribunals to deal with cases justly: Rule 10 (1).  By Rule 10 (2), dealing with a case justly includes, so far as practicable, ensuring that the parties are on an equal footing, saving expense, dealing with the case in ways which are proportionate to the complexity of the issues and ensuring that it is dealt with fairly and expeditiously.  A Tribunal must seek to give effect to this overriding objective when it seeks to exercise any power given to it by the Rules.

11	The Rules themselves, the Employment Tribunal Rules of Procedure 2001, are in Schedule 1 to the Regulations.  By paragraph 4 (1) of the Rules, a Tribunal has wide powers to give directions for case management.  By paragraph 4 (3), they may include the directions relating to the provision and exchange of witness statements.  By paragraph 4 (8), sanctions are provided.  They may include an order for costs and an order that the whole or part of a Notice of Appearance may be struck out.  Rule 15 contains further powers to strike out an Originating Application or a Notice of Appearance where there has been scandalous, unreasonable or vexatious conduct by a party.

12	An appeal lies against an Employment Tribunal’s decision only on a question of law.  An interlocutory decision will only be challengeable where the Employment Tribunal exercised its discretion under a mistake of law or in disregard of principle or under a misapprehension as to the facts, where they took into account irrelevant matters, failed to take into account relevant matters or where the conclusion was outside the generous ambit within which reasonable disagreement is possible.  If such a mistake of law is made, the Employment Tribunal’s discretionary decision will be set aside.  If the matter is plain enough on the material before the Employment Appeal Tribunal, the Employment Appeal Tribunal itself may exercise the discretion that would otherwise have fallen for exercise by the Tribunal below.  Otherwise, it must remit the matter for further or fresh consideration by the Employment Tribunal.

13	What are the principles on which the Employment Tribunal should act in deciding whether to strike out in a case such as this, where there has been a breach of a direction?

14	Where the unreasonable conduct which the Employment Tribunal is considering involves no breach of a court order, the crucial and decisive question will generally be whether a fair trial of the issues is still possible: De Keyser Ltd v Wilson [2001] IRLR 324, at paragraphs 24 to 25 applying Logicrose Ltd v Southend United Football Club Ltd (Times, 5 March 1998) and Arrow Nominees Inc v Blackledge [2000] 2 Butterworths Company Law Cases, 167.  De Keyser Ltd v Wilson was recently followed and applied in Bolch v Chipman [2003] EAT 19 May, a decision which has been starred and is likely to be reported: see pages 21-22.

15	Even if a fair trial as a whole is not possible, the question of remedy must still be considered so as to ensure that the effect of a debarral order does not exceed what is proportionate: see Bolch v Chipman at pages 23-25.  For example, it may still be entirely just to allow a defaulting party to take some part in a question of compensation which he is liable to pay: see page 25.

16	Those principles apply where there is no disobedience to an order.  What if there is a court order and there has been disobedience to it?  This is an additional consideration.  The principles which we have set out above do not apply in the same way.  The Tribunal must be able to impose a sanction where there has been wilful disobedience to an order: see De Keyser v Wilson at paragraph 25, Bolch v Chipman at page 22.

17	But it does not follow that a striking out order or other sanction should always be the result of disobedience to an order.  The guiding consideration is the overriding objective.  This requires justice to be done between the parties.  The court should consider all the circumstances.  It should consider the magnitude of the default, whether the default is the responsibility of the solicitor or the party, what disruption, unfairness or prejudice has been cause and, still, whether a fair hearing is still possible.  It should consider whether striking out or some lesser remedy would be an appropriate response to the disobedience.

18	In the Civil Procedure Rules 1998 there is, at Part 3, Rule 9, a checklist to be considered upon an application for relief from a sanction.  The Employment Tribunal Rules of Procedure 2001 contain no similar checklist; but the overriding objective in Rule 10 requires a broadly similar approach.  As Millet J said, in another context, in Logicrose Ltd v Southend United Football Club Ltd:

“The Court must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice.”

The Tribunal’s Decision

19	We turn then to the Employment Tribunal’s Decision.  The part of the Decision which is the subject of the appeal begins at paragraph 14.  Between paragraphs 14 and 17 the Employment Tribunal direct themselves to take into account the question whether there has been prejudice and whether or not a fair hearing is still possible.

20	The Employment Tribunal reached the conclusion that the Respondent had clearly been prejudiced.  It reached this conclusion not because any specific prejudice was pointed out by the Respondent, for example, in his inability to call a witness, but because what the Appellant had done enabled it, in principle, to tailor witness statements in accordance with the contents of the statements that had been served on them.  The Employment Tribunal said:

16	“It is, of course, impossible to know to what extent the Respondents have done so.  The Applicant clearly believes they have.  If they have that is an advantage that they would have throughout the hearing that we could not, realistically, negate.  That would not, therefore, be a fair hearing.”

21	On behalf of the Respondent, Mr McCarthy in his submissions upholds that reasoning.  He says that a fault line was crossed when Mr Roberts, the Appellant’s solicitor, opened the statements and read them.  He said that the very opening of the statements and the reading of them placed the Employment Tribunal in an impossible position.  It could scarcely be fair to allow a cross-examination of Mr Roberts by a litigant in person in order to ascertain whether any unfair advantage had taken place.  The only option, he said, was to strike out the Notice of Appearance in the face of such a default by Mr Roberts.

22	We have reached the conclusion that in paragraphs 15 to 16 of the Employment Tribunal’s Decision there is a clear error of approach.  The only prejudice which the Employment Tribunal found to exist on the part of the Respondent was that the Appellant had the opportunity to tailor its witness statements.  The Employment Tribunal did not make or record any inquiry as to whether that had taken place, simply saying that it was impossible to know the extent to which it had been done.

23	But in this matter, in our judgment, a proper inquiry could have been made.  The Respondent’s witness statements, except in one respect, did not go beyond his Originating Application.  Quite apart from the fact that the Appellant’s solicitor denied taking any unfair advantage, in this case a perusal of the witness statements would have shown that there was no unfair advantage taken.

24	In our judgment, there was insufficient basis for a finding that the Respondent had clearly been prejudiced when no such inquiry had been made and where the Employment Tribunal simply said that it was “impossible to know” the extent to which any advantage had been taken.

25	We pause to refer to the statement of Mr Raby, which was the last statement that the Appellant had served.  It is common ground that the Appellant’s solicitor took an additional statement from Mr Raby and served it later because he had read the Respondent’s witness statements.  However, Mr Raby’s name had not been mentioned in the Originating Application and we see no injustice in an additional statement being taken once the name had been given.

26	The Employment Tribunal went on, in paragraph 17, to say the following:

17	“At any event whether a hearing is fair or not is often as much a matter of perception as it is a matter of reality.  Mr Armitage is affronted by the Respondent’s actions, he firmly believes, as he has said to us, that it is “not fair”.  He is absolutely right to think that.  If we ignore the Respondent’s acts he will have that belief throughout these proceedings, and in the event that he were to be unsuccessful will always believe that he has been cheated.  We doubt that anything that we were to say or do would alter that.  That, in our view, makes a fair hearing impossible.”

27	It seems to us that whether a fair hearing is impossible is to be judged objectively by the Employment Tribunal.  The feeling of one party or the other, whether soundly based or not, is not in itself a decisive factor.  What the Employment Tribunal must do is address its mind to the issues in the case, address its mind to the fairness of allowing the case to proceed in the face of the default and reach an objective decision as to whether a fair trial is possible.

28	When we read paragraphs 14 to 17 we do not see the careful approach to this question which we would have expected to see.  We bear in mind the default which was made by the Appellant through its solicitors.  We bear in mind that this will have given a sense of unfairness to the Respondent; but, objectively viewed, we do not think that there was anything in the late service of the witness statements which rendered a fair trial impossible.  As we have said, the witness statements of the Respondent were limited in their extent.  The witness statements served by the Appellant were responsive to its own Notice of Appearance.  We do not think any injustice would have been caused by going ahead with the case.
29	In our judgment, in its approach at paragraphs 14 to 17, the Employment Tribunal fell into error in the manner in which we have described.

30	We should also note paragraphs 18 to 19 of the Decision.  In those paragraphs the Employment Tribunal refer to the fact that they are required as a matter of law to case manage.  They refer to the fact that, as they say, if they do not strike out the Notice of Appearance there will effectively have been a flagrant breach of the terms of the direction to the advantage of the Appellant that will be done without any sanction being imposed.

31	In our judgment this consideration does not obviate the need for the kind of inquiry which we have already identified.

32	The Employment Tribunal also say, in paragraph 19, that they have no other effective sanction.

33	If some unfairness had accrued from one or more of the Appellant’s witness statements being served at the last moment, or taking unfair advantage of the failure to exchange, we consider that the Employment Tribunal would have had a remedy short of the sanctions remedy.  It would have had the power, by combination of Rule 4 and Rule 16, to exclude all or part of such a witness statement if it was proportionate to do so having regard to the default and to the overriding objective.  We should not therefore be taken as agreeing with paragraphs 18 and 19 of the decision.

34	A further point was taken on behalf of the Appellant to the effect that the Employment Tribunal was wrong to prevent the Appellant from taking any further part in the proceedings, even after making its debarrel order.  That is an interesting point, but having regard to our decision thus far it is not necessary to decide it and we will not do so.

35	Is this a clear case where we can ourselves exercise the discretion which the Employment Tribunal should have exercised?  We believe it is.  We conclude that despite the Appellant’s default the Employment Tribunal should not have struck out the Notice of Appearance and should have allowed the Appellant to adduce evidence in accordance with the witness statements.  They were supportive of the case in the Notice of Appearance.

36	We have not detected any unfair advantage being taken of the service of the Respondent’s witness statements.  Although they were served late, the Respondent had time to read and digest them.  The default of the Appellant’s solicitors could and should have been dealt with by a stiff remand in open Tribunal.  An apology has been proffered to us by Mr Roberts who has attended and listened to our criticisms of him as this hearing has proceeded.  

37	The only statement which calls for particular mention is Mr Raby’s statement.  Although this was served later and was responsive to a witness statement served by the Respondent, there was no unfairness in doing so.  The name, as we have said, came from the Respondent’s witness statements.

38	In these circumstances, the appeal is allowed and the case is remitted to a fresh Employment Tribunal to hear the claim for unfair dismissal on the evidence.