FAIR EMPLOYMENT TRIBUNAL

CASE REFS:   169/09 FET
6666/09
253/09 FET
7553/09
63/10 FET
1457/10

CLAIMANT:		Dr Shyam Chakraborty 

RESPONDENTS:		1.	University of Ulster
				2.	Prof Martin McGinnity
				3.	Professor Liam Maguire
				4.	Dean Richard Millar
				5.	Professor Brian Scotney
				6.	Professor Gerry McAllister

DECISION ON COSTS

The unanimous decision of the Tribunal is that the claimant’s application for an extension of time within which to apply for a Preparation Time Order is refused.

The respondents’ application for a Order for Costs is granted and the claimant is ordered to pay £10,000.00 costs to the respondents.  

Constitution of Tribunal:
Vice President:		Mr N Kelly 
Members:			Mr B McGuire
				Mr P McKenna

Appearances:
The claimant was represented by Mr A Melia.
The respondents were represented by Mr B Mulqueen, Barrister-at-Law, instructed by Mr O McCullough, of University of Ulster Legal Service.

Preparation Time Order application

1.	Under Rules 27 – 41 of the Fair Employment Tribunal Rules of Procedure, set out in Schedule 1 to the Fair Employment Tribunal (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005, a Preparation Time Order may be made in favour of an unrepresented litigant in respect of time spent preparing for a hearing, but not for the hearing itself.  To make an Order, the Tribunal must be satisfied that the other party has, in the conduct of the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably or be satisfied that the other party’s conduct or bringing of the proceedings has been misconceived.  

2.	An application for a Preparation Time Order must be made either during the proceedings or within 28 days of the date on which a decision was issued to the parties following the conclusion of the proceedings.  

3.	In the present case, the claimant had claimed that the respondents had unlawfully discriminated against him on grounds of both race and religious belief and, further, that he had been unfairly dismissed and had suffered an unauthorised deduction from wages and/or a breach of contract.  Those claims were heard over three days, between 14 – 16 June 2011.  All the claims were dismissed in a written decision which was issued to the parties on 9 August 2011.  

4.	The claimant made no application for a Preparation Time Order during the course of the proceedings or within 28 days of the date on which the decision was issued to the parties.  The claimant has referred to an e-mail of 28 April 2011 which he argues constituted such a application for a Preparation Time Order.  The Tribunal does not agree.  The e-mail read, in relevant part:-

“I am thus soliciting the Tribunal’s opinion to seek cost attachment and/or fine and/or draw adverse inference as appropriate under Article 84(9)(10) of the Fair Employment and Treatment (Northern Ireland) Order 1998 and Rule 9(2)(d) of the Fair Employment Tribunal Rules of Procedure 2005.”

5.	The e-mail nowhere uses the words ‘Preparation Time Order’ or refers to the appropriate Rules.  The only references to legislation are to those parts of the 1998 Order which deal with criminal offences and to a Rule dealing with Orders for Discovery and Inspection.  

	Mr Melia argued that the claimant, as an unrepresented litigant, should be allowed considerable latitude and that the Tribunal should read this e-mail, in fact, as a request for a Preparation Time Order.  The claimant had been assisted, in turn, by two separate firms of solicitors, was fluent in English and was able, as his request during the case-management process indicated, to access the relevant Rules.  He was an intelligent man and perfectly capable of seeking advice and applying in clear terms for a Preparation Time Order if he had wished to do so.  He did not.  Furthermore, the claimant did not seek to pursue the e-mail of 28 April 2011 and did not at any point attempt to that it had in fact been an application for a Preparation Time Order, until long after the decision had issued dismissing his claims.  He did not mention preparation time or argue that his preparation time had been increased or affected by any action or failure on the part of the respondents.  In fact, he only raised this issue and sought to re-interpret his e-mail as an application for a Preparation Time Order when it became clear that the respondents were seeking an Order for Costs against him.  

6.	The Tribunal has power under Rule 37(5) to extend the time allowed for the lodgement of an application for a Preparation Time Order if an extension is in the interests of justice.  It is clear from the claimant’s own correspondence that his sole purpose in seeking to raise the issue of a Preparation Time Order is to respond to the application for an Order for Costs by the respondents.  In fact, the claimant in plain terms suggests that one should be set off against the other.  In Paragraph 3 of a written submission from the claimant in relation to the costs hearing he states:-

“Then I submit that the fairest way to proceed is to have the applications cancel each other out.”

7.	There are no grounds in this case upon which any Tribunal could extend the          time-limit for lodging an application for a Preparation Time Order by the claimant in the interests of justice and his application for an extension of time is refused.

Respondents’ application for costs

8.	A Order for Costs may be made under Rules 34 – 36.  Under Rule 35, a Tribunal may make such an Order if it is satisfied that the paying party, in this case the claimant, has, in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably or if it is satisfied that the actions of the claimant, in bringing or conducting the proceedings, have been misconceived.  Under Rule 36(1)(a) the Tribunal may specify the sum which the claimant should pay to the respondents provided that that sum does not exceed £10,000.00.  ‘Misconceived’ is defined in Regulation 2 as including ‘having no reasonable prospect of success’.

9.	Mr Mulqueen argued that the proceedings by the claimant had been misconceived from the start and also that he had conducted those proceedings unreasonably.  He referred the Tribunal to different parts of the written decision dismissing all the claims.  It would serve no purpose for this decision to repeat or quote from the decision which issued in August 2011.  However, the Tribunal, at the substantive hearing, dismissed all the claims brought by the claimant and concluded that there had been no evidence to support those claims.  

10.	Mr Mulqueen referred the Tribunal, in particular, to Paragraphs 16 – 17 of the substantive decision.  He argued that Paragraph 17, in particular, demonstrated that the Tribunal had concluded that the claimant had conducted the proceedings at, and before, the substantive hearing in an unreasonable manner.  Mr Melia argued that the Tribunal’s decision was not explicit in this respect.  Paragraph 17 of the substantive decision put matters in the alternative and stated that the claimant ‘appeared to be either unable to understand simple and frequently repeated directions or to be deliberately obstructive and time-wasting’ [my emphasis].

11.	Mr Melia is correct to argue that the Tribunal did not reach a positive finding in that respect and at this stage the Tribunal is unwilling to do so.  However, the Tribunal remains puzzled at the manner in which the claimant chose to pursue the claims before and during the substantive hearing.  

12.	The claimant in his written submission to the costs hearing, and indeed in the oral submissions advanced on his behalf, and on his instructions by Mr Melia, argued that he had not, at any stage, refused any offer to settle the claim.  He argued, therefore, and Mr Melia argued, therefore, on his behalf, that this was not the type of case where the Tribunal could conclude that an unreasonable refusal to settle a claim, before or during the substantive hearing, amounted to unreasonable conduct for the purposes of an Order for Costs.  

13.	Having made such a statement, and having effectively denied that any offer of settlement had been made by the respondents, the claimant must be taken to have waived any ‘without prejudice’ protection which attached to any such discussions which may have taken place.  Mr Mulqueen, in any event, took the view that any such protection had been waived and informed the Tribunal at the costs hearing that an offer to settle the claims had been made by him personally to the claimant’s then solicitor, Mr Mearns, at a Case Management Discussion.  He identified the Case Management Discussion as the last such discussion at which Mr Mearns had been present.  That would have fixed the date of the Case Management Discussion at 14 March 2011.  Mr Mulqueen stated that he had made it plain to Mr Mearns and had stated explicitly that the first-named respondent would agree to pay a sum equivalent to three months’ notice pay to the claimant, if the claimant withdrew all the claims.  He also stated, explicitly to Mr Mearns, that if the respondents’ offer were not accepted the case would proceed to a substantive hearing and that costs would be sought.  The claimant had refused to accept the offer.

14.	The Tribunal accepts Mr Mulqueen’s version of events and concludes, firstly, that the first-named respondent had made a generous offer to settle the claims and, secondly, that the claimant had acted unreasonably in refusing to accept that offer.  

15.	It is also clear that the claimant’s case, for the reasons set out at length in the substantive decision which issued on 9 August 2011, never had any reasonable prospect of success.  It was misconceived from the start and the respondents were forced to incur significant expense to defend themselves against the serious accusations made by the claimant.

Relevant law

16.	The Court of Appeal in Lodwick  v  London Borough of Southwark [2004] IRLR 554, stated that:-

“Costs are rarely awarded in proceedings before an Employment Tribunal – costs remain exceptional (Gee  v  Shell United Kingdom Limited [2003] IRLR 82) and the aim is compensation of the party which has incurred expense in winning the case, not punishment of the losing party.”

17.	In assessing whether a party has acted unreasonably, the Tribunal has to be careful to acknowledge that the merit, or lack of merit, of some cases may not become apparent until after the conclusion of the hearing.  In ET Marler Ltd  v  Roberts [1974] ICR 72, the court held:-

“Ordinary experience in life frequently teaches us that that which is plain for all to see once the dust of battle has subsided, was far from clear to the contestants when they first took up arms.”

18.	A Tribunal need not attribute costs to any specific unreasonable conduct on the part of the paying party.  The Court of Appeal in McPherson  v  BNP Paribas [2004] ICR 1398 stated:-

“(38)	Ms McCaffrey submitted that her clients’ liability for the costs was limited, as a matter of construction of [equivalent GB provision], by a requirement that the costs in issue were ‘attributable to’ specific incidences of unreasonable conduct by him.  She argued that the Tribunal had misconstrued the Rule and wrongly ordered payment of all the costs, irrespective of whether they were ‘attributable to’ the unreasonable conduct in question or not.  The costs awarded should be caused by, or at least be proportionate to, a particular conduct which has been identified as unreasonable.  

(40)	In my judgment, Rule 14(1) does not impose any such cause or requirement in the exercise of a discretion.  The principle of relevance means that the Tribunal must have regard to the nature, gravity and effect of the unreasonable conduct as factors relevant to the exercise of the discretion, but that is not the same as requiring BNP Paribas to prove that specific unreasonable conduct by Mr McPherson caused particular costs to be incurred.  As Mr Tatton-Brown pointed out, there is significant contrast between the language of Rule 14(1) which deals with the costs generally and the language of Rule 14(4) which deals with an Order in respect of the costs incurred ‘as a result of the postponement or adjournment’.  Further, the passages in the case as relied on by Ms McCaffrey – are not authority for the proposition that Rule 14(1) limits the Tribunal’s discretion to those costs that are caused by or are attributable to the unreasonable conduct of the applicant.

(41)	In a related submission, Ms McCaffrey argued that the discretion could not properly be exercised to punish Mr McPherson for unreasonable conduct.  That is undoubtedly correct, if it means that the indemnity principle must apply to the award of costs.  It is not, however, punitive and impermissible for a Tribunal to order costs without confining them to the costs attributable to the unreasonable conduct.  As I have explained, the unreasonable conduct is a               pre-condition of the existence of the power to order costs and it is also a relevant factor to be taken into account in deciding to make an Order for Costs and the form of the Order.”

19.	In Kopel  v  Safeway Stores PLc [2003] IRLR 753, the EAT considered a case in which the Tribunal had concluded that the claimant’s refusal of an employer’s offer amounted to unreasonable conduct.  The EAT held:-

“The Employment Appeal Tribunal had not erred in exercising its discretion under Rule 14(1)(a) of the Employment Tribunal’s Rules of Procedure and making a Costs Order against the applicant on the grounds that part of her claim was seriously misconceived and that her failure to accept the employer’s substantial offer of settlement was unreasonable conduct of the proceedings.”

20.	Under Rule 36(2), the Tribunal ‘may have regard to the paying party’s ability to pay when considering whether it shall make a Costs Order or how much that Order should be’.

	The EAT in Jilley  v  Birmingham & Solihull Mental Health NHS Trust [UKEAT/0584/06/DA] held:-

“(53)	The first question is whether to take the ability to pay into account.  The Tribunal has no absolute duty to do so.  As we have seen, if it does not do so a County Court may do so at a later stage.  In many cases it will be desirable to take means into account before making an Order; ability to pay make affect the exercise of an overall discretion, and this course will encourage finality and may avoid lengthy enforcement proceedings.  But there may be cases where for good reason the ability to pay should not be taken into account; for example if a paying party has not attended or has given unsatisfactory evidence about means.”

21.	It is clear that the claims were misconceived from the start.  The claimant further acted unreasonably in refusing a generous settlement offer from the respondents.  This is clearly a case where an Order for Costs is appropriate.  The respondents’ costs comprised, in large part, the brief fee for the substantive hearing which was listed for four weeks.  That brief fee was £8,000.00.  Two refreshers, each comprising £750.00, and the fee for a written submission comprising £1,250.00 takes that amount to £10,750.00.  The tribunal concludes, given the circumstances of this case, that those fees were reasonable.

22.	The claimant submitted, through his representative, that he was on Social Security Benefits in Finland and that he had limited means.  However, it is clear that he has, on his own admission, savings of some 12,000 Euros, together with an interest in a property which is currently rented out.  It is not the case that an individual must be wealthy before being required to pay costs.  If an individual has significant savings and part-owns or owns property which could be sold to meet any liability, there is no reason why costs, on that ground, should not be awarded.  

23.	The respondents requested that the Tribunal award costs of £10,000.00 in accordance with the limit on its statutory jurisdiction.  In all the circumstances of the case, the Tribunal concludes that it is appropriate to do so and orders that costs of £10,000.00 should be paid by the claimant to the respondents.  

Vice President:

Date and place of hearing:	27 January 2012, Belfast

Date decision recorded in register and issued to parties: