THE INDUSTRIAL TRIBUNALS

CASE REF:	2414/15

CLAIMANT:			Katie Lyn Yeagliss 	

RESPONDENTS:		1.	Ashbrook Care Home
				2.	Countrywide Care Homes Ltd	

DECISION ON AN APPLICATION FOR COSTS
The decision of the tribunal is that the claimant is ordered to pay the second-named respondent the sum of £629.38 in respect of costs and disbursements.

Constitution of Tribunal:
Employment Judge (sitting alone):	Employment Judge McCaffrey	

Appearances:

The claimant was represented by Murphy McManus Solicitors.

The respondents were represented by Hicks Watson Solicitors.

1.	This decision relates to an application for costs made by the respondents’ representative.  By the consent of the parties it has been dealt without a hearing on the basis of the written submissions from the parties.  

2.	The claimant lodged an ET1 form in the Office of the Industrial Tribunals on 8 October 2015, alleging unfair dismissal and disability discrimination.  She also sought a redundancy payment.  The respondents contested all of the claims and noted that the claimant did not have one year’s continuous service on which to ground a claim for unfair dismissal.  

3.	The representatives of the parties attended a Case Management Discussion by telephone conference on 12 January 2016.  On that date Employment Judge Buggy decided to convene a deposit order hearing on 5 February 2016 commencing at 12 

noon, to facilitate the respondents’ solicitor travelling from England.  The second named respondent company is also based in England.  

4.	The respondents’ solicitor made the claimant’s solicitor aware that Ms Swan of the respondents’ solicitors would be travelling to Northern Ireland on Thursday 4 February 2016 to attend the proposed deposit pre-hearing review on Friday 5 February 2016.  When she arrived in Belfast, Ms Swan received a voicemail from the claimant’s solicitor advising that the claimant was considering withdrawing her claim.  Due to the time she received this message, she was unable to return the call.  The claimant’s solicitors’ firm opens at 9.30 am in the morning.  The following morning Ms Swan telephoned Mr McManus who was out of the office.  His secretary advised her that she had instructions to issue a withdrawal of the claim.  The formal withdrawal of the claim was made by email on the morning of 5 February 2016 at approximately 9.54 am, approximately two hours before the proposed hearing.

5.	The respondents’ solicitors applied by letter dated 29 February 2016 for costs in respect of their wasted legal costs and disbursements for the deposit hearing.  They submitted that the claimant’s conduct was unreasonable and that any withdrawal should have been made earlier than two hours before the hearing.  They suggested that had a withdrawal been made the day before when it appears to have been considered, the respondents would not have incurred the expenses involved to attend the hearing.  They also noted that while the respondents could have instructed an agent in Belfast, they were entitled to use legal representatives who had a detailed knowledge of the claim.

6.	The claimant’s solicitor objected to any order for costs in relation to this matter, suggesting that the rated principles of the tribunal was that it should be “costs neutral” and that costs did not ordinarily follow the event and were therefore awarded only in exceptional circumstances.  They noted that the claimant was unemployed and was in receipt of state benefits.  They did not accept that the claimant’s conduct of proceedings was unreasonable, stating, “In fact we submit that matters before the industrial tribunal are very often agreed between the parties on the day of the hearing, and that this is common practice.”  

7.	They disputed whether travel costs would have been incurred if the case had been withdrawn the day before.  They also disputed that the respondent had been “legally represented” as they asserted that Ms Swan did not hold a practising certificate for Northern Ireland and was not on the roll of solicitors.  They suggested that no legal fees were therefore payable as the respondent was not represented by a solicitor properly qualified in this jurisdiction.

8.	The respondents’ solicitor replied, noting that Ms Swan was a qualified solicitor of the Supreme Court of England and Wales and as such they suggested that she met the requirement of having a general qualification under Section 71 of the Courts and Legal Services Act 1990.

THE RELEVANT LAW

9.	The tribunal’s power to award legal costs is set out in the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 (“the 2005 Rules”).  The general power to make a costs order is set out in Schedule 1 at Rule 38.  I was specifically referred to the provisions of Rule 40, the relevant parts of which state as follows:-

		“(2)	A tribunal or [employment judge] shall consider making a costs order against a paying party where, in the opinion of the tribunal or [employment judge] (as the case may be), any of the circumstances in paragraph (3) apply.  Having so considered, the tribunal or [employment judge] may make a costs order against the paying party if it or he considers it appropriate to do so.

		(3)	The circumstances referred to in paragraph (2) above are where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived”.  

	“Misconceived” is defined at Regulation 2 as including “no reasonable prospect of success”.

10.	In Rule 38, a Costs Order may be made only where the receiving party has been legally represented at the hearing under Rule 26 or in proceedings which should be determined without such a hearing, if the receiving party is legally represented when the proceedings are determined.  Otherwise a preparation time order can be made.

11.	Rule 38(3) indicates that “costs” shall mean fees, charges or disbursements incurred by or on behalf of a party in relation to the proceedings. 

12.	Rule 38(5) provides as follows:-

	“In these Rules “legally represented” means having the assistance of a person (including where that person is the receiving party’s employee) who 

(a)	has a general qualification within the meaning of Section 71 of the Courts and Legal Services Act 1990; 

(b)	is an advocate or solicitor in Scotland; or

(c)	is a member of the Bar of Northern Ireland or a solicitor of the Supreme Court of Northern Ireland.”

13.	Section 71 of the Courts and Legal Services Act 1990 provides at Section 71(3) provides as follows:-

	(3)	For the purposes of this section, a person has - ...
		
		(c)	A “general qualification” if he has a right of audience in relation to any class or proceedings in any part of the Senior Courts, or proceedings in County Courts or Magistrate Courts.” 

14.	Ms Swan made it clear in her correspondence that she had rights of audience in all County Courts in England and Wales and therefore met the requirement of the “general qualification” under the Courts and Legal Services Act 1990.  This was not disputed by the claimant’s representative, and I accept in the context of Rule 38(5) that she is therefore a legal representative.  It is clear to me on reading Rule 38(5) that this rule is intended to encompass within the definition of a legal representative any person who is a qualified solicitor or barrister within any of the three jurisdictions in the United Kingdom.

15.	The tribunal’s jurisdiction in relation to costs is outlined in Harvey on Industrial Relations and Employment Law Division P1 (Practice and Procedure) at paragraph 1044 and following.  Harvey emphasises that, despite changes which have extended the tribunal’s powers to make orders for costs considerably, the fundamental principle remains that costs are the exception rather than the rule and that costs do not automatically follow the event in Employment Tribunals (McPherson v BNP Paribas (London Branch) [2004] EWCA Civ 569 at paragraph 2; and Barnsley Metropolitan Borough Council v Yerrakalva [2011] EWCA Civ 1255 at paragraph 7).  

16.	Tribunals must apply a two stage test to an application for costs.  First of all, they must consider whether the relevant party’s behaviour falls within Rule 40(3).  Secondly, they must consider whether it is an appropriate case in which they should exercise their decision to make a costs order.

Unreasonable Conduct

17.	Harvey (see paragraph 1064), indicates that “unreasonable” conduct includes conduct that is vexatious, abusive or disruptive.  The discretion of the tribunal is not fettered by any requirement to link the award causally to the particular cost which has been incurred as a result of specific conduct which has been identified as unreasonable.  In McPherson, Mummery LJ stated:-

	“The principle of relevance means 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 [the receiving party] to prove that specific unreasonable conduct by [the paying party] caused particular cost to be incurred.”

18.	Subsequently in Yerraklava, he stressed that this passage in McPherson was not intended to be interpreted as meaning either that questions of causation are to be disregarded or that tribunals must dissect the case in detail and compartmentalise conduct.  As he observed:

	“The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so to identify the conduct, what was unreasonable about it and what effects it had.”

19.	He also observed that:

	“a costs decision in one case will not in most cases predetermine the outcome of a costs application in another case: the factors of the case will be different, as will be the interaction of the relevant factors with one another and the varying weight to be attached to them”.

20.	Harvey emphasises that when considering whether costs should be awarded on the grounds of unreasonable conduct, it is the conduct of a party in bringing or defending a claim, or in continuing to pursue the claim or defence, that can give rise to an award and not conduct occurring before the institution of proceedings (see paragraph 1066).  

The Means of the Claimant

21.	The case of Jilley v Birmingham and Solihull Mental Health NHS Trust [UKEAT/0584/06] emphasises the importance of taking account of a claimant’s means, although lack of means to pay is not a barrier to a costs order being made.  The judgment states as follows:-

	“53.  The first question is whether they [the tribunal] should 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 may 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 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.”

REASONS AND DECISION

22.	In this case the respondents’ representative asserts that the claimant acted unreasonably in withdrawing her claim a matter of a couple of hours before the time fixed for the deposit pre-hearing review.  They suggest in particular that had the case been withdrawn earlier then travel expenses would not have been incurred.  The claimant’s representative disputes this, pointing out that an aeroplane ticket would in their view have had to have been obtained in good time prior to the departure to Northern Ireland.  While this may well be the case, the issue is still whether the claimant acted unreasonably in withdrawing her claim so late in the day.

23.	It is fair to observe that withdrawal of a claim will not of itself be an unreasonable conduct.  In Scott v British Energy Group plc (case no 1101005/07/EB) the issue arose of the circumstances of withdrawal of the claim.  In that case the tribunal was persuaded that the claimant’s reason for withdrawing was that he did not wish his application form for a new job to be disclosed because it may damage his claim of constructive dismissal.

24.	In the present case, I am concerned that although the claimant’s representative indicated the day before the proposed deposit order hearing that she may withdraw, the actual withdrawal was only made on the morning of the hearing, and in the knowledge that the respondents’ representative would have to travel from England.  I am also conscious that the date for the deposit pre-hearing review was fixed on 12 January 2016 and therefore that the claimant had some three to four weeks between that date and 5 February 2016 to consider whether or not she intended to proceed with her claim.  In light of that I am satisfied that the claimant’s behaviour in waiting until almost the last minute to withdraw her claim was unreasonable behaviour within Rule 40(3) of the 2005 Rules.

25.	The next matter for me to consider is whether it is appropriate for me to exercise my discretion to award costs in this case.  The claimant’s representative made the point of his client is currently unemployed and in receipt of state benefits.  That may not always be the case however and it is quite possible that she will seek other employment.  Given that I have limited information about the claimant’s income and expenditure and whether she is the sole bread winner in her family or not, I consider the information before me as incomplete and therefore in accordance with Jilley (see above) I have not taken the claimant’s means into account in making my decision regarding costs.  Secondly, I am conscious of the view expressed in case law that any award of costs should be compensatory and not punitive.  The respondents’ representative would have had to prepare for the pre-hearing review even if the claimant had withdrawn her claim the day before or even a week before the date of hearing.  I do not therefore consider it appropriate to award costs in the substantial amount claimed by the respondents’ representative of £3,000 plus VAT and travel expenses of £379.38 plus VAT.

26.	In this case I consider that it would be appropriate to make an award of the disbursements incurred by the respondents’ solicitor (flights, car parking, travel and overnight hotel accommodation) and to make an award of £250 in respect of legal costs.  I therefore order the claimant to pay to the respondents the sum of £629.38 in respect of costs and outlay.   

Employment Judge:

Date decision recorded in register and issued to parties: