Appeal No. UKEAT/0067/02/TM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 4 March 2004
Judgment delivered on 21 April 2004

Before
HIS HONOUR JUDGE J MCMULLEN QC
MR D A C LAMBERT
MR A E R MANNERS

MISS SHARON MARIE GRADY	APPELLANT

HOME OFFICE	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

CONSIDERED ON WRITTEN SUBMISSIONS
NEITHER PARTY ATTENDING

For the Appellant	MR MICHAEL MULHOLLAND
(of Counsel)
Instructed by:
Messrs Linder Myers Solicitors
Phoenix House
45 Cross Street
Manchester M2 4JF	
For the Respondent	MR JEREMY JOHNSON
(of Counsel)
Instructed by:
The Treasury Solicitor
Queen Anne’s Chambers
28 Broadway
London SW1H 9JS

Summary

Practice and Procedure

An Employment Tribunal erred in striking out an Originating Application of its own initiative for gross disregard of its directions, without first noting whether a fair trial could follow, in circumstances where both parties were ready and willing to proceed.  Topic 8H.

HIS HONOUR JUDGE J McMULLEN QC

1.	On 5 December 2002 we determined that we had no jurisdiction to hear the Applicant’s case of unfair dismissal because she was bankrupt and no trustee in bankruptcy had assigned the right to sue: [2003] ICR 753.  We did not have the benefit of an Employment Tribunal decision on the subject since bankruptcy had occurred since its hearing, nor of a Skeleton Argument by the Respondent, who is now correctly named as the Home Office [2003] ICR 753, 765.  The matter was raised as an issue of jurisdiction during the course of our hearing. Two authorities were cited to us.

2.	The brief facts are set out in our first judgment at paragraphs 1 to 4 and our provisional view of the substantive merits of the case at paragraphs 19 to 21.

3.	On 11 April 2003, pursuant to permission to appeal which we granted, the Court of Appeal reversed our decision on the bankruptcy point: [2003] ICR 759, per Sedley LJ giving the judgment of the Court.  The Court of Appeal said of us (see [2003] ICR 765):

26	“They concluded in the light of the authorities a right to claim unfair dismissal was a property right and not a personal right
…
27	For reasons which we have given we respectfully take the contrary view.  We consider that an unfair dismissal claim, both in its nature and in its remedies, is personal to the claimant and not apt to vest in her trustee and bankruptcy as a thing in action.”

4.	The Court of Appeal was shown and followed the judgment of the House of Lords in Beckham v Drake (1849) 2 HL Cas. 579, which opinion was based upon the judgments of Erle J and Williams J in the Court of Exchequer Chamber; and the judgment of the Court of Exchequer Chamber in Gibson v Carruthers (1841) 8 M&W 321.  In the absence of a Skeleton Argument from treasury counsel who took the point, and of citation of these two authorities by either counsel, we were left to decide the point on the authorities cited to us.

5.	The jurisdiction point having been decided in favour of the Applicant’s right to bring proceedings for unfair dismissal, the Court of Appeal referred the substantive issue back to us to decide for, as Sedley LJ put it, 

28.	“The issue is one which depends heavily on the accumulated experience and knowledge of the EAT in respect of employment tribunal practice and procedure…”

6.	Since then two things have happened.  The Applicant’s trustee in bankruptcy has taken an interest in these proceedings and supports the Applicant’s claims, which unarguably vest in him, in respect of wrongful dismissal and disability discrimination.  Secondly, this resumed hearing is conducted on the papers, following our unopposed direction to that effect for the saving of costs.  We have paid careful attention to these written submissions bringing us up to date some 16 months after our original sally into this matter.

The Facts

7.	It is submitted by the Respondent that the Applicant is an alcoholic.  The evidence certainly discloses that she has an anxiety/depressive disorder with some features of alcohol dependency and that “she has suffered with the alcohol dependence syndrome on and off for a great number of years.”  She is a bankrupt.  The former does not preclude her from entering the gates of justice before an Employment Tribunal, and, following the judgment of the Court of Appeal, nor does the latter.  The question is whether the fact that she was in gross disregard of case management directions by a Regional Chairman of Tribunals justifies the striking out of her claims on the Tribunal’s own initiative.
8.	As we indicated in our provisional view of this case, having heard only the Applicant, neither party indicated there would be prejudice in conducting a hearing on the day fixed, or following an adjournment of one day.  An adjournment would have allowed at least for reading of the papers.  The worst that could be said was that the Applicant’s gross disregard of the directions, which included failure to co-operate with directions given for examination by an expert provided at the instance of the Respondent, would affect her claim of disability discrimination but not the other claims.  Given that a fair trial of the outstanding issues was still possible, following the industry and flexibility of Counsel over the previous weekend, the drastic remedy of a strike out was called into question.

9.	It is contended on behalf of the Applicant that the Tribunal failed to consider a submission by her Counsel that she was willing to go ahead with the hearing in the event that an adjournment were not granted, and the attitude of the Respondent which is summarised as follows:

23.	“It is conceded that in the present case the Respondent was ready willing and prepared to contest the Appellant’s claim.  The Respondent did not seek to strike out the claim, and the Respondent did not contend that a fair trial was not possible.  Nevertheless, the Tribunal was entitled to strike out the case because the Appellant’s conduct amounted to wilful disobedience to the court’s orders: she had not complied with a single order.”

10.	The Tribunal moved of its own initiative to consider its powers under Rules 4 (8) and 15 (2) (d).  It held that the two rules mirror each other.  It found that the Applicant’s conduct of her case had been unreasonable and vexatious.  This is a reflection of Rule 15 (2) (d) which allows a Tribunal to strike out an Originating Application on those grounds.

11.	Rule 4 deals with case management and provides that the power to strike out is exercisable where there has been a failure to comply with a requirement, for example, to provide particulars or other material.  In National Grid Company Ltd v Virdee [1992] IRLR 555 it was held that exercise of a power under Rule 4 (8) should only follow a finding that a fair trial of the issue is no longer possible.  Plainly the Tribunal in the instant case did not consider that issue, given that the movement towards strike out was initiated by the Tribunal, and the parties did not contend a fair trial was impossible.  Further, National Grid indicates that the power should not be used as a punishment but as a means to coerce the parties into compliance.

12.	Both Rules 4 (8) and 15 (2) (d) deal with the consequences of a failure to observe the orders of a Tribunal, in the former specifically and in the latter generally.  But in our judgment, in either case, attention must be given to the possibility of there being a fair trial 

13.	The correct approach to such an issue has been reinforced by the judgment of the EAT, Judge Reid QC and members, in Profile Analysis Ltd v Cassidy (15 October 2003 EAT/0586/03 & EAT/0587/03) in paragraph 18:

18	“We were referred to a number of authorities: Bennett v Southwark LBC [2002] ICR 881 (to which the Tribunal had referred), Bolch v Chipman (unreported, EAT, 19 May 2003), de Keyser v Wilson [2001] IRLR 324, Logicrose v Southend United FC (5 Feb 1988, transcript, Times 5 March 1988), and Arrow Nominees v Blackledge [2000] BCLC 167.  It seems to us that the principles to be drawn from those authorities, so far as relevant to this case, are:
(1)	It does not automatically follow from a finding that proceedings have been conducted by a respondent in a manner which is scandalous, frivolous or vexatious that the notice of appearance will be automatically struck out.
(2)	Wilful, deliberate or contumelious disobedience to an order of the court can lead straight to a strike out.
(3)	Striking out should only be ordered if it is a proportionate response to the conduct.
(4)	Except in exceptional cases (such as wilful, deliberate or contumelious disobedience to an order), a strike out will not be ordered unless a fair trial is no longer possible.”

14.	It will be noted that in that case the Tribunal’s apprehension that a fair trial was not possible was unsubstantiated and on that basis its order to strike out a Notice of Appearance was set aside.

15.	In those circumstances the Employment Tribunal’s judgment cannot be upheld.  In our provisional view (above) we made it clear that case management directions were given for the benefit of parties who must comply.  A failure to comply also involves keeping other parties out of an Employment Tribunal.  But a proper perspective upon these matters reveals that the primary purpose is to ensure a fair trial can occur.  It is only if it cannot that it is appropriate to consider the drastic measures in Rules 4 and 15.  Other methods to ensure a fair trial were available in this case, e.g. allowing an adjournment, or refusing an application to adjourn and ordering the case to proceed absent the claim for disability discrimination, which the Applicant would have put up with.  Further, the power of the Tribunal to award costs in such circumstances could have been utilised.

16.	As to the decision to award costs against the Applicant, it is contended by the Respondent that that should stay in place.  On behalf of the Applicant it is submitted that since the substantive decision has gone in her favour, the order for costs should be set aside.  In our judgment it would be wrong to sustain the order for costs given that the substantive basis upon which it was made has now disappeared.  Yet there is an outstanding issue as to costs, and the Respondent may renew its application, for costs were clearly incurred in attending what was at least one day of abortive hearing.

17.	In view of the passage of time in this case, we will direct that the Applicant should seek directions from the Employment Tribunal.  If practicable, this matter will be remitted to the same Employment Tribunal, since it will be seized as the matters in relation to an application for costs.  But if that is impracticable, a differently-constituted Employment Tribunal can hear the case in our view.

18.	The appeal is allowed.