Appeal No. UKEAT/0096/07/MAA
	UKEAT/0095/07/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 16 October 2007

Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
(SITTING ALONE) 

	APPELLANT
MS J E JANSEN VAN RENSBURG

THE ROYAL BOROUGH OF KINGSTON-UPON-THAMES & OTHERS	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS J E JANSEN VAN RENSBURG
(The Appellant in Person)	
For the Respondent	MR PETER OLDHAM 
(of Counsel)
Instructed by:
Royal Borough of Kingston-Upon-Thames Legal Services
Guildhall
2 High Street
Kingston-upon-Thames
Surrey
KT1 1EU	

SUMMARY

Practice and Procedure:  Striking-out/dismissal – Imposition of Deposit

The Employment Tribunal made a deposit order under rule 20 of the Tribunal Rules of Procedure against the Appellant on the grounds that her claims had little prospect of success.  She failed to pay the deposit by the date specified and her claims were struck out.  The appeal raised two issues. The first was whether the Chairman was entitled to have regard to the likelihood of the facts being established when making a deposit order.  The second was whether the apparently mandatory duty under rule 20(4) to strike out claims if the deposit was not paid in time complied with Article 6 of the ECHR.  
The EAT held that the Chairman could have regard to the likelihood of the facts being established when making a deposit order.  The EAT did not on the facts need to resolve the question whether rule 20(4) was compatible with Article 6.   The appeals were dismissed.

THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1.	The Appellant to this appeal, who was the Claimant below, was for over two years the corporate equality advisor to the Respondent Council.  She made a series of allegations against the Council in three separate originating applications.  They included claims of sex, race and victimisation discrimination, an equal pay claim, and one of constructive unfair dismissal.

2.	There were preliminary hearings at which various orders and directions were made. In this appeal we are concerned with just two orders.

3.	The Council sought an order under rule 20 of Schedule 1 to the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2004 that the Claimant be required to pay a deposit. (This was in fact as an alternative to striking out the claims altogether under rule 18(7), which application was refused.) Rule 20(1)is as follows:
“At a pre-hearing review, if a chairman considers that the contentions put forward by any party in relation to a matter required to be determined by a tribunal have little prospect of success the chairman may make an order against a party requiring the party to pay a deposit of an amount not exceeding £500 as a condition of being permitted to continue to take part in the proceedings in relation to this matter.”
Rule 20(2) requires a Chairman to take reasonable steps to ascertain the ability of a person to pay the deposit, and to take account of any information so ascertained. 

4.	The Chairman found that the various claims had little prospect of success and ordered a deposit of £100 as a condition of the Appellant being permitted to continue to take part in the proceedings. That was an order made on 15 June 2006.  When giving reasons, the Chairman noted that the Appellant was working part time as a psychotherapist.  She also indicated that she had had regard to the submissions of the Council which were as follows: 
“The Respondent submitted that the claims are weak and unclear. The Claimant demonstrated her difficulty in articulating them at the hearing. The equal pay claims were hopeless and her allegations of sex and race discrimination were not made during the course of her employment. The Claimant is seeking re-engagement which undermines her claim of constructive dismissal. The Claimant herself put forward the first Respondent for a diversity award on the ground that it was a leader in this field.”

5.	The Appellant failed to pay the deposit as required. Initially, she had not done so because she was appealing to this Tribunal and she was apparently under the impression that the deposit need not be paid in those circumstances. She had sent a cheque but asked for it not to be banked until her appeal to the EAT had been determined.  Because of this misunderstanding, the Chairman of her own motion extended the time for lodging the payment from the 7 July,  when it was originally due to be paid, to the 28 July.  However, the Appellant still failed to pay the deposit by that later date.  That led to a further order being made, dated 16 August 2006, in which the Tribunal ordered that the claims be struck out because of the failure to remit the deposit.  This was pursuant to rule 20(4) which provides as follows: 
“If a party against whom an order has been made does not pay the amount specified in the order to the Secretary-
(a)	within the period of 21 days of the day on which the document recording the making of the order is sent to him; or
(b)	within such further period, not exceeding 14 days, as the chairman may allow in the light of representations made by that party within the period of 21 days,
a chairman shall strike out the claim or response of that party …”

6.	 The Tribunal noted, when giving reasons for that order, that the Claimant had made representations that her means were not taken into account.  However, the Chairman noted that she had considered them. Accordingly, in view of rule 20(4), she concluded that all the claims should be struck out. 

7.	The Appellant submitted two appeals with respect to each of these orders, and indeed, lodged other appeals to which we need not make reference. She alleged that the deposit order ought not to have been made not least because no assessment of means had been made, and also because it was not clear from the correspondence that the order was not suspended pending the appeal.  She argued, inter alia, that the strike out was a disproportionate response which infringed her Article 6 rights to a fair trial.

8.	 Initially, both appeals were rejected on the sift pursuant to rule 3. His Honour Judge Serota QC held that the Tribunal was entitled to conclude that the appeals had little chance of success and to impose the deposit order. His Honour Judge McMullen QC concluded that once the deposit order was made, the strike out pursuant to rule 20(4) was mandatory once the deposit had not been paid, and there was no error of law in that regard.

9.	The case went to Mr Justice Langstaff, who heard renewed applications under rule 3(10) in relation to each of these decisions. He allowed both appeals to go forward, but on specific limited grounds only.  As to the order to make a deposit, he accepted that the Chairman had had regard to the means because she referred to the fact that the Appellant was working part time as a psychotherapist. He also accepted that the Chairman had given adequate reasons for doubting the credibility of the Appellant’s claims.  The Chairman had implicitly accepted the points advanced by the Council and it justified her conclusion that the claims had little prospect of success.  However, the judge permitted this particular appeal to go forward on one basis only (not, it seems, identified in the grounds of appeal.)  He held that the Appellant should be entitled to advance an argument that the Employment Tribunal was not entitled to reach a view as to the credibility of assertions put forward in support of the claim.  He considered that there was an issue whether it was open to the Tribunal to assess credibility at that stage.  

10.	The single ground permitted to go ahead with respect to the second order was whether the Tribunal was indeed obliged to strike out the claims after non-payment of the deposit, as the mandatory terms of rule 20(4) seem to suggest. Alternatively, notwithstanding the mandatory language, is it possible to imply a discretion not to make an order where to do so would preclude a claim being heard, arguably in breach of the right to a fair trial as required by Article 6 of the ECHR, even in circumstances where there was a good reason for failing to pay the money within the stipulated period?  In giving his judgment on the rule 3(10) application, Mr Justice Langstaff gave some examples of cases where the mandatory application of the rule could cause a real injustice, potentially in breach of Article 6.

11.	The premise for permission being granted on this second ground was that Mr Justice Langstaff thought that it was possible - because he had not seen relevant correspondence - that even after time had been extended by the Chairman, the Appellant may still have been led to believe that it was not necessary or possible for her to lodge a deposit until her appeal to this Tribunal had been determined.  On that basis, he considered that if there were a discretion not to strike out, this could be an appropriate case for its exercise.

12.	The Appellant has chosen not to make representations on the appeal.  However, she wishes the issues to be determined.  I shall deal with both grounds, but taking the latter first.

The strike out order.
13.	I have now seen the correspondence between the Appellant and the Tribunal. It is plain from a letter dated 14 July 2006 from the Tribunal that the Appellant was told in terms that the appeal to the Employment Appeal Tribunal did not have the effect of staying the Tribunal order. The text of the letter was as follows:-
“The Tribunal has received a copy letter sent by you to the Employment Tribunal Services Finance directorate. It appears that you have misunderstood the Tribunal’s order requiring that you pay a deposit as a condition of being permitted to continue to take part in these proceedings. Your appeal to the Employment Appeals Tribunal does not have the effect of staying the Tribunal Order.
On her own motion the Chairman (Ms Taylor) has granted an extension of time until 28th July 2006 to comply, if the payment of the deposit is not received by that date the Chairman may strike out your claim.”

14.	Subsequently on 7 August 2006 the Appellant wrote a letter to the Tribunal stating that she did not intend to pay the deposit until the outcome of the appeal. In my judgment, this really removes the premise on which the appeal against the order is based.  It was plainly possible for the Appellant to deposit the money in time.  She had not been misled about the position, and there is no ground put forward to suggest that it was impossible or impracticable for her to do make the payment.  Indeed, she had sent a cheque well within the relevant time, with instructions not to bank it. She chose not to make the deposit with full knowledge that the appeal did not suspend the effect of the order.

15.	Accordingly, this is not a case where the potential injustice might require that rule 20(4) should be read so as to confer a discretion whether to strike out or not. Given that conclusion, I am unwilling to consider the wider issue, as interesting as it is, particularly since I have only had the advantage of hearing argument from the Respondent to this appeal. 

16.	I simply note that Mr Oldham, counsel for the Respondent, has pointed out that there are a number of decisions, including Sodexho Ltd v Gibbons [2005] IRLR 836 para 25 and Pandya v Leicestershire County Council (unreported Court of Appeal permission application, 19 July 1999), which suggest that the rule does indeed impose a mandatory obligation. He suggests that the way to deal with a potential unfairness is conferred on tribunals by rule 34, which gives power to review a judgment where the interests of justice require it. This can apply to a case where a claim is struck out for failure to pay a deposit: see Sodexho, para 28.    However, I do not think that this takes matters any further.  The power to review in cases of explicable failure to remit the deposit is of no value unless rule 20(4) itself permits some discretion to be exercised.  If it does not, it seems to me that the tribunal on review would be obliged to reach the same result as the original tribunal.  However, I say no more about the merits or otherwise of this issue.

The deposit order.
17.	I turn to the appeal in relation to the order to make the deposit in the first place.  If it were improperly made, then it seems to me that the strike out order would fall with it. 

18.	  Mr Justice Langstaff posits the possibility that, save perhaps in very clear cases, the Tribunal has to assume that the facts may be established and only make a finding that there is little reasonable prospect of success if the case is likely to be unsustainable in law.  On this analysis the Tribunal would not be entitled to consider whether the facts as asserted appear to be credible or not. 

19.	Mr Oldham submits there are three reasons why this contention should fail. First, he notes that the rule directs the ET to consider the contentions of either party “in relation to a matter required to be determined”. The word “contentions”, he says, is broad, and furthermore, there is no justification for limiting the matters to be determined merely to legal matters; they would naturally embrace both factual and legal matters which the ET has to determine.

20.	The second ground is that it might lead to a tribunal focusing too tightly on the way in which claims are set out in the pleadings and to require deposits only in respect of those which, for example, are poorly pleaded or are presented with a lack of clarity. That, submits Mr Oldham, would be disadvantageous to litigants in person who have greater difficulty in formulating their legal claims satisfactorily.  In addition, limiting the claim to cases where there was no likelihood of the claim succeeding as a matter of law would give the rule very little scope.

21.	Third, he submits that there is no authority supporting a construction of rule 20 which would limit the Tribunal’s power to consider legal issues only. He says that there are a number of cases where it has been assumed that the ET is entitled to consider whether there is little prospect of establishing the findings of fact: see HM Prison v Dalby [2003] IRLR 699, para 5 and Maurice v Betterware Co Ltd [2001] ICR 14, para 4.

22.	I do not, with respect, consider that grounds two and three are very persuasive. Neither of the cases referred to in ground three directly raised the point in issue, as Mr Oldham accepted.  Indeed, in the Maurice case the court was noting that it was unlikely that oral evidence would be sufficient to alter the legal effect of a contractual document. It did not raise issues of credibility as such at all. Nor do I see why a principle limited to striking out cases which had little prospect of success in law would necessarily adversely impact on litigants in person.  Moreover, whilst such a principle might only affect a very small number of cases, that could be what Parliament intended.

23.	However, I am persuaded by the first argument. It seems to me that the language is clear and brooks no real doubt, essentially for the reasons advanced by Mr Oldham.  In particular, I see no reason to limit “a matter required to be determined” to legal matters only.  If that had been the draughtsman’s intention, the rule would surely have been differently formulated so as to render the intention clear.

24.	  I am reinforced in this view by the fact that there is a more draconian rule under rule 18(7)(b) which empowers a tribunal to strike out a claim, or any part of it, on the grounds that it is “scandalous or vexatious, or has no reasonable prospect of success”. In the recent decision of the Court of Appeal, North Glamorgan NHS Trust v Ezsias [2007] IRLR 603 Lord Justice Maurice Kay, with whose judgment Ward and Moore-Bick LJJs concurred, recognised that in principle- albeit that the cases will be very exceptional- it would be possible for a claim to be struck out pursuant to this rule, even where the facts were in dispute. 

25.	Maurice Kay LJ gave as an example a case where the facts as asserted by the applicant were totally inconsistent with the undisputed contemporaneous documentation. It is also to be noted that in that case the Employment Tribunal had, prior to making the strike out order, indicated that subject to the question of means, the case would be an appropriate one for a deposit to be made. No such order was in the event made because the strike out order disposed of the case altogether. However, the Court of Appeal noted that the possibility of a deposit under rule 20 remained open and they made it plain that that would have to be considered afresh by a tribunal, but that they were not “indicating any view of the ultimate merits of this case one way or the other”.  The Court was clearly acting on the assumption that the power to order a deposit could in principle be exercised where the Tribunal had doubts about the inherent likelihood of the claim succeeding.

26.	Ezsias then demonstrates that disputes over matters of fact, including a provisional assessment of credibility, can in an exceptional case be taken into consideration even when a strike out is considered pursuant to rule 18(7). It would be very surprising if the power of the Tribunal to order the very much more limited sanction of a small deposit did not allow for a similar assessment, particularly since in each case the tribunal is assessing the prospects of success, albeit to different standards. 

27.	Moreover, the test of little prospect of success in rule 20(1) is plainly not as rigorous as the test that the claim has no reasonable prospect of success found in rule 18(7).  It follows that a tribunal has a greater leeway when considering whether or not to order a deposit.  Needless  to say, it must have a proper basis for doubting the likelihood of the party being able to establish the facts essential to the claim or response.  

28.	 I therefore reject this ground of appeal and conclude that the deposit order was properly made. 

29.	Accordingly, for these reasons, the appeal in relation to both orders fails.