Appeal No. UKEAT/0300/07/JOJ

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 26 October 2007

Before
HIS HONOUR JUDGE McMULLEN QC
MRS D M PALMER
MR P SMITH

MR O C JATTO	APPELLANT

1) MESSRS GODLOVES SOLICITORS	RESPONDENTS
2) MS N KAY
3) MR I GOLDMAN

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR O C JATTO
(The Appellant in Person)	
For the Respondents	MR ASHLEY SERR
(of Counsel)
Instructed by:
Messrs Godloves Solicitors
8-16 Dock Street
Leeds
LS10 1LX	

SUMMARY
Practice and Procedure – Striking-out/dismissal
Race Discrimination - Direct
The Claimant, a black African, was offered a job as a solicitor by G, conditional on satisfactory references. A previous employer, T, refused to provide one and the offer was withdrawn.  Claims of race discrimination against G and T were struck out. On appeal in respect of G, there being no appeal in respect of T, the strike-out was upheld. There was no discrimination by T and no prospect of success against G. Eszias and Anyanwu applied.

HIS HONOUR JUDGE McMULLEN QC

1.	This case is about the striking out of a race discrimination claim as having no reasonable prospect of success at a PHR.  The judgment represents the views of all three members.  We will refer to the parties as the Claimant and to the firm of Godloves as the Respondent and the one-time Respondents the Thompson Partnership as Thompsons.

Introduction
2.	It is an appeal by the Claimant in those proceedings against a judgment of an Employment Tribunal Chairman Mrs C Lee sitting alone at Leeds, registered with reasons on 16 March 2007.  The Claimant represents himself and the Respondents are represented by Mr Ashley Serr of Counsel.  The Claimant claimed race discrimination against two firms of Respondent solicitors, and two individual solicitors working for each firm, arising out of the refusal of Godloves to employ him when Thompsons for whom he had previously worked refused to give him a reference.  The two Respondent firms and the two each individual Respondents’ solicitors contended the claims were misconceived and showed no reasonable prospect of success.  

The issue
3.	The essential issue for the Chairman was to consider at a PHR, conducted under rule 18 of the Tribunal Rules, whether there was a reasonable prospect of success or whether any part of the claim was misconceived.  The Chairman dismissed all the claims either as having no prospect of success or as misconceived.  The Claimant appeals.  Directions sending this appeal to a full hearing were given in chambers by Underhill J.  He directed that the appeal from a Chairman should exceptionally be heard by a Judge and members under the Employment Tribunals Act 1996 s.28.  

The legislation
4.	The relevant legislation has not been the subject of dispute. The Chairman summarised them by reference to a number of authorities.  The essential question on this application for a strike-out is whether there was a reasonable prospect of success that the burden of proof under s.54A Race Relations Act 1976 was discharged.  This requires the Claimant to put before a Tribunal evidence which could, without an explanation from a Respondent, show race discrimination in which case, step 1, it would pass the burden of showing that there was no discrimination and providing an explanation to the Respondent, step 2.

The facts
5.	The Claimant is self described as of black African origin.  He trained in Nigeria obtaining a law degree from the University of Efe with an upper second and become a barrister and a solicitor having passed the Nigeria bar exams at the Council of Legal Education, again with an upper second, in July 1999.  He had employment initially at the Ecobank in Nigeria but not as a solicitor.  In 2002 he also obtained a masters degree at the University of Aberdeen and by the Transfer Regulations was given a certificate of eligibility from the Law Society in England and Wales so that he was required to pass only three papers before being admitted as a solicitor and in due course he was so admitted.  

6.	He was employed as a solicitor by Thompsons for a year in 2003-2004 and by Lister Croft, another firm of solicitors from 2004 until he gave his notice and left in September 2006.  So broadly speaking he had three employers one in Nigeria, the Ecobank, and two solicitors firms in England: prior to the events relevant to these proceedings.  

7.	The Thompson Partnership is a small firm but it is connected by association with Thompsons Solicitors.  The Thompson Partnership does wills and conveyancing for trade union members who are the principal clients of Thompsons Solicitors, a well known firm throughout the United Kingdom, but the two are separate.  The Thompson Partnership was the subject of the joined legal proceedings from which this appeal emerges.

8.	In 2006, the Claimant applied for a job as an assistant solicitor in the commercial conveyancing department of Godloves, a firm in Leeds.  He was interviewed and offered employment, the offer conditional upon satisfactory references being forthcoming.  The Claimant volunteered that he would obtain references from Thompsons, Lister Croft, from a class mate on a personal basis who worked as a solicitor for HM Customs and Excise.
 
9.	Thompsons refused to give him a reference.  Six attempts were made by Godloves to obtain a reference from Mr Thorns who was later a named Respondent in the parallel proceedings against Thompsons.  The Claimant recognised that he needed a reference from Thompsons for he knew that without it his career as a solicitor at Godloves would probably be ineffective as he himself chased up Mr Thorns.  

10.	Godloves began to be uneasy about the failure of Thompsons to provide a reference.  It was, we hold, the standard practice of Godloves to require and obtain satisfactory references and no specific number was required for satisfaction.  The solicitors at Godloves began to draw an inference that there may be some issue about the termination of the Claimant’s relationship with Thompsons.  He had explained it himself in a letter but that did not satisfy Godloves and they took the step of going to Thompsons Solicitors (see para 7) in order to see if material would be forthcoming.  
11.	In due course, Godloves’ fears came true. Thompsons said they would not give a reference because it was going to be unfavourable.  It is said by the Claimant that he had a good relationship with Thompsons until he gave his notice, which was for three months, and then things went cold between him and the principal Mr Thorns.  

12.	The effect of the refusal was an immediate withdrawal of the conditional offer. On the papers, that was the reason for the decision.  The Claimant was dissatisfied and issued proceedings against Thompsons and Godloves and four solicitors on 6 October 2006.  He followed it up with a questionnaire pursuant to the Race Relations Act 1976 on 16 October 2006 and the Respondent entered a response in the proceedings on 6 November 2006.  It did not answer the questionnaire.  The Claimant contended that the failures by Thompsons and Godloves constituted race discrimination, direct and indirect.  

13.	The two cases were bolted together and a PHR was ordered by a Chairman on 24 November 2006.  A Chairman ordered that the PHR be conducted by a Chairman alone.  Rule 18 requires that a PHR be conducted by a Chairman alone, unless there has been a request from one party and a Chairman considers that substantive issues of fact are likely to be determined, in which case it may be conducted by a three person Tribunal.  No application was made.  There appears to have been no issue before the Chairman who set up the PHR, Mr J M Q Hepworth. Although the Claimant disputed the need for a PHR, contending that his case was plain and should go straight to trial, there was no appeal against the decision to conduct a PHR constituted as a Chairman alone.  At the PHR, the Chairman considered, therefore, both of the cases which were before her and she came to this conclusion which we cite in full in relation to Godloves’ case:

“2.1	All of the accounts put by the First Respondent and the Claimant suggest that the First Respondent in good faith offered the Claimant a post as a solicitor, and asked for a number of references, whereupon the Claimant put forward a former employer, Mr Thorns, as a referee. Within a day or two of Mr Thorns refusal to give a reference without giving any reason for his refusal, Godloves withdrew the offer of employment.
2.2	There is nothing in the accounts I have heard from either party which suggests that the reason for the revocation of the offer of employment had anything to do with race, or any other factor than the fact that an expected reference was refused.
2.3	The Claimant has argued that Godloves required more referees for him than for a comparator whom he had worked with, but I accept Mr Serr’s submission that the nature and number of referees an employer might reasonably require depends very much on each employee’s experiences, for example an employer might require more referees for an employee who worked for four different employers in a year than for one who had one previous employer in 10 years.
2.4	There is nothing on the account I have heard to suggest or even hint that the requirement for more referees from the Claimant than from the comparator could in any way be discriminatory.
2.5	I have taken into account that although the Claimant was asked to provide a reference from a bank he had worked for in Nigeria, when he explained the practical problems about obtaining such a reference, Godloves accepted in its stead a copy of a reference earlier supplied by the bank to the Law Society, It does not appear to me that any inference of discrimination could possibly be drawn from those facts. On the contrary, Godloves’ willingness to accept a substitute reference at that stage shows goodwill towards the Claimant.
2.6	The Claimant has reminded me of all of the guidance on inferences to be found in such cases as Balamoody, Dattani, Anya, Bahl, Singh, etc, and has also reminded me of the guidance in the Chief Constable of West Yorkshire v Kahn on less favourable treatment, but all of those are predicated on the Claimant being able to show the primary facts. Given the reverse burden of proof and the guidance in Igen Limited & Others v Wong and Barton v Investec for this claim to have any chance of success the Claimant has to be able to prove facts from which, together with any inferences which might be drawn, it might be concluded that discrimination on a prohibited ground may have occurred. It is only at that stage that the burden passes to the Respondent to justify its actions. Whilst I recognise that inferences may come from the evidence of either party, and therefore the test is not on all fours with a submission of no case to answer, it cannot be the case that the Claimant is entitled to pursue a case which on his own account of the facts does not show any suggestion at all of discrimination on prohibited grounds, in the hope that some adverse inference may possibly emerge from the Respondents’ evidence. From the documents to which I have been referred and the submissions heard this afternoon, the Claimant has no prospect at all of showing the primary facts necessary to transfer the burden of proof. For that reason it is my view that the claim against Godloves, Mr Goldman, and Miss Kay should be dismissed today.”

The effect was therefore to dismiss the claim against the Godloves team.  

14.	The Chairman gave full consideration to the claim against Thompsons for obvious reasons - here was a direct refusal to provide a reference to a black former employee. The consideration of this claim extends to three times that of Godloves’.  The claims against Thompsons were also dismissed, in the case of one of the officers, Mr Morrison, because it was misconceived.  

15.	There has been no appeal against that judgment.  Thus there was no discrimination by Thompsons in failing to provide a reference.  The focus of attention is upon the reaction of Godloves to the absence of a satisfactory reference.  

The Claimant’s case
16.	The Claimant’s case is that he was treated differently by Godloves on account of his race.  That is a claim of direct discrimination under s.1 of the Act: see paragraph 4 above.  There is no dispute that the failure to get the job at Godloves constitutes a detriment.  In fact, the Claimant burned his boats and handed in his notice at Lister Croft while he was still under a conditional offer. We can understand why he would not go back on his resignation.  But, adventitiously, he obtained work as a solicitor at another firm, Jordans, upon the expiry of his notice.  

17.	The principal contention is that an imposition was placed upon him different from that placed upon the single named comparator advanced in the proceedings, Mr Phil Taylor.  He had worked together with the Claimant at Lister Croft.  He is white, we understand.  He produced references and was taken on.  These two appear to be very similar.  They both became solicitors in 1999, the Claimant in Nigeria and Mr Taylor here.  They each worked for the same number of employers, including together at Lister Croft, and they both received offers from the Respondent.  

18.	The request for a reference is detailed and asks something like 12 questions and some of those had been returned.  It is contended Mr Taylor was subject to a requirement that there be fewer referees.  We doubt that.  The number of references which he provided is in fact the same, but the Chairman, as is correct, took the Claimant’s cases at its highest and considered whether or not, even if there were a requirement for more referees from the Claimant, there was discrimination.  The Claimant also mentioned before us but did not cite, another person, Mr Simms and a further person who was named in the proceedings Lee Rogers.  

19.	The central allegation is that the Chairman should not have struck this out because there were substantial issues of fact.  The Claimant enumerated these in his Notice of Appeal at paragraph 3(a)-(g). He also raised many other grounds including, as will become relevant, that the failure by the Chairman to hold it against the Respondent that it failed to answer the statutory questionnaire was perverse.  Other grounds are advanced but essentially that is the nature of the complaint. Put in different ways, the Chairman was wrong not to exercise her discretion or she acted perversely or she was wrong in law.  The Claimant also made what is described by Mr Serr as a rather muddled case of indirect discrimination which appears to be that because he personally found it difficult to obtain a reference from Thompsons and because he is black, the requirement to obtain a reference from Thompsons was indirectly discriminatory.  

The Respondent’s case
20.	On behalf of the Respondent it is contended that the Chairman acted entirely correctly. The threshold for striking out a case is plainly higher in a race discrimination claim but if there are no significant issues of dispute it is proper to do so to avoid the costs and exposure in a long trial, at if there is either a misconceived claim or it is doomed to failure.  The simple proposition advanced by the Respondent is that it reasonably required references before it employed a solicitor.  To ask for a reference from his last but one employer was reasonable.  That was accepted by the Claimant.  Both the Claimant and the Respondent took steps to obtain the reference and failed. The conditional offer never became unconditional because of that failure.  Satisfactory references were required; a refusal by a named referee to provide a reference was not satisfactory.
The legal principles
21.	The legal principles in this case have been set out in summary by the Chairman.  The starting point is the judgment of the Court of Appeal in Ezsias [2007] EWCA Civ 330 in which Maurice Kay LJ, giving the judgment with which Ward and Moore-Bick LJJ agreed, recognised the power of a Chairman to strike-out a claim which had no reasonable prospect of success pursuant to rule 18(7).  He said this:  

“3.	Although I have described these protections in terms availing a respondent’s employer, in principle they may also avail an applicant if he can show that the respondent’s case has little or no reasonable prospect of success. Experience shows that cases such as the one brought by Mr Ezsias in the Employment Tribunal can make substantial demands on management time and resources with only a limited prospect of recovering litigation costs from an unsuccessful applicant after trial. The limitation is that the Employment Tribunal can only award costs against an applicant or respondent who has brought or conducted the proceedings vexatiously, abusively, disruptively or otherwise unreasonably, or where the bringing or conducting of the proceedings has been misconceived -- rules 40 and 44. In these circumstances it is not surprising that employers in particular frequently seek the protections available under rules 18 and 20.  
27.	I too accept that there may be cases which embrace disputed facts but which nevertheless may justify striking out on the basis of their having no reasonable prospect of success -- see ED&F Mann Liquid Products Limited v Patel [2003] EWCA Civ 472 at paragraph 10 per Potter LJ; a commercial rather than an employment case. However, what is important is the particular nature and scope of the factual dispute in question. In the present case it is stark.  Mr Ezsias is contending that others turned on him because he was a whistleblower. The Trust says that he was impossible to work with and that he unreasonably jeopardised the proper functioning of the hospital. What was it that caused the chair of the Employment Tribunal to consider that that head-on conflict of fact could be resolved without a trial to the point of a conclusion that Mr Ezsias’s case has no reasonable prospect of success? Although in the document of 20 July 2005 she purported to identify some legal points, these effectively fell away in the September reasoning and Mr Pitt-Payne does not seek to rely upon them. In the September reasoning she based her decision on “the letter from all your nine colleagues and the statements they made” concluding that “any reasonable tribunal” would on that basis decide that Mr Ezsias was dismissed not because he had made protective disclosures but because of an irretrievable breakdown of relationships for which he was responsible.  
28.	The question for this court is whether that reasoning on the part of the Employment Tribunal contains an error of law. I have no doubt that it does. Given the extent of the factual dispute, it was legally perverse to conclude as the Employment Tribunal did. In addition to the diametrically opposed cases on the reason for the dismissal, Mr Ezsias had put in issue the evidential significance of the letter of February 2003 by contending that (1) he does not accept its date because it was not shown to him until after he had been suspended in April; and perhaps more importantly (2) its signatories include the two colleagues in respect of whom he had previously made allegations of fraud and others whom he had criticised as regards their competence and professional standards.  
29.	It seems to me that on any basis there is a crucial core of disputed facts in this case that is not susceptible to determination otherwise than by hearing and evaluating the evidence. It was an error of law for the Employment Tribunal to decide otherwise. In essence that is was Elias J held. I do not consider that he put an unwarranted gloss on the words “no reasonable prospect of success”. It would only be in an exceptional case that an application to an Employment Tribunal will be struck out as having no reasonable prospect of success when the central facts are in dispute. An example might be where the facts sought to be established by the applicant were totally and inexplicably inconsistent with the undisputed contemporaneous documentation. The present case does not approach that level.”  

22.	The approach to discrimination cases was an issue from in Clwyd County Council v Leverton [1985] IRLR 197 EAT. Hutchinson J said this:
“11.	For reasons which, if we may say so, we understand, those words caused a certain amount of disquiet in the appellants’ camp because, on one construction, it might appear that he was saying that anybody could launch an application of this sort without having a prima facie case and seek by discovery, by ferreting around in the documents and contracts in their employers’ possession, to make a case which until discovery took place did not even prima facie exist.  We do not believe that the Chairman meant that.  He was speaking in the context of this case.  If he did mean it then, as we made clear to Mr Webster in the course of the argument, it could not possibly be right to suggest that any employee could launch an application of this sort against his employer without any sort of prima facie case and rely upon discovery, and the assistance of the Tribunal in granting discovery, to make out some sort of case.”

This deals essentially with “fishing” and is relevant to what we say about the statutory questionnaire.  

23.	A Tribunal may draw an inference from a refusal without reasonable excuse to answer a questionnaire or if the answer IS evasive see s.65(2)(b).

24.	As to indirect discrimination, the requirement of a reference could be described as a provision criterion or practice under Race Relations Act 1976 s. 1(1A). This is racially neutral although it may have an impact on, for example, women who have career breaks and may have more difficulty complying.  It is difficult to see how that would sound in a race discrimination claim.  

25.	In Anyanwu v The South Bank University [2001] IRLR 305 Lord Steyn drew particular attention to the importance of letting discrimination claims to go a full hearing for this is said:
“24. … For my part such vagaries in discrimination jurisprudence underline the importance of not striking out such claims as an abuse of process except in the most obvious and plainest cases.  Discrimination cases are generally fact sensitive and their proper determination is always vital in our pluralistic society.  In this field perhaps more than any other the bias in favour of the claim being examined on the merits or de-merits of its particular facts is a matter of high public interest.”
Lord Hope of Craighead added:
“37. … I would have been reluctant to strike out these claims on the view that discrimination issues of the kind which have been raised in this case should as a general rule be decided only after hearing the evidence.  The questions of law that have to be determined are often highly fact sensitive.  The risk of injustice is minimised if the answers to these questions are deferred until all the facts are out. The tribunal can then base its decision on its findings of fact than on assumptions as to what the claimant may be able to establish if given an opportunity to leave evidence.”

Discussion and conclusions
26.	With those principles in mind we turn to the issue in this case.  Mr Serr is correct when he analyses the effect of Ezsias.  It is appropriate to use a PHR to strike-out as misconceived or having no reasonable prospect of success (a) when there is no factual dispute to be resolved, (b) when such facts as are disputed are insignificant or peripheral to the principal issue to be decided, (c) where there are important facts but they can be resolved summarily by reference to the documents.  

27.	The starting point in this case, which makes it unique in our experience, is that this African solicitor was offered a job by Godloves. Questions as to direct and indirect discrimination by them must pay attention to that salient fact.  This is not a case where half a dozen people were interviewed and the Claimant, on grounds of race, was not appointed; he was.  He was the man this firm wanted.  He was offered a job conditional only upon providing satisfactory references and he provided some references which on any account are satisfactory.  He also raised an issue about Thompsons and as a matter of practicality we can fully understand why he brought proceedings against them. It was after all Mr Thorns who decided he would refuse and there plainly was an issue to be determined about that. But the Chairman dismissed the claim against Thompsons and so there is not even any knock-on or continuation of a discriminatory regime operated by Thompsons now in the hand of Godloves which would significantly influence their decision.  

28.	The record shows equal treatment with Mr Taylor.  The Claimant has not been treated less favourably.  Each was asked to provide references.  We agree with the Chairman that there is no magic in the number of references to be provided. Throughout his submissions, the Claimant has asserted that he was required to provide five and Mr Taylor fewer.  But that is too simplistic.  The requirement for satisfactory references will be fulfilled in different ways according to the different careers of the persons to be employed. It may well be satisfactory to seek only one. On the other hand, we hold in this case of a relatively junior solicitor with two jobs in this country before the job sought, satisfactory references would be required to be brought from both of them.  Of course Godloves could have overcome Thompsons’ refusal to provide a reference: they had interviewed and approved the Claimant.  They had accepted his explanation for why there were no references, they could have waived the reference.  None of those happened. But we are concerned not with whether the Respondent acted reasonably but whether it discriminated on the ground of race by offering less favourable treatment to the Claimant.  

29.	The primary facts to put before a Tribunal upon which it could form the view that there was discrimination were not met in this case in respect of the named comparator Mr Taylor.  We hold that there is no discrimination in requiring a solicitor to provide satisfactory references or in making an offer conditional upon it.  In this case there is no prima facie case off discrimination in the action of the Respondent.  As to the other comparators, Mr Simms who was not named and Mr Lee Rogers, neither of those is in fact a proper comparator and neither takes this case any further.

30.	On the seven issues said to be significant disputes of fact, and thus crying out for a trial, we accept in full the argument of Mr Serr dealing analytically with each.  The documentation put paid to the suggestion made by the Claimant that Nicola Kay waived the requirement.  She did not.  She insisted upon satisfactory references including, as agreed, the reference from Thompsons.  There is no possibility of an argument for waiver to be constructed. Nor is there a dispute about Mr Taylor who produced four work references and no refusal. But even if there were, the Chairman accepted the Claimant’s case at its highest and rejected it as.  

31.	However, one aspect has caused us some concern which was the failure by the Respondent to answer the statutory questionnaire.  We agree that the failure by the Respondent to disclose equal opportunities material might constitute a serious issue to be tried. It is surprising and unsatisfactory for a firm of solicitors, taxed by a race discrimination questionnaire, which firm itself operates an equal opportunities policy, to fail to reply.  The question is whether that signal failure makes the Chairman’s decision at the PHR wrong so as to suffer a trial of the issues. In our judgment the Chairman should have dealt specifically with this point because it was addressed to her and is now part of the grounds of appeal both on perversity and application of Ezsias test.  Standing back as we do, noting that the other six substantive issues which the Claimant cites do not, in our judgment, constitute real disputes on the facts, and putting this failure to answer the questionnaire in its context, we consider that there is no error. 

32.	As a matter of chronology the questionnaire was quickly followed by the response where at least some of the issues in the questionnaire are dealt with.  Secondly, some of the questions taken off the former CRE website are of a more general nature and are not apt to deal with the situation here, unique as we have found.  This solicitor was offered a job by this firm and so asking questions about the number of black solicitors employed by the organisation is not going to advance the case without a considerably better tailored question.  We also have in mind that failure to answer a questionnaire is not in itself a breach of the statute although it may give rise to an inference.  Seeing it in context and expressing our dissatisfaction with the way in which this was handled by the Respondent, we do not see that testing the reasonableness of the excuse, so as to consider drawing an adverse inference, alone militated in favour of a trial.  

33.	As to indirect discrimination, we respectfully reject Mr Jatto’s contentions and agree that this is a muddled claim.  No factual basis was set up to show an indirect discrimination claim, even acknowledging as we do there was no race relations questionnaire.  A questionnaire usually precedes a claim; in this case it followed it. We bear in mind, as we have cited from Leverton, that this must not be used in order to try and construct a claim at this stage. In our judgment there was no basis for the indirect discrimination claim.  The Claimant cannot begin to found an allegation of indirect race discrimination simply because he was asked to provide satisfactory references before starting a job.

34.	For those reasons we uphold the judgment of the Employment Tribunal Chairman on the Godloves case, and dismiss the appeal.  We thank Mr Jatto and Mr Serr for their helpful submissions today.