Appeal No. UKEAT/0126/09/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 29 July 2009

Before
THE HONOURABLE MR JUSTICE BEAN
MRS R CHAPMAN
MR C EDWARDS

DR C D’SILVA	APPELLANT

(1) NATFHE (now known as UCU)
(2) MR M SCOTT
(3) MR A PIKE
(4) MR R KLINE
(5) MR P MACKNEY
(6) MR P JONES	RESPONDENTS

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING - APPELLANT ONLY

	APPEARANCES

For the Appellant	DR C D’SILVA
(The Appellant in Person)	

SUMMARY
PRACTICE AND PROCEDURE:  Costs
1.    The fact that an employment tribunal made an award of costs on the basis that the claim had been misconceived from the start did not support an allegation of bias against the tribunal.
2.   An employment tribunal was entitled to make an award of costs notwithstanding that the chairman who had presided at the liability hearing had retired on the grounds of ill health and a new employment judge had been appointed to sit with the original lay members to hear the costs application.
3.  In making an award of costs an employment tribunal was not obliged to enquire into the paying party’s means of its own motion where substantial submissions had been made as to costs but no argument about means had been raised. 

THE HONOURABLE MR JUSTICE BEAN

1.	The Appellant, Dr D’Silva, joined the staff of Manchester Metropolitan University (MMU) in 1993.  In the years from 2002 to 2005 he brought, he told us, five sets of proceedings against MMU for racial discrimination.  One of these at least succeeded in part and we have the Judgment at pages 164 onwards of the bundle.  That Judgment itself has been the subject, Dr D’Silva told us, of an appeal to this Appeal Tribunal and a remission to the Employment Tribunal for rehearing of part of the claim. 

2.	That is the background against which the present proceedings arise.  Dr D’Silva sought legal assistance and representation from his union, then NATFHE, now UCU, and save to a limited extent which was not satisfactory to him, that assistance was refused.  He then brought proceedings for racial discrimination including victimisation against NATFHE itself.  Those proceedings came on for hearing in the London Central Employment Tribunal before Mr B C Buckley, Chairman and two lay members, Mr G Ellis and Mr M S Howe between 26 June and 6 July 2006.  Mr D’Silva had the services of a lay representative, Mr Deman.  The Respondents were represented by Counsel.  

3.	By its reserved Judgment sent to the parties on 2 August 2006 the Tribunal dismissed all the claims.  That liability Judgment, as we shall call it, was the subject of an appeal to this Appeal Tribunal which was dismissed in a Judgment which is reported at [2008] IRLR 412.  That Judgment has been the subject of an application by Dr D’Silva for permission to appeal to the Court of Appeal.  He told us that the permission application was refused on the papers but has been renewed to an oral hearing which has not yet taken place.

4.	To return to late 2006: the Respondents made an application for costs and lodged written submissions in support of it.  Dr D’Silva replied to those written submissions.  Unfortunately, they were never considered by the Employment Tribunal as originally constituted.  They did not come on for an oral hearing until 27 November 2008.  By this time Employment Judge Buckley, as he had become, had ceased to sit on the grounds of illness.  His place was taken by Employment Judge Angela Stewart.  She sat with the two original lay members, Mr Howe and Mr Ellis, to hear the application for costs.  The representation was as before.

5.	The Tribunal, by a Judgment sent to the parties on 17 December 2008, granted the Respondents’ application for costs to the extent of 50 per cent of their entire costs and ordered that the matter be referred to the county court for a detailed assessment of what that figure should be.  The Respondents were claiming total costs of £74,390.60, so if the 50 per cent claim were to be allowed in full that would be a sum in excess of £37,000.  The present appeal is against that order for costs.

6.	Although the liability Judgment is still under appeal to the Court of Appeal, we have to proceed at this stage on the basis that the liability Judgment was correct, given that it has been upheld in this Appeal Tribunal.  Of course, if the Court of Appeal were to allow Dr D’Silva’s appeal and set aside the liability decision, that would obviously have potential consequences for the costs decision which followed it.

7.	Dr D’Silva has appeared in person before us.  He has lodged a substantial document setting out his grounds of appeal and has conducted the case today in a very articulate manner.  We will take his grounds of appeal in what seems to us to be the most convenient logical order, not necessarily exactly the order in which the points are put in the grounds of appeal.  

8.	The first ground is that it was unsatisfactory for the Tribunal hearing the costs application to be differently composed (to the extent of the Judge taking the chair) from the Tribunal which had heard the original application; and that the decision to appoint Judge Stewart in Judge Buckley’s place, taken by the Regional Employment Judge, was one about which Dr D’Silva had not been told in advance.  

9.	We cannot see that there is anything in this as a ground of appeal on its own.  Judge Buckley was on health grounds no longer available.  This did not deprive the Respondents of the right to have their costs application heard and determined by someone.  The two members of the original Tribunal who were available did sit to hear the case.  The position of a presiding Judge who has become ill is no different from what the position would be if, for example, a Judge or member has died or (as sometimes happens between for example a liability hearing and a remedies hearing in the Tribunal) one member of the Tribunal is going to be absent for a long time and the view is taken that if the case is to be heard without intolerable delay there must be a change in the composition of the Tribunal.  It was not incumbent on the Tribunal office to notify the parties in advance of Mr Buckley’s indisposition and in any event we cannot see that Dr D’Silva could have done anything about it if he had been informed in advance. 

10.	The next ground of appeal is, as we see it, the most substantial.  The Judgment on liability, although it finds unequivocally against Dr D’Silva on the merits, does not castigate his claim as having been unreasonable or misconceived or doomed from the start, nor does it criticise the manner in which he or his representative conducted the case.  Those criticisms only emerge in the findings in the costs Judgment on 27 November 2008.  Dr D’Silva complains that Judge Stewart, coming new to the case, can have formed no view of her own as to whether, for example, Mr Deman had conducted cross-examination in a way which was offensive and distressing, nor on whether the case had been doomed from the start. As for the lay members, they had to rely on their recollections of a hearing which had taken place two and a half years previously. 

11.	We do not think that this does justice to the position of a Tribunal who are considering issues of costs in a case where the findings in the liability hearing have been reduced to a reasoned written Judgment, which in the present case extends to 28 pages.  The lay members had not only their recollection of the previous hearing but the written Judgment, as well as the principal documents in the case, to prompt their recollection.  Although the interval since the liability Judgment had been considerable, the case had lasted about a fortnight and we have no reason to think that their recollections about the case as set out in the costs Judgment were too vague or too dim or too diminished by the passage of time to be sustainable.  As for Judge Stewart, she had the liability Judgment to go on and in any event those findings against the Claimant which are dependent on perceptions of what happened at the hearing, such as the way in which the Claimant or Mr Deman behaved, are expressly stated to be findings of the lay members only and not of Employment Judge Stewart as well.  

12.	A further complaint made about the lay members is that one of them, Dr D’Silva argues, was asleep for part of the hearing.  This was not, we understand, raised before the Tribunal during the liability hearing.  It was first mentioned in a letter to HHJ Meeran, then President of the Employment Tribunals, sent on 25 April 2007. Very strikingly, it was not raised as a ground of appeal before this Appeal Tribunal in the liability appeal: see the reported Judgment in which nine grounds of appeal are set out in detail in the Judgment delivered by Underhill J and none of them complains of a Tribunal member falling asleep.  It is too late, in our judgment, for this matter to be raised on the costs appeal.  Like other aspects of the conduct of the liability hearing it was a matter to be raised, if at all, on appeal from the liability Judgment itself.

13.	We now turn to the merits of the decision to make an award of costs and before that will refer to those authorities which were cited to us by Dr D’Silva either in his written submissions or in oral argument.  It is well established, for example in the Judgment of Pill LJ in Lodwick v London Borough of Southwark [2004] ICR 884, that an order for costs made in the Employment Tribunal is an exceptional course of action.  In McPherson v BNP Paribas [2004] ICR 1398 at paragraph 41 Mummery LJ, giving the leading Judgment in the Court of Appeal, noted the submission of Ms McCafferty for the Appellant employee that the Tribunal’s discretion toward costs could not properly be exercised to punish the Applicant for unreasonable conduct.  He went on:
“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 precondition of the existence of the power to order costs and it is also a relevant factor to be taken in to account in deciding whether to make an order for costs and the form of the order.”  
To similar effect is the decision of the Employment Appeal Tribunal, Burton J presiding, in Salinas v Bear Stearns [2005] ICR 1179.  

14.	In Jilley v Birmingham and Solihull Mental Health NHS Trust (UKEAT/0584/06 and 0155/07), a decision of this Appeal Tribunal with Judge Richardson presiding delivered on 21 November 2007, Ms Jilley had brought four sets of proceedings against the Respondents.  She lost the first two in their entirety and an application was made for costs.  The Tribunal heard submissions from her about her means and made a decision on costs which included a finding that the claims were substantially misconceived.  Ms Jilley then brought a third and fourth set of proceedings which again failed.  At the subsequent costs hearing she did not attend in person although she delivered a bundle of documents.  Again, the Tribunal made an award of costs against her.  On appeal Counsel submitted that the Tribunal had not dealt properly or adequately with the question of her means.  They had evidence that her capital was limited to some £40,000 at most and her net monthly income was modest.  The Employment Appeal Tribunal agreed with the submission of Counsel for Ms Jilley and what appears to have been a concession by Counsel for the employers that the Tribunal had not dealt adequately with the question of Ms Jilley’s means, since they said nothing about means in their costs decision in relation to the third and fourth sets of proceedings.  Judge Richardson said this at paragraphs 44 and 45:
“44. Rule 41(2) gives to the Tribunal a discretion whether to take into account the paying party’s ability to pay.  If a Tribunal decides not to do so, it should say why.  If it decides to take into account ability to pay, it should set out its findings about ability to pay, say what impact this has had on its decision whether to award costs or on the amount of costs, and explain why.  Lengthy reasons are not required.  A succinct statement of how the Tribunal has dealt with the matter and why it has done so is generally essential.
45.	In this case the Tribunal has not provided any such explanation.  It has made an order for detailed assessment, knowing that even if the costs are substantially reduced at the detailed assessment they are still likely to be beyond the ability of Ms Jilley to pay them.  We do not say the Tribunal is not entitled to take such a course; but reasoning is required if it is to be taken.” 

15.	Here what the costs decision says as to means is limited to paragraph 15 which reads as follows:  
“The Respondent’s representative stated during his opening remarks that the Tribunal may have regard to the paying party’s capacity to pay in considering whether or not to make an order and of how much.  However, the Claimant did not address the Tribunal on this issue.”

16.	We were not, of course, present at the oral hearing; but we do have the detailed written submissions of both parties on the subject of costs made in late 2006 and then a substantial document lodged by Mr Deman on behalf of Dr D’Silva in late 2008.  Indeed, that document has been relied on to a considerable extent, although not by any means entirely so, in Dr D’Silva’s Notice of Appeal and accompanying argument before us.  Mr Deman’s document says nothing whatever about Dr D’Silva’s means or lack of them, although it does make a substantial number of other submissions.  In those circumstances we consider that it was not for the Tribunal to take the initiative if the matter was not raised before them.  The position is in contrast with the Jilley case where the same Tribunal had conducted at least two hearings involving the same parties and had had detailed evidence about means and submissions based on that evidence at the earlier hearing.  This Appeal Tribunal held that it was incumbent on the Tribunal to explain why, with that information before them, they nevertheless made an order for detailed assessment of costs in what may have been a significant sum for Ms Jilley (although not as great a sum as that which arises in the present case) notwithstanding that Ms Jilley’s means were evidently severely limited. Jilley is, if we may say so, an unimpeachable decision on the facts, especially if there was indeed the concession we have mentioned, but it does not lay down any general principle of law, and is in our view rightly unreported.

17.	The next point raised by Dr D’Silva is that the finding in the costs Judgment that the lay members considered the case misconceived from day one means that they at least were biased against him.  As to the conduct of the liability hearing, as we have already said in the context of other submissions, that does not arise on the costs appeal but what we understand Dr D’Silva to be saying in relation to the costs appeal is that this indicated that the lay members, and possibly relying on their perceptions of Judge Stewart, were tainted with bias in their consideration of the costs application. 

18.	The test to be applied when allegations of bias are raised is now well established and is found in the decisions of the House of Lords in Porter v Magill [2002] 2AC 357 and Lawal v Northern Services [2003] ICR 856, the latter case concerning of a hearing before this Appeal Tribunal.  The question is whether a real possibility of bias, conscious or otherwise, has been shown as perceived by a hypothetical fair-minded observer who is neither unduly suspicious nor unduly sensitive.  We do not consider that the finding of the Tribunal, or even the lay members, in the costs application that the proceedings were misconceived from the start indicates bias.  When an application for costs is made Rule 40 of the Tribunal Rules of Procedure requires the Tribunal to reach a decision on whether, among other things, the bringing of the proceedings has been misconceived.  The question of the conduct of the proceedings is of course another heading; but where an application is made on the basis inter alia that the bringing of proceedings by the paying party has been misconceived, this inevitably involves the Tribunal in expressing a view on whether, as matters stood on day one of the hearing, the claim appeared to be misconceived.

19.	The fact that this is a procedure laid down by the Rules does not mean that if the Tribunal make a finding against the paying party that this must mean that their consideration either with the claim on liability or of the claim for costs was biased.  As is very well known to Judges and lay members conducting hearings in courts and tribunals and as Megarry J memorably said in the case of John v Rees [1970] 1 Ch 345, claims which appear open and shut one way or the other on the first day of a hearing may turn out by the end of the hearing not to be so open and shut at all.  The case which seemed extremely strong on day one may in the end fail.  The case which seemed rather weak on day one may in the end succeed.  Of course, the case which seemed extremely weak on day one may fail as well. We do not consider that there is anything in the bias allegation under this heading. 

20.	The next point is that it was argued below, though not other than by brief reference before us, that the failure by the Respondents to make an application to the Employment Tribunal to strike out the claims was an indication that the Employment Tribunal’s view that the claim was misconceived from the start could not be a sound one.  As to this the Employment Tribunal said at paragraph 5: 
“The fact that no strike out application was made by the Respondents is not definitive.  Strike out applications, if made, are very rarely granted in discrimination cases and the Tribunal’s view is that the lack of strike out application in this case was indicative of the Respondent’s representatives’ restraint.”  

21.	We are not sure that we agree with the Tribunal on the last point.  They are certainly right to say that strike out applications are rarely granted in discrimination cases, because of the observations of the House of Lords in Anyanwu & Ebuzoeme v South Bank Students Union & Another [2001] ICR 391.  We would therefore prefer to say that the lack of a strike out application in this case was indicative of the Respondent’s representative’s realistic view of the case law. Since strike out applications are so rarely granted in discrimination cases, the fact that no such application was made tells us nothing about the correctness or otherwise of the Tribunal’s finding at the costs hearing that from day one of the liability hearing it was a misconceived claim.

22.	As to whether there was any basis on which the Tribunal could come to that conclusion, this is very much a matter of fact for them. We note in the Judgment that they found that the conduct of the proceedings had been both misconceived and unreasonable. The points they took into account were, firstly, the naming of five extra individual respondents over and above the union which was named as the First Respondent; secondly, the insistence on voluminous additional documents which principally related to other proceedings and which were not referred to at the hearing; thirdly, the unreasonable and abusive cross-examination of the Respondents’ witnesses conducted by Mr Deman and with the Claimant, so the Tribunal found, smirking continually while this was going on.  

23.	The naming of unnecessary additional Respondents and the insistence on voluminous additional documentation are clearly sound bases for a finding of unreasonable conduct of the proceedings.  As to the unreasonable and abusive cross-examination, this was a finding of fact which the Tribunal were entitled to make and to make only in the costs Judgment.  It was not referred to in the liability Judgment; it would not have been relevant to liability.  

24.	The principle set out in McPherson v BNP Paribas, to which we have already referred, is that it is not necessary to establish a direct causal link between particular examples of unreasonable conduct and the costs incurred by the Respondent.  Once a finding of unreasonable conduct or misconceived bringing of proceedings or another ground under Rule 14 is made, the question of costs is then very much within the discretion of the Tribunal. 

25.	Finally, Dr D’Silva in his written submissions has argued that the costs application should not have been heard in the London Employment Tribunal at all, particularly once Mr Buckley became unavailable, and that the London Employment Tribunal is institutionally racist and biased against him.  This, he says, is supported as a proposition by the fact that a subsequent case which he has brought against the same Respondents, the UCU, was at his request ordered to be heard in Manchester by the then President of the Employment Tribunals, Judge Meeran.  In our view, firstly, that order gives no support to the allegation that the London Employment Tribunal is institutionally racist.  Secondly, the question of where a fresh case should be tried is wholly different from the question of where a remedy or costs hearing in a case which has already been the subject of a liability hearing should be tried.  It is extremely unusual for subsequent proceedings in the same litigation to be moved to a different venue. Moreover, if the costs application had been moved to a different venue it would have meant that none of the three Tribunal members who had sat at the liability hearing would have been able to sit, a result diametrically opposed to the one for which Dr D’Silva was contending when complaining of the substitution of Employment Judge Stewart.  

26.	Finally we note that in the written submissions, although not his oral submissions, Dr D’Silva alleged that both Employment Judge Stewart and the two lay members in this case have perjured themselves and perverted the course of justice.  Such allegations are both unfounded and unworthy of Dr D’Silva.  They were rightly not developed in oral argument.  

27.	In the result there is no point of law which in our judgment should go to a full hearing and the appeal is dismissed. 

(Dr D’Silva applied for permission to appeal)
28.	Dr D’Silva, we are not prepared to grant permission to appeal to the Court of Appeal but, as you know, it is open to you to make an application to the Court of Appeal direct within 21 days.  We would respectfully suggest to the Court of Appeal that if you do make such an application an attempt is made to marry up the file with the appeal which you are seeking to pursue against the liability Judgment since, obviously, knowledge of that case would help the Court of Appeal in deciding on any application in this case; but of course it is a matter for them.