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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Panama v. London Borough of Hackney [2005] UKEAT 0364_04_2402 (24 February 2005) URL: http://www.bailii.org/uk/cases/UKEAT/2005/0364_04_2402.html Cite as: [2005] UKEAT 364_4_2402, [2005] UKEAT 0364_04_2402

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APPEARANCES

 

For the Appellant	MR R O'DAIR (Of Counsel) Instructed by: Messrs Pollecoff Solicitors 41 Tabernacle Street London EC2A 4AA
For the Respondent	MR M SUTTON (Of Counsel) Instructed by: London Borough of Hackney Legal Services 298 Mare Street Hackney London E8 1EA

SUMMARY

Appeal from ET's decision to strike out A's Originating Applications on the grounds of her unreasonable conduct in the proceedings (Rule 15(2)(d) of 2001 Regulations) – Perversity challenge. Appeal dismissed.


 


THE HONOURABLE MRS JUSTICE COX

1. This is an appeal by the Applicant, Felicia Panama, against the Decision of a Stratford Employment Tribunal, promulgated on 2^nd March 2004, striking out the Applicant's two Originating Applications under Rule 15(2)(d) of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2001 on the grounds of the Applicant's unreasonable conduct of the proceedings. The Applicant contends, essentially, that the Tribunal's Decision was perverse; and that striking out the Applications was inappropriate and disproportionate in the circumstances and amounted to a breach by the Tribunal of her right of access to a court under Article 6 of the European Convention on Human Rights. The Respondents contend that the Decision was entirely justified in the circumstances, that the Tribunal directed themselves appropriately and in line with the guidance given in relevant Appellate authorities and that the grounds of appeal are unsustainable. Both parties have been represented by counsel before us.
2. The Relevant Background

The Applicant had worked for the Respondents since November 1991. In 1995 she was promoted to the position of Re-housing Manager, working seventeen and a half hours per week in a job-share arrangement, providing advice to tenants on the Respondents' housing transfer list. Meanwhile, in 1993 she obtained a law degree (LL.B. Hons.) and she hoped thereafter to qualify as a solicitor. In December 1994 she obtained work with a firm of solicitors, Bhardwaj and Co. in South Molton St., London, and she intended to complete her training contract with that firm. She secured appropriate permission from the Respondents for this work; and it is not in dispute that she recognised that she should not at any stage allow this work to place her in a position of conflict with the Respondents.

3. In March 1998 she went on maternity leave, her child being born on 13^th May 1998. For various reasons, which are irrelevant to this appeal, she did not return to work until 1^st June 1999. After returning she considered that the Respondents had treated her unlawfully, following a wide-ranging reorganisation of the housing department in her absence and the disappearance of the Re-housing Manager posts. She issued an Originating Application on 16^th August 1999 complaining of sex and race discrimination, victimisation, "deemed and unfair dismissal, breach of equal opportunity legislation and breach of maternity rights." The Respondents resisted all her allegations and the case was listed for hearing on 10^th January 2000. However, in December 1999, the Applicant presented a second Originating Application making fresh complaints following her dismissal by the Respondents purportedly for redundancy on 24^th September 1999. The hearing was therefore adjourned to enable all the matters to be dealt with at the same hearing and to ensure that both parties had an adequate opportunity to prepare for that hearing.
4. On 1^st July 1999, shortly before she issued her first Originating Application, the Applicant had been suspended by her employers pending an investigation into her conduct. The cause of their concern was the receipt by the Respondents, a year earlier in May 1998, of a letter from Bhardwaj and Co. concerning the housing difficulties of one of their clients, a Mrs. D. The letter provided a writer's reference including the initials "FP". It made reference to some very difficult personal circumstances of Mrs. D's children, who were said to be suffering from brain damage and, in seeking re-housing, revealed an understanding of the Respondents' practice and procedure relating to housing matters. Bhardwaj and Co. confirmed upon enquiry that the person dealing with the case was indeed the Applicant. The Respondents decided at this stage not to raise the matter with the Applicant whilst she was away on maternity leave. However they considered that it raised a conflict of interest issue; and that the Applicant should not have been acting within her area of responsibility, on behalf of a client who was then in dispute with the Applicant's own employers. They therefore took action upon her return from maternity leave and suspended her on 1^st July 1999 pending an investigation.
5. The Applicant's suspension was lifted on 27^th August 1999 and a disciplinary hearing was arranged for 30^th September next. However, in the event that hearing did not take place because, during the intervening period, the Applicant not accepting offers of alternative employment following the department reorganisation, her employment was terminated by the Respondents purportedly by reason of redundancy; and her employment was therefore terminated with effect from 24^th September 1999.
6. The Tribunal hearing for the Applicant's two Originating Applications then took place between 27^th and 30^th March 2000 with both parties being represented by counsel. All the Applicant's complaints of sex and race discrimination and victimisation were dismissed, but the Tribunal found that she had been unfairly dismissed. They found she was dismissed not for redundancy, but for some other substantial reason of a kind sufficient to justify the dismissal of an employee holding the position which the Applicant held, and that her dismissal was unfair in the circumstances. It was ordered that a remedies hearing should be fixed to take place if the parties were unable to agree an appropriate figure for compensation. However, they found that the only loss suffered by the Applicant, as a result of the unfair dismissal, was the amount of the remuneration that would have been paid to her over the period of three weeks before she would have been fairly dismissed in any event for gross misconduct. This was because they held that, by the time the disciplinary process would have reached its conclusion, the Respondents had discovered that the May 1998 letter from Bhardwaj and Co. represented an attempt to defraud the Respondents. Mrs. D had been contacted and had accepted that her housing claim to the Council had been fabricated and stated that, in making it, she had acted on her solicitor's advice. The statement in the letter that her children were brain damaged was false and the Tribunal found that it was plainly intended that the Respondents should act upon this particularly unpleasant form of misrepresentation, so as to secure an improper advantage for the client. The Tribunal stated that they had considered the Applicant's explanation, which amounted to a denial of any involvement in the sending of the letter. At paragraph 41 of the Liability Decision promulgated on 2^nd June 2000, however, the Tribunal said:

"We have not found her denials to be convincing. The probability is that the reasonable employer would have taken the same view of that evidence, as does this Tribunal. We find it to be the overwhelming probability that the Applicant would have been found guilty of gross misconduct and would have been summarily dismissed."

7. The Applicant appealed against the Tribunal's Decision on liability and applied for the remedies hearing, fixed for 20^th October 2000, to be adjourned pending the appeal. This Application was refused and the remedies hearing went ahead on 20^th October, the Decision being promulgated on 2^nd November 2000. At this hearing the Respondents were represented by counsel, but the Applicant was neither present nor represented. No explanation for her absence was provided at any stage and, after waiting for a time and satisfying themselves that the Applicant had had notice of the hearing, the Tribunal proceeded to deal with the matter in her absence. They decided that the Applicant should be awarded no compensation, having regard to the provisions of section 122(2) and section 123(6) Employment Rights Act 1996; and finding (a) that the Applicant's conduct before her dismissal was such as to justify the Respondents summarily dismissing her and that it would not, therefore, be just and equitable to make any basic award; and (b) the subsequently discovered misconduct of the Applicant entitled them to reduce to nil the compensatory award. Further, they found that there was an even more compelling reason for making a nil award, namely because no loss arose in respect of the period between the date of the actual dismissal and the date upon which the Applicant would have been fairly dismissed, during which time she was being paid the sums due to her under her contract.
8. The Applicant also appealed against this Remedies Decision and both her appeals were heard by the EAT in March 2002. Both appeals were dismissed. However, on 17^th February 2003 the Court of Appeal allowed the Applicant's appeal in respect of the Remedies Decision and ordered that "the finding of fraud within the Employment Tribunal's determination be set aside" and that the question of compensation should be remitted to the Tribunal for reconsideration.
9. The Tribunal then directed that there should be an Interlocutory Hearing so that directions could be given in respect of this new hearing. This took place at Stratford before the then Regional Chairman (Mr. Lamb) on 30^th October 2003, when the remedies hearing was fixed for 20^th and 21^st January 2004. Both parties were legally represented before Mr. Lamb on that occasion and the Applicant also attended personally. Directions were given and his Decision with extended reasons was promulgated on 6^th November 2003. There was no appeal from that Decision. After referring to the Court of Appeal's Order Mr. Lamb set out the position as he understood it as follows:

"3 This interlocutory hearing was convened to consider the proper ambit of the remedy hearing which is now to take place; and the composition of the Tribunal panel to hear it. Previously, representations were invited from the representatives on these issues, and there was a failure to agree. At the interlocutory hearing, there have been before me not only the previous decisions of the Employment Tribunal and the Employment Appeal Tribunal, but also the transcript of the judgment of the Court of Appeal and, with particular significance, a transcript of the discussion which took place after the judgment was given by their Lordships.

4 Given the understanding of the details of the case already shared by the parties, I can summarise the position very briefly. The reason for the dismissal was put forward by the Respondents as redundancy but was found by the Employment Tribunal to be "some other substantial reason of a kind sufficient to justify the dismissal". Her job had ceased to exist because of a reorganization. The Tribunal decided that the dismissal was unfair for reasons which it set out in paragraph 38 of its extended reasons. In its first decision, it set out a conclusion that if Ms Panama had not been unfairly dismissed, she would have secured alternative employment; but she would have been dismissed in any event, for gross misconduct, and that would have been a summary dismissal. That conclusion by the Tribunal was based upon a finding that Ms Panama had written a letter in her capacity as a trainee solicitor, to the Respondent council, by which she was still employed at that time. In arriving at that conclusion, the Tribunal made findings adverse to Ms Panama: it rejected her evidence that she was not involved in the contents or sending of the letter; and it found that not only was the letter fraudulent, but also that she knew that it was fraudulent.

5 The central argument before the Court of Appeal was that Ms Panama did not have a fair opportunity to meet the allegation that she was knowingly involved in fraud in respect of the contents of the letter. The Court of Appeal accepted that contention: hence that part of the order which expressly refers to the finding of fraud being set aside. However, it upheld the finding of fact which attributed the letter to Ms Panama. The Court of Appeal also decided that the Employment Tribunal had applied the wrong test in concluding that the Applicant would have been dismissed in any event. It held that the question for the Tribunal to consider was whether she would have been fairly dismissed. The court answered that question itself and concluded that she could not have been fairly dismissed.

6 The resulting position gives rise to some difficulty. The Respondent council began an investigation into the letter as a conflict of interest point, but did not complete its enquiries, deciding instead simply to dismiss the Applicant because of redundancy. However, the Court of Appeal accepted that the evidence before the Employment Tribunal was sufficient to allow the Tribunal to conclude that despite her denial, Ms Panama wrote the letter concerned.

7 The decision of the Tribunal as to remedy, promulgated on 2 November 2000, resulted from a further hearing, but proceeded on the basis that there had already been key findings in the first decision which resulted in the declaration that there had been an unfair dismissal. In particular, in paragraph 4 of the remedy decision, the Tribunal decided that Ms Panama was not entitled to a basic award for the following reason: "The Tribunal had found that the conduct of the Applicant before her dismissal was such as to have justified the Respondent in summarily terminating the employment because of the conduct of the Applicant. In the circumstances we do not consider that it could be just and equitable to make any basic award". I pause to comment that the reference to summary termination could only refer to a finding of fraud, because the council had not contended that it was entitled to dismiss by reason only of the conflict of interest argument. In the following paragraph in the remedy decision, the Tribunal turned to the compensatory award, referred to Section 123(6), and then stated: "because the Respondent had yet to complete its investigations into its concerns about the Applicant's conduct, those concerns were not the cause or a contributory factor in the decision to dismiss" I pause there to comment that that is a reference to the conflict of interest investigation which was cut short by the decision to dismiss on other grounds. The decision then continues thus: "it was made clear by the House of Lords in Devis v Atkins that in assessing compensation an Employment Tribunal is entitled to have regard to subsequently discovered misconduct and, if they think fit, to award nominal or nil compensation. Accordingly, for the same reasons as for the reduction of the basic award, we would reduce to nil the entitlement of the Applicant to a compensatory award".

8 It seems to me to be clear that in the use of the words "for the same reasons" the Tribunal is proceeding on the basis that because there could have been a summary dismissal for fraud, the conclusion expressed in its first decision, then there should be no compensatory award. That is therefore a conclusion which rests upon a finding overturned by the Court of Appeal.

9 It has been submitted to me by Mr Sutton that although the Court of Appeal judgment shuts out an argument based on Polkey, it does not shut out an argument based on Devis v Atkins, i.e. the reduction or elimination of a compensatory award on the basis of "subsequently discovered misconduct". The Respondent, he contended, is entitled to return again to the letter attributed to the Applicant by the Employment Tribunal, and to argue that it "resonates in remedy".

10 Mr Wishart has contended that the discussions after the judgment show that Mr Sutton was attempting to go behind the decision of the Court of Appeal in putting forward the various arguments which might be left to him at the subsequent, remitted remedy hearing, and the Court of Appeal was constantly closing them off. He contends that the Tribunal is now limited to simply calculating loss, including any issue of mitigation of loss which might arise.

11 Broadly speaking, it is clear that the discussion after the judgment was somewhat fluid. At one point Mr Sutton described it as a stream of consciousness. It is fair to say that their Lordships were making comments which in large part were intended to prevent the Respondent from reopening issues which had been, or should have been, determined. However, the discussion became essentially focussed at paragraph 24 in the comments of Lord Justice Gibson, when he referred to "reopening matters that should have been dealt with", but then went on to say: "so I think you are stuck, if I might say so, with that now, but you have got some comfort from that particular point". The point to which he was referring was the attribution of the letter. Mr Sutton took up that point, and tried to set out its implications for him, and was then cut short by Lord Justice Gibson who, however, then went on to say, as the final words of the discussion: "you are not asking it go to another Tribunal, so we will remit back to the Tribunal, but on the limited basis that there is an adverse finding of your client, that is to say about the letter. But that is as far as it goes. Fraud is not shown".

12 It seems to me that those closing words of the discussion are definitive. They result in the remission being put on the basis that the letter may be treated as arguable "fault" on the part of the Applicant, as the basis for an argument that there should be a reduction in her compensation. However, that fault cannot include any express or implicit allegation of fraud. At best it can only be put forward as a conflict of interest argument."

10. Mr. Lamb then gave the following directions:

"14 Directions have been given as follows:

(i) Two days have been allocated as a safe and cautious estimate. The hearing is fixed for 20 - 21 January 2004 with the agreement of the parties.

(ii) By 21 November, the Applicant is to serve on the Respondents a schedule of loss and a list of relevant documents, with inspection on reasonable notice of the listed documents by 5 December.

(iii) The parties will exchange the statements of the witnesses upon whom they intend to rely on 17 December, including any relevant evidence in respect of the conflict of interest argument.

(iv) Any supplementary witness statements are to be served by 12 January, and in respect of that direction, I have in mind in particular that the Applicant may wish to serve some evidence in response to the new material which may be served by the Respondents."

11. The Hearing on 20^th January 2004

The events which took place on the day fixed for hearing are contained in the Tribunal's Decision at paragraphs 14 to 23 and in view of their significance in this appeal we shall set them out in full here as follows:

"14 At 10.00 am the remedy hearing was called on and the Respondents were in a position to proceed. However, the Applicant was not. Only Mr Pullen [counsel] was present. Mr Pullen was in no position to proceed in the absence of his solicitor, Mr Wishart, or the Applicant. Mr Pullen had only been instructed, fully, at 7.00 pm yesterday evening, although some papers had been delivered to him in the course of last week. Five minutes later the Applicant arrived and at 10.16 am Mr Wishart entered the Tribunal having been incommoded by delays on the Underground system. Mr Sutton protested at the situation that had arisen, indicating that apart from what had been revealed to the Tribunal this morning, there had been a simple failure on the part of the Applicant and her solicitors to comply with Mr Lamb's directions. Time was then allowed for Mr Pullen to seek instructions.

15 At 10.51 am the Tribunal reviewed the position. Mr Sutton drew the Tribunal's attention to the fact that Direction 14(2) had been breached. The schedule of loss and the listed documents that were to be served by 21 November 2003 had not been served in total until 19 January 2004, ie yesterday. Accordingly inspection could not take place. Furthermore the documents themselves, despite requests that had been made and ignored, were only made available piecemeal between 14 and 19 January 2004.

16 Accordingly, Mr Sutton submitted, it was not possible to exchange witness statements by 17 December and any evidence concerning the conflict of interest argument. No measures were taken by the Applicant's solicitors to forewarn the Tribunal of any difficulties they were experiencing, nor why the breaches were taking place.

17 Upon enquiry by the Tribunal it became apparent that no steps had been taken in respect of the conflict of interest argument to agree a schedule or prepare an argument to establish what the parameters were for the purposes of the remedy hearing. As a consequence it was becoming apparent that the historical confusion concerning the Court of Appeal judgement(sic) which was ventilated at the interlocutory hearing for directions had not been resolved or prepared for resolution.

18 Mr Sutton continued that he had only been informed about 10 to 15 minutes previously that the schedule of loss that actually did exist was wholly inaccurate and that the Applicant wished to serve a new one relating to post dismissal earnings. Mr Sutton then took the Tribunal through the efforts made by the Respondents in December to obtain partial disclosure in the days leading up to the hearing.

19 Mr Sutton then highlighted the unsatisfactory state of the bundle. Given that full disclosure has not been provided and no attempt had been made to comply with the directions, he gave warning that the Respondents would seek to strike out the Originating Application pursuant to Rule 15(2)(d) of the 2001 Regulations or seek an adjournment with the Applicant condemned in costs.

20 Indicating that the Respondent found it impossible to proceed in the circumstances, Mr Sutton drew the Tribunal's attention to the typewritten witness statement of Ms Panama. Effectively it constituted about three pages of A4 within which appeared half a dozen paragraphs relating to general information of a superficial nature which could hardly be regarded as a serious attempt to set out the material information required to deal with the issues in a remedies hearing. Upon viewing the unsigned statement the Tribunal is of the opinion that Mr Sutton's view is well founded and certainly Mr Pullen did not seek to argue otherwise.

21 In order to salvage the position the Tribunal directed that immediate measures should be taken to:

i) obtain a statement from Ms Panama setting out a full explanation for the conduct alleged by the Respondents;

ii) the parties are to attempt, even at this late stage, to agree a bundle for a remedies hearing;

iii) a schedule be agreed as to the facts to be considered for the purposes of the remedy hearing and

iv) agreement be achieved to identify those discrete issues that the Tribunal might determine in order to assist the parties on a preliminary basis - ie whether there was a contributory factor and, if so, to what extent would it affect the basic and compensatory awards?

Should the parties, however, be unable to achieve these steps, then Mr Sutton, it was indicated, could formally proceed with his application and Mr Pullen would be called upon to resist it.

22 At 12.34 pm, after several extensions of time, the case was recalled by the Tribunal. The result of the parties' efforts was as follows:

a) a brief two page statement had been taken from Ms Panama in which she indicated that she had additional information concerning mitigation of loss material but failed to inform her solicitor of the difficulties in retrieving it from her former matrimonial home which she left in May 2003. Furthermore, she had been receiving counselling for depression;

b) a schedule of the Respondent's wasted costs in the sum of £2,200;

c) there was no agreement as to the facts or issues;

d) there was further documentation that the Applicant sought to rely upon which might be available tonight or not at all and

e) effectively, there was no agreed bundle and even if one might be achievable, it, nevertheless, was likely to be supplemented in due course.

In the circumstances, therefore, the Tribunal, at 12.45 pm decided to hear the Respondents' formal application to strike out the Originating Applications or to postpone the remedy hearing with a costs order in their favour at 1.45 pm.

23 Evidence of Ms Panama

These are the facts that the Tribunal distilled from the Applicant's testimony which was, at times, both vague and contradictory:

i) the Applicant could not quantify the remaining documents in her possession which were material to the remedies hearing;

ii) when the Applicant's marriage broke down she was obliged to leave the matrimonial home with her five children and move to a refuge, leaving her documentation behind;

iii) suffering from distress and depression the Applicant attends a weekly group counselling session but receives no medication;

iv) in late December she retrieved her documentation and sought to make a selection of her attempts to mitigate loss;

v) for two weeks the Applicant sought to make her selection from hundreds of job applications and selected the front of the applications rather than the whole documents;

vi) Mr Wishart had acted for the Applicant at the Court of Appeal. However, the Applicant did not confide to him about her matrimonial difficulties and her subsequent problems in retrieving the appropriate paperwork despite his requests;

vii) the Applicant, admitted to the solicitor's roll in August 2001, secured employment as a solicitor - initially from February 2002 to July 2003, then the evidence changed to February 2002 to July 2002 with further positions between October 2003 until January 2004. This changed again in re-examination to February 2002 to January 2003 with a month's work in April and May 2003;

viii) the Applicant was able to carry out her duties satisfactorily as a solicitor;

ix) the Applicant attended the directions hearing before Mr Lamb on 30 October 2003 when Mr Wishart represented her. Mr Wishart is a solicitor in whom the Applicant reposes confidence;

x) the Applicant knew that the directions had been made, she knew that she was obliged to comply with them and that if she did not either a costs order could be made against her or her Originating Applications may be struck out."

12. After summarising the parties' submissions the Tribunal set out their conclusions at paragraphs 26 to 28 as follows:

"26 Conclusion

Rule 15(2)(d) of the Employment Tribunal (Constitution & Rules of Procedure) Regulations 2001 Schedule 1 provides:

'(2) A Tribunal may:

…

d) subject to paragraph (3), at any stage of the proceedings, order to be struck out any Originating Application or Notice of Appearance on the grounds that the manner in which the proceedings have been conducted by or on behalf of the Applicant or, as the case may be, Respondent, has been scandalous, unreasonable or vexatious;

(3) Before making an order under sub-paragraph (c), (d) or (e) of paragraph (2) the Tribunal shall send notice to the party against whom it is proposed that the order should be made, giving him an opportunity to show cause why the order should not be made; but this paragraph shall not be taken to require the Tribunal to send such notice to that party if the party has been given an opportunity to show cause orally why the order should not be made."

For the purposes of the strike out application, the Tribunal does not consider that unreasonableness per se is a standard to be applied (as it would be in respect of a costs application) but rather that degree of unreasonableness that is consistent with a course of conduct or behaviour that can be properly regarded as contumelious. In other words conduct that deliberately seeks to flout or ignore the Tribunals directions or orders, properly made, which seek to manage cases within its jurisdiction in a way consistent with the overriding objective. This provides, at Regulation 10 of the 2001 Regulations:

'10 Overriding objective

i) The overriding objective of the rules in Schedules 1, 2, 3, 4, 5 and 6 is to enable Tribunals to deal with cases justly.

ii) Dealing with a case justly includes, so far as practicable:

a) ensuring that the parties are on equal footing;

b) saving expense;

c) dealing with the case in ways which are proportionate to the complexity of the issues; and

d) ensuring that it is dealt with expeditiously and fairly.

iii) A Tribunal shall seek to give effect to the overriding objective when it:

a) exercises any power given to it by the rules in Schedules 1, 2, 3, 4, 5 and 6; or

b) interprets any rule in Schedules 1, 2, 3, 4, 5 and 6.

iv) The parties shall assist the Tribunal to further the overriding objective.'

The Tribunal also bears in mind that it has a duty under the Human Rights Act 1998 to both parties to ensure they receive a fair hearing. Accordingly, in reaching its decision the Tribunal has also considered whether a fair hearing can still be achieved which will do justice between the parties. In doing so the Tribunal takes into account the history of this case, the conduct of the parties, their likely future conduct and whether finality can be achieved within a reasonable time frame consistent with the overriding objective.

27 As a result the Tribunal has concluded that, on the evidence it has heard today, the history of the case and its duty to provide the parties with a fair hearing in accordance with the overriding objective, there is no other course open to it but the rare and grave measure of strike out. In the unanimous judgment of the Tribunal an order for costs would be inappropriate and ineffectual given the history of this case. The Applicant's conduct provides no satisfactory foundation for any assurance that this case will be brought to a conclusion within a reasonable period. If the Respondent could be compensated for its wasted costs there would still be a series of orders and directions that would have to be issued. After that a further directions hearing may or may not be necessary and, in any event, a further two day listing be required in order to settle this case at some unknown date in the future. Effectively the Respondents have no realistic prospect of finally identifying the precise nature of the Applicant's work history and attempts to mitigate loss as she has chosen, deliberately, not to cooperate with her solicitor or with the Tribunal's directions, well knowing, as a qualified and experienced lawyer in her own right, what the consequences could be. As a result there is and cannot be within a reasonable time a fair hearing.

28 Accordingly, the Originating Application is struck out because of the Applicant's unreasonable conduct of her case."

13. The Law

By virtue of section 21 of the Employment Tribunals Act 1996 an appeal lies to the EAT on any question of law arising from any Decision of, or arising in any proceedings before an Employment Tribunal under or by virtue of various Acts of Parliament including the Employment Rights Act 1996. The position in relation to interlocutory decisions, including decisions on applications to strike out proceedings, has been considered on a number of occasions.

14. In Medallion Holidays Limited v. Birch [1985] ICR 578, the EAT rejected an argument that they have power to review the interlocutory decisions of Employment Tribunals upon their merits, regardless of whether any error of law is involved. At page 584 they held that:

"We….reject the argument that the appeal tribunal has power to review the interlocutory decisions of industrial tribunals upon their merits, regardless of whether any error of law is involved. Interlocutory directions on matters such as discovery or the granting or refusal of an adjournment or the striking out of an originating application or notice of appearance or any part thereof are wholly within the discretion of the industrial tribunal. It is a discretion with whose exercise we have no jurisdiction to interfere unless it can be shown to have been contrary to some established principle of law or to have involved a result at which no reasonable tribunal exercising the same discretion could have arrived."

15. Subsequently in Adams and Raynor v. West Sussex County Council [1990] IRLR 215, this approach was affirmed by the EAT as the correct approach, the Tribunal holding:

"It seems to us desirable, and indeed we would have expected, that the same principle would apply to interlocutory appeals as for final appeals even though the former will in the main be the result of the exercise of a discretion. Thus, in examining an interlocutory order of an industrial tribunal or of a chairman sitting alone we would define three issues:

(a) Is the order made one within the powers given to the Tribunal?

(b) Has the discretion been exercised within guiding legal principles? eg as to confidential documents in discovery issues.

(c) Can the exercise of the discretion be attacked on Wednesbury principles?"

16. More recently in the case of Noorani v. Merseyside TEC Limited [1999] IRLR 184, the Court of Appeal endorsed the limited circumstances in which the exercise of discretion by an Employment Tribunal is susceptible to an appeal. At paragraphs 32 and 35 Henry LJ, with whom the other members of the Court agreed, said as follows,

"I am satisfied, contrary to what the Employment Appeal Tribunal found, the ET were here exercising the classic discretion of the trial judge in the issue of witness summonses and in like matters. Such examples of such a discretion lie not only in the issue of witness summonses but whether to grant an adjournment or whether to order the trial of a preliminary issue etc. These decisions are entrusted to the discretion of the court at first instance. Appellate courts must recognise that in such decisions different courts may disagree without either being wrong, far less having made a mistake in law. Such decisions are, essentially, challengeable only on what loosely may be called Wednesbury grounds, when the court at first instance exercised the discretion under a mistake of law, or disregard of principle, or under a misapprehension as to the facts, where they took into account irrelevant matters or failed to take into account relevant matters, or where the conclusion reached was 'outside the generous ambit within which a reasonable disagreement is possible', see G v G [1985] 1 WLR at 647.

…

35

Such proactive judicial case management in the law courts becomes more and more important now that it is generally recognised that, unless the judge takes on such a role, proceedings become overlong and over costly, and efforts must be made to prevent trials being disproportionate to the issue at stake, and thus doing justice neither to the parties, to the case at point or to other litigants. "

We agree with Mr. Sutton's submission that the principles identified as applicable by the EAT in the Medallion case are applicable a fortiori in the light of the Overriding Objective (Regulation 10 of the 2001 Regulations) and the importance increasingly being attached to effective case management by Employment Tribunals.

17. In relation to the power to strike out a claim on the grounds of unreasonable conduct of the proceedings, Rule 15(2)(d) provides as follows:

"A Tribunal may … subject to paragraph 3(3), at any stage of the proceedings, order to be struck out any Originating Application or notice of appearance on the grounds that the manner in which the proceedings have been conducted by or on behalf of the Applicant or, as the case may be Respondent has been scandalous, unreasonable or vexatious."

The EAT (Burton P. presiding) has recently provided guidance on what has to be decided by an Employment Tribunal before such an order is made, taking into account the earlier judgments in Bennett v. London Borough of Southwark [2002] IRLR 407 CA and De Keyser Limited v. Wilson [2001] IRLR 324 EAT. In Bolch v. Chipman [2004] IRLR 140 the EAT, at paragraph 55 of the judgment, identified four matters to be decided by a Tribunal when faced with a question under Rule 15(2)(d):

"(1) There must be a conclusion by the tribunal not simply that a party has behaved unreasonably but that the proceedings have been conducted by or on his behalf unreasonably.

…

If there is to be such a finding in respect of rule 15(2)(d), in this or any case, there must be a finding with appropriate reasons, that the conduct in question was conduct of the proceedings and, in the circumstances and context, amounted to scandalous, unreasonable or vexatious conduct.

…

(2) Assuming there be a finding that the proceedings have been conducted scandalously, unreasonably or vexatiously, that is not the final question so far as leading on to an order that the notice of appearance must be struck out.

The helpful and influential decision of the Employment Appeal Tribunal, per Lindsay P, in De Keyser Ltd v Wilson [2001] IRLR 324 is directly in point. De Keyser makes it plain that there can be circumstances in which a finding can lead straight to a debarring order. Such an example, and we note paragraph 25 of Lindsay P's judgment, is 'wilful, deliberate or contumelious disobedience' of the Order of a court.

But in ordinary circumstances it is plain from Lindsay P's judgment that what is required before there can be a strike out of a notice of appearance or indeed an originating application is a conclusion as to whether a fair trial is or is not still possible.

That decision is not only a decision binding on employment tribunals and persuasive before this tribunal, but it follows well established authority - in the High Court in the persuasive decision of Logicrose Ltd v Southend United Football Club Ltd by Millett J (as he then was), reported in The Times 5 March 1998, and in the Court of Appeal in Arrow Nominees Inc v Blackledge [2000] 2 BCLC 167; both of which authorities were recited by Lindsay P in the course of his judgment in De Keyser.

An enquiry must be held by the tribunal, having made its finding as to the conduct in question, absent the exceptional case as to whether a fair trial is still possible.

…

The reason for the need for that question to be asked, save in the exceptional circumstance to which we and Lindsay P have referred, is that a striking out order is not (or at any rate not simply) regarded as a punishment.

…

Employment tribunals must have the power to manage cases, and to make orders that unless their orders be complied with applications will be debarred or dismissed, and if there are breaches of those orders then of course, pursuant to what Lindsay P himself made clear in De Keyser, there will have been, absent a proper excuse, wilful disobedience of a court order, which can lead to a strike-out.

There will plainly be circumstances, perhaps such as we indicated earlier by way of illustration, in which conduct of proceedings, for example by way of a threat, even if it results in some kind of promise of good behaviour, or something of that kind, by a respondent, can still have such lingering effect that the tribunal is of the view that there can no longer be a fair trial. That can certainly be the case in the example given by Millett J where documents have been fabricated, if, for example, no tribunal hearing the case can be satisfied that there are no further documents to be produced or that the present documents may not also have been fabricated, because confidence has been entirely lost in the good faith and honesty of one party or the other. But there must be, and certainly should have been in this case, in our judgment, a conclusion as to whether or not a fair trial can and could be held.

(3) Once there has been a conclusion, if there has been, that the proceedings have been conducted in breach of rule 15(2)(d), and that a fair trial is not possible, there still remains the question as to what remedy the tribunal considers appropriate, which is proportionate to its conclusion.

…

(4) But even if the question of a fair trial is found against such a party, the question still arises as to consequence.

…

We are satisfied that any tribunal making an order, in the circumstances in which this Tribunal made its order [striking out a notice of appearance], must ask the question as to what the appropriate consequence is."

Thus in relation to factors (3) and (4) it may be possible to impose a lesser penalty than one which leads to a party being debarred from the case in its entirety; and further, even if the Tribunal decide that a striking out order is appropriate, they should first consider the consequences of that order.

18. This Appeal

Mr. O'Dair, for the Applicant, invites us first to adopt a broader, and what he terms a more "human rights compliant", approach to the challenge he makes to the Tribunal's Decision to strike out the Originating Applications. As we understand his submissions he contends that any restriction upon the Applicant's right of access to a fair hearing by an impartial Tribunal must be not only reasonable, but also proportionate and necessary. The EAT, he submits, has jurisdiction to overturn the Tribunal's Decision not only on what he describes as the "traditional" basis, where the Tribunal can be shown to have misdirected themselves as to the law or to have arrived at a perverse decision; but also where we disagree with the Tribunal's conclusion after applying the relevant legal principles to their primary findings of fact. He contends that special considerations arise in a strike out application and that the EAT, which benefits from the views of its experienced lay members, is equally well placed to decide whether, accepting the primary facts found by the Tribunal, they were right to infer that a fair trial was no longer possible and that the claim should be struck out. Mr. O'Dair relies on the case of Arrow Nominees Inc. and Another v. Blackledge and Others an unreported Court of Appeal decision dated 22^nd June 2000, where the Court of Appeal exercised a de novo approach to this question when considering an appeal from the trial judge's refusal to strike out a petition in the Chancery Division.

19. Interesting though this argument was, we find that we are unpersuaded by it. The approach to appeals governed by the Civil Procedure Rules is entirely different from that which applies in the EAT, the jurisdiction of this Tribunal being entirely statutory and governed by the provisions of section 21 of the 1996 Act. The approach to be adopted in this Appeal Tribunal to appeals from employment tribunal decisions to strike out proceedings is that which is well established in the authorities we have referred to above. Mr. O'Dair does not submit that section 21 of the 1996 Act is incompatible with the European Convention on Human Rights and, as Mr. Sutton observed, that is not in any event a submission he could make before us. Nor did he seek to challenge the authorities referred to in the course of his submissions. Rather, he put forward a broader proposition, unsupported by authority, that the merits in this case are such that this Appeal Tribunal should confer upon itself a broader jurisdiction to intervene; and that the EAT is entitled to review the Decision of the Tribunal, where their exercise of discretion necessarily involved questions of mixed law and fact, and to draw its own inferences from the primary facts.
20. That, as it seems to us, would involve a radical departure from the authorities to which we have referred, which define and limit the circumstances in which the EAT can intervene in such cases, and which in our judgment should be followed in this case. We find ourselves wholly in agreement with the principles established in those cases. Further, we can see nothing in this case which could be said to offend Article 6, such as would lead us to exercise such powers of review, even if we could. In any event the drawing of inferences from the primary facts is essentially the function of the Tribunal at first instance, who have had the benefit of hearing the whole of the evidence. Absent perversity the EAT cannot interfere.
21. We turn then to the specific, or "traditional", grounds of appeal, which Mr. O'Dair pursued on behalf of this Applicant. Firstly, we see nothing in the suggestion that the Tribunal should have proceeded to deal with the matter pursuant to Rule 4 of the 2001 Regulations dealing with the Tribunal's powers of case management. Mr. Sutton applied to strike out the claim under Rule 15(2)(d) and the Tribunal were fully entitled to consider whether to exercise the powers given to them under that Rule in the circumstances of this case. It is clear from their findings that the Tribunal regarded the Applicant's conduct in these proceedings as extending beyond mere non-compliance with Mr. Lamb's directions and as amounting to contumelious conduct.
22. Mr. O'Dair's main submission was that the Tribunal's conclusions, both that the Applicant was guilty of contumelious conduct and that no fair trial was now possible, were perverse. He contends that the Tribunal should have adjourned the remedies hearing and given directions for the preparation of the resumed hearing, coupled with a warning to the Applicant that her claim would be struck out if she failed to comply without reasonable excuse, thereby giving her a "second chance". In these circumstances he submits that a fair trial would still have been possible and the Tribunal's decision on this issue was therefore perverse. Further, he submits that, given the Tribunal's findings as to the Applicant's personal circumstances, including domestic conflict and treatment for depression, their finding as to her contumelious conduct was also perverse.
23. We find we cannot accept these submissions, both of which we considered on their merits despite the fact that, as the EAT held in Bolch, a finding of contumelious conduct may remove altogether the need to determine the second question whether a fair hearing can still be achieved. The Tribunal went on to consider this second question themselves and, for the reasons developed below, we consider their conclusions upon both issues to fall well within the boundaries of their discretion and in line with the overriding objective, to which they directed themselves. Mr. O'Dair in our judgment has come nowhere near the high threshold which he must cross in order to succeed before this Appeal Tribunal in a challenge based on perversity.
24. Thirdly, Mr. O'Dair submits that the Tribunal erred in taking into account an impermissible consideration, namely the Applicant's means, in deciding whether or not to refuse a postponement. However, there is no indication in the Tribunal's reasoning that the Applicant's means per se were regarded as relevant to their Decision to strike out rather than to allow the case to proceed at a postponed hearing. Indeed, in their conclusions at paragraph 27 the Tribunal specifically considered whether the satisfaction of a wasted costs order would alleviate their concern that a fair trial was unachievable and held that it would not.
25. Fourthly, it is contended that the Tribunal erred in failing to have regard, when assessing the conduct of the parties, to the Applicant's successful appeal against an earlier Decision on remedy. It is unclear to us however what relevance is to be attached to the fact that the Court of Appeal allowed the appeal against the decision of the Tribunal, following the earlier remedies hearing; and it appears that it was not argued below on the Applicant's behalf that this fact was material to the Tribunal's Decision on the application to strike out the claim.
26. Finally, Mr. O'Dair contended that the Tribunal erred in failing to postpone the strike out hearing in order that the Applicant could show cause why her complaint should not be struck out, in accordance with their power under Rule 15(3). He submitted that, despite the fact that the Applicant and her legal representatives were present at the hearing and were given time to prepare to respond to the application, the Tribunal should still have offered her the opportunity to consider if she needed an adjournment in order to prepare for the strike out application. However, no application was made on the Applicant's behalf at the time for a postponement of the hearing, in order to prepare to resist the application. Furthermore, a reasonable period of time was afforded to the Applicant and her advisers on the day of the hearing so that they could formulate their evidence and prepare submissions as to why a strike out order should not be made. We agree with Mr. Sutton's submission that the requirements of a fair hearing were observed in this case.
27. Having regard to the guidance given to Tribunals in the case of Bolch, we consider that the questions identified in that case as being required to be addressed by the Tribunal were adequately addressed in this Decision. In relation, firstly, to the Applicant's unreasonable conduct in the proceedings, on 20^th January 2004 the Applicant attended the Tribunal late and her counsel had received his papers only at 7pm the previous evening. The Tribunal found that she had deliberately chosen not to co-operate with her solicitor or with the Chairman's directions. They found the following breaches of the Order for directions given by Mr. Lamb:

"i. The Applicant's schedule of loss and list of documents due to be served by 21^st November 2003 were in fact served two months late on 19^th January 2004, the day before the hearing;

ii. The disclosure of documents had been made piecemeal between 14^th and 19^th January 2004 despite the efforts of the Respondents' solicitor to obtain even partial disclosure in December 2003;

iii. The Applicant's default in disclosure had made it impossible for the Respondents to prepare their case in relation to the "conflict of interest" issue;

iv. The Applicant had made no effort to forewarn the Tribunal as to the difficulties in complying with their directions nor had she offered any explanation as to why she was failing to comply;

v. The Applicant's counsel informed the Respondents' counsel only approximately 15 minutes before the start of the hearing that the schedule of loss already produced very late in the day by the Applicant was in fact inaccurate and that the Applicant now wished to serve a new one;

vi. The Applicant's witness statement in relation to remedy consisted only of a small number of paragraphs containing vague and superficial information. The Applicant's counsel conceded that it was impossible to proceed with the hearing in the circumstances.

28. Further, having given the Applicant approximately two hours to enable her to prepare an explanation of the circumstances which had given rise to these failures to comply, the Applicant, through her counsel, revealed that disclosure was incomplete and that further documents of unknown quantity were unavailable on that day to the Applicant or her representatives. The Applicant herself gave evidence to the Tribunal, which evidence they found to be vague and contradictory, particularly in relation to her employment history. Further, she acknowledged that she had understood the effect of the Regional Chairman's directions and that striking out was one of the potential consequences of non-compliance. This was particularly the case having regard to the Applicant's legal qualifications and experience. No evidence was placed before the Tribunal concerning the Applicant's personal history or depressive condition.
29. Against this background the Applicant's counsel conceded, in our judgment realistically, that his client had conducted herself unreasonably in relation to the proceedings. The Tribunal themselves applied a high standard of unreasonableness, equivalent to contumelious conduct, in assessing the Applicant's conduct and in the circumstances their conclusion cannot be categorised as perverse.
30. In relation to the second question to be considered, namely whether a fair trial was still possible, the Tribunal identified at paragraph 26 the following factors as being relevant to their conclusion that a fair hearing was not achievable within a reasonable time:

"a) Even if costs were awarded to the Respondents there would still be a series of orders and directions that would have to be issued;

b) After that a further directions hearing might become necessary;

c) A further two days would then be required, at some unknown future date, for the remedies hearing to take place;

d) The Respondents had no realistic prospect of finally identifying the precise nature of the Applicant's work history or mitigation efforts by reason of her deliberate failure to cooperate with her solicitor and with the Tribunal's directions when she knew the potential consequences of such failure.

31. We agree with Mr. Sutton, that these findings of deliberate and contumelious conduct by the Applicant, which significantly impeded the Respondents' opportunity to respond to her remedy complaint and gave rise to the prospect of further and substantial delay, inconvenience and costs provided a sound basis for the Tribunal's conclusion that a fair trial was no longer possible in the circumstances.
32. On the third question, namely whether strike out was proportionate, this matter was specifically raised with the Tribunal in the Respondents' submissions as a matter which they should have in mind in judging whether strike out was appropriate (see paragraph 24 (k) of the Decision) and it is clear that they did have regard to it. It is also clear that the Tribunal had well in mind the overriding objective, of which proportionality is a specific ingredient.
33. In relation to consequential considerations the specific instance which the EAT referred to in Bolch (the striking out of a notice of appearance) did not arise in this case. The strike out order, if made, would necessarily dispose of the proceedings.
34. For all these reasons we accept Mr. Sutton's submission that the Tribunal's Decision to strike out this Applicant's claim fell well within the boundaries of their discretion. They directed themselves correctly and in line with relevant authorities and in our judgment their Decision cannot be categorised as perverse. This appeal must therefore be dismissed.