THE INDUSTRIAL TRIBUNALS

CASE REF:  183/07

CLAIMANT:			Scott Abram

RESPONDENT:		Yellow Pages Sales Limited

DECISION ON COSTS
The unanimous decision of the tribunal is that the claimant is hereby ordered to pay costs to the respondent in the sum of £3,000 inclusive of VAT due to the claimant’s unreasonable behaviour in conducting his case under rule 40(3) of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (NI) 2005.  

Constitution of Tribunal:
Chairman:		Mrs Ó Murray
Members:		Mr Lowden
			Mr Hampton

Appearances:
The claimant did not appear and was unrepresented.
The respondent was represented by Mr P Ferrity, Barrister-at-Law, instructed by Eversheds LLP.

The Application

1.	The respondent’s application was that the claimant should pay the respondent’s costs comprising solicitor’s costs, witness expenses and counsel’s fee.  Specifically the application was that the claimant’s claim was misconceived and/or the claimant had acted “otherwise unreasonably” within the scope of rules 40(2) and 40(3) of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland 2005 (“the Rules”).

Reasons

2.	The original claims were for race discrimination and constructive dismissal.  The tribunal read the claimant’s statements, the respondent’s four statements and the claimant’s supplementary statement. 
 
3.	At no stage during the currency of the claim did the respondent apply for a deposit nor for the claims to be struck out as being of no merit. 

4.	At a pre-hearing review (PHR) on 1 August 2007 a tribunal determined that it had no jurisdiction to hear the claim of race discrimination as the requisite grievance was raised too late to comply with the dispute resolution procedures and the tribunal declined to extend time.  The claimant represented himself at that hearing and the respondent submitted written representations.

5.	On 10 December 2007 the respondent wrote to the claimant advising that he had a weak case and if he withdrew at that stage they would not seek costs against him.  

6.	A Case Management Discussion (CMD) was held on 21 January 2008 to determine whether the case, which was listed for 25 January 2008, could proceed in view of the respondent’s application that interlocutory matters had not been dealt with.  At the CMD the claimant represented himself.  The respondent’s solicitor, Mr Ledrum, appeared for the respondent. There was an adjournment application at the respondent’s behest which appears to have been because of their lack of familiarity with procedures in Northern Ireland.  The case was adjourned and directions were given that, inter alia, witness statements be prepared by both sides and shared by 15 February 2008.  The case was to be listed for 10-14 March 2008.  The case was also referred back to the Chairman who dealt with the PHR because the claimant raised an issue that there was confusion over the scope of his race discrimination claim.  
7.	At a CMD on 18 February 2008 the claimant again represented himself and the respondent was represented by Mr Ferrity BL.  The Chairman determined that the claimant’s contention that his dismissal itself was an act of race discrimination had only been raised by the claimant when he was unsuccessful at the PHR.  The chairman therefore directed that the claim proceed as a constructive dismissal claim only on the dates listed ie 10-14 March 2008. 
8.	On 5 March 2008 the respondent sent a letter to the claimant received on 6 March 2008.  In that letter the respondent advised that, following consideration of the witness statements that had been shared, it was their view that the claim lacked merit and that they would apply for costs if the claim proceeded to hearing.

9.	On 6 March 2008 the day on which the claimant received the respondent’s letter in relation to costs, the claimant emailed the respondent’s solicitors advising that he would not be withdrawing his claim.

10.	The case came on for hearing on 10 March and was due to last for four days.  There was no contact at all between the claimant and respondent on the day of the hearing.  

11.	The respondent’s side assembled on the morning of the hearing comprised Mr Ferrity BL, his solicitor Mr Ledrum who had flown over from England for the hearing, two witnesses who had flown over from England for the hearing and two witnesses from the respondent’s Northern Ireland base.  There was one other local witness in attendance who no longer worked for the respondent.  

12.	The claimant attended before 10.00 am but left the building indicating to the door staff that he would be back in fifteen minutes.  When the claimant failed to appear at 10.00 am the Chairman directed the clerk to ring the claimant to ascertain his whereabouts.  The claimant then advised the clerk that he wanted to withdraw his claim and would not return to the hearing as he was on the bus home to Carnlough.  He advised that he would send an email to the tribunal office confirming the position when he returned home.

13.	The panel and the respondent’s representatives and witnesses waited for one hour for the email to arrive from the claimant.  The email which was received was equivocal as to the withdrawal, so, with the consent of the respondent, the case was postponed for a formal withdrawal form to be completed if the claimant was going ahead with his withdrawal.  The respondent advised that it wished to make a costs application so a date was listed for that application as the claimant had to be given adequate notice of the date of that application.  

14.	The claimant sent a formal IT21 Notice of Withdrawal to the tribunal dated 14 March 2008 together with a schedule of his income and outgoings which had been drawn up with a charity debt counselling organisation on 5 March 2008.  He stated in his covering letter that he had absented himself from the hearing essentially because the presence of the solicitor and counsel unnerved him.  The claimant’s net income per month amounted to £1,085; once his outgoings and expenses were deducted he was left with £150 surplus per month and £10 per month for emergencies.  There was no information on any capital assets.  
15.	The respondent sent a note of their claim for costs to the claimant in advance of the costs hearing.  The claimant made no response or comment to the respondent nor to the tribunal and did not appear at the costs hearing.  The solicitor’s claim for costs came to a total of £16,566 and Counsel’s fees amounted to £2,500 making a total claim for costs in the sum of £19,066.  The schedule of costs drawn up by the respondent’s solicitor listed headings with figures and hours spent in brackets beside them and comprised all costs incurred by the solicitors since the start of the claim.  
Respondent’s submissions

16.	In submissions by counsel it was conceded that the majority of costs were incurred after December 2007.  Counsel’s submission was that firstly, the claim was misconceived from the start and therefore all costs should be payable.  Secondly, he submitted that the unreasonable behaviour consisted in the late withdrawal and fairly conceded that he could not sustain the argument that all costs from the start should be payable under this heading.

17.	The claimant was accused of use of email without permission and circulating a sectarian email.  The claimant referred to alleged previous instances of racial comment and a possible sectarian episode but made no complaint at the time.  However he complained in his claim that an investigation should have been carried out into his complaints.  Counsel’s application was that the claim was misconceived because the race case had not been particularised and that there were issues about what the discrimination was and who the comparators were.  

18.	In relation to the constructive dismissal claim counsel submitted that the claimant had a disciplinary hearing, was given a final written warning, worked for a few hours then went off and never came back despite attempts to contact him.  On 4 July 2008, in a phone call, the claimant said he was leaving and gave several reasons including unfair treatment relating to the sending of the emails.

The Law

19.	The tribunal’s power to award costs is contained in the Rules. The general power is outlined at rule 38.  The two specific rules invoked by the respondent were rule 40(2) and rule 40(3) which state as follows:-

“40(2) – a tribunal or Chairman shall consider making a costs order against a paying party where, in the opinion of the tribunal or Chairman (as the case may be), any of the circumstances in paragraph 3 applies.  Having so considered, the tribunal or Chairman may make a costs order against the paying party if it or he considers it appropriate to do so.  

40(3) – the circumstances referred to in paragraph 2 or where the paying party has, in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or the conducting of the proceedings by the paying party has been misconceived.”
	
	“Misconceived” is defined at Regulation 2 as follows:-

			 “misconceived includes having no reasonable prospect of success”.  

20.	The tribunal’s jurisdiction in relation to costs is outlined in Harvey on Industrial Relations in Employment Law Division T Practice and Procedure at paragraphs 1026-1080.  Harvey suggests that the test is more than a simple objective assessment of whether the claimant knew or ought to have known that his case lacked substance or merit.  The tribunal must look at not just the proceedings themselves but the claimant’s conduct in bringing or conducting the proceedings and one potential factor can be the failure to apply to strike out the claim at an earlier stage. 

21.	The tribunal must go through a two-stage process in determining whether to award costs.  Firstly a tribunal must determine whether the claimant in bringing the proceedings or in conducting the proceedings acted unreasonably or whether the bringing or conducting of the proceedings by the claimant has been misconceived.  The second stage of the process is for the tribunal to decide whether or not it is appropriate to exercise its discretion to award costs in the case.

22.	Counsel referred the tribunal to the cases of Macpherson v BNP Paribas 2004 EWCA CIV 569;  Carabine v Royal Mail a decision of the tribunal in Northern Ireland, (case ref 655/06) and the case of Cartier Superfoods v Laws 1978 EAT. The Cartier case concerned a costs order against a respondent  where there was clearly no defence to the proceedings.  In the Carabine case costs were awarded against the claimant.
   
23.	One of the leading cases in relation to the exercise of the discretion is the Macpherson case where the Court of Appeal held that there was no necessity for a causal link between the party’s unreasonable behaviour and the costs incurred by the receiving party. The Court stated:

“In exercising its discretion to award costs, the tribunal must have regard to the nature, gravity and effect of the unreasonable conduct.  However, the discretion is not limited to those costs that are caused by or attributable to the unreasonable conduct.  The unreasonable conduct is a pre-condition of the existence of the power to order costs and it is also a relevant factor to be taken into account in deciding whether it makes an order for costs and the form of the order, but that is not the same as requiring a party to provide that  specific unreasonable conduct caused the particular costs to be incurred.”

24.	Costs Orders are exceptional in nature and this was emphasised by Sedley LJ in the case of Gee v Shell UK Ltd 2003 IRLR 83:-

“It is nevertheless a very important feature of the employment jurisdiction that it is designed to be accessible to ordinary people without the need of lawyers, and that – in sharp distinction from ordinary litigation in the UK – losing does not ordinarily mean paying the other side’s costs”.

	The case of Jilley UK EAT/0584/06/DA emphasises the importance of taking account of the claimant’s means although a lack of means to pay is not a bar to a costs order being made.

Conclusions

Proceedings Misconceived

25.	There was clearly a dispute over the claimant’s reasons for leaving. There was also a dispute over whether the respondent should have investigated the issues raised by the claimant.

26.	The tribunal has been careful not to fall into the trap of determining the substantive case on the merits particularly as at no stage was the claimant before this tribunal.  The tribunal, rather, looked at the claimant’s claims objectively taking account of the fact that there was a dispute between the parties on several matters.  One factor of importance to the tribunal was that the respondent never suggested a strike out application nor a deposit application despite the PHR and two CMDs.  There was no evidence before the tribunal that the claimant knew or ought to have known that his claims were without merit.  The witness statements were shared relatively close to the hearing date and it was only following their exchange that the respondent put the claimant on notice that their view was that the claim lacked merit.

27.	The tribunal therefore, does not find the claimant’s claims of race discrimination and constructive dismissal to have been misconceived.  The test is whether the claimant reasonably believed he had a case and this appears to have been the case here.  From the evidence before us it appears that he believed that the respondent’s failure to follow up or investigate the two incidents he complained of and the way the respondents invoked the disciplinary procedure against him in the absence of a complaint, showed that they treated him more stringently or strictly than others.  The race case ended because it fell foul of the dispute resolution procedures and was out of time.  Nevertheless, the claimant appears reasonably to have believed that he still had a constructive dismissal case because of this perceived differential treatment which led to his being disciplined. 
Unreasonable behaviour
28.	Costs were first mentioned in December 2007 when the respondent said they would refrain from a costs application if the claimant withdrew at that stage.  The claimant was well aware of a costs risk from that stage.  

29.	The tribunal does not accept the claimant’s behaviour was unreasonable from that date because the CMD in January 2008 clarified that several interlocutory matters were outstanding and witness statements were directed at that stage.

30.	Witness statements were exchanged and prompted the respondent to send the letter of 6 March 2008.  That was confirmation for the claimant that there was a definite costs risk.  It appears that it was only then that the full extent of the respondent’s defence and the weaknesses in his case would have been apparent to him.  Nevertheless the claimant immediately sent back an email saying that he would not withdraw.  We have no evidence as to what went on in the claimant’s mind between that date and the hearing four days later.  The tribunal does not accept at all the claimant’s contention that he was somehow fazed on the morning of the hearing by the presence of respondent’s representatives and that this led him to withdraw.  He had represented himself three times before in tribunal hearings including once against counsel and once against the solicitor.  

31.	The tribunal has taken into account that an award for costs is the exception rather than the rule. However, the tribunal finds that it was completely unreasonable for the claimant to absent himself on the day of the hearing in the way that he did and to withdraw so late in the day without any valid explanation in circumstances where he must have known that the respondent solicitor and several witnesses had flown over from England for the hearing and that other local witnesses and counsel would be in attendance.

32.	If withdrawal was in the claimant’s mind at all he should have taken the opportunity of withdrawing his claim on 6 March when he was warned by the respondent of the risk of a costs application.  Leaving the matter until the morning of the hearing and absenting himself without explanation clearly caused considerable expense and inconvenience to the respondent, its representatives and its witnesses.  

33.	The tribunal therefore finds that the claimant’s behaviour from the 6 March 2008 to the date of hearing was unreasonable within the meaning of rule 40(3) and further finds that it is appropriate in this case to award costs against the claimant.

Amount of Costs awarded

34.	The tribunal finds it appropriate to award the following costs.
35.	The costs incurred by the respondent’s solicitor, comprise the final preparation for hearing, the travel expenses for the solicitor and the witnesses for 10 April 2008 and the wasted day for the solicitor on 10 April 2008.  Counsel’s fees comprise the consultation with one witness on the Friday before the hearing and the consultation on the morning of the hearing and the final preparation for the hearing.  If the claimant had withdrawn the previous week following the letter of 6 March, counsel would still have been entitled to the bulk of his brief fee as counsel had been involved from 18 February 2008 so the tribunal does not accept that counsel’s full fees are payable due to the late withdrawal. 
36.	The tribunal has looked carefully at the debt plan sent in by the claimant.  There was no information about capital and net earnings amounted to £1,058 leaving £160 per month left over after outgoings and expenses.  The claimant made no response to the list of costs served by the respondents amounting to £19,066.  The tribunal is also not satisfied with the detail of the costs listed by the respondent in that it was not clear as to whether it comprised an hourly rate of fees or expenses and outlay and witness expenses on top of that.  

37.	The tribunal did a rough calculation of £600 for witness expenses, £2000 for the solicitor’s fees and £1000 for Counsel’s fee being the extra fee incurred by the late withdrawal.  All figures are inclusive of VAT.  The tribunal discounted the total of £3600 by £600 to take account of the claimant’s ability to pay.  

38.	The tribunal therefore orders that the total sum of £3000 inclusive of VAT be paid by the claimant to the respondent in respect of costs.

Chairman:

Date and place of hearing:  16 April 2008. Belfast

Date decision recorded in register and issued to parties: