THE INDUSTRIAL TRIBUNALS

CASE REF: 7464/09

CLAIMANT:		Steven Martin

RESPONDENT:	Arnotts (Fruit) Limited 

DECISION ON COSTS
The tribunal is not of the opinion that the bringing or conducting of the proceedings by the claimant were misconceived and dismisses the application for a costs order pursuant to Rules 40 (2) and (3) of the Industrial Tribunal Rules of Procedure contained in Schedule 1 of The Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 in favour of the respondent.  

Constitution of Tribunal:
Chairman:		Ms M Bell
Members:		Mr P Kearns
			Mrs M O’Kane

Appearances:

The claimant was represented by Mr Peter Martin of Martin Consulting.

The respondent was represented by Mr Mark McEvoy, Barrister-at-Law, instructed by J Blair Employment Law Solicitors.

1.	Following hearing of this case on 19 April 2009 the tribunal’s unanimous decision that the claimant was fairly dismissed was issued to the parties on 27 May 2010.

2.	The Office of the Industrial Tribunals received a letter from the respondent’s solicitors dated 9 June 2010 on the same date setting out the respondent’s wish to make application against the claimant for a costs order in respect of costs incurred by the respondent of £3,999.70 including VAT, under ‘Regulation 40 (2) and (3) of the Industrial Tribunals ( Constitution and Rules of Procedure ) Regulations ( Northern Ireland) 2005’ based on the respondent’s contention that this matter was a misconceived and vexatious application on the part of the Claimant.

3.	A costs hearing was listed for 9 August 2010.

4.	At commencement of the costs hearing Mr McEvoy confirmed that the respondent’s application for costs was now being made only on the ground that the bringing or conducting of the proceedings was misconceived and that no argument was being pursued that the claim was vexatious.

The Issues

5.	
(i) 	Is the tribunal of the opinion that the bringing or conducting of the proceedings by the claimant has been misconceived pursuant to Rule 40(3) of the Industrial Tribunal Rules of Procedure contained in Schedule 1 of The Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005? If so,

(ii) 	Does the tribunal consider it appropriate to exercise its discretion to make a costs order against the claimant in the circumstances pursuant to Rule 40(2) of the 2005 Rules? If so,

(ii) 	What amount does the tribunal consider is appropriate to order the claimant to pay?

Facts

6.	The respondent’s solicitors wrote a letter to Mr P Martin on 14 April 2010  setting out the two premises on which it understood the claimant’s case to be based :-

‘(1)	The claimant was not smoking in his van and was therefore innocent of the offence and/or;

(2)	The dismissal was procedurally unfair in that Mr Geary as a Human Resources Consultant would not have overturned at appeal the original decision of the Managing Director Mr Orr.’

The letter then set out why in their view both these arguments were ‘entirely without merit’;

‘………..It is the Tribunal’s role simply to determine whether the sanction of dismissal fell within the band of reasonable responses open to the employer. It is not for the Tribunal to substitute its own view and what it believed the employer should have done. In this instance we believe that the tribunal will conclude that it was reasonable for the Respondent to accept the evidence of a witness to the incident and therefore to conclude that the Claimant was indeed smoking in his van.  This incident occurred whilst the Claimant still had a live final written warning on file for exactly the same act of misconduct.  In our view this means that the Claimant’s first argument as set out above has little prospect of success. 

With regards to the procedural point we again are of the view that the Tribunal will accept the Respondent’s position that it is entirely reasonable to engage the services of a Human Resources Consultant to carry out appeal hearings of this type. It is not for the Tribunal to ‘dictate’ to a company that it should have carried out a disciplinary procedure using different personnel. We believe the evidence that will be given in this matter will more than show the independence of Mr. Geary and the fact that he would have been very prepared to have overturned Mr. Orr’s decision if he felt it was appropriate to do so.’

Notice was then given that if the respondent was successful in its defence an application for costs would be made against the claimant on grounds that ‘this was an unreasonable and vexatious claim’ and use would be made of the letter, and in the alternative it stated in the unlikely event of a finding of unfair dismissal on procedural grounds that application would be made for no damages to be awarded to the claimant on grounds of 100% contributory fault.

7.	Following hearing of the case on 19 April 2009 a decision was issued to the parties on 27 May 2010 (the ‘Decision’) that it was the unanimous decision of the tribunal that the claimant was fairly dismissed and the claimant’s claim of unfair dismissal was dismissed.

8.	The respondent’s solicitors wrote to Mr. P Martin on 7 June 2010 referring to its previous letter of 14 April 2010 ‘inviting the Claimant to withdraw his claim against the Respondent …’  (although the wording of the letter of the 14 April 2010 does not  include a actual express invite to the claimant to withdraw his claim)  and warning of the intention to seek costs if the respondent were otherwise successful in its defence, now seeking a proposal from the claimant to pay or contribute to the Respondent’s costs of £3,999.70 including VAT, the points made in its letter of 14 April 2010 having been confirmed by the tribunal in its Decision.

9.	By letter of 9 June 2010 Mr P Martin replied to the respondent’s solicitors confirming that the claimant had no proposals to make in respect of costs, and that the submissions summarized at paragraph 31 and findings at paragraphs 35 – 41 of the Decision issued demonstrated that this was a proper case for the claimant to bring and that the respondent had not been wholly vindicated as per paragraph 37 of the Decision.

10.	On 9 June 2010 the respondent’s solicitors wrote to the Office of the Industrial Tribunals setting out its wish to make application against the claimant for a costs order under ‘Regulation 40 (2) and (3) of the Industrial Tribunals ( Constitution and Rules of Procedure ) Regulations ( Northern Ireland) 2005, based on the respondent’s contention that this matter was a misconceived and vexatious application on the part of the claimant, and referring to the above correspondence of 14 April, 7 and 9 June 2010.

The Law

11.	Rule 40(2)  and  (3) of the Industrial Tribunal Rules of Procedure contained in Schedule 1 of The Industrial Tribunals ( Constitution and Rules of Procedure) Regulations( Northern Ireland) 2005 provide:-
  
‘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) apply. 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.

(3) The circumstances referred to in paragraph (2) are 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 conducting of the proceedings by the paying party has been misconceived.’

12.	Under Regulation 2 of the 2005 Regulations interpretation of ‘misconceived’ includes having no reasonable prospect of success.

13.	Sedley LJ in Scott v Commissioners of Inland Revenue 2004 IRLR 713, CA stated that the key question in relation to the misconceived ground is not whether the party thought that he was in the right, but whether he had reasonable grounds for doing so. The EAT’s view in Hamilton-Jones v Black EAT 0047/04 was that the tribunal was required to assess objectively whether the claim had any prospect of success at any time of its existence. The view that a representative’s conduct is not relevant to the question of whether the bringing or conducting of proceedings were misconceived, but the misconceived proceedings must have been carried out by the paying party himself was given by the EAT in Hosie and ors v North Ayrshire Leisure Ltd EAT 0013/03. 

14.	If the tribunal finds that the bringing or conducting of proceedings was misconceived, the tribunal then has a duty to consider whether to exercise its discretion to award costs, this is a wide discretion and cannot be restricted by case law.

15.	How the amount of a costs order shall be determined is set out in Rule 41 of the Industrial Tribunal Rules of Procedure.

Applying the Law	

16.	Mr McEvoy submitted that whilst as a matter of law it is not unreasonable conduct per say for the claimant to ignore an offer and to proceed with his claim, that a distinction should  be drawn in this matter on the basis that the ‘calderbank style’ letter of 14 April 2010 to the claimant had clearly set out to him that the proceedings never enjoyed any reasonable prospect of success as they were contingent on an argument that the tribunal should re-hear the claimant’s disciplinary matter and despite this that the claimant chose to ignore the reasoned view of the law set out to him and proceed with the case, that the claimants submissions to this effect  and a similar view of the law had been reflected in the tribunal’s decision at paragraphs 31 & 33. It was also submitted that it was spurious for the claimant to suggest that because Mr Geary was an outsider that he could not have afforded any independent appeal.

17.	Mr Martin disputed that the claimant’s bringing or conduct of the proceedings were misconceived and his submissions included that the findings of the tribunal at paragraphs 38 and 39 of its decision as to the credibility of  Mr Geary and Mr Orr were crucial to the tribunal’s decision but until it heard such evidence it could not have reached a determination; whilst it was not for the tribunal to substitute its own view it could only reach a view on whether procedures were fair after hearing the evidence and referred to the tribunals comments at paragraph 37; that prior to the hearing the claimant was aware that the respondent had not followed its own disciplinary procedures, was of the view that Mr Geary was not sufficiently independent to overturn a decision of Mr Orr and that these were issues which had to be considered by the tribunal; that the claimant was not aware of the evidence of Mr Geary on one occasion overturning the decision of 
Mr Orr until very close to the hearing; that it was for the tribunal to determine whether the change from the respondent’s written disciplinary procedure was merited; that it had been proper and reasonable for the claimant to take the proceedings following rejection of his appeal to the respondent, having suffered serious financial loss and  dismissal for something he believed he was not doing. It was also submitted in respect of the costs figure given, that as the respondent is VAT registered it had sustained no loss for VAT, which was accepted by Mr McEvoy, and request made that if the tribunal were to exercise the discretion to award costs that the claimants ability to pay be taken into account, being in receipt of £290.00 net per week, paying £450.00 rent per month and supporting his 20 year old son who lives with him.  Mr P Martin declined the opportunity to seek further instructions from the claimant who was not present for more detailed information as to his outgoings and net disposable income.
 
18.	The initial question for the tribunal is whether it is of the opinion that the bringing or conducting of the proceedings by the claimant has been misconceived? On consideration of the all the information before the tribunal, in particular the respondent’s letter of 14 April 2010, whilst the tribunal considers that the claimant’s claim relied on a number of points which in view of the questions to be properly determined by the tribunal in an unfair misconduct dismissal complaint meant that overall this claim may have had ‘little prospect of success’, as assessed by the respondent in the third paragraph of its letter of 14 April 2010 in respect of the first premise of the claimant’s case, and has fallen very close indeed to crossing the threshold into misconceived, the tribunal is not however persuaded in consequence of the respondent’s letter of 14 April 2010 that the threshold has clearly been crossed such that the claim was without any prospect of success whatsoever, that his bringing or conducting of the proceedings had no reasonable prospect of success  and as such were misconceived. The tribunal accordingly does not have the discretion to make an order for costs. 

Conclusion

19.	The tribunal is not of the opinion that the bringing or conducting of the proceedings by the claimant were misconceived and dismisses the application for a costs order pursuant to Rules 40 (2) and (3) of the Industrial Tribunal Rules of Procedure contained in Schedule 1 of The Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 in favour of the respondent.  

Chairman:

Date and place of hearing: 9 August 2010, Belfast.

Date decision recorded in register and issued to parties: