Appeal No. UKEAT/0226/06/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	   At the Tribunal
	On  24 July 2006
	Judgment handed down on 02 August 2006

Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
MR P M SMITH
MRS R A VICKERS

(1) D & H TRAVEL LTD 	APPELLANTS
(2) MR D HENDERSON 

MS M L FOSTER 	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	Mr David Pievsky (Counsel)
Instructed by:
Messrs Forbes
Solicitors
Rutherford House
4 Wellington Street (St John’s)
BLACKBURN
BB1 8DD

For the Respondent	Ms Joanne Woodward (Counsel)
Instructed by:
Messrs Thomson Wilson Pattison
Solicitors
114-116 Stricklandgate
KENDAL
LA9 4QA	

SUMMARY

The employee made a claim for sexual harassment against her employer and an individual who effectively ran the company. No response was entered and the Chairman entered a default judgment on liability only.  Some months later a remedies hearing was fixed and the individual (the Second Appellant) turned up and wished to make representations. He contended that he had in fact written to the Tribunal seeking a review of the default judgment.  The Chairman held that there was no valid application for review and that in any event he would have exercised his discretion against granting it.  He told the individual that thereafter he could not participate in the proceedings by virtue of Rule 9 of the Employment Tribunal Rules of Procedure.  Compensation was fixed.  The Appellants contended that the Chairman ought to have allowed the application to set aside the default judgment, alternatively should at the very least have permitted the Appellants to take part in the remedies hearing since they were present and wished to do so.  They also challenged the assessment of compensation on various grounds.  The EAT dismissed the appeal against the default judgment on liability but held that the Chairman should have sought to permit them to participate in the remedies hearing, and that there was an admittedly tortuous and somewhat artificial procedure whereby that could have been done.  The EAT made on order that the Appellants should be allowed to take part in that hearing and set aside the award of compensation.  In the circumstances it did not consider the ground of appeal directed solely at the assessment.

THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1.	This is an appeal against decisions of the Employment Tribunal sitting at Newcastle-upon-Tyne in which it (a) refused to revoke or vary a default judgment on liability which had been entered following the failure by the Appellant to provide a response; (b) refused to allow the Appellant to take part in the remedies hearing; and (c) ordered the Appellant to pay the Respondent the sum of £16,248.90 by way of compensation and interest arising out of a claim for alleged unlawful sex discrimination.

The background

2.	The Respondent Employee resigned from the First Appellant on 2 September 2005. On 20 October she presented her Tribunal claim, claiming sexual harassment. She claimed that from the time when she joined the Company in 2001 she had been the subject of lewd, suggestive and upsetting remarks and text messages of a sexual nature by the Second Appellant, Mr Henderson.  Notwithstanding the fact that she objected to them, Mr Henderson continued to make them. She claims that they were one of the reasons why she subsequently left the Company (although there were also, as she accepts, other reasons and she has made no unfair dismissal claim). 

3.	The claim in this matter was served on both Appellants.   Mr Henderson said that he was not sure that they had received it, but it was sent to the same address as other documents which had been received.   Neither Appellant entered any response.
4.	On 24 November 2005 the Tribunal decided to enter a default judgment pursuant to Rule 8 of the Employment Tribunals (Constitution and Rules of Procedures) Regulations 2004 (“the 2004 Rules”) because of the failure to provide a response in good time.

5.  	    The judgment was specifically limited to liability. The Chairman said this, when making the default judgment:
“I consider the above judgment appropriate because the claim form contained sufficient detail to reveal a well-founded case for sex discrimination, but does not contain enough to enable me to decide remedy.”

6. 	A remedies hearing was fixed for 22 December 2005. Notice of the date was given to the Appellants, but again no response was received. In fact the Respondent’s Solicitors sought an adjournment to that hearing and it was re-fixed for 30 January 2006, again on notice to the Appellants. That notice led him to believe that he could participate in that hearing and he attended the hearing with that expectation. 

7.       When the default judgment had been sent to him, he had been informed of his right to have it reviewed and the letter set out in some detail what information such a review application should contain. He had not, however, made any such application. 

The hearing before the Tribunal

8.  	The Chairman observed that he was not, in fact, expecting either Appellant to appear. He records that he told Mr Henderson that he no right to play any part in the proceedings because of the operation of rule 9 of the Employment Tribunal rules (which we consider below.)  Mr Henderson said that he wished to challenge the account given by the Respondent. He also contended that he had sent a letter to the Tribunal dated 30 November 2005, a copy of which was produced to the Tribunal, in which he had explained to the Tribunal that he had a defence to the allegations and that they ought to be considered, notwithstanding his failure to submit a response.
 
9.	He admitted in that letter that he did use inappropriate and sometimes crude language of the kind alleged by the Respondent, but submitted that this was in the nature of banter, made in jest, and that the Respondent voluntarily contributed to it. He also pointed out that if these claims were true then one might have expected the Respondent to have raised them much earlier. His submission to the Tribunal was that he should be allowed to put his side of the case. 

10.   	The Chairman noted that neither the Tribunal at Newcastle nor indeed the Respondent’s Solicitors had any record of receiving the letter of 30 November.  He observed that this “tends to suggest” that the letter was never sent. Mr Henderson maintained nonetheless that he had sent the letter.

The Relevant Law

11.	 Before analysing the decision of the Tribunal, we first set out certain material provisions of the Tribunal Rules and analyse them with the Authorities relating to them.

12.   	Rule 4(1) is as follows:
“If the Respondent wishes to respond to the claim made against him he must present his response to the Employment Tribunal Office within 28 days of the date on which he was sent a copy of the claim. The response must include all the required relevant information. The time limit for the Respondent to present his response may be extended in accordance with Rule 4(4)”. 
	
	Rule 4(4) then provides:

“The Respondent may apply under Rule 11 for an extension of the time limit within which he is to present his response. The Application must be presented to the Employment Tribunal Office within 28 days of the date on which the Respondent was sent a copy of the claim (unless the Application is made under Rule 33(1) and must explain why the Respondent cannot comply with the time limit. Subject to Rule 33, the Chairman shall only extend the time within which a response may be presented if he is satisfied that it is just and equitable to do so”.

13. 	Certain consequences flow from the failure to enter a response or to enter it in good time or after an extension lawfully granted. First, the Chairman has a discretion to enter a default judgment pursuant to Rule 8. Second, under Rule 9, a respondent is barred from participating in the proceedings save in certain specific ways prescribed by the Rules. The relevant Rules, so far as are material, are as follows:
Rule 8
(1) In any proceedings if the relevant time limit for presenting a response has passed, a chairman may, in the circumstances listed in paragraph (2) issue a default judgment to determine the claim without a hearing if he considers it appropriate to do so.
(2) Those circumstances are when either –
(a) no response in those proceedings has been presented to the Employment Tribunal Office within the relevant time limit;…
 (3) A default judgment may determine liability only or it may determine liability and remedy. If a default judgment determines remedy it shall be such remedy as it appears to the chairman that the claimant is entitled to on the basis of the information before him.
(5) The claimant or respondent may apply to have the default judgment reviewed in accordance with rule 33.
Rule 9.
A respondent who has not presented a response to a claim or whose response has not been accepted shall not be entitled to take any part in the proceedings except to-
(a)	make an application under rule 33 (review of default judgments);
(b)	make an application under rule 35 (preliminary consideration of application for review) in respect of [rule 34(3)(a), (b) or (e)];
(c)	be called as a witness by another person; or
(d)	be sent a copy of a document or corrected entry in accordance with rule 8(4), 29(2) or 37; and in these rules the word ‘party’ or ‘respondent’ includes a respondent only in relation to his entitlement to take such a part in the proceedings, and in relation to any such part which he takes.

14.	 It is important to note that Rule 9 bites automatically. There is no order made by the Tribunal as such. That is plain we think from the language of the Rule and was indeed the view of this Tribunal in the case of Butlins Skyline Limited v Beynon UK EAT/0042 – 045/06 (HH Judge Burke QC presiding). The Judge said, at para 47, that:
“Rule 9 describes an effect of the rejection of the response and
 involves no judicial decision before it comes into operation”.
	
15.	 The decision to enter a default judgment for failure to lodge a response can be the subject of a review pursuant to Rule 33, as Rule 8 makes plain. This Rule sets out in some detail the information which should be provided by a party seeking review, and also outlines some of the factors which a Tribunal ought to take into consideration when determining whether or not to exercise its discretion in favour of setting a default judgment aside. The material provisions of Rule 33 are as follows:
“33.-(1) A party may apply to have a default judgment against or in favour of him reviewed. An application must be made in writing and presented to the Employment tribunal Office within 14 days of the date on which the default judgment was sent to the parties. The 14 day time limit may be extended by a chairman if he considers that it is just and equitable to do so.
(2)The application must state the reasons why the default judgment should be varied or revoked. When it is the respondent applying to have the default judgment reviewed, the application must include with it the respondent’s proposed response to the claim, an application for an extension of the time limit for presenting the response and an explanation of why rules 4(1) and (4) were not complied with.
(6) In considering the application for a review of a default judgment the chairman must have regard to whether there was good reason for the response not having been presented within the applicable time limit.”

16.	 Rule 6 provides what is to happen when a respondent seeks to put in a response, but it is rejected for either failing to set out all the material matters which ought to be included or because it is out of time.
“6.-(2) The Secretary shall not accept the response if it is clear to him that any of the following circumstances apply –
(a) the response does not include all the required information (defined in rule 4(3));
(b) the response has not been presented within the relevant time limit.
(3) If the Secretary decides not to accept a response for either of the reasons in paragraph (2), he shall refer the response together with a statement of his reasons for not accepting the response to a chairman. The chairman shall decide in accordance with the criteria in paragraph (2) whether the response should be accepted.
(6) Any decision by a chairman not to accept a response may be reviewed in accordance with rules 34 to 36. If the result of such a review is that the response should have been accepted, then the Secretary shall accept the response and proceed to deal with the response as described in rule 5(2).”

17.     The review procedure applicable here is not in the same terms as with the review of default judgments. Whereas the latter is regulated by Rule 33, a review pursuant to Rule 6(6) is under Rules 34-36. The material provisions of those Rules are as follows:-
 “34.-(1) Parties may apply to have certain judgments and decisions made by a tribunal or a chairman reviewed under rules 34 to 36. Those judgments and decisions are –
(a) a decision not to accept a claim, response or counterclaim;…..
(3) Subject to paragraph (4), decisions may be reviewed on the following grounds only –
(a) the decision was wrongly made as a result of an administrative error;
(b) a party did not receive notice of the proceedings leading to the decision;
(c) the decision was made in the absence of a party;
(d) new evidence has become available since the conclusion of the hearing to which the decision relates, provided that its existence could not have been reasonably known of or foreseen at that time; or
(e) the interests of justice require such a review.
(4) A decision not to accept a claim or response may only be reviewed on the grounds listed in paragraphs 3(a) and (e).
(5) A tribunal or chairman may on its or his own initiative review a decision made by it or him on the grounds listed in paragraphs (3) or (4).”
.
Rule 35 provides that an application for review should be made within fourteen days of the date on which the decision was sent to the parties, although time may be extended in the Chairman considers that it is just and equitable to do so.
Rule 35(2) is then as follows: 
“The application must be in writing and must identify the grounds of the application in accordance with rule 34(3), but if the decision to be reviewed was made at a hearing, an application may be made orally at that hearing.”

18. 	It follows from these Rules that where a response is not entered and no application for an extension of time is made within 28 days of the date when the claim was sent to the Respondent, the only method of reviewing the refusal to accept a response is by way of an application for a review pursuant to Rule 34. If such an application for review is successful then it follows that a respondent will be treated as having provided a response and Rule 9 will no longer operate, but if the application for the review fails, then Rule 9 continues automatically to bar any involvement in the proceedings save as specified in the exceptions in Rule 9.

19.	This was recognised by the EAT (Mr Justice Burton presiding) in Moroak TA Blake Envelopes v Cromie [2005] IRLR 535 at paras.19-21.
 
The exercise of discretion

20.	 It follows that there are a number of Rules which will enable a party effectively to challenge the refusal to accept a response. First, there is Rule 4(4) itself, but that requires the application to be made within 28 days of the claim being sent. (Note that this does mean sent, rather than received, and that is so even if the claim was never received by the respondent and therefore he is not at fault: see Bone v Fabcon Projects Ltd UK EAT/0079/06).

21. 	Where a default judgment has been entered there can be a challenge to the default judgment pursuant to Rule 33. The effect of revoking the default judgment is to allow the respondent’s proposed response (which should be submitted with the review application) to stand as an effective response to the claim. Rule 9 thereafter has no application.

22. 	Finally, in the absence of a default judgment, a respondent can seek to enter a response and when it is turned down for being out of time he can seek a review pursuant to Rule 34.

23.	 In each of these cases the Tribunal has to exercise a discretion. The authorities indicate that whichever particular Rule is under consideration, the manner in which the discretion should be exercised – the considerations which ought to be taken into account – will be the same in each case. 

24.	 In Kwik Save Stores Ltd v Swain [1997] ICR 49, the EAT (Mummery J presiding) had to consider a case in which the employer entered notice of appearance (now response) out of time. The Tribunal Chairman refused to extend time on the grounds that the employer had shown a total disregard for its responsibilities and given no valid explanation for the delays other than incompetence. The EAT allowed the appeal, saying that, in particular, the merits of the defence ought to have been considered. 

25. 	The basic approach to the way in which Tribunals should approach this question was set out by Mummery J in the following terms (p.55C to E):
“the process of exercising a discretion involves taking into account all relevant factors, weighing and balancing them one against the other, and reaching a conclusion which is objectively justified on the question of reason and justice. An important part of exercising this discretion is to ask these questions: what prejudice will the applicant for an extension of time suffer if the extention is refused?  What prejudice will the other party suffer if the extension is granted? If the likely prejudice to the applicant for an extension outweighs the likely prejudice to the other party, then that is a factor in favour of granting the extension of time, but it is not always decisive. There may be countervailing factors. It is this process of judgment that often renders the exercise of discretion more difficult than the process of finding facts in dispute and applying to them a rule of law not tempered by discretion”.

26. 	 In Pendragon PLC v Copus [2005] ICR 1671 the EAT (Burton J presiding) held that where there is a review of a default judgment then precisely the same considerations ought to be  weighed with the Tribunal when exercising that discretion as indicated by Mr Justice Mummery in the Kwik Save case. And in the Moroak case, to which we have made reference, the EAT held that the principles for exercising a Rule 34 review, where there had been refusal to accept a response and no application for extension had been made within the 28 day time limit, the principles were again the same as those in Kwik Save. Accordingly, it is not beneficial to go down one route rather than the other, although circumstances may dictate which route a respondent has to employ.

The Tribunal Decision

27.	 At the remedies hearing the Chairman first considered the application that had been made by Mr Henderson. He recounted the history of the matter and noted that the default judgment had been sent to the Appellants, together with the information telling them how to apply for a review. Notwithstanding that, no proper application to review the default judgment had been made. 

28.	 As we have indicated, the Chairman was clearly very dubious as to whether the letter of 30 November had in fact been sent on that date, although it is right to say that the he did not, in terms, make a finding that the letter had not been sent.  The Chairman in any event considered that the letter fell “far short of an application for review of a default judgment”. He noted that it did not contain any explanation for failing to put in a response in time, nor did it in fact identify the response which the Appellant wished to advance. The Chairman then said this, at paragraph 1.15: 
“There being no valid application for a default judgment I am primarily of the view that I have no discretion to exercise in favour of the respondents today but even if I had such discretion I would decline to exercise it. This is not a case in which a respondent can reasonably argue that he did not know what danger he was facing or that he was confused as to what to do if he wished to contest the case. The covering letters under the new rules explain it in clear language, for reasons which will become even more apparent as I go through the main body of this case I have reached the conclusion, with no pleasure whatsoever, that Mr R has simply buried his head in the sand and now seeks at the very last moment to have a reprieve for his failure to comply with any of the rules and to start afresh to compel a claimant to prove every aspect of her case. As has been made clear in cases in the Civil Courts, eg Beachley Properties v Edgar, the Tribunal business must not be allowed to be disrupted, nor injustice done to a claimant who has come here today purely to argue remedy before a chairman sitting alone, by a respondent being allowed at the eleventh hour to defend a case which he could easily have defended earlier had he not “buried his head in the sand”. Today’s hearing would have to be abandoned and a full Tribunal convened just because Mr [Henderson] has not been bothered to do as the Tribunal (and ACAS) have demanded or suggested. The balance of justice therefore is clearly in favour of refusing any application which I have power to consider to allow Mr [Henderson] to defend at this stage.”

29.	Having reached that conclusion, the Chairman then considered the question of remedy. He took evidence on oath from the Respondent, which was by reference to her written Statement. He summarised the content of that statement. He heard representations from her Solicitor as to the appropriate level of compensation. He considered the authorities, and he fixed compensation in the following way. 

30. 	First, damages for injury to feelings of £10,000.00. He considered that the nature of the conduct and the consequential injury to feelings brought this within the middle band in the analysis by the Court of Appeal in the wellknown case of Vento v Chief Constable of West Yorkshire Police[2003]ICR318. 

31. 	 He then considered that this was an appropriate case for aggravated damages, having regard to the decision of the Court of Appeal in Scott v Commissions of the Inland Revenue [2004] IRLR 713. He concluded that it was appropriate to uplift compensation by 25%, saying “it relates to the dismissive way in which (the Appellants) ignored the claimant’s request that he desist and the thinly-veiled threats that he would dismiss anyone who challenged him”. 

32. 	There was a further uplift of 25% to reflect the fact that there had been a failure to respond to the grievance which the Respondent had raised prior to lodging her claim before the Employment Tribunal; and finally, there was compensation under Section 38 of the Employment Rights Act for the failure to provide a statement of terms and conditions of employment.

33.	 The total sum amounted to £16,248.90. 

The grounds of appeal

34.  	 Essentially, they are three-fold: 
(i) The Chairman ought to have exercised his discretion so as to set aside the default judgment on liability.
(ii) any event, he ought to have exercised his discretion to allow the response to be entered late so as to enable the Appellants to participate in the remedies hearing. It was disproportionate to refuse this.
 (iii) Finally, the awards of compensation were too high and were unjustified. The amount in relation to injury to feelings was too high; there is no justification for aggravated damages; and the uplift of 25% for failing to deal with the grievance procedure was unjust and involved an error of law.

Setting aside the default judgment
35. 	As to the first ground, Mr Pievsky, counsel for the Appellants, submits that the Chairman ought to have treated the Appellants as having made a valid application for review. He accepts that the letter itself gave insufficient details to constitute a proper application as required by Rule 33, but he contends that the Chairman should have appreciated the fact that the Appellant was a litigant in person and that it was plain from the letter, and indeed from the presence of Mr Henderson at the remedies hearing, that he wished the default liability judgment to be reconsidered. Furthermore, insofar as the Chairman indicated that he would have rejected the application even had it been valid, he erred in law. He simply focused upon the failure to comply with the procedures and did not take into consideration at all the merits of the case, which is inconsistent with the principles established in Kwik Save and the other cases to which we have made reference. 

36.	He submits that the defence, as indicated by Mr Henderson, identified a properly arguable case, essentially that the alleged harassment was largely banter which was reciprocated by the Respondent. He says that the Chairman paid no attention to this. Moreover, the case was potentially damaging to the Appellants and in particular to Mr Henderson, who was faced with a serious finding of sexual harassment and had no chance to defend himself.

37.	The Respondent submits that there plainly was no valid application and that the Chairman was right to say so. The Appellants had not indicated why they had not put in a response in time, nor had they provided a response either at the hearing or indeed in the earlier letter of 30 November. There was on any view a flagrant breach of the Rules. Furthermore, the defence was of little weight, since it was not denied that various inappropriate remarks had  been made, and the only proper exercise of discretion would have been in favour of rejecting the review even had a valid application been made, as the Chairman properly held.

38.	We think there can be no criticism of the Chairman on the primary ground on which he rejected this application. He did not have a valid application for review before him, even assuming that the letter of 30 November had been sent. He was not obliged to adjourn matters to enable the Appellants to put their case properly in order. It was by then already some four months since the original claim had been lodged. A chairman is not obliged to give additional leeway to a party, other than that which the Rules provide, particularly when, as here, the party has been advised by the Tribunal in detail of what needs to be done effectively to challenge the default judgment. 

39.	We accept that the Chairman did err in saying that had there been a valid application then he would have exercised his discretion against review. The error was that he did not take into account the potential merits of the case, but focused merely on the nature and extent of the breach of the Rules. 

40.	Having said that, we have little doubt that in this case the discretion would have been exercised against revoking the default judgment, even had the merits been taken into consideration. As we have said, the defence sought to minimise the significance of the comments rather than to deny that they had been made.

41.	However, had this been the only basis for the Chairman’s conclusion we would have felt constrained to send the matter back to the Tribunal for reconsideration. In the event, however, given that the Chairman’s alternative basis that there was no valid application was plainly right, it is not appropriate to take that step.  That is an independent justification for the Chairman’s decision.

Refusing the right to participate
42.	As we have said, Rule 9 automatically bars any further participation unless the employer seeks to put a response in late, has it is refused on the grounds that it is out of time, and then seeks to have that reviewed pursuant to Rule 34.

43.	Mr Pievsky submits that even if the default judgment on liability were to stand, nonetheless it was plain that the Appellants wished to take as much part in the proceedings as they could and since Mr Henderson was there at the review hearing he should have been permitted to participate. He says – and this is supported by certain observations of the Chairman at the beginning of his Decision – that the Chairman simply assumed that it would be impossible for the Appellants to participate because of Rule 9.  Accordingly, once he had determined that there should be no review of the default judgment, he did not give any further thought to the possibility that Mr Henderson might participate in the remedies hearing alone.  The default judgment itself did not apply to the remedy.

44.	Mr Pievsky relied on the decision of the EAT in NSM Music Ltd v Leaf [2006] ICR 450.  In that case the head note records that the respondent employers put a response in late and they had not asked for an extension within the time limit pursuant to Rule 4(4). Judgment in default was not entered, but a tribunal chairman made an order that the employers could take no further part in the proceedings. There was an application for review, but that was refused and compensation was awarded. The employers wished to appeal against the award and requested written reasons for the judgment. That was refused by the Chairman on the ground that they could not take part in the proceedings pursuant to Rule 9, and making a request for written reasons was not one of the exceptions in that rule. The EAT agreed with that, although they exercised a power conferred under the EAT Rules of Procedure to require the reasons to be given.

45.	In the course of giving judgment, Mr Justice Burton commented at paragraph 6 that in exercising these discretions, the Tribunal had to have regard to the issue of proportionality and stated:
“… if a fair trial were not possible on liability there could still be an order simply to barring the respondent from taking any further part on liability, but permitting that respondent to take part on the question of compensation”.

46. He also added in paragraph 7:
“if, as here, the effect of not entering a default judgment with its appropriate considerations either on an original decision or on a review but of taking the course of a Rule 9 decision is that the respondent is debarred, whatever the nature or quality of its default, from contesting both liability and remedy or quantum of compensation, it is all the more important for an employment tribunal carefully to consider the position in the light of such orders it has made in protecting, so far as is proportionate, the position of a debarred respondent”.

47.	Mr Pievsky submits that this paragraph indicates that a tribunal has an option whether or  not to exercise its discretion to enter a default judgment under Rule 8 or to make a barring order under Rule 9.

48.	In this case therefore he submits that it was not proportional for the Tribunal to make a barring order and that the Appellants ought to have been allowed to participate in the remedies hearing.

49.	We see how the decision in NSM Music could be interpreted as suggesting that Rule 9 is implemented by the tribunal itself, but in fact there was no barring order made in this case, and as we have said, there ought to be no such order in any  case since we have no doubt that the effect of Rule 9 is automatic. It does not require any action from anyone. The language is unambiguous: “a respondent ….shall not be entitled to take any part in the proceedings” except in relation to the exceptional matters. Accordingly, this was not a case where there was a disproportionate decision to make an order pursuant to Rule 9 which can be the subject of reconsideration; there was no such decision and there could not be.

50.	Mr Pievsky submitted in the alternative that the Chairman ought to have treated the Appellant as having made an application under Rule 34 for an extension of time for his response. He accepts that Mr Henderson never, of course, put his case in those terms. He had no idea how he could as a matter of law put his argument in a way which might persuade the Tribunal to allow him to participate in the proceedings, but Mr Pievsky says it was plain that Mr Henderson was seeking to take part, and obviously if he could not take the whole meal after setting aside the default judgment, he would at least want to have one of the courses and participate in the remedies hearing. 

51.	He argues that given that Mr Henderson was a litigant in person and that he had in substance made an application which could properly be considered as a Rule 34 application for review, then he ought to have been allowed to participate in the proceedings. The Chairman could properly have taken his application to be a Rule 34 application; had he done so, then the only proportionate response, particularly since Mr Henderson was at the hearing and ready to participate, was formally to allow him to enter a response so that he could thereafter participate in the remedies hearing.  This would not have had to involve upsetting the default judgment. 

52.	He emphasises, as has been said on a number of occasions, that the purpose of the debarring rules is not to punish a party for having failed to comply with the Rules. Proportion at the end of the day is what justice requires, and it would have been met here by allowing the limited participation which could have been achieved without any further delay to the proceedings.

53. 	Ms Woodward, counsel for the Respondent, contends that this ground must fail also. She points out that there never was a formal written response which he had sought to enter in any case. He had given some indication in the letter of 30 November, assuming it had been sent, and had made certain representations orally to the Chairman, but that was all. He had not made any application under Rule 34, and indeed, she submits that the way in which he presented his concerns to the Tribunal, commenting that he wished to challenge the case against him, suggested that he was concerned only with liability and not with remedies.

Discussion and analysis
54.	We agree with Mr Pievsky that the Chairman plainly did not give any consideration to the possibility that Mr Henderson might participate in the remedies hearing. He assumed that unless the default judgment was set aside, Mr Henderson could play no further part in the proceedings.  He did not treat Mr Henderson as making any other application which might have enabled him to participate in the remedies hearing itself.  We quite understand why that was so. The focus was undoubtedly on the default judgment, and the Chairman gave reasons, sound in law, as to why he would not revoke that judgment pursuant to rule 33.  The only way in which Mr Henderson could thereafter participate in the remedies hearing was if he could persuade the tribunal to accept a response out of time.  Without a valid response, rule 9 applied automatically.
 
55.	Had the Chairman appreciated that Mr Henderson wanted at least to be allowed the more limited right to participate in the remedies hearing, was there a route whereby he might in principle have permitted this?  We think that there was, although we readily concede that the route is tortuous and highly artificial, at least in circumstances where the default judgment on liability stands. 

56.	The route is this.  As we have indicated, the only way in which a challenge can be mounted to a refusal not to accept a response where no default judgment is entered is through a review under Rule 34.  So far as remedy was involved, there was no default judgment with respect to that, and therefore nothing to set aside pursuant to rule 33.  So a rule 34 review was the only route.  That presupposes that a response has been refused. It is true that no formal response had even been drafted or submitted, but we think that in rejecting the review of the default judgment, the Chairman must be taken to have also rejected an application to permit the late submission of a response. After all, the essence of a review of a default judgment is that the Tribunal is being asked to accept a response out of time.   Had the response been accepted then the default judgment would have been set aside.  That refusal to allow a response could then itself be the subject of a review under rule 34.  Normally that would require an application in writing but there is an exception where it is made orally at the hearing where the decision which it is sought to review was made: Rule 35(2).  That was the position here, at least if the representations by Mr Henderson could realistically be seen as an application for a review.  

57.	We think that they could.  Mr Henderson was plainly hoping to put his case; even if he could not reopen liability, the only fair inference, it seems to us, is that he wanted to play whatever part he could in the proceedings. He was present and anxious to do so.   Moreover, it is well established that no great formality will be required from litigants in person in these circumstances.  In particular, an application for a review under rule 34 is sufficiently made out if grounds can be discerned from the application: see Sodexho Ltd v Gibbons [2005] ICR 1647 at paras 32-33. There can be no real doubt that this was done here; Mr Henderson was saying that it was not fair that he should be excluded from putting his case.  That was in legal terms saying that the interests of justice required a review. 

58.	The artificiality of this, as we fully appreciate, is that in practice the response will focus on liability – which, by definition, will already have been determined in the default judgment – rather than on remedy itself.  Accordingly, if Mr Henderson were to be allowed to put in a response in this case, it would not have been for its real purpose of setting out the employer’s case in response to the claim, but for the sole purpose of circumventing rule 9.  

59.	Accordingly, whilst we are not remotely critical of the Chairman for adopting the position he did, we think that had he applied his mind to the more limited question whether there was a way of circumventing the effect of rule 9 so as to enable Mr Henderson to participate in the remedies hearing, there was indeed such a path.  One possibility now would be to remit the matter for that possibility now to be explored.  However, we have the power to dispose of the matter by exercising the powers of the employment tribunal: see section 35(1) of the Employment Tribunals Act 1996 and we think we should exercise it.

60.	We are conscious of the decision of the Court of Appeal in Bennett v Southwark LBC [2002] ICR 881 where that section was said to apply only where there was but one conclusion the employment tribunal could reach.  However, that was before the overriding objective was incorporated into the Rules.  We agree with the approach of HH Judge Peter Clark in the Sodhexo case that where the basic facts are not in issue, it will sometimes be desirable and in the interests of the fair and expeditious disposal of the case for the EAT to determine the matter without further referral.  We think this is such a case. There are no more facts to be found, and we have heard full argument on the point.  In fact, we are also minded to think that there could only be one sensible outcome on this issue, as we will explain.

61.	We bear in mind the observations of Burton J in the NSM Music case that it will sometimes be proportional to allow a party to participate in the remedies hearing albeit that liability has been determined against him.  We all of us consider that this is plainly such a case.  
Mr Henderson was present; he could have cross examined the Respondent and made submissions. Whereas the Chairman understandably did not think it right to reopen liability, with all the delays thereby involved, that very fundamental concern did not apply to the more limited participation in the remedies hearing.  Had Mr Henderson sought an adjournment to produce witnesses or further documents, there would have been every good reason to refuse it.  But that was not suggested. He wanted to be able to make observations and submissions with respect to remedies, even if he could not put his side of the story with respect to liability.  To exclude him in the circumstances seems to us simply as a punishment for failing to comply with the rules.  

62.	Punishment is clearly not the purpose of these sanctions: see the observations of Chadwick LJ in Hussain v Birmingham City Council [2005]EWCA Civ 1570 at para 36 dealing with similar provisions in the Civil Procedure Rules.   As his Lordship there pointed out, ultimately all discretions should be exercised so as to achieve the overriding objective, which is to deal with cases justly.   Moreover, as the judgment of Mummery J in Kwik Save shows, an important consideration will be the extent of any prejudice to the parties.  In this case there would be no prejudice to the Respondent in allowing Mr Henderson to take part; by contrast, there was obvious prejudice against the Appellants in denying him that right. 

63.	We therefore have no doubt that the interests of justice dictated that he should have been allowed to be heard if an appropriate legal route could be found, and indeed we have no reason to suppose that the Chairman would have disagreed.   Moreover, Mr Henderson had been led to believe that he would be entitled to do so (albeit mistakenly, because rule 9 precluded this until a response had been accepted.)  If there were no way of enabling participation in these circumstances then we think that there would be a real question, as Mr. Pievsky  submitted, whether rule 9 might be incompatible with Article 6.  But we need not explore that issue further having concluded that there is a lawful, if artificial, route. 

Compensation assessed too high
64.	In view of our conclusion that Mr Henderson should now be entitled to participate in the remedies hearing, we think that it would serve no useful purpose to express any views on this aspect of the case. 

Conclusion

65.	We think that the Chairman was empowered to consider what was in effect Mr Henderson’s application to participate in the remedies hearing, albeit that this had to be done through the device of reviewing the refusal to accept a response out of time.  As artificial as that was, we have no doubt that the overriding objective dictated that he should have been allowed to participate in the remedies hearing given that he was present and eager to do so.  There would have been no real prejudice to the Respondent in permitting this.  

66.	Accordingly, the award of compensation can no longer stand.  There will need to be a fresh hearing on remedies, and in the circumstances we think it should be before a different Chairman.  

67.	We emphasise two matters, however.  The first is that the issue of liability has been determined.  So the finding of sexual harassment cannot be reopened.  The Appellants should be permitted to adduce evidence designed to show that the Respondent was not unduly upset by the comments, since that goes to the extent of injury to feelings.  The dividing line between liability and remedy is not always clear cut, but we do not anticipate that the fresh tribunal will have any real practical problems in limiting the scope of the hearing to allow only evidence which properly has a bearing on remedy. The second point is this.  The Appellants must be aware that in a new hearing the Tribunal would be able to consider the matter entirely afresh.  The Chairman would not be constrained by any of the findings of the first tribunal.   This of course means that the figure finally awarded could be greater that the sum now being appealed.  That is a risk the Appellants take, unless of course some settlement is reached thereby saving the costs of a further hearing.

68.       For these reasons, therefore, the appeal is allowed in part.  The award of compensation is set aside, and the Appellants are to be allowed to participate in a fresh remedies hearing.