Appeal No. UKEAT/0048/08/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 22 April 2008

Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
MRS A GALLICO
MR P SMITH

FORCE ONE UTILITIES LTD		APPELLANT

MR K HATFIELD		RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR G SIMS
(of Counsel)
Instructed by:
Messrs Waterman Cheetham
Solicitors
4 Church Street
PETERBOROUGH
PE1 1DJ	
For the Respondent	MR T CROXFORD
(of Counsel)
(Bar Pro Bono Unit)

MS S WILKINSON
(of Counsel)
(Bar Pro Bono Unit)

	

SUMMARY

Practice and Procedure – Striking-out/dismissal

Respondents’ response struck out, and they were barred from taking further part in the proceedings because of intimidatory conduct. The Employment Tribunal held that they did not think it likely that a fair trial could be held if the respondents took part.  The EAT held that they had a proper evidential basis for that conclusion and that the decision did not reflect any error of law.

  

THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1.	This is an appeal against the unanimous decision of the Employment Tribunal sitting at Bury St Edmunds, in which it held that the respondent’s response should be struck out in its entirety and that the respondent should not be entitled to take any further part in the case, either with respect to liability or any remedy which might follow. The Tribunal stated that the order was made under rule 18(7)(b), but it is common ground that they must have meant 18(7)(c), which empowers a tribunal to strike out for conduct by or on behalf of a party which is scandalous, vexatious or unreasonable.

The background.
2.	Mr Hatfield, whom we shall call the claimant as he was below, took a case for unfair dismissal. He represented himself. The respondent was represented by counsel, Mr Sims. There were two preliminary points. The first was whether the claimant was an employee, and the second was whether he had resigned or been dismissed.

3.	On 5 January 2007 a hearing which had been fixed for that day was adjourned at the request of both parties. The Tribunal were told that they were near a settlement. The matter was re-listed for 26 April 2007. Again on that day there was a joint request for postponement in the face of a proposed settlement. Mr Hatfield asked the Tribunal to give him advice concerning the settlement, but they quite properly refused to do so. They did, however, adjourn the case in order for him to obtain legal advice.

4.	The Tribunal issued a brief judgment with respect to the hearing on that day. They noted that there was considerable tension between the parties concerning the authenticity or otherwise of what was termed a “works operative accreditation card”. This card represents the claimant as having obtained a certificate which he stated he had never in fact obtained and which he said was secured by the payment to Mr Shuter of £600. The significance of the accreditation card is that it apparently lent support to Mr Hatfield’s contention that he was an employee. 

5.	Mr Shuter was one of the respondent’s witnesses and was also Executive Director of an associated company of the respondent. He played a key role in handling the case for the respondent. The Tribunal noted that he had become very alarmed and agitated at the assertion that this certificate had been dishonestly given to Mr Hatfield.

6.	Later on the afternoon of 26 April, after the case had been adjourned, Mr Hatfield came back before the Tribunal, together with Mr Sims of counsel. The claimant said that when he had left the Tribunal building, Mr Shuter had been present and had made a serious threat of physical harm to him. It included the threat that he should be careful “how he slept at night”. The threat, said Mr Hatfield, was made in the presence of one of his witnesses, namely Mr Rudd. Mr Hatfield contacted the Police at that point because he was concerned about his personal safety.  The Tribunal also recounted that there was an incident on that day when each member of the Tribunal had seen Mr Shuter drive his car to the car park exit and park his car there for some time thereby blocking the exit and inconveniencing other vehicles for some five or ten minutes.

7.	The matter came back before the Tribunal on 27 September. The claimant made certain submissions about what had occurred on 26 April and the Tribunal concluded that the conduct appeared to be more serious than they had originally appreciated. Mr Hatfield said that as he left the Tribunal Mr Shuter had said to him words to the effect “Watch how you sleep at night”. 

Mr Shuter then came close to the claimant and said: 
“You’ve got one over on me today, you won’t get one over on me again. You’re getting no fucking money out of me.” 

8.	Then Mr Hatfield went on to say:
 “As we proceeded outside to my car he turned to me and said ‘You do realise this is being relisted’. We were about 20 yards away. He stopped in his tracks and said ‘You two, watch how you sleep at night, I mean it.”

9.	Mr Hatfield said he went to his car to put his jacket in the boot. Mr Byrne, a witness for the respondent, and Mr Shuter were in their car. Mr Shuter drove alongside the claimant, blocking him in. He wound down the electric window and said:
“Me and you – 10 minutes up the road now”. 
The claimant did not answer. 

10.	It was at this point that Mr Hatfield had gone back inside to the Tribunal. 

11.	The claimant told the Tribunal on 27 September that he was still nervous and afraid.   His wife confirmed this and said that he had been anxious for weeks after the threat. The Tribunal also noted that the Tribunal clerk had formed the impression that Mr Hatfield was very frightened and anxious whether or not to proceed.  He was not an educated man and was not legally represented at the Tribunal, being assisted by his wife. He was also given on that morning a costs’ schedule from the respondent claiming almost £8,500, which no doubt increased his anxiety. The Tribunal was critical of the manner in which this was done, but it did not bear on their decision and we say no more about it. 

12.	The hearing on 27 September was adjourned by the Tribunal because they considered they should consider of their own motion whether or not to strike out the response in whole or in part. They gave Mr Shuter the opportunity to appear before them on the following day. He was originally going to be called as a witness but following the hearing in April the respondent had  resolved not to call him. 

13.	The following day, the 28 September, the Tribunal heard from both Mr Hatfield and Mr Shuter. The Tribunal considered Mr Hatfield to be an honest witness. He gave reliable evidence along the lines of the account he had given the previous day. Mr Shuter then gave evidence, as did his instructing solicitor. 

14.	Mr Shuter denied that he had parked in the exit and he denied that he had made threats. He did say that he had expressed concern about Mr Hatfield not signing the agreement. He admitted having said:
 “Kevin, I hope you can fucking sleep at night knowing you have got the money for fucking nothing”. 
He denied any other aspect of the conversation. 

15.	The Tribunal were not impressed by Mr Shuter’s evidence. They considered him uncompromising and unhelpful. He observed to the Tribunal that he thought the claimant was setting him up. His evidence was not accepted.

16.	The Tribunal did in fact hear evidence on which he relied to demonstrate that it was not he who had blocked the exit, but the Tribunal appear to have cut short Mr Sims when he sought to make submissions on the matter. The Tribunal recorded in the decision that they were “disinterested in any explanation or evidence which tends to suggest we were wrong” in their reliance on their own observations.  They were understandably unwilling to be cross examined on what they had seen. The employment judge observed that none of them “had any doubt whatsoever concerning what we saw”. 
17.	They were prepared to listen to reasons given by Mr Shuter as to why there had been this incident in the car park exit, but not about whether it had happened. In fact no explanation was forthcoming.

The Tribunal’s conclusions.
18.	The Tribunal directed themselves in accordance with the three authorities of Bennett v London Borough of Southwark [2002] IRLR 407, Bolch v Chipman [2004] IRLR 140, and Blockbuster Entertainment Ltd v James [2006] IRLR 630.  

19.	As we have said, the relevant rule in issue here is rule 18(7)(c )which permits striking out of a  case or response on the grounds that the manner in which the proceedings have been conducted has been scandalous, unreasonable or vexatious. 

20.	In a case of this kind, Bolch established a three stage approach. First, has the conduct related to the manner of proceedings?  Second, did the conduct make it impossible to hold a fair trial?   Third, if so, was there some response short of barring the wrongdoing party which would be proportionate?   We would only observe that questions two and three are, it seems to us, interrelated.  If steps short of a strike out can properly be considered a proportionate response, in our judgment that can only be because they are sufficient to render a fair trial possible.  If such steps still render the trial unfair, they cannot be proportionate to deal with the prejudice to the wronged party.

21.	It was accepted that intimidatory conduct here, in the circumstances in which it allegedly arose, would relate to the manner of the proceedings and therefore could in principle lead to a strike out.  The Tribunal then considered whether in the circumstances they should strike out the response. They recognised that it was a draconian power and that the test was whether a fair trial is still possible. It was suggested to them that Mr Hatfield was prepared to go on with the case and that this demonstrated that a fair trial was possible.  Furthermore, it was submitted that since Mr Shuter would not now give evidence, there was no justifiable reason why the claimant should feel under pressure or in fear.

22.	The Tribunal rejected these points. They felt that the fact that the claimant had returned to the Tribunal was not evidence that he was free from fear. They also felt that Mr Shuter’s influence would be very profound in relation to any evidence that Mr Hatfield would give and that simply removing Mr Shuter from having any role in the hearing itself would not affect that. 

23.	The Tribunal noted that it had no difficulty in believing Mr Hatfield’s version of the threats being made; and that Mr Hatfield was plainly in real fear.  They were not satisfied that he could give reliable evidence if his evidence were to come into conflict with that advanced on behalf of the respondent. Such conflict of evidence was considered highly likely. 

24.	The Tribunal concluded that striking out the response was a proportionate response to the intimidation.  They specifically directed themselves as to whether the respondent should be debarred just from participating in the liabilities hearing, or whether they should be barred from the remedies hearing also.  They considered that it should be both. The remedies’ hearing would, in the Tribunal’s view, be equally fraught and subject to the same considerations as the hearing on the merits itself. They noted that the effect of the order was not that the claimant necessarily was going to succeed. The Tribunal would still have to hear the evidence and assess it.

25.	In the event, the claimant did succeed and was awarded compensation of some £14,000.

The grounds of appeal.
26.	There are essentially four grounds of appeal. 

The first ground of appeal.
First, it is said that the Tribunal erred in analysing what is a fundamental issue in a case of this kind, namely whether a fair trial was possible. The Tribunal properly applied that test as they were required to do, in accordance with the decision of the EAT (Burton P presiding) in Bolch, but Mr Sims submits that the Tribunal wrongly applied that test to the facts of the case. 

27.	The Tribunal erroneously concluded that since Mr Hatfield was frightened, there was no likelihood at all that he would give reliable evidence if it conflicted with evidence adduced by the respondent.  It is submitted that this was an unjustified inference particularly since the Tribunal found in terms that they accepted the evidence Mr Hatfield had given with respect to the incidents of intimidation and it was inconsistent with their analysis of his evidence on that matter for the Tribunal to conclude that they would not be able to rely upon the evidence he gave in relation to other issues in the case. 

28.	We reject that submission. The Tribunal was best placed to appreciate the impact which this intimidatory conduct had had on the claimant. It was for them to make an assessment in all the circumstances of whether they considered that a fair trial would be possible. It is not possible in an appellate court to make a judgment on such a fact-sensitive issue. This was a matter for the Employment Tribunal. In truth, this ground can only succeed if the conclusion of the Tribunal was perverse. Once intimidation of this kind is found to have occurred, it will be a very exceptional case indeed where it can be said that a finding that no fair trial is possible is perverse. We are satisfied that this is not such a case.  

29.	More specifically, with respect to the alleged inconsistency in the Tribunal’s approach, we think it is perfectly cogent for the Tribunal to be satisfied that the claimant could give reliable evidence with respect to the intimidation, when he was essentially repeating in evidence what he had earlier told the Tribunal in the absence of Mr Shuter, but that his palpable fear was likely to render his subsequent evidence unreliable.

30.	A related ground is the submission that a substantial amount of the oral evidence had already been given by Mr Hatfield. Mr  Sims, who appeared both here and below, told us that Mr Hatfield had given most of his evidence as to whether or not he had been dismissed, and it was accepted that if he was an employee and had been dismissed, then the dismissal was unfair.  However, there was still the need for him or his wife to cross examine the respondent’s witnesses, as well as to give evidence on the preliminary question of whether he was an employee.  

31.	We accept that there may be some cases where the intimidation occurs at such a late point in the trial that a fair trial plainly is still possible.  However, the fact that some evidence had been given was at most a factor for the Tribunal to consider and it had no more significance than that.

32.	Mr Sims says that the Tribunal should have expressly made reference to this point. We do not agree.  This was uncontroversial background that would have been well in their minds.  It is trite law that they do not have to recite all aspects of the evidence or matters that weigh with them.   We see no error of law here.

The second ground of appeal.
33.	The second ground is that the decision to strike out was disproportionate. Reliance is placed on the observations of Sedley LJ in the Court of Appeal in Blockbuster, where he expressed the view that the power to strike out is draconian and should not be readily exercised. Lord Justice Sedley observed:
“It takes something very unusual to justify the striking out on procedural grounds of a claim which has arrived at the point of trial.”

34.	The Tribunal specifically referred to that observation, and therefore had very much in mind that this should be an exceptional step. This is not, however, simply a procedural error by one of the parties. It is, as the Tribunal found, wholly unacceptable conduct which goes to the very root of the Tribunal’s ability fairly to assess the evidence of the witnesses. 

35.	The appellant places emphasis on the fact that Mr Shuter was not due to give evidence. It is submitted that the Tribunal had to operate a balancing exercise, weighing up the adverse effect on the claimant with the detrimental effect on the company if they were to be denied the opportunity of defending the case. 

36.	We do not accept that a balancing exercise is the correct metaphor in a case of this kind.  The intimidatory conduct of one party is specifically designed to put the other in fear of the consequences of continuing with the action. Where a tribunal concludes that the intimidated party will be unable to manage that fear and is likely to tailor the evidence to fit with the other party’s case, then it seems to us that the only proportional response is to disallow the intimidating party from being allowed to take further part in the proceedings, at least with respect to liability. It is a draconian step to take and it plainly does affect the ability of the intimidating party to defend the case, but that is a consequence which that party has brought upon itself.
37.	In our judgment, once a tribunal finds that a party is sufficiently intimidated as to affect his or her ability to give evidence without fear of consequences, the only proportionate response can be to bar the other party from participating in the trial. Of course, as in this case it will still be necessary for the claimant to prove the evidence to establish the case and that may not always be possible, such as where the evidence conflicts with contemporaneous documents. Plainly there is prejudice to the respondent in this case, but it is something which they have brought upon themselves.

38.	The Tribunal might have allowed the respondent to participate in the remedies hearing as a proportionate response.  We accept that some tribunals may have taken that step, simply by striking out that part of the claim referable to liability.  However, the Tribunal specifically addressed this issue and concluded that the risk of an unfair trial remained even at that stage. That is a conclusion which can only be challenged on perversity grounds, and we see no such perversity here.

The third ground of appeal.
39.	The third ground is directed at the Tribunal’s refusal to hear the submissions which counsel wished to make about the car park incident. Each member of the Tribunal was satisfied that they knew what they had seen with their own eyes and they were not prepared to hear submissions that they were mistaken. 

40.	We do accept that this was strictly an error by the Tribunal.  Counsel should have been entitled to make whatever points he wished, however unlikely it was that the Tribunal would be persuaded. In reality, however, the possibility that he would have caused the Tribunal members to have any real doubts about what they had seen was fanciful.  They had, after all, heard all the evidence that Mr Shuter wished to adduce on the matter.  Mr Shuter did not claim to have had an identical twin or anything of that kind.  So we think that the error had no real significance.

41.	This conclusion is reinforced by the fact that in our view the exit incident was only of the most marginal significance.  The real issue here was the words spoken by Mr Shuter to the claimant and the circumstances in which the conversation took place. The incident when the exit was blocked, although perhaps demonstrating boorish behaviour, had very little direct bearing on that issue. We think there is no prospect at all of the Tribunal changing its assessment of the effect of the conversation on the claimant, even if we were to remit on this point.

42.	Mr Sims said that the evidence corroborated the evidence of Mr Hatfield because it tended to suggest that there were conversations between Mr Shuter and Mr Hatfield.  But that was never disputed.  He also submitted that it would have damaged the credibility of Mr Shuter, but the Tribunal gave reasons why they found him a less than satisfactory witness, and they were for quite different reasons. 
 
The fourth ground of appeal.
43.	The final ground challenges the Tribunal’s decision that the respondent should be liable for the acts of its witness, Mr Shuter.  It was put on two bases.  

44.	First, it is said that since Mr Shuter is only a witness, the respondent cannot be liable for his conduct.  His behaviour cannot be laid at the door of the company.  

45.	Second, it is said that in any event the respondent had disassociated themselves from his conduct by indicating that they did not wish to call upon him as a witness at the resumed hearing.  

46.	Reliance was placed on some observations of Sedley LJ in the Bennett case (para 26) to the effect that a party may dissociate itself from what a representative has done.  The same must apply to a witness, says Mr Sims. There is no evidence that the respondent in any sense ratified his behaviour or adopted his actions.

47.	We reject these submissions. Mr Shuter was not just a witness in the proceedings.  He was plainly directing matters on behalf of this company. The Tribunal found as a fact in this case that Mr Shuter was a director of the respondent’s sister company and he, in practice, exercised control of the proceedings and had been conducting negotiations with Mr Hatfield personally. Mr Sims suggested that there was some doubt whether the Tribunal was finding that Mr Shuter was in control of these proceedings, or merely conducting contract negotiations.  

48.	We do not agree.  It is plain that the Tribunal finding was that he was the party responsible for conducting these proceedings.   We think there is no conceivable error in the Tribunal treating the individual who is its representative in the very litigation as being the actions of the respondent itself.  Rule 18(7)(c) requires that the unacceptable conduct is “by or on behalf of” a party.  Whatever difficulties there may be in other cases, we can see no proper basis at all for saying that the conduct of Mr Shuter was not on behalf of the respondent.

49.	Nor do we accept the alternative submission that the respondent had disassociated itself from the conduct of Mr Shuter.  They chose not to call him as a witness but there is no evidence whatsoever that this was because they disapproved of, and wished to distance themselves from, his conduct, or that this action was intended to mitigate its effects.  Indeed, we suspect that there may well have been quite different tactical reasons for that decision.

50.	  We recognise that there may be circumstances where prompt action taken by a party to repudiate unacceptable conduct may be sufficient to mitigate its effects.  We are inclined even then to accept the submission of Mr Croxford, counsel for the claimant, that the essential question will still be whether a fair trial is possible.  If it is not, then in our view the purported repudiation will be ineffective.  Sometimes, as Burton P pointed out in the Bolch case, the conduct may have lingering effects even after the wronging party has attempted to make amends.

Conclusion.
51.	Accordingly, for these various reasons, we reject this appeal. We consider that the Tribunal was entitled to reach the view it did. It understandably considered these threats could be taken seriously. Mr Hatfield was in genuine fear. He was known to Mr Shuter, who also knew where he lived. The Tribunal heard the witnesses and assessed the evidence. They concluded, as they were entitled to, that a fair trial was not possible and that Mr Shuter’s conduct was to be attributed to the respondent. We see no error of law in this approach. The only fault was the failure to allow Mr Shuter’s counsel to deal with the exit incident, but for the reasons we have given we think that error has not tainted the conclusion in this case.