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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Irwell Insurance Company Ltd v Watson & Ors  EWCA Civ 67 (22 January 2021)
Cite as:  Lloyd's Rep IR 145,  4 All ER 805,  WLR(D) 58,  EWCA Civ 67,  ICR 1034
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ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
THE HONOURABLE MR JUSTICE KERR
UKEAT/0007/19/JOJ,  UKEAT 0007_19_1612
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE FLAUX
LORD JUSTICE MALES
| IRWELL INSURANCE COMPANY LIMITED
- and –
|(1) NEIL WATSON
(2) HEMINGWAY DESIGN LIMITED (IN LIQUIDATION)
(3) DARREN DRAYCOTT
David Gray-Jones (instructed by Lawson West) for the First Respondent (Mr Watson)
The Second and Third Respondents did not appear and were not represented.
Hearing date: 14 January 2021
Crown Copyright ©
Lord Justice Bean :
"1. Rights against insurer of insolvent person etc
(1) This section applies if—
(a) a relevant person incurs a liability against which that person is insured under a contract of insurance, or
(b) a person who is subject to such a liability becomes a relevant person.
(2) The rights of the relevant person under the contract against the insurer in respect of the liability are transferred to and vest in the person to whom the liability is or was incurred (the "third party").
(3) The third party may bring proceedings to enforce the rights against the insurer without having established the relevant person's liability; but the third party may not enforce those rights without having established that liability.
(4) For the purposes of this Act, a liability is established only if its existence and amount are established; and, for that purpose, "establish" means establish—
(a) by virtue of a declaration under section 2 or a declarator under section 3,
(b) by a judgment or decree,
(c) by an award in arbitral proceedings or by an arbitration, or
(d) by an enforceable agreement.
(5) In this Act—
(a) references to an "insured" are to a person who incurs or who is subject to a liability to a third party against which that person is insured under a contract of insurance;
(b) references to a "relevant person" are to a person within sections 4 to 7[ (and see also paragraph 1A of Schedule 3)];
(c) references to a "third party" are to be construed in accordance with subsection (2);
(d) references to "transferred rights" are to rights under a contract of insurance which are transferred under this section.
2. Establishing liability in England and Wales and Northern Ireland
(1) This section applies where a person (P)—
(a) claims to have rights under a contract of insurance by virtue of a transfer under section 1, but
(b) has not yet established the insured's liability which is insured under that contract.
(2) P may bring proceedings against the insurer for either or both of the following—
(a) a declaration as to the insured's liability to P;
(b) a declaration as to the insurer's potential liability to P.
(3) In such proceedings P is entitled, subject to any defence on which the insurer may rely, to a declaration under subsection (2)(a) or (b) on proof of the insured's liability to P or (as the case may be) the insurer's potential liability to P.
(4) Where proceedings are brought under subsection (2)(a) the insurer may rely on any defence on which the insured could rely if those proceedings were proceedings brought against the insured in respect of the insured's liability to P.
(5) Subsection (4) is subject to section 12(1).
(6) Where the court makes a declaration under this section, the effect of which is that the insurer is liable to P, the court may give the appropriate judgment against the insurer.
(7) Where a person applying for a declaration under subsection (2)(b) is entitled or required, by virtue of the contract of insurance, to do so in arbitral proceedings, that person may also apply in the same proceedings for a declaration under subsection (2)(a).
(8) In the application of this section to arbitral proceedings, subsection (6) is to be read as if "tribunal" were substituted for "court" and "make the appropriate award" for "give the appropriate judgment".
(9) When bringing proceedings under subsection (2)(a), P may also make the insured a defendant to those proceedings.
(10) If (but only if) the insured is a defendant to proceedings under this section (whether by virtue of subsection (9) or otherwise), a declaration under subsection (2) binds the insured as well as the insurer.
(11) In this section, references to the insurer's potential liability to P are references to the insurer's liability in respect of the insured's liability to P, if established."
The jurisdiction of employment tribunals
The judgments below
"10. The principal issue is whether the determination of issues under the 2010 Act is a matter that this Tribunal can and should decide or whether it a matter for the ordinary courts."
11. In his helpful submissions Mr Gray-Jones argues that the 2010 Act was specifically passed to deal with the problems highlighted by the Law Commission on third party rights against insurers in their report in July 2011. Although I have not been provided with a copy of the Commission's report, there is no dispute that the aim of the legislation was to make it easier for third parties to bring claims without having to establish liability separately. The explanatory notes to the Act apparently state that the report's recommendations are accepted in that respect.
12. Accordingly, Mr Gray-Jones on behalf of the Claimant invites me to interpret the Act in such a way that it deals with the mischief which was designed to be addressed, namely that a third party should not have to bring separate proceedings to enforce an indemnity against an insurer.
13. Mr Graham on behalf of Irwell argues that Tribunals are creatures of statute and there is no statutory authority to give the Tribunal jurisdiction to deal with the provisions of the 2010 Act. He agrees that the issue as to liability under the 2010 Act needs to be determined but that the Tribunal is not the proper forum.
14. None of the cases which Mr Gray-Jones has referred me to, and I do not need to set them out here, are cases which involve the 2010 Act and Employment Tribunals. Of course the fact that there are no previously decided cases is not determinative but I note that there is an absence of any previously decided cases in the Employment Tribunal under the 2010 Act. All of them are cases in the ordinary courts. Mr Gray-Jones agrees that the reference to "arbitral proceedings" in section 2(8) does not refer to Employment Tribunals.
15. The issue between the Claimant and Irwell has nothing to do with an employment contract but rather a contract of insurance. The Claimant's claims against Mr Draycott and Hemingway arise out of an employment relationship. Irwell was never the Claimant's employer. There is no contractual nexus between the Claimant and Irwell nor indeed between Mr Draycott and Irwell. The insurance policy seems to have been taken out by Hemingway.
16. There will no doubt be evidential issues in relation to whether Hemingway breached the terms of its insurance policy. They will be critical to the ultimate decision. Those issues are properly decided by the ordinary courts rather than an Employment Tribunal. They do not arise out of any employment relationship. The Tribunal's jurisdiction in breach of contract cases is limited to claims under the Employment Tribunals (Extension of Jurisdiction) Order 1994. This case is nothing to do with that Order.
17. There will also be issues between Mr Draycott and his dealings with Peninsula as to whether the terms of the policy were followed and whether the conditions were adhered to. Those matters have nothing to do with any employment relationship or contract.
18. For those reasons, I consider it appropriate to stay the present proceedings."
"28. In my judgment, the real question I must decide is whether an employment tribunal falls within the words "the court" in section 2(6) of the 2010 Act. If it does, then the 2010 Act has conferred jurisdiction on the employment tribunal to make a declaration as to the insurer's liability under section 2(2)(a) of that Act. If that is so, the 2010 Act falls within the words "any other Act, whether passed before or after this Act" in section 2 of the ETA; and the jurisdiction "conferred on them" (the employment tribunals) by the 2010 Act is one which, by section 2 of the ETA, they "shall exercise".
29. But if an employment tribunal is not included in the meaning of "the court" in section 2(6) of the 2010 Act, the employment tribunal has no power to make a declaration under section 2(2)(a) of the 2010 Act. If that is the position, the employment tribunals have no power to determine an insurer's liability under the 2010 Act. No jurisdiction under that Act would be "conferred" on the tribunal within section 2 of the ETA. And as Mr Watson rightly observes, no ministerial order under section 3 of the ETA has conferred any such jurisdiction.
30. The employment judge observed that the issue between the claimant and Irwell "has nothing to do with an employment contract"; that there is "no contractual nexus between the Claimant and Irwell"; and that the issues between the claimant and Irwell "do not arise out of any employment relationship". These observations go too far. The issues between the claimant and Irwell do arise, indirectly, from an employment relationship. And a contractual nexus between the claimant and Irwell is created by the statutory transfer of contractual rights pursuant to the 2010 Act and the vesting of those rights in the claimant.
31. The judge was of the view that the issues between the claimant and Irwell "are properly decided by the ordinary courts rather than the Employment Tribunal". He considered that the latter's jurisdiction "in breach of contract cases is limited to claims under the Employment Tribunals (Extension of Jurisdiction) Order 1994". Those observations of the judge (leaving aside the jurisdiction over wrongful deductions from pay which may be a breach of contract) are correct only if an employment tribunal is not "the court" within section 2(6) of the 2010 Act. All roads lead back to that question.
32. It is clear from the differences between the regime of the 1930 Act and that of the 2010 Act, that the latter was intended to promote a "single forum" solution to recovery against an insurer where the insured has become insolvent. Mr Gray-Jones rightly says that the passages he showed me in the Law Commission report provide strong support for that view. I therefore accept that the "mischief" canon of construction tends to point along the path down which he beckons me.
33. I do not attach much weight to any suggestion that contracts of insurance are so far out of an employment tribunal's comfort zone as to make it unlikely that Parliament can have intended the tribunals to grapple with them. Employment tribunals are required to be versatile, not just to decide complex EU law points worthy of the Supreme Court's consideration and sometimes a reference to the Court of Justice in Luxembourg. They not infrequently have to consider contract based issues going beyond traditional employer and employee relations.
34. They have to look at contracts between, for example, third and fourth parties for the provision of agency services. They make forays into landlord and tenant law, where an employee has a right to occupy premises as an incident of employment. They also have to apply the general law outside the employment sphere. For example, they may have to apply the provisions of the Interpretation Act 1978 where, say, provisions have been repealed or delegated legislation replaced by an updated statutory instrument. They have to decide human rights points in their capacity as a body bound by section 6 of the Human Rights Act 1998.
35. They are used to considering generic defences to contract claims, such as want of consideration, estoppel, affirmation or illegality. In TUPE cases, they may have to consider non-employment contracts transferring, or not as the case may be, an undertaking or part of an undertaking to another person. The transfer of rights under the 2010 Act operates in a manner not dissimilar to TUPE. In both cases, contractual rights and obligations are transferred to a person not a party to the original contract. …………..
38. Is an employment tribunal "the court" in section 2(6) of the 2010 Act? Mr Watson urged that the legislature has differentiated a "tribunal" from "the court" in the same section, when dealing with arbitral proceedings. I am not persuaded that the references in section 2 to a "tribunal" in the context of arbitral tribunals are of significant weight. They deal with a specific type of tribunal, not with tribunals generally, nor with a particular kind of statutory tribunal such as an employment tribunal. The separate treatment of proceedings before arbitral tribunals is needed because of the prevalence of arbitration clauses in insurance contracts.
39. Underhill J (P), as he then was, in Brennan v. Sunderland City Council, at [22(2)] was unwilling to construe the word "court", read with the word "action" in the Civil Liability (Contribution) Act 1978 as embracing an employment tribunal. [Kerr J referred to some passages in Brennan, and continued:]
41. There are differences between the nature of the right in play in the present case and the right in the Brennan case. There, the right claimed was a right to claim contribution by one joint tortfeasor against the other. It turned out that the underlying right to claim a contribution does not exist under the Civil Liability (Contribution) Act 1978 in the case of joint tortfeasors sued in employment tribunal proceedings. Sunderland City Council's problem was not just one of forum; it had no right to contribution that could be claimed even in an ordinary court.
42. Here, the issue is one of forum only. It is not disputed that Hemingway's rights under the insurance contract have transferred to the claimant, subject to Irwell's defences to a claim under it. Leaving aside the impact of the arbitration clause (to which I shall return shortly), the meaning of the word "court" determines whether the employee must bring one claim or two. If the latter is the correct construction of section 2(6) of the 2010 Act, the statutory purpose has failed in the 2010 Act in its application to employment tribunal claims.
43. Essentially for that reason, I have come to the conclusion that the construction for which Mr Gray-Jones contends is the correct one. The context calls for a purposive construction. The "single forum" statutory purpose would, otherwise, be defeated in employment tribunal claims. In my judgment, the cases relied on by Mr Gray-Jones, especially the Peach Grey & Co case, provide sufficient authority for the proposition that an employment tribunal is included within the words "the court" in section 2(6) of the 2010 Act.
44. In all the respects emphasised by Rose LJ in Peach Grey & Co, the employment tribunal functions like a court. It is independent of the state. It determines rights and liabilities. It administers oaths and affirmations. It awards remedies including compensation. In addition, it was omitted from the architecture of the First-tier Tribunal and the Upper Tribunal, created by the Tribunals, Courts and Enforcement Act 2007. Mr Gray-Jones' broad construction fits with the policy of the 2010 Act. Mr Watson's narrow construction does not.
45. I therefore respectfully disagree with the judge's conclusion that he had no jurisdiction to entertain the claim as against Irwell."
"46. I turn to consider the impact, if any, of the arbitration clause in the contract between Irwell and Hemingway. I have seen the clause, which is in fairly standard form. It applies where there is a "difference or dispute" between Irwell and Hemingway "or any other person insured under this Policy". The difference or dispute "shall be referred to and finally resolved by arbitration before a sole arbitrator in accordance with the Arbitration Acts as amended (save as the parties may expressly agree)…". The president of a particular arbitration body "shall on the application of either party appoint the Arbitrator in default of agreement between the parties".
47. Strictly speaking, I do not need to consider the impact of the arbitration clause at this stage. Neither party has yet sought to invoke it. Irwell decided instead to engage with the employment tribunal by making the unsuccessful strike out application, without prejudice to its denial of jurisdiction. It was arguable that on its own case Irwell lacked any standing to bring the strike out application. The judge was prepared to determine it, perhaps because Mr Draycott was present and is likely to have supported it.
48. Irwell relied on the existence of the arbitration clause in its grounds of resistance to the claim, but merely pointed to its existence "[f]urther or in the alternative" to Irwell's challenge to the tribunal's jurisdiction. Irwell did not assert that it intended to take steps to have an arbitrator appointed. It had no need to do so unless its primary contention that the tribunal lacked jurisdiction were wrong, as I have now decided. If its primary contention were right, as the judge decided, the next step would be proceedings in the High Court or county court, which might or might not ever be brought.
49. Nevertheless, it is possible that the arbitration clause may become relevant at the next stage of the proceedings, should either party take steps to have an arbitrator appointed. Irwell is more likely to do so than the claimant. I heard argument (including in written observations from the parties after the oral hearing of the appeal) on the impact of the arbitration clause and I think it right to express my views on the arguments the parties have advanced.
50. The Law Commission report dealt with arbitration clauses at paragraphs 5.39-5.44. The Commissions recognised that the prevalence of arbitration clauses in employer's liability insurance contracts called for specific provision. They noted in the report that "under the ABI [Association of British Insurers] / Lloyds arbitration agreement most UK insurers have now undertaken not to enforce arbitration clauses in standard-form policies if the insured prefers to have questions of coverage determined by a court" (paragraph 5.40).
51. The Commissions recommended (paragraphs 5.43-5.44) that the third party should be bound by an arbitration clause in the insurance contract to the same extent as the insured. The third party should, however, be allowed to establish the insured's liability, as well as the insurer's, in the arbitration. If the third party's underlying dispute with the insured was subject to arbitration, the Commissions recommended that the third party should be obliged to litigate that underlying dispute in a court rather than by arbitration, unless the insurer agreed otherwise.
52. In the 2010 Act, those recommendations were accepted. The explanatory notes stated (at paragraph 3) that the Act "gives effect, with minor modifications, to the recommendations set out in the … joint report… ." As already mentioned, where there is an arbitration clause in the insurance contract, the third party is bound by it but may apply in the arbitration proceedings for a declaration as to the insured's liability in the underlying dispute. The insured may be joined as a defendant and if it is, any declaration will be binding on it.
53. Such is the effect of section 2 as it applies to arbitral proceedings. The third party is able to establish his or her rights, if he or she wishes, in a single proceeding, preserving the "single forum" policy in cases where the insurance contract contains an arbitration clause. The single forum is the arbitration, not the court. If the third party wishes to litigate the underlying dispute against the insured in the ordinary court, he or she will have to litigate on two fronts unless the insurer waives the benefit of the arbitration clause.
54. How do the provisions apply in the context of employment tribunal claims where the insured is insolvent and the third party has acquired the statutory right to proceed directly against the insurer? If I am correct in deciding that "the court" in section 2(6) includes an employment tribunal, the question could arise how section 2 would work where the insurer seeks to rely on an arbitration clause in the insurance contract. Irwell has already suggested that may happen in this case.
55. Mr Gray-Jones submitted that the issue could not arise because the insurer, here Irwell, is unable to rely on the arbitration clause by reason of section 203 of the ERA and section 144 of the EqA. He points to the decision of Slade J in the Clyde & Co LLP case. She held that an arbitration clause in an agreement between a partnership and a member thereof fell foul of both section 203 of the ERA and section 144 of the EqA: see her judgment at -. However, that was an arbitration clause in the contract between the third party and the respondent to the tribunal proceedings; it was not an arbitration clause in an insurance contract between the respondent to tribunal proceedings and that respondent's insurer.
56. In argument before me, the parties addressed the arbitrability of the dispute between the claimant and Irwell. Mr Watson pointed out, as I have said, that section 203 and section 144 of the respective Acts refer to contract terms affecting the operation of "provisions of this Act", to inhibitions on proceedings "under this Act" or terms which "purport to exclude or limit a provision of or made under this Act". They refer to the provisions of the ERA and EqA respectively, but make no reference to the 2010 Act.
57. Mr Watson suggested that an arbitrator could determine the liability of an insured in respect of employment tribunal claims. Section 2(7) of the 2010 Act allows the third party in arbitration proceedings to "apply in the same proceedings for a declaration under subsection (2)(a)", i.e. "a declaration as to the insured's liability" to the third party. Mr Watson drew my attention to Fulham FC (1987) Ltd v. Sir David Richards  EWCA Civ 855,  Ch 333. The Court of Appeal upheld Vos J's decision staying Fulham's "unfair prejudice" petition under section 994 of the Companies Act 2006, to enable that dispute to be the subject of arbitration pursuant to the rules of the Football Association Premier League Limited.
58. Mr Watson suggested that an arbitral tribunal could, similarly, entertain the underlying dispute even though it would normally have to be litigated in an employment tribunal, not an ordinary court. I think there could well be difficulties with that proposition, though it would need to be decided on the basis of fuller argument than I have heard. If it arose for decision, it could fall to be decided by an arbitration tribunal, sitting in private, subject to a challenge in the High Court under the Arbitration Act 1996, rather than by an employment tribunal.
59. If the validity of Irwell's arbitration clause were to arise in this case, I think the better view is that the clause is void as against the claimant by reason of section 203 of the ERA and section 144 of the EqA. An arbitration clause of the type in this case, requiring the claimant (as statutory transferee of the rights of Hemingway, the insured) to submit his dispute with Irwell to arbitration, would in my view limit the operation of the provisions of the ERA and EqA relied on by the claimant as against Hemingway, not to mention Mr Draycott.
60. Those provisions would not be as fully functional as they would be if the arbitration clause were absent. If the clause is read with the law on transferred rights in section 2 of the 2010 Act and if it is invoked by the insurer, the third party is put in the position of either asking the arbitral tribunal rather than the employment tribunal to rule on the underlying dispute with the insured – probably against opposition from the insured, if made a defendant and if present – or litigating on two fronts before different tribunals; in the employment tribunal as against the insured (and any other party such as Mr Draycott in the present case) and in the arbitral tribunal as against the insurer.
61. I think those consequences are sufficient to render the arbitration clause void, though my observations to that effect are of course obiter. My reason for allowing this appeal is my decision that the learned judge below was wrong to reject jurisdiction over the claim against Irwell under the 2010 Act, for reasons I have given earlier."
Authorities on whether a tribunal is a "court"
"But in my judgment, not every court is a court of judicature, i.e. a court in law. Nor am I prepared to assume that Parliament intends to establish a court as part of the country's judicial system whenever it constitutes a court. The word 'court' does, in modern English usage, emphasise that the body so described has judicial functions to exercise; but it is frequently used to describe bodies which, though they exercise judicial functions, are not part of the judicial system of the kingdom ... When therefore, Parliament entrusts a body with a judicial function, it is necessary to examine the legislation to discover its purpose. The mere application of the 'court' label does not determine the question; nor, would I add, does the absence of the label conclude the question the other way."
"In my judgment it is. I say this for a number of reasons. First, ……. an industrial tribunal has many of the characteristics to which the authorities refer as being those of a court of law. It is true that it is not a court of record and its monetary awards have to be enforced and taxation of costs carried out by the county court; that although in practice it observes the rules of evidence it is not strictly bound to do so; that there are conciliation proceedings available involving the Advisory Conciliation and Arbitration Service; and that rights of audience are not limited to lawyers. But it was established by Parliament, it has a legally qualified chairman appointed by the Lord Chancellor, and, like the Employment Appeal Tribunal, which is a court of record, other members representing employers and employees drawn from panels compiled by the Secretary of State for Employment, It sits in public to decide cases which affect the rights of subjects and it has power to compel the attendance of witnesses, administer oaths, control the parties' pleadings by striking out and amendment and order discovery; the parties before it can have legal representation; it has rules of procedure relating to the calling and questioning of witnesses and addresses on behalf of the parties; it can award costs; it must give reasons for its decisions which, on a point of law, can be appealed to the Employment Appeal Tribunal and Court of Appeal. In all, it appears to me to exercise judicial functions."
"16. Logically, there are two distinct questions – first, whether the 1978 Act on its true construction confers a right to contribution in the case of liability for discrimination in the employment field; and secondly whether, if so, the employment tribunal itself has jurisdiction to determine such claims or whether they can be brought only in the ordinary courts. No doubt the two questions are related: for one thing, it would be inconvenient, to put it no higher, if the Act did confer such rights but a party seeking to enforce them had to start a separate claim in the County Court. Nevertheless we think it important in the interests of clear analysis to take them separately. We start with the question of jurisdiction.
17. The starting-point is that any jurisdiction to consider contribution claims of the kind in question must derive not from the 1978 Act, which is concerned simply with the creation of a right to contribute rather than with the question of where it may be enforced, but from the statutes which expressly confer jurisdiction on the employment tribunal. This was indeed common ground between the parties. The case advanced by Mr Reade on behalf of the Council was not that the 1978 Act as such conferred the relevant jurisdiction but rather that the jurisdiction of the employment tribunal to determine the primary claims brought with it the power to determine any contribution claims between the respondents.
18. Each of the anti-discrimination statutes now superseded by the 2010 Act has its own provision conferring jurisdiction on the employment tribunal, but they are in substantially identical terms. In the present case the relevant statute is the Sex Discrimination Act 1975. Section 63 reads (so far as material):
"Jurisdiction of employment tribunals
(1) A complaint by any person ("the complainant") that another person ("the respondent")—
(a) has committed an act of discrimination or harassment against the complainant which is unlawful by virtue of Part II or section 35A or 35B, or
(b) is by virtue of section 41 or 42 to be treated as having committed such an act of discrimination harassment against the complainant,
may be presented to an employment tribunal.
19. In our view it is plain that that provision does not confer jurisdiction to entertain a claim under the 1978 Act. A contribution claim is not a claim "by … [a] complainant" that a respondent has committed an act of discrimination: it is a claim by a respondent that another person has committed such an act.
21. We accordingly believe that the Tribunal was right to hold that it had no jurisdiction to entertain the Council's contribution claim, and the appeal must be dismissed. It follows that we do not strictly have to decide the question whether the Council has such a claim at all, albeit justiciable in the County Court or High Court rather than the employment tribunal. But we heard extensive submissions on the question, and we think we should express our view.
22. It was the Unions' case that the 1978 Act is concerned only with liabilities falling for determination in the High Court or County Court and thus that it creates no right to contribution in relation to liabilities for discrimination in the employment field. Mr Millar and Mr White, for the Unions, placed particular reliance on section 1 (6) of the Act, which defines the liability in respect of which contribution may be awarded as being a liability established, or capable of being established, in an "action"; and on section 2 (1), which refers to the assessment of contribution "by the court". Although neither "action" nor "court" is defined (save for the provision in section 6 (1) that an action means "an action brought in England and Wales"), they submitted that the two terms taken together can only fairly be read as referring to court proceedings. Both terms have technical meanings well understood by lawyers. Specifically:
(1) In relation to "action" we were referred to section 225 of the Judicature Act 1925, which ultimately derives from the Judicature Act 1873 and defines "action" as "a civil proceeding commenced by writ or in such other manner as may be prescribed by Rules of Court". In Herbert Berry Associates Ltd v Inland Revenue Commissioners  1 WLR 1437 Lord Simon said, at p. 1446C:
"The Companies Act 1948 is a statute dealing with technical matters, and one would expect the words therein to be used in their primary sense as terms of legal art. The primary sense of "action" as a term of legal art is the invocation of the jurisdiction of a court by writ, …".
Mr Millar pointed out that the Employment Tribunals Act 1996 used the term "action" in precisely this technical sense in the section empowering the minister to confer jurisdiction on employment tribunals to hear contractual claims: see section 3 (2).
(2) In relation to "court" we were reminded that when the legislature means that term to cover tribunals it says so expressly: see, e.g., sections 12 (3) and 13 (5) of the Administration of Justice Act 1960; section 19 of the Contempt of Court Act 1981; and section 37 of the Freedom of Information Act 2000. Otherwise the "court" and "tribunal" are recognised as distinct: Mr Millar pointed out that the 1996 Act expressly designates the Employment Appeal Tribunal, but not employment tribunal, as a court of record (section 20 (3)).
The Unions also took the point that the Employment Tribunal Rules of Procedure contain no provisions equivalent to those of Part 20 of the Civil Procedure Rules under which a contribution claim may be brought and if necessary the party against whom contribution is sought brought into the proceedings.
23. It was Mr Reade's case that the Unions' focus on the words "action" and "court" was unduly narrow and technical. More particularly:
(1) We were referred to the decision of the Divisional Court in Peach Grey & Co. v Sommers  ICR 549, in which, purporting to follow observations made in the House of Lords in Attorney General v British Broadcasting Corporation  AC 303, it was held that an industrial tribunal was an "inferior court" within the meaning of RSC O.52 so that it had jurisdiction to punish an act of contempt. We were also referred to Vidler v UNISON  ICR 546.
(2) Mr Reade submitted that the language of "actions" was now largely obsolete and that courts and tribunals used similar language of "claim" and "claim form".
As to the absence of any procedural rules corresponding to Part 20 of the CPR, he submitted that rule 10 of the Rules of procedure gave tribunals wide procedural powers; and that in any event any lacuna in such powers could not affect the existence of the substantive right.
24. We prefer the Unions' submissions. In our view the natural reading of the sections on which they rely is indeed that the 1978 Act is concerned only with claims justiciable in the ordinary courts. No doubt the use of the words "court" and "action" is not conclusive, as the cases referred to by Mr Reade show; and it would be possible to construe them expansively if the context showed that that was the intention of Parliament. But we can see nothing in the context to suggest any such intention or that the draftsman was not using the technical language that he did in the sense in which it would normally be understood by lawyers. It is also necessary to bear in mind the legislative history. If the 1978 Act had been a wholly new creation it would have been at least reasonable to argue that Parliament must have intended to cover the statutory torts of discrimination which were by then already in existence (albeit fairly freshly-minted), even if the language was rather inept for the purpose. But the essential provisions of the 1978 Act derive from the 1935 Act, and although the former was intended to extend the scope of the latter that was only in certain limited and specific respects. We do not regard this point as decisive, since in principle it would be possible to construe the statute as "always speaking" and thus as applying to subsequently-created rights; but in our view the argument nevertheless carries some weight……………..
25. The construction which we favour also has the merit of being consistent with our conclusion on the issue of jurisdiction. If it were otherwise the position would be that Parliament had created a right to contribution as between joint or concurrent discriminators in the employment field but had incompetently neglected to give the appropriate jurisdiction to employment tribunals to enforce those rights, whereas in our view it has provided for no right to contribute in this field at all, which is a more coherent position. The truth as we see it is that the legislature has simply failed to consider the question of contribution in the context of liability for unlawful discrimination, and since the right to contribution is a creature of statute we cannot repair that omission.
26. We do not regard this conclusion with any satisfaction. … Be that as it may, however, in our view any right to contribution, whether precisely mirroring the position as regards common law claims or modified to some extent to suit the employment context, can only be created by Parliament."
"Every statute other than a pure consolidating statute is, after all, enacted to make some change, or address some problem, or remove some blemish, or effect some improvement in the national life. The court's task, within the permissible bounds of interpretation, is to give effect to Parliament's purpose. So the controversial provisions should be read in the context of the statute as a whole, and the statute as a whole should be read in the historical context of the situation which led to its enactment."
The arbitration issue
"(1) A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter.
(4) On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed."
"………The statements of principle set out in the textbooks referred to above are simply recognitions that the scope of even the most widely drafted arbitration agreement will have to yield to restrictions derived from other areas of the law. Sections 9(4) and 81 of the AA 1996 confirm this. But the source of those restrictions is to be found elsewhere. ……………One can point to a number of examples of statutory intervention designed to preserve a right of access to the courts. In the field of matrimonial law post-nuptial agreements dealing with maintenance on any subsequent separation were held to be unenforceable on grounds of public policy insofar as they purported to remove the right of the parties to apply to the Court for financial relief. This reservation is now statutory: see Hyman v Hyman  AC 601 and ss 34-36 of the Matrimonial Causes Act 1973. In relation to employment and discrimination, there are statutory restrictions on the enforceability of any agreement which excludes or limits an employee's access to the employment tribunal: see Employment Rights Act 1996 s 203 and Equality Act 2010 s 144(1) as discussed in Clyde & Co LLP v Van Winkelhof  EWHC 668 (QB)."
Lord Justice Flaux:
Lord Justice Males:
UPON the hearing of the appeal against the Judgment and Order of the Employment Appeal Tribunal dated 16 December 2019.
AND UPON hearing Mr David Mitchell of Counsel for the Appellant and Mr David Gray-Jones of Counsel for the First Respondent.
AND UPON the Second and Third Respondents being neither present nor represented.
IT IS ORDERED THAT
1. The appeal is dismissed;
2. The Appellant shall pay the First Respondent's costs of the appeal to the Court of Appeal on the standard basis. Costs are to be assessed if not agreed.