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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Verdin v Harrods Ltd [2005] UKEAT 0538_05_2112 (21 December 2005) URL: https://www.bailii.org/uk/cases/UKEAT/2005/0538_05_2112.html Cite as: [2005] UKEAT 538_5_2112, [2006] IRLR 339, [2005] UKEAT 0538_05_2112, [2006] ICR 396 |
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At the Tribunal | |
On 1 November 2005 | |
Before
HIS HONOUR JUDGE RICHARDSON
(SITTING ALONE)
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | MR NIRAN DE SILVA (of Counsel) Instructed by: Messrs Archon Solicitors Martin House 5 Martin Lane London EC4R 0DP |
For the Respondent | MR PAUL NICHOLLS (of Counsel) Instructed by: Messrs Nabarro Nathanson Solicitors Lacon House Theobald Road London WC1X 8RW |
SUMMARY
The Tribunal Chairman erred in law in concluding that Mrs Verdin's breach of contract claim should be dismissed.
Rule 25 of the Employment Tribunal Rules 2004 is to be construed in the light of Ako v Rothschild Asset Management [2002] IRLR 348.
A claim should be dismissed if (a) the Claimant is intending to abandon it or (b) if the Claimant is intending to resurrect it, it would be an abuse of the process to allow that to occur.
The Tribunal may dismiss part of a claim on withdrawal.
HIS HONOUR JUDGE RICHARDSON
25. (1) A claimant may withdraw all or part of his claim at any time - this may be done either orally at a hearing or in writing in accordance with paragraph (2).
(2) To withdraw a claim or part of one in writing the claimant must inform the Employment Tribunal Office of the claim or the parts of it which are to be withdrawn. Where there is more than one respondent the notification must specify against which respondents the claim is being withdrawn.
(3) The Secretary shall inform all other parties of the withdrawal. Withdrawal takes effect on the date on which the Employment Tribunal Office (in the case of written notifications) or the tribunal (in the case of oral notification) receives notice of it and where the whole claim is withdrawn, subject to paragraph (4), proceedings are brought to an end against the relevant respondent on that date. Withdrawal does not affect proceedings as to costs, preparation time or wasted costs.
(4) Where a claim has been withdrawn, a respondent may make an application to have the proceedings against him dismissed. Such an application must be made by the respondent in writing to the Employment Tribunal Office within 28 days of the notice of the withdrawal being sent to the respondent. If the respondent's application is granted and the proceedings are dismissed those proceedings cannot be continued by the claimant (unless the decision to dismiss is successfully reviewed or appealed).
(5) The time limit in paragraph (4) may be extended by a chairman if he considers it just and equitable to do so".
The Facts
"The Company will be required to give you 6 months' notice ….. The Company reserves the right to pay your salary in lieu of notice"
"18. In the circumstances, the Claimant avers that the Respondent is in breach of contract in that it (a) failed to pay the Claimant her salary in lieu of notice as a lump sum on termination; and/or (b) has ceased to make payment of her salary by instalments.
19. Having regard in particular (but without limitation) to the fact that there is no legal basis for the Respondent to avoid payment of the Claimant's salary, it is averred that the Respondent discriminated against the Claimant on the ground of the protected act referred to above by not continuing to pay her salary by instalments from 19 April 2005.
20. For the avoidance of doubt, the Clamant makes no claim for breach of contract in respect of the non-payment of bonus and reserves the right to bring proceedings in respect of the same in the High Court".
"We write further to receipt of your client's ET3.
We wish to clarify our client's position in so far as it relates to your client's failure to pay her notice pay.
It is our primary case that the decision to cease payments is victimisation. It is, accordingly, appropriate to bring the claim for loss of notice pay as part of our client's claim of sex discrimination within these Tribunal proceedings. It also promotes economy of proceedings since, if the claim for notice pay is dealt with by the Tribunal as losses arising by reason of victimisation, there will be no need for separate High Court proceedings (subject to a possible claim in relation to the non-payment of bonus).
If, as we expect, the Tribunal agrees that our client was victimised then the claim or loss of notice pay will not be subject to the £25,000 limit. However, it is not our intention to limit our client's claim for loss of notice pay to £25,000. Accordingly, the claim for loss of notice pay is not being pursued as a claim for breach of contract in the Tribunal. If the Tribunal makes no finding of victimisation, we will pursue the claim in respect of unpaid notice in the High Court.
In order that the matters set out above are clear on the pleadings, we intend to ask the Tribunal to allow the ET1 to be amended according to the marked-up draft attached. We will also notify the Tribunal of the reasons for the amendment/withdrawal of the breach of contract claim and ask the Tribunal to record the same".
The proposed amended Details of Complaint omitted paragraph 18 altogether. In paragraph 20 the words "in respect of the non payment of bonus" were omitted, so as to stipulate that no claim at all for breach of contract was made in the Tribunal proceedings.
"We write with regard to proposed amendments to the Details of Complaint which forms part of our client's ET1. The amendments concern the withdrawal of the claim for breach of contract in relation to the Respondent's failure to pay our client her salary in lieu of notice on termination of employment and their ceasing to make payments of her salary by instalments.
It is our primary case that the decision to cease payments is victimisation. It is, accordingly, appropriate to bring the claim for loss of notice pay as part of our client's claim for sex discrimination within these proceedings. However in the event that the Tribunal makes no finding of victimisation, our client would not wish to limit her claim for notice pay to the Tribunal breach of contract cap of £25,000. Accordingly, the breach of contract claim is being withdrawn on the express basis that, if the Tribunal makes not finding of victimisation, our client will be free to pursue her claim in respect of unpaid notice in the High Court.
Accordingly, we ask the Tribunal to allow the ET1 to be amended according to the marked-up attachment and to record the reasons for the withdrawal of the breach of contract claim..
We consider that the withdrawal of the breach of contract claim will result in an efficient streamlining of our client's claims and will thus assist the Tribunal in dealing with the proceedings efficiently and fairly. We have written to the Respondent's solicitors notifying them of this application and attach a copy of that letter".
Harrods' solicitors objected to the course proposed on behalf of Mrs Verdin. They pointed out that Mrs Verdin had without doubt brought her contract claim in the Tribunal. They said any attempt to re-litigate it in the High Court would be prevented by one legal principle or another – res judicata, or issue estoppel, or abuse of process. They said:
"We can see no basis on which the Claimant should be allowed to withdraw that claim having brought it. Her maximum recovery in this regard is accordingly £25,000. Any shortfall from what would have been her maximum recovery had the claim been correctly brought and won is a matter between the Claimant and her solicitors"
The Tribunal's decision
"The decision of the Chairman is to refuse the application for leave to amend to withdraw the complaint of breach of contract"
In paragraph 1.5.9 she said:
"It is still open to the Claimant to proceed with her complaint of breach of contract in the Employment Tribunal as currently pleaded and unless the Claimant indicates within 14 days of the promulgation of this decision that she intends to proceed with the claim of breach of contract in the Employment Tribunal that claim will be dismissed on withdrawal under rule 25(4) of the Employment Tribunal Rules of Procedure 2004"
Her reasoning appears from two passages:
"1.5.6. Ms Verdin in the present case seeks to withdraw her complaint of breach of contract, rely on her claim of victimisation in the Employment Tribunal and then, if not successful, bring a claim of breach of contract in the High Court. This is on a par with the situation in Sajid in that the subsequent proceedings in the High Court for breach of contract would be an attempt to re-litigate the same cause of action to recover the same sum due, if Ms Verdin is not successful with her claim of victimisation in the Employment Tribunal.
1.5.8 The Chairman was satisfied that the authorities indicate that having commenced a claim of breach of contract and wishing to withdraw it, the Claimant cannot simply request that it should not be dismissed to allow her to bring a claim in the High Court at some future date if she is unsuccessful in recovering the same sums through her complaint of victimisation in the Employment Tribunal".
In reaching her conclusion, the Chairman referred to and seems particularly to have had in mind London Borough of Enfield v Sivanandan [2005] EWCA Civ 10.
Submissions on appeal
Finality in litigation
Finality, withdrawal and dismissal
"The underlying policy of cause of action estoppel and related doctrines, which are usually classified under the heading res judicata, is that of finality in litigation and the avoidance of the multiplicity of proceedings. Save in special circumstances, it is contrary to public policy and may be an abuse of the process of the court to attempt to reopen in new proceedings a case which has already been litigated and finally determined by a court or tribunal in proceedings between the same parties or issues which could have been litigated properly between the parties in relation to the subject-matter of the earlier litigation. This doctrine embodies, in my view, a principle of justice, not just policy. In the absence of special circumstances, it is unjust for a party who spent time and money in obtaining a final determination of a claim or an issue in a claim to be faced with fresh proceedings from the other party seeking to re-litigate the same cause of action or the same issue".
He went on to say:
"Far from abandoning his claim for breach of contract, Dr Sajid was, in view of the quantum of his claim, seeking to preserve his full rights, having started proceedings in the High Court for same cause of action. He did so because of the limited nature of the jurisdiction of the Employment Tribunal over such claims. The order was made for the purposes of avoiding duality or multiplicity of proceedings, which would have been open to the objection of embarrassing duplicity, if they had not been determined in the way that they were by the Employment Tribunal. The order of 6th May was not, and could not have been, intended either by the parties or by the tribunal to constitute a final and binding determination dismissing Dr Sajid's claim. Its purpose was to enable his claim to be pursued and determined in a court which had the jurisdiction which the Employment Tribunal lacked".
Laws LJ said:
"22. I entirely agree. As my Lord has said, the policy which justifies the doctrine of cause of action estoppel is the need to prevent multiplicity of legal proceedings being raised upon the same issue. If this court were to allow this appeal, far from supporting that policy we should undermine it. The respondent's common law claim in the tribunal (being withdrawn) was, on 6th May 1999, dismissed upon the very premise and for the very reason that it should not be litigated there but in another forum. That dismissal thus supported the policy underlying the cause of action estoppel to which I have referred.
23. Mr Rogers' argument, if accepted, would entail the conclusion that a party acting as the respondent did here would find himself trapped by the very doctrine to which he had himself been loyal, forever barred from having his claim for damages over £25,000 litigated at all. If the law produced such a result we should be ashamed of it. But it does not. We do not allow salutary principles to be corrupted into instruments of injustice".
"In my judgment, the reasoning in Barber and Lennon does not require that cause of action estoppel, as applied in the ordinary courts, should apply to employment tribunal cases where it is clear, on an examination of the surrounding circumstances, that the withdrawal of the application is in substance a discontinuance of the proceedings. Discontinuance does not release or discharge the cause of action. It preserves the right to establish an untried claim on the merits in other proceedings. If, as I have explained, this is so in ordinary courts, it does not make any sense that the position should be more strict in its application in the less formal setting of the employment tribunals. Unless and until the Regulations of the employment tribunals are amended to deal with this point, it would be advisable for employment tribunals, on being notified of the withdrawal of an originating application, to ask the applicant for a statement of the circumstances of the decision to withdraw before deciding whether to make an order dismissing the proceedings".
Dyson LJ said at para 41:
"In my view, what emerges from these authorities is that there is no inflexible rule to the effect that a withdrawal or judgment by consent invariably gives rise to a cause of action or issue estoppel. If it is clear that the party withdrawing is not intending to abandon the claim or issue that is being withdrawn, then he or she will not be barred from raising the point in subsequent proceedings unless it would be an abuse of process to permit that to occur. On the facts of the present case, it is clear that Ms Ako did not intend to abandon her claim. Nor would it be unjust or unfair as between the parties to permit her to start again: no abuse of process is involved here".
The new Rule
The whole claim
Part of the claim
(1) To my mind, the most important consideration is the purpose of rule 25, with its enhanced distinction between withdrawal and dismissal. As I have found, an important part of the purpose is to enable the Tribunal to consider, at an early stage, whether the withdrawing party is intending to abandon the claim, and if the withdrawing party is intending to resurrect the claim in fresh proceedings, whether it would be an abuse of the process to allow that to occur. But this question may arise if part of a claim is being abandoned, just as it may arise if the whole claim is being abandoned.
Take as an example the case of Mr Sajid. He commenced proceedings in the Tribunal on three different grounds. He only withdrew the breach of contract claim. Under the rules prior to 2004, if loyal to the decision of the Court of Appeal in Ako, the Tribunal would have enquired into Mr Sajid's reasons, and only dismissed the breach of contract proceedings after such enquiry. Under the new rules it would do so if this was Mr Sajid's only claim. But if Mr de Silva's submissions are right, the Tribunal would not have any role in considering whether he intended to abandon that claim, or whether it would be an abuse of the process for him to do so. I see no sensible reason for this distinction.
(2) On a first reading one might conclude that rule 25(4) only applies in respect of the whole claim, by virtue of the reference to it in rule 25(3), and by reference to the consequence, namely that "the proceedings" are dismissed. But rule 25(4) does not expressly say "the whole claim", and I think that the words "the claim" should be read as meaning any cause of action, and that "the proceedings" should be read as meaning the proceedings in respect of that cause of action. In this way the essential purpose of rule 25, which does not to my mind depend on whether the whole or part of the claim is being dismissed, is fulfilled.
For these reasons I reject Mr. de Silva's submission that the Tribunal had no jurisdiction to dismiss part of the claim.
The decision in this case
Conclusions