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Industrial Tribunals Northern Ireland Decisions


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URL: http://www.bailii.org/nie/cases/NIIT/2014/458_12IT.html
Cite as: [2014] NIIT 458_12IT

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THE INDUSTRIAL TRIBUNALS

 

CASE REFS:   458/12

3010/11

2973/11

1463/11

 

CLAIMANT:                      Paul Keogh

 

 

RESPONDENT:                Banbridge and District Citizens Advice Bureau

 

 

COSTS DECISION

 

The unanimous decision of the tribunal is that the claimant is ordered to pay costs to the respondent in the sum of £10,000.00 (ten thousand pounds) inclusive of VAT.

 

 

Constitution of Tribunal:

 

Employment Judge:         Employment Judge Murray 

 

Members:                        Mr D Hampton

                                        Mr P McKenna

 

 

Appearances:

 

The claimant did not appear and was not represented.

 

The respondent was represented by Mr B Mulqueen, Barrister-at-Law instructed by Ms McAloon of Worthingtons Solicitors.

 

 

REASONS

 

1.       The respondent claimed costs in the sum of £10,000.00 on the grounds that the claimant had behaved vexatiously and/or unreasonably and that the bringing or conducting of the proceedings was misconceived.

 

2.       Mr Keogh gave notice that he did not intend to attend the costs hearing stating the following in his email of 17 August 2014:

 

          “Dear Panel Members

 

1.               I will not be contesting nor will I be in attendance at the costs hearing on 19th August 2014 as I take the view that there is absolutely no prospect of my positively influencing the outcome of this hearing.

 

2.               Whilst my conscience is absolutely clear, so too is your judgement.  I could advance a myriad of reasons as to why I believe lost the case but they will just sound boring and conspiratorial.

 

3.               The fact is that all the whining in the world will not change a thing.  The judgement handed down is damning.  I did not accept it and appealed, but the Court of Appeal’s judgement was every bit as damning.

 

4.               I certainly will not be asking for clemency or making any pleas to this Tribunal.  I cannot abide that form of hypocrisy!  I believed fully in my claims.  I stood on my feet without prompt and brought the Tribunal through my evidence with ease.  I did so because I knew I was telling the truth.  But my truth was not accepted.

 

5.               Six years of struggle are at an end, because I have decided also to drop my claim against Newry & Mourne CAB in case ref 2435/11/IT.  The definition of insanity, as proffered by Albert Einstein, is to do something over and over again expecting different results.  The pursuit of this claim will be self-defeating!  I know that [redacted] actions, in releasing my medical records, were motivated by revenge following my earlier triumph over NMCAB.  But I also know in my heart that I cannot win.  Ultimately I have alienated the very institution that has the power to give me a remedy.  Not only is said institution not going to remedy my claims; it is highly likely, if I persevere, to further punish me.  Punishing me also means punishing my family, and I am no longer prepared to bring this upon them.

 

6.               It has been an incredible journey.  Two trips to the Court of Appeal and multiple claims to this institution have taught me a massive amount about myself.  Despite ultimately losing it has been a real privilege to hold Citizens Advice and the OIT to account.  I stand on the brink of bankruptcy but I would not change a thing.  Many people ask the question: ‘What price truth?’  Few however are prepared to pay its price!  I was prepared to put everything I own on the line for my beliefs.  I started off this process a homeowner and end it in rental accommodation.  But I say again I would not change a thing!  I have nothing more to prove.  I have made my point; I have shown my courage; I need do no more!

 

7.               And so this just leaves me with the task of congratulating Louise McAloon and Barry Mulqueen on their victory.  I will take much consolation from the fact that it took both them and a small army to stop me, but stop me they have!

 

8.               I will simply end by saying that I have wasted enough of my life fighting two institutions.  Now it is time to attend to my wife and two boys and to start the job of rebuilding our future.  Finally, always remember that whilst you may seek to attach shame to me I will not apprehend it – not because I have no conscience, but because my conscience is clear!

 

Yours faithfully

 

 

Paul Keogh”

 

 

THE LAW

 

3.       The tribunal’s power to award costs is contained in the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (NI) 2005 (“the Rules”). The general power is outlined at rule 38.  The two specific rules invoked by the respondent were rule 40(2) and rule 40(3) which state as follows:-

 

“40(2) – A tribunal or chairman shall consider making a costs order against a paying party where, in the opinion of the tribunal or chairman (as the case may be), any of the circumstances in paragraph (3) apply.  Having so considered, the tribunal or chairman may make a costs order against the paying party if it or he considers it appropriate to do so. 

 

40(3) – The circumstances referred to in paragraph (2) or where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived.”

         

4.       “Misconceived” is defined at Regulation 2 as follows:-

 

                    “misconceived includes having no reasonable prospect of success”.

 

          The tribunal’s jurisdiction in relation to costs is outlined in Harvey on Industrial Relations and Employment Law at division P1 paragraphs 1044 – 1120 and at Division T Practice and Procedure at paragraphs 1026-1080.  Harvey suggests that the test is more than a simple objective assessment of whether the claimant knew or ought to have known that his case lacked substance or merit.  The tribunal must look at not just the proceedings themselves but the claimant’s conduct in bringing or conducting the proceedings and one potential factor can be the respondents’ failure to apply to strike out the claim or to apply for a deposit at an earlier stage.

 

5.     Harvey states at Division T paragraph 1047:-

 

“When considering whether to award costs in respect of a party’s conduct in bringing or pursuing a case that is subsequently held to have lacked merit, the type of conduct that will be considered unreasonable by a Tribunal will obviously depend on the facts of the individual case, and there can be no hard and fast principle applicable to every situation.  In general, however, it would seem that the party must at least know or to be taken to have known that his case is unmeritorious (see Cartiers Superfoods Ltd  v  Laws [1978] IRLR 315).”

 

6.     The tribunal must go through a two-stage process in determining whether to award costs.  Firstly, a tribunal must determine whether the respondent in conducting the proceedings acted vexatiously or unreasonably.  This is the threshold test.  Secondly, the tribunal must decide whether or not it is appropriate to exercise its discretion to award costs in the particular circumstances of the case.  (See Criddle  v  Epcot Ltd [UKEAT/0275/05] and Khan  v  Kirklees BC [2007] EWCA Civ 1342.)

 

7.     Costs Orders are exceptional in nature in the tribunals where costs do not normally follow the event as in the Civil Courts.  In Gee  v  Shell UK Ltd [2003] IRLR 82 Sedley LJ stated:

 

“It is nevertheless a very important feature of the employment jurisdiction that it is designed to be accessible to ordinary people without the need of lawyers, and that – in sharp distinction from ordinary litigation in the UK – losing does not ordinarily mean paying the other side’s costs”.

 

8.     An Order for Costs must be compensatory and not punitive.

 

9.     The tribunal must have regard to the overriding objective and to the comments of Girvan LJ in the case of Peifer  v  Castlederg High School and Western Education & Library Board & Another [2008] NICA 49 where Girvan LJ stated as follows:-

 

                    “Tribunals should be encouraged to use their increased costs powers set out in the Rules of Procedure to penalise time-wasting or the pursuit of cases in a way which unduly and unfairly increases the costs falling on opponents.

                   

                    ...

 

When parties before the Tribunal appear in person, without the benefit of legal representation, the lack of legal experience on the part of an unrepresented party may lead to the pursuit of irrelevancies and unnecessary lengthy proceedings.  Whilst Tribunals must give some latitude to personal litigants who may be struggling in a complex field they must also be aware that the other parties will suffer from delay, incur increased cost, be exposed to unstructured and at times irrelevant cross-examination.  While we must have sympathy for a Tribunal faced with such a situation the Tribunal remains under the same duty to ensure that the overriding objectives and Regulation 3 are pursued.”

       

10.   One of the leading cases in relation to the exercise of the discretion is the case of Macpherson v BNP Paribas [2004] EWCA Civ 569 where the Court of Appeal held that there was no necessity for a causal link between the party’s unreasonable behaviour and the costs incurred by the receiving party. The Court stated:

 

“In exercising its discretion to award costs, the tribunal must have regard to the nature, gravity and effect of the unreasonable conduct.  However, the discretion is not limited to those costs that are caused by or attributable to the unreasonable conduct.  The unreasonable conduct is a pre-condition of the existence of the power to order costs and it is also a relevant factor to be taken into account in deciding whether it makes an order for costs and the form of the order, but that is not the same as requiring a party to provide that  specific unreasonable conduct caused the particular costs to be incurred.”

 

11.     In the case of Barnsley Metropolitan Borough Council  v  Yerrakalva [2011] EWCA Civ 1255, Mummery LJ reviewed the authorities in relation to the issue of costs and provided guidance as to the correct approach to be adopted in an appeal against a costs order.  Mummery LJ said:

 

“7. As costs are in the discretion of the ET, appeals on costs alone rarely succeed in the EAT or in this court.  The ET’s power to order costs is more sparingly exercised and is more circumscribed by the ET’s rules than that of the ordinary courts.  There the general rule that costs follow the event and the unsuccessful litigant normally has to foot the legal bill for the litigation.  In the ET costs orders are the exception rather than the rule. In most cases the ET does not make any order for costs.  If it does, it must act within rules that expressly confine the ET’s power to specified circumstances, notably unreasonableness in the bringing or conduct of the proceedings.  The ET manages, hears and decides the case and is normally the best judge of how to exercise its discretion.

 

8. There is therefore a strong, soundly based disinclination in the appellate tribunals and courts to upset any exercise of discretion at first instance. In this court permission is rarely given to appeal against costs orders.  I have noticed a recent tendency to seek permission more frequently. That trend is probably a consequence of the comparatively large amounts of legal costs now incurred in the ETs.

 

9. An appeal against a costs order is doomed to failure, unless it is established that the order is vitiated by an error of legal principle, or that the order was not based on the relevant circumstances.  An appeal will succeed if the order was obviously wrong.  As a general rule it is recognised that a first instance decision-maker is better placed than an appellate body to make a balanced assessment of the interaction of the range of factors affecting the court’s discretion.  This is especially so when the power to order costs is expressly dependent on the unreasonable bringing or conduct of the proceedings.  The ET spends more time overseeing the progress of the case through its preparatory stages and trying it than an appellate body will ever spend on an appeal limited to errors of law.  The ET is familiar with the unfolding of the case over time.  It has good opportunities for gaining insight into how those involved are conducting the proceedings.  An appellate body’s concern is principally with particular points of legal or procedural error in tribunal proceedings, which do not require immersion in all the details that may relate to the conduct of the parties.

...

41. The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had. …”

 

12.     In a decision of the EAT in the case Peat & Others  v  Birmingham City Council [UKEAT/0503/11], Supperston J noted that for a party to succeed in arguing for costs on the basis of unreasonable conduct, it was not necessary to show that the other party had no reasonable prospect of success.  He held that if the claimant’s solicitors had engaged with the issues and the costs warning letters they likely would have appreciated that the claimant’s reasonable prospects of success was so thin that it was not worth going to the hearing. 

 

13.     In the case of Arrowsmith v Nottingham Trent University [2011] EWCA Civ 797, ICR 159, the Court of Appeal held that lying in evidence can found an Order for costs as this is one of the factors the tribunal can take into account in deciding whether an Order for costs is appropriate.

 

14.     In Harvey at Division P1 paragraph 1052.01 it is stated:-

 

“The Court of Appeal has emphasised that a lie will not necessarily, of itself, be sufficient to find an Order for Costs (nor, conversely, will the absence of a lie necessarily mean that there cannot be a finding that the proceedings have been brought or conducted unreasonably or are misconceived … .”

 

15.     The classic definition for vexatious claims is found in the case of ET Marler Ltd  v  Robertson [1974] ICR 72, as follows:-

 

“ … an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some other improper motive, he acts vexatiously.” (emphasis added)

 

          The Court made clear that this was a high hurdle for a party to show, stating:-

 

“ … it is a serious finding to make against an applicant, for it will generally involve bad faith on his part and one would expect that discretion to be sparingly exercised … .”

 

16.     In the case of HM Attorney General  v  Bentley [2002] (UKEAT/0556/11) the Tribunal referred to the judgment of Bingham CJ, the EAT quoted from the case of HM Attorney General  v  Barker [2002] SCR 1, as follows:

 

 “The hallmark of vexatious proceeding is in my judgment that it has little or no basis in law (or at least no discernible basis); that, whatever the intention of the proceedings may be, its effect is to subject the defendant to inconvenience, harassment and expense out of all proportion to any gain likely to accrue to the claimant, and that it involves an abuse of the process of the Court, meaning by that a use of the Court process for the purpose or in a way which is significantly different from the ordinary and proper use of the Court process.”

 

17.     The Employment Appeal Tribunal also referred to the judgment of Rimer J, as he then was, in the case of HM Attorney General  v  Roberts [2005] AER (D) 138, when at Paragraph 6 of his judgment he said as follows:-

 

“Most cases of allegedly vexatious litigants, as Lord Bingham there points out (in a reference to Barker), concern repeated claims or applications in respect of one particular matter by which the litigant has become obsessed, commonly involving the same defendant or defendants.  In the employment law field this is a less common feature.  Instead, what is commonly seen in the making of repeated applications of a like time to Employment Tribunals, usually against different respondents but founded on the like-basis … .”

 

18.     In the case of A Q Ltd  v  Holden [UKEAT/0021/12], in the Employment Appeal Tribunal His Honour Judge Richardson stated:-

 

“Justice requires that Tribunals do not apply professional standards to lay people, who may be involved in legal proceedings for the only time in their life … lay people are likely to lack the objectivity and knowledge of law and practice brought by a professional legal adviser.  Tribunals must bear this in mind when assessing the threshold test in Rule [40(2)].  Further, even if the threshold test for an Order for Costs are met, the Tribunal has discretion whether to make an Order.  This discretion will be exercised having regard to all the circumstances.  It is not irrelevant that a lay person may have brought proceedings with little or no access to specialist help and advice.  This is not to say that lay people are immune for an Order for Costs; far from it as the case has made clear.  Some litigant-in-persons are found to have behaved vexatiously or unreasonably even when proper allowance is made for their inexperience and lack of objectivity … .”

 

19.     In the case of Jackson  v  Walsall Metropolitan Borough Council [UKEATPA/1247/10], the Employment Appeal Tribunal decided that it would not interfere with the Employment Tribunal’s discretion to award costs against a claimant whose five claims had been dismissed, noting the claimant was a barrister with special experience in employment law and this meant that she should be alert to weaknesses in her case.  It also confirmed that a barrister specialising in employment law and asserting her knowledge is particularly open to scrutiny.

 

20.     The Rules provide at Rule 41(2) that:-

 

“The tribunal or chairman may have regard to the paying party’s ability to pay when considering whether it or he shall make a costs order or how much that order should be.”

 

21.     The case of Jilley UK emphasises the importance of taking account of the claimant’s means although a lack of means to pay is not a bar to a costs order being made.  (Jilley  v  Birmingham & Solihull Mental Health NHS Trust [UKEAT/0584/06/DA]):-

 

“[53]   The first question is whether to take the ability to pay into account.  The tribunal has no absolute duty to do so.  As we have seen, if it does not do so, a County Court may do so at a later stage.  In many cases it will be desirable to take means into account before making an order; ability to pay may affect the exercise of an overall discretion, and this course will encourage finality and may avoid lengthy enforcement proceedings.  But there may be cases where for good reason ability to pay should not be taken into account; for example, if a paying party has not attended or has given unsatisfactory evidence about means.” (emphasis added)

 

FINDINGS OF FACT AND CONCLUSIONS

 

22.     By a decision of the tribunal promulgated on 24 January 2013, the claimant’s four claims against the respondent were dismissed following an eleven-day hearing in December 2012.

 

23.     In essence, the decision of the tribunal was that the claimant, in collusion with others, concocted a claim and raised spurious allegations of sex discrimination and unfair dismissal, in addition to detriment and dismissal on grounds of having made a series of protected disclosures and on grounds of having made a series of health and safety disclosures.

 

24.     At paragraph 6.3 of the decision, the tribunal found that the claimant produced extremely lengthy and diffuse documentation as part of an apparent tactic to paralyse the respondent.  This practice of producing extremely long documents in relation to these proceedings began with the claim forms which ran to approximately 400 pages of typed narrative and included whole documents and extracts from documents.  The claims originally were against 12 respondents.  In addition the replies ran to 100 pages and set out 35 alleged disclosures and 120 alleged detrimental acts.

 

25.     Mr Mulqueen drew our attention to paragraphs 6.5, 6.8(5), 6.68, 6.92, 6.93, 6.95(2) and (3), 6.99, and 7.8.  All of these paragraphs state our findings that essentially the claimant conducted a campaign to penalise the respondent and to formulate a set of claims based on spurious allegations.

 

26.     We are mindful of the fact that the legal authorities set a high hurdle for vexatious claims, but it is our view that the claimant in this case acted vexatiously in bringing and conducting his claims in bad faith and with a view to making the claims harder and more costly for the respondent to deal with.  We so find for the following principal reasons:-

 

          (1)      We found that the claimant lied in relation to several key events and that he colluded with his witnesses to pursue claims which were without merit. 

 

          (2)      It is our view that the extremely lengthy correspondence and claim forms and interlocutory documents in relation to these proceedings were a continuation of the claimant’s tactic (deployed during his employment) of trying to make things difficult for his opponent.

 

          (3)      The claimant’s treatment of the tribunal Orders in relation to witness statements and his persistence in failing to comply with those Orders and yet trying to use witness statements during the hearing were, in our view, a tactic to make it more difficult and costly for his opponents to deal with these proceedings.

 

          (4)      During the previous hearing it was common case that the claimant was a specialist adviser who presented claims in the industrial tribunal and other tribunals and was the holder of a law degree.  The claimant at the relevant time was an experienced representative with clear familiarity with employment law and procedure.  Despite this, he pursued unmeritorious   claims based on evidence which we found to be untrue.  The claimant therefore pursued these proceedings in bad faith.

 

          (5)      It was clear from the claimant’s behaviour at hearing that he was a confident advocate with experience of the law and procedure.  From the hearing and correspondence it was clear that he was familiar with Court processes.  Nevertheless the claimant suggested an unreasonable timetable stating that he would need 36 hours (that is six days) to present his evidence and he unreasonably refused to agree a reasonable timetable taking account of the short employment and the limited number of key events relied upon by him.  This meant that a timetable had to be imposed and the claimant sought to exceed that on every occasion.   We find this to be indicative of the claimant’s attitude which was to try to lengthen proceedings to increase costs for the respondents.

 

27.     If we are wrong that the claimant’s behaviour amounts to vexatious behaviour, it certainly amounts to unreasonable behaviour in our judgement. 

 

28.     The effect of the vexatious/unreasonable behaviour was as follows:

 

          (1)      Two CMDs, which took place on 15 and 24 October 2012, were unnecessary            as they had to be arranged to deal with the claimant’s failure to comply with                   the tribunal Orders in relation to witness statements;

 

          (2)      The substantive hearing was lengthened because witness statements had to                     be abandoned because of the claimant’s behaviour and time was wasted at            the outset of the hearing when the claimant tried to reintroduce statements;

 

          (3)      Throughout the hearing the claimant had to be reminded to focus on the           issues and to pick out relevant parts from the voluminous documentation           which he said supported his claim.  This prolonged the hearing;

 

(4)      The claimant’s four claims generated an inordinate amount of documentation         which led to four lever arch files of documents being presented during the hearing.  We accept Mr Mulqueen’s assessment that the papers generated for the respondent ran to six or seven lever arch files;

 

(5)      Half a day was lost on the last day of hearing because the claimant simply           failed to turn up because he wanted more time to prepare his submissions   without reference to the tribunal or the respondent.   (Paragraph 5.2 of the      tribunal’s decision).

 

29.     We further find that the claimant’s claims were misconceived as they had little reasonable prospect of success given our finding that the claimant knew that he was pursuing claims which had no merit.

 

30.     We therefore find that the conduct of the claimant meets the threshold test in the Rules and we now turn to whether or not it is appropriate to award costs in this case.

 

31.     We have no hesitation in deciding that it is appropriate to award costs in this case primarily because we found that the claimant pursued the claims in bad faith. 

 

32.     Whilst it is the case that one does not judge a claimant by the standard of a professional adviser if the claimant is unrepresented, in this case the claimant was clearly familiar with litigation processes and produced submissions quoting extensively from legal provisions and authorities.  This is not therefore a case of a claimant acting in ignorance of the law or unable to assess the merits of his claim.  The claimant was well able to assess the merits and demerits of his claim as he was well able to argue his case at hearing on the facts and the law.  These are factors supporting our conclusion that costs are appropriate in this case following unreasonable and/or vexatious conduct.

 

33.     The claimant was on notice that the respondent intended to pursue him for costs by virtue of the following:

 

(1)            In the response form when it was made clear that the respondent’s view was that the claims were misconceived, vexatious, abusive and unreasonable.

 

(2)            The costs risk was referred to at the CMD on 11 June 2012.

 

(3)            Ms McAloon made clear the respondent’s intention in relation to costs in an email of 1 December 2012 in response to the claimant’s email of 28 November 2012.  That email of the claimants was headed: “Without prejudice save as to preparation time order”, and sought compensation which, the claimant suggested, should be paid in two parts in two different tax years.  In that email the claimant stated that he had been working non-stop since April 2012 on a similar wage to that received in the respondent’s employ. 

 

34.     Whilst the respondent sought costs of £10,000.00 being the upper limit for any Order of the tribunal, the bill of costs drawn up by the respondent amounted to the sum of £47,370.36 which includes professional fees outlays and counsel’s fees.  We find that the behaviour of the claimant led to increased work for the respondent’s representatives and a longer hearing which in turn led to a bill of such magnitude. 

 

35.     We turn now to the claimant’s means.  It was made clear to the claimant in advance of the hearing that the tribunal would hear oral and written evidence in relation to his earnings, outgoings and savings.  Prior to the costs hearing, the respondent’s solicitor rightly sought details in relation to the claimant’s means following the production of some documentation by him which appeared to be incomplete.

 

36.     We therefore had some documentary evidence and a statement by the claimant of his alleged income, outgoings, business debts, and domestic debts.

 

37.     It is our view that the financial details provided are clearly selective.  For example, the claimant provided evidence that his house was for sale and agreed for sale, but despite being asked to provide the price agreed, he failed to do so.  In addition the claimant gave a list of business debts, amounting to approximately £18,350.00            with no vouching documentation.  There was no information given by way of accounts or an accountant’s statement in relation to the earnings Mr Keogh may have received in that business.  The tribunal notes that in the course of the hearing the claimant sought sizeable future loss of earnings in relation to his business, yet we had no information in the costs hearing as to what had happened to the business.

 

38.     When the costs hearing was arranged the letter confirming the date of hearing made it clear that evidence of income outgoings and means would be required.  The claimant was therefore under no illusions about what would be involved in the costs hearing and he chose not to attend and chose to provide selective evidence relating to his means when he must have known that failure to attend would mean that he would not be subjected to questioning on the limited evidence provided.

 

39.     We have looked at the claimant’s means, insofar as we have been given details of them, and we draw the inference that the claimant likely has capital from the sale of his house.  Having considered the claimant’s means, it is our conclusion that an order for £10,000.00 costs (being the maximum which we can award) is appropriate in this case.  We decline to discount this sum given the paucity of selective financial evidence from the claimant and given the fact that he chose not to attend the costs hearing and thereby avoided submitting to cross-examination in relation to his means.      

 

40.     In the email of 1 December 2012 the respondent’s solicitor made overtures to the claimant in relation to a possible economic settlement without putting any figure on it and stating that she had no instructions to make such a settlement.  In the costs hearing Mr Mulqueen relied on that as a Calderbank offer.  We have discounted that in our assessment of whether costs are payable as: no sum was offered; there was no firm offer of settlement; and the solicitor made it clear that she had no instructions so it amounted to no more than a ‘sounding out’ of the claimant.

 

41.    In conclusion we award the sum of £10,000 costs inclusive of VAT to the respondent.

 

         

 

 

 

Employment Judge:      

 

 

Date and place of hearing:         19 August 2014, Belfast. 

 

 

Date decision recorded in register and issued to parties:

 

 


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