The claimant filed his ET1 claiming unfair dismissal, disability and age discrimination, this claim form being presented to the respondent’s solicitors soon afterwards. Unfortunately, the respondent’s solicitors failed to lodge their ET3 in time, despite reminders from the respondents themselves. When the error was spotted, a solicitor from the firm lodged a ‘protective ET3’ and asked that time be extended because ACAS had written to the respondents explaining their difficulties with the workload and thus the respondents mistakenly thought they had extra time to lodge their ET3. At the same time, a ‘no response’ letter was sent to the respondents. The letter from the solicitor requesting extra time was treated as an application for review of the ‘no response’ decision, this application being refused by the Employment Judge partly on the basis that the ACAS letter did not support the respondents argument.

The EAT had to decide whether to admit evidence, not placed before the Employment Judge, which might persuade them that there was in fact a legitimate excuse for the delay. This new evidence was a witness statement from one of the solicitors of the firm, claiming that the respondent had behaved entirely appropriately and it was through no fault of theirs that the ET3 had been filed late. The EAT found that it could not admit this new evidence because it could have been put before the Employment Judge. However they also found that the Employment Judge had failed to consider either the prospective merits of the respondent’s defence to the claim or the balance of prejudice between the parties, and, rather than exercising their discretion to decide the case themselves, remitted the matter to the Employment Tribunal. The claimant’s application for costs under Rule 34A was refused on the basis that the rule concerned proceedings in the Employment Appeal Tribunal, not the Employment Tribunal, and is not there to punish the respondent for transgressions through its solicitors at the ET.

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Appeal No. UKEAT/0155/10/DM

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 7 May 2010

Before

HIS HONOUR JUDGE PETER CLARK

(SITTING ALONE)

GRAHAMS GARDEN MACHINERY LTD (APPELLANT)

MR E J WARNE (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant
MR NICHOLAS SPROULL (of Counsel)
Instructed by: Messrs Coodes Solicitors
Elizabeth House
Castle Street
Truro
TR1 3AP

For the Respondent MR DAVID CURWEN (of Counsel)
Instructed by: Messrs Lyons Davidson Solicitors
Victoria House
51 Victoria Street
Bristol
BS1 6AD

PRACTICE AND PROCEDURE

New evidence on appeal

Review

Costs

Admissibility of fresh evidence on appeal. Principles to be applied when exercising discretion on review application to Employment Tribunal. Costs in the appeal where the unreasonable conduct related to proceedings before the Employment Tribunal.

1. This case is proceeding in the Exeter Employment Tribunal. The parties are Mr Warne, Claimant, and Grahams Garden Machinery Limited, Respondent. I shall so describe them.

1. This is an appeal by the Respondent against the decision of Employment Judge Hollow dated 29 January 2010, refusing the Respondent’s application for review of a decision not to accept the Respondent’s form ET3 which was not lodged within time.

1. By his form ET1 lodged on 23 November 2009 the Claimant alleged that he was employed by the Respondent from 1 March 1973 until his dismissal on 24 August 2009. He contended that he was disabled within the meaning of the Disability Discrimination Act 1995. He was born on 23 October 1951. He complained of unfair dismissal, disability and age discrimination and that he was owed holiday pay. His schedule of loss totals just over £100,000.

1. It appears from the witness statement of Peter Lamble, a partner in the firm of Messrs Coodes, solicitors, dated 10 March 2010 and lodged in these appeal proceedings pursuant to paragraph 16.2 of the EAT Practice Direction, that on 1 December 2009 Mr Lamble met with representatives of the Respondent, a small family owned business. He was passed a copy of the form ET1 and received instructions to represent the company and lodge a form ET3. Further documentation was received from the client on 7 December 2009 and at that date, Mr Lamble acknowledges, Coodes were in a position to lodge the form ET3.

1. The Employment Tribunal Rules provide that a form ET3 must be lodged within 28 days. Time for doing so in this case expired on 23 December 2009. Mr Lamble continues that on 15 December 2009 Mr Cartwright, of the Respondent Company, telephoned Coodes to inquire as to whether the ET3 had been prepared. He spoke to a Ms Garde Evans who was responsible for drafting and lodging the ET3 under Mr Lamble’s supervision. She was then a trainee solicitor.

1. Ms Garde Evans told Mr Cartwright that she was working on the document and that it would be lodged before the 23 December 2009 deadline. Mr Lamble went on holiday on 19 December 2009 and did not return to the office until 4 January 2010. Meanwhile, no form ET3 had been lodged; no extension of time had been sought; the deadline had passed.

1. On 4 January 2010 Emma Bramley, a solicitor with Coodes, emailed the Employment Tribunal attaching what is described as a “protective ET3 Form”. She said this:

“We have recently been instructed by the above named client in respect of this claim. We do appreciate that the limitation date for the submission of the ET3 in respect of this matter was 23 December 2009. Our client was under the mistaken impression that the period to submit the ET3 form had been extended due to a letter from ACAS explaining their difficulties with workload. However this coincided with our offices being closed for the Christmas and New Year period and only opening today. We have accordingly submitted, by way of attachment to this email a protective ET3 form on the office reopening today. We would therefore respectfully request the Tribunal to exercise its discretion in respect of this claim to extend the period for the submission of the response in the interests of equity and justice.”

1. On the same day the Tribunal wrote to the Respondent a standard form “no response” letter setting out the limited extent to which the Respondent could take part in the proceedings, prescribed in ET Rule 9.

1. The email of 4 January 2010 was treated as an application for review of the “no response” decision and was opposed by the Claimant’s solicitors, Lyons Davidson, for the reasons given in their letter sent by fax on 20 January 2010.

1. Having considered the parties’ submissions on paper, Employment Judge Hollow refused the Claimant’s review application for the reasons set out in the decision letter dated 29 January 2010. He said:

“Your application for a review of the decision not to accept the ET3 was referred to Employment Judge Hollow.

This is potentially a large claim given the Claimant’s age and loss. The delay in seeking a review is not great. The explanation given for not filing the ET3 is not a good one; there is nothing in the ACAS letter to support the Respondent’s argument and they had access to legal advice. These are only factors and not determinative of themselves. It further appears that the Respondent waited several weeks before contacting their solicitors.

Taking all these matters into account I do not review or revoke the decision not to accept the ET3.”

1. The ACAS letter, dated 1 December 2009, is contained within the EAT bundle. It plainly does not support the “mistaken impression” attributed to the Respondent Company by Ms Bramley in her email of 4 January 2010.

1. I have earlier referred to Mr Lamble’s witness statement dated 10 March 2010. He does not suggest there, as did Ms Bramley, that the reason why the ET3 was not lodged in time was due to this client’s mistaken impression gained from the intervention of ACAS; on the contrary, on his account the Respondent behaved entirely correctly in my view. They instructed their solicitors to represent their interests shortly after being served with the form ET1 by lodging an ET3 in answer to it. They supplied Mr Lamble at the first available opportunity with a copy of the form ET1 and then Mr Cartwright telephoned on 15 December 2009 to ensure that the ET3 would be lodged in time. He received that assurance from Miss Garde Evans.

1. That account is materially different from the inappropriate excuse for delay tendered by Ms Bramley, and upon which basis Employment Judge Hollow exercised his discretion.

1. In these circumstances, Mr Curwen, on behalf of the Claimant, submits that I should not admit in evidence before me Mr Lamble’s witness statement. It raises matters which could, with reasonable diligence, have been placed before the Employment Judge on the review application. All the facts stated by Mr Lamble were known to the Respondent’s solicitors as at 4 January 2010. On an application to admit that witness statement as fresh evidence, such an application fails on the first limb of the Ladd v Marshall test. I interpose that the approach of the Court of Appeal in Ladd v Marshall [1954] 1 WLR 1489 has been adopted in this jurisdiction; see Wileman v Minilec Engineering Ltd [1988] ICR 318 (Popplewell P presiding) reflected in paragraph 8 of the EAT Practice Direction.

1. The procedure set out in paragraph 16.2 of the Practice Direction should be read with the Judgment of Mummery P as he then was in Kwik Save Stores Ltd v Swain [1997] ICR 49 to which I have been referred by Counsel. Kwik Save concerned an employer’s appeal against an Employment Tribunal Chairman’s refusal to extend time for a response under then Rule 3 of the Industrial Tribunal Rules 1993. The former President there set out the principles on which time should or should not be extended, including the explanation or lack of explanation for the delay, the merits of the defence and the balance of prejudice between the parties.

1. In that case, the Appellant employer lodged affidavits and exhibits sworn after the Industrial Tribunal Decision, in the EAT. As to that affidavit evidence, the former President said this:

“We have read some of the correspondence exhibited to the affidavits, but have paid little attention to the contents of the affidavits themselves. As an appeal to this tribunal is only on a question of law, we find difficulty in understanding the basis on which the employers could properly file affidavit evidence on matters which could, and should, have been put before the industrial tribunal chairman on the applications for extensions of time. Reference was made to the decision of this appeal tribunal in Charlton v Charlton Thermosystems (Romsey) Ltd [1995] ICR 56 which sets out a procedure for affidavit evidence by an appellant who has never entered a notice of appearance and is seeking to appeal against a substantive decision on the merits reached adversely to him. In those cases the appeal tribunal laid down a procedure, at p. 60E-H, so that the tribunal could be satisfied that the appellant against the substantive decision had a reasonably arguable defence on the merits, as well as a satisfactory explanation for his failure to enter a notice of appearance or to apply for an extension of time for entering a notice of appearance. If the tribunal were not satisfied on those matters, then the appeal would be dismissed at a preliminary hearing.

These cases are not, however, appeals against a substantive decision on the merits. They are appeals against the interlocutory refusal of the chairman to grant an extension of time for serving a notice of appearance before the full hearing on the merits has taken place. In such cases it is incumbent upon the applicant for an extension of time to place all relevant documentary and other factual material before the industrial tribunal in order to explain (a) non-compliance with the Rules and (b) the basis on which it is sought to defend the case on the merits. Depending on the nature and circumstances of the case, that may be done by letter to the tribunal, or by affidavit verifying the factual position or at an oral hearing. The admission of fresh evidence on the hearing of an appeal against the refusal of an extension of time by the industrial tribunal is rarely necessary and is unjustifiable unless the strict requirements of Ladd v Marshall [1954] 1 WLR 1489 are satisfied: see Wileman v Manilec Engineering Ltd [1988] ICR 318.”

We have read some of the correspondence exhibited to the affidavits but it paid little attention to the contents of the affidavits themselves. As an appeal to this Tribunal is only on a question of law, we find difficulty in understanding the basis on which the employers could properly file affidavit evidence on matters which could, and should, have been put before the Industrial Tribunal Chairman on the applications for extension of time. Reference was made to the decision of this Appeal Tribunal in Charlton v Charlton Thermosystems (Romsey) Ltd [1995] ICR 56 which sets out a procedure for affidavit evidence by an Appellant who has never entered a notice of appearance and is seeking to appeal against a substantive decision on the merits that reach adversely to him. In those cases the Appeal Tribunal laid down a procedure at page 60E to H so that the Tribunal could be satisfied that the Appellant against a substantive decision had a reasonably arguable defence on the merit, as well as a satisfactory explanation for his failure to enter a notice of appearance or to apply for an extension of time for entering a notice of appearance. If the Tribunal were not satisfied on those matters then the appeal would be dismissed at a Preliminary Hearing.

These cases are not, however, appeals against a substantive decision on the merits, they are appeals against the interlocutory refusal of the Chairman to grant an extension of time for serving a notice of appearance before the full hearing on the merits has taken place. In such cases, it is incumbent on the application for an extension of time to place all relevant documentary and other factual material before the Industrial Tribunal in order to explain (a) a non compliance with the rules, and (b), the basis on which it is sought to defend the case on the merits. Depending on the nature and circumstances of the case that may be done by letter to the Tribunal or by affidavit verifying the factual position or at an oral hearing.

The admission of fresh evidence on the hearing of an appeal against the refusal of an extension of time by the Industrial Tribunal is rarely necessary and is unjustifiable unless the strict requirements of Ladd v Marshall [1954] 1 WLR 1489 are satisfied, see Wileman v Minilec Engineering Ltd [1988] ICR 318.

1. Mr Sproull accepts that he cannot resist the proposition advanced by Mr Curwen that the account given by Mr Lamble could, with reasonable diligence had been put before Employment Judge Hollow. On that basis, artificial though it may be, I have concluded that I should not admit the evidence of Mr Lamble.

1. In these circumstances I proceed on the basis that no full, honest and satisfactory explanation for the delay in this case has been put forward by, or more accurately on behalf of, the Respondent. However, as Mummery P made clear in Kwik Save, that is not the end of the matter. A proper exercise of discretion also requires consideration of the prospective merits of the Respondent’s defence to the claim and the balance of prejudice between the parties.

1. I am persuaded by Mr Sproull that on the face of his reasons Employment Judge Hollow failed to consider either the merits question or the balance of prejudice. In other words he failed to take into account relevant factors in arriving at the exercise of his discretion. That is an error of law which, in my judgment, vitiates his decision.

1. Mr Sproull urges me to exercise my own discretion in the matter rather than remit the case to a different Employment Judge for reconsideration. Tempting though that is in terms of celerity and the saving of costs, I prefer Mr Curwen’s submission that the matter ought to be remitted to the Employment Tribunal.

1. What is required is a proper exercise of discretion by the Employment Tribunal. That will include, among other factors, the length of delay, whether the size of the claim is a factor for the Claimant or Respondent or is neutral, the merits of the prospective defence and the overall balance of prejudice between the parties: to the Respondent, who will be unable to defend this sizeable claim; and to the Claimant, who will be deprived of the fruits of the Respondent’s default.

1. Accordingly, I shall allow this appeal and remit the matter to a different Employment Judge for reconsideration.

1. Following my Judgment in this case, Mr Curwen made an application for costs in the appeal on the basis that, under Rule 34A, the proceedings brought by the Appellant before me were unnecessary improper, vexatious, etc. In particular he relies on unreasonable conduct in the bringing or conducting of proceedings by the Appellant. The unreasonable conduct he relies upon is the false account that was given by the Respondent’s solicitors in the email of 4 January 2010 to the Employment Tribunal which has now been corrected by Mr Lamble’s witness statement in the appeal. But for that, he says, the appeal would not have been necessary. I cannot accept that submission. My reading of Rule 34A is that the rule is concerned with proceedings in the Employment Appeal Tribunal, not in the Employment Tribunal.

1. What has happened on appeal is that the Respondent has pursued an appeal with leave to a partially successful conclusion in the sense that the appeal has been allowed and the matter remitted to the Employment Tribunal. In these proceedings Mr Lamble has, I am quite satisfied, given a full and truthful account in his witness statement which has been lodged pursuant to paragraph 16.2 of the Practice Direction. What the rule does not encompass in my judgment is punishing the Respondent for its transgressions through its solicitors at the Employment Tribunal.

1. In these circumstances I dismiss the application for cost.