THE INDUSTRIAL TRIBUNALS

CASE REF:   3142/04

CLAIMANT:		Anne-Marie Murphy

RESPONDENT:		Osborne King & Megran Ltd T/A Osborne King

DECISION ON A PRE-HEARING REVIEW

The decision of the tribunal is that costs should not be awarded against either the claimant or the respondent.

Constitution of Tribunal:
Chairman (sitting alone):		Mr Kelly

Appearances:
The claimant was represented by Ms S Bradley, Barrister-at-Law, instructed by Murphys, Solicitors.
The respondent was represented by Mr B Mulqueen, Barrister-at-Law, instructed by John McKee & Sons, Solicitors.

The issues

1.	This is a pre-hearing review by a chairman sitting alone under both:-

(i)	Rule 17 of Schedule 1 to the Fair Employment Tribunal (Rules of Procedure) Regulations (Northern Ireland) 2005; and

(ii)	Rule 18 of Schedule 1 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005;

to determine the following issues:-

whether the claimant should be ordered to pay all or part of the costs incurred by the respondent; 

(i)	pursuant to Rule 14 of Schedule 1 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2004 in respect of Case Reference No: 3142/04 (direct discrimination on grounds of gender).

(ii)	pursuant to Rules 34 to 36 of Schedule 1 of the Fair Employment Tribunal (Rules of Procedure) Regulations (Northern Ireland) 2005 in respect of Case Reference No: 183/05 FET ( direct discrimination on grounds of religious belief), and those parts of Case Reference No: 1374/05 which fall within the jurisdiction of the Fair Employment Tribunal as a result of a direction under Article 85 of the Fair Employment and Treatment (Northern Ireland) Order 1998 (victimisation on grounds of gender, constructive/unfair dismissal); and

(iii)	pursuant to Rules 40 and 41 of Schedule 1 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 in respect of those parts of Case Reference No: 1374/05 which are outside the scope of the direction under Article 85 of the Fair Employment and Treatment (Northern Ireland) Order 1998 and therefore remain within the jurisdiction of the Industrial Tribunal (unlawful deduction of wages, breach of contract, equal pay).

2.	There was also a counter-claim by the claimant for costs incurred as a result of the respondent pursuing the claim for costs under each of the statutory provisions as set out above in paragraph 1.  

3.	This decision is the decision of the Industrial Tribunal.  A separate decision has been issued by the Fair Employment Tribunal.  Both decisions should be read together.  

Findings of fact relevant to the issues

4.	Both parties proceeded by way of submissions through counsel and by documentary evidence.  Witnesses were not called.  I made the following findings of fact:-

(1)	The claimant commenced proceedings by lodging a claim on 9 December 2004 alleging sex discrimination in relation to promotion, her treatment on gardening leave and the withholding of a bonus.  In response to the question, “Are you alleging you were unlawfully discriminated against on the grounds of religious belief or political opinion”?, neither the ‘Yes’ or ‘No’ box was ticked. The question was not answered.

(2)	The respondent lodged a fairly detailed response on 14 January 2005.  The respondent pointed out that the claimant had received her promotion on 1 July 2004 and stated that the claimant had resigned on 6 October 2004 because she had been approached and offered alternative employment by a commercial rival, Hamilton Osborne King.  The respondent stated that the bonus scheme was discretionary and that, like other members of staff, she would not receive  a bonus for the year to 31 December 2004 if she resigned before that date.  The respondent also stated that gardening leave was it’s normal practice when employees were working their notice.  None of this was disputed by the claimant.  She alleged through her counsel that she was told on 20 October 2004 to work in Queen’s University Belfast during her gardening leave. She alleged this was demeaning.  The respondent in the response and through it’s counsel stated that the claimant only worked for one day in Queen’s University Belfast during her gardening leave.  She had holiday arrangements which the respondent agreed to honour and did not return.

(3)	The respondent issued a Notice for Further and Better Particulars and a Notice for Discovery on 25 May 2005.  

(4)	The claimant changed her solicitor in July 2005 and on 1 August 2005 by letter to the tribunal she sought to amend her claim to include claims for victimisation on the grounds of gender and religion, discrimination of grounds of religion, unlawful deduction of wages, breach of contract, constructive/unfair dismissal and equal pay.  The respondent objected to these amendments.

(5)	The claimant’s replies to the respondent’s Notices were received on 4 October 2005 and contained detailed allegations of, inter alia, religious discrimination.

(6)	A Case Management Discussion was held on 7 October 2005 to consider, inter alia, the application to amend the claim which was contained in the letter of 1 August 2005.The additional complaints were registered as fresh claims received on 2 August 2005. It was directed that a pre-hearing review be held to determine jurisdictional issues including time limitation points.  

(7)	The respondent lodged a further detailed response to the additional claims on 14 October 2005.

(8)	The pre-hearing review was fixed for hearing in December 2005 but it was adjourned for good reason..

(9)	On 18 January 2006 the claimant’s solicitor wrote to the tribunal purporting to withdraw all applications on a conditional basis, ie that no Order for Costs be made.  The agreement of the respondent was not sought by the claimant prior to the sending of this letter.  The letter was copied by the tribunal to the respondent who objected.  The tribunal did not accept the conditional withdrawal.

(10)	The respondent wrote on 20 January 2006 to the claimant’s solicitor stating that they would pursue an application for costs unless the respondent received an apology from the claimant for pursuing frivolous and vexatious claims.  No apology was received.  The claimant’s solicitor in turn stated in a letter dated 24 January 2006 that she would seek costs in relation to any costs application pursued by the respondent.

(11)	On 10 March 2006 the claimant confirmed her withdrawal of all claims on a non-conditional basis.  

(12)	The only explanation given for this withdrawal was that the claimant wanted to “get on with her life” and that she “sought closure”.  

(13)	The respondent claimed solicitor’s costs of £6,976.62 inclusive of VAT and counsel’s fee of £2,256.00 inclusive of VAT.  The claimant claimed in respect of the costs application, solicitor’s costs of £2,500.00 inclusive of VAT and counsel’s fee of £1,000.00 inclusive of VAT.  

Relevant law

5.	The Regulations relating to costs applications are set out above in the paragraph dealing with the issues before me and I do not propose to set them out full in this decision.  However, in summary if a party has acted vexatiously, abusively, disruptively or otherwise unreasonably, or if a party’s actions in bringing a case (or in the case of the 2005 Regulations conducting a case) have been misconceived a tribunal should consider making and may make an award for costs.  

6.	The leading case in relation to Costs Orders where a claimant withdraws a claim is the Court of Appeal decision in McPherson  v  BNP Paribas (London Branch) [2004] IRLR 558.  In that case the Court held that:-

“In deciding whether to award costs against an applicant who has withdrawn his claim, the crucial question is not whether the withdrawal of the claim is in itself unreasonable but whether, in all the circumstances of a case, the applicant has conducted the proceedings unreasonably.  It would be legally erroneous if, acting on a misconceived analogy with the Civil Procedure Rule that an applicant who discontinues proceedings is liable for costs which a defendant has incurred before notice of discontinuance was served, tribunals took the line that it was unreasonable conduct for employment tribunal applicants to withdraw claims and that they should accordingly be made liable to pay all the costs of the proceedings.”

	The Court continued:-

“On the other hand they should not follow a practice on costs which might encourage speculative claims by allowing applicants to start cases and to pursue them down to the last week or two before the hearing in the hope of receiving an offer to settle, and then, failing an offer, dropping the case without any risk of a cost sanction.  The solution lies in the proper construction and application of Rule 14.”

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

Vexatious conduct was described in E T Marler Ltd. v Robinson [1974] ICR72:-

“If an employee brings a hopeless claim not with the expectation of receiving compensation, but out of spite to harass his employer, or for some other improper motive, he acts vexatiously and likewise abuses the procedure.”

Contentions of the parties

7.	The respondent argued that the claimant should have known when she received the response on 14 January 2005 that her claim was misconceived.  Her claim had effectively been rebutted and the respondent had put forward an explanation of its bonus policy, its gardening leave policy and the proposed placement in QUB. This explanation was not challenged in any material particular by the claimant.  The allegation in relation to promotion was denied and since the claimant had in fact been promoted some five months before she lodged proceedings, the respondent argued that proceedings brought by the claimant were more a case of a parting shot from an employee who had decided to take another job than a genuine complaint in good faith.  The respondent argued that the attempted expansion of the claim on 1 August 2005 was entirely unjustified and that no real explanation had been put forward for the claimant’s decision to withdraw all claims some five months later.

8.	The claimant argued that the claims brought by her were entirely justified and that it was only after the claimant had changed her solicitor in July 2005 that she realised that the pleadings needed amendment She had not been advised previously that she could bring a claim of discrimination on grounds of religious belief.  She argued that no substantive hearing had been listed and that the proceedings were still at an early stage when she withdrew her claims.  It would be wrong to deter claimants from pursuing their rights before a tribunal by awarding costs where claims are brought in good faith and then discontinued at such an early stage.  

Decision

9.	In relation to the claim (3142/04) alleging direct sex discrimination, I note that the promotion was some five months before the lodgement of proceedings, that the practice in relation to the bonus scheme appears to have been clear and not disputed, and that the claimant appears to have known that the respondent had a practice of putting employees who were working their notice on gardening leave. It could be argued that the claimant’s case was not particularly strong.  However the claimant was alleging a pattern of behaviour on the part of the respondent culminating in what she perceived to be victimisation in the posting which was proposed in Queen’s University Belfast. Without having had the advantage of hearing evidence in chief and cross-examination, on behalf of both parties, I am not prepared to hold that the lodgement and maintenance of this claim up to the date of withdrawal was vexatious, abusive, disruptive, unreasonable or misconceived.  

10.	The nature of the case changed when the claimant’s new solicitor wrote to the tribunal on 1 August 2005 seeking to expand the claim in several different directions.  That included, in particular, a claim of discrimination on grounds of religious belief.  I do not accept that the claimant, an associate director in a major firm and clearly an educated individual, did not realise that she could lodge a claim for unlawful discrimination on grounds of religious belief with a tribunal until she was advised of this fact by her solicitor in the course of July 2005.  Similarly I do not accept that she was ignorant of the possibility of a claim of equal pay, breach of contract, etc, even though she would have been unaware of the specific statutory basis for such claims. Neither do I accept that the claimant’s first solicitor, with whose assistance she completed the original claim form, would have been unaware of the possibility of making such claims.   That said, the claimant did change her solicitor in July 2005, and it was open to that new solicitor and in fact incumbent on that solicitor, to reassess the claimant’s position and if appropriate to seek to amend pleadings.

11.	  I do find it surprising, in particular, that the allegation of discrimination on the grounds of religious belief emerged for the first time some nine months after the original proceedings were lodged, but after some consideration, I have concluded that I do not have sufficient evidence to decide that the claimant’s actions in this respect were vexatious, abusive, disruptive, unreasonable or misconceived. The delay in lodging this claim and the other fresh claims was due to be considered at a pre-hearing review and the claimant supplied particulars of the claims on 4 October 2005. Once the fresh claims were lodged on 2 August 2005, there was no particular failure to prosecute those claims in the period leading up to their eventual withdrawal.  The claims were withdrawn at a relatively early stage. I therefore conclude that the claimant should not be ordered to pay all or part of the costs the respondent has claimed.  

12.	Turning to the claimant’s application for costs incurred as a result of the respondent pursuing it’s application for costs; I conclude that the respondent was not acting in any sense unreasonably pursuing this application for costs.  I did not find this an easy matter to determine and while I have decided that I do not have sufficient evidence on which I could conclude that the claimant was acting in a manner which would warrant an Order 

for Costs , the respondent had an arguable case that it was entitled to advance. I make no Order for Costs against the respondent.

Chairman:

Date and place of hearing:	22 June 2006, Belfast

Date decision recorded in register and issued to parties: