Employment — Appeal by firm of estate agents — Allegation by employee of unfair dismissal — Employee resigned after proposal to transfer him from residential to commercial office and claimed constructive dismissal — Lengthy but inconclusive negotiations — Proceedings commenced by employee before industrial tribunal but in the event the tribunal’s hearing was directed solely to question of costs — Errors by industrial tribunal and by Employment Appeal Tribunal — Industrial tribunal, although there was no evidence before them directed to the merits of the case, no pleadings, and all they had was a bundle of documents and notes on office files, considered that the firm had acted vexatiously and unreasonably towards their employee and ordered them to pay his costs — Under the Industrial Tribunals (Rules of Procedure) Regulations costs are not normally awarded but exceptionally they may be ordered where in the tribunal’s opinion a party has acted frivolously, vexatiously or otherwise unreasonably — The employers appealed on the question of costs to the Employment Appeal Tribunal who, although criticising the industrial tribunal’s decision severely, held that they could not interfere with it; they could not in all conscience say that it was plainly wrong — Held by the Court of Appeal that the Industrial Tribunal had exercised its discretion as to costs wrongly and that the Employment Appeal Tribunal had been in error in not reversing the decision — The industrial tribunal had made a decision on costs which indicated that they had formed a view on merits as to which they had no information whatever — They had taken as proved matters which had only been alleged and there was no basis on which they could properly exercise their discretion as to costs — The Employment Appeal Tribunal were also wrong in law in the way in which they had approached the matter — Employers’ appeal allowed
No cases are referred to in this report.
This was an appeal by Chestertons from a decision of the Employment Appeal Tribunal dismissing an appeal by Chestertons from an award as to costs made by an industrial tribunal in proceedings brought by J S Collins, who had been an employee of Chestertons.
P Birts (instructed by Roche Hardcastles) appeared on behalf of the appellants; C Edelman (instructed by Lawford & Co) represented the respondent.
Giving the first judgment at the invitation of Fox LJ, CROOM-JOHNSON LJ said: This is an appeal by Chestertons, estate agents, from a decision of the Employment Appeal Tribunal given on March 5 1986 by which they dismissed an appeal by Chestertons against an award made by an industrial tribunal dated August 9 1985. The decision of the industrial tribunal concerned only an award of costs.
Mr Collins, the respondent to this appeal, was employed by Chestertons at their office in Kensington High Street as a negotiator for the sale of residential property. He had been employed by them for six years at a salary plus commission. It is clear that there was some unhappiness between him and Chestertons — presumably over a period of time.
Chestertons proposed to transfer Mr Collins to their office in Queen Street, in the City, which office deals with the sale of commercial property, which meant that Mr Collins would be trained in a different type of estate agency. It was stipulated, fully, that by such a transfer he would not suffer financially and would also receive any commission already earned by him.
However, Mr Collins’ reaction to that proposal was a point-blank refusal to have any discussion concerning such a transfer. Accordingly, in June 1984, Chestertons suspended him on full pay. Thereupon Mr Collins consulted solicitors and he demanded from Chestertons a payment of £25,000.
On July 2 1984 he resigned; he alleged that he had been constructively dismissed. There were some discussions between the parties, but on September 20 1984 Mr Collins made an application to the industrial tribunal for compensation, alleging that he had been unfairly dismissed by reason of oppressive conduct. Chestertons’ reply to that allegation was that they had not acted oppressively, that Mr Collins had resigned and had not been dismissed. There then followed a continuation of negotiations between the parties’ respective solicitors with a view to settling the dispute. It was quite clear that one of the matters which Mr Collins had very much in mind was the effect on his business reputation on leaving Chestertons, together with his opportunity of earning commission.
There were letters and notes of interviews between the parties concerning the contentions put forward on both sides. The rights or wrongs of these matters have never been investigated, let alone determined, so that as far as concerns this court — and the tribunals from which the appeals are brought — they remain wholly unknown quantities.
On September 26 1984 Chestertons’ solicitors, when they were apprised of the proceedings before the industrial tribunal, reminded Mr Collins’ solicitors of the statutory level of the maximum award which the industrial tribunal could make. They also made it clear that Chestertons were denying liability and said that even if Mr Collins succeeded in establishing unfair dismissal, his compensation could be reduced substantially in respect of contributory conduct.
Their letter continued:
Having said that, we would certainly be willing to consider advising our clients to come to a reasonable settlement if it were to save substantial costs of a tribunal hearing.
It was common ground between the parties at the hearing before the industrial tribunal that the matter would take between three and four days. In view of that, a proposed hearing date in November was vacated and the matter was refixed for a hearing lasting four days in July 1985. It was apparent that the costs of the hearing would be substantial.
Chestertons made an offer of £5,000, but Mr Collins wanted £25,000. In October of that year, Mr Collins’ solicitors took the course of sending his proof of evidence to Chestertons’ solicitors. It consisted of 18 pages and it set out what his allegations would be. It would seem that that proof of evidence has not been in front of any tribunal. The reply from Chestertons’ solicitors was that Mr Collins’ demands were ‘extraordinary’.
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It is unnecessary to set out the details of the ensuing negotiations, save to say that the offer of £5,000 having been refused was withdrawn.
On January 24 1985 the solicitors acting for Mr Collins wrote a letter to Chestertons’ solicitors, as follows:
We now intend to prepare all the evidence for use on that hearing, but in one final effort to resolve this matter amicably, we are instructed that our client would be prepared to accept £15,000 by way of compensation for his loss of income and reputation together with one-third of the commission payable in respect of the two transactions referred to in earlier correspondence which caused our client to lose commission provided confirmation of settlement on this basis is received within the next 14 days.
If this proposal is not acceptable, we will proceed to the hearing.
There was then a reference to a possible witness.
On February 7 1985 there was a reply from the solicitors acting for Chestertons. They did not accept the suggestion of a settlement of £15,000, but referred to complaints of alleged slanderous statements having been made by Mr Collins to third parties relating to business dealings which had been carried out by Chestertons. The letter concluded:
We have remarked previously that your client is doing himself a disservice by his totally unjustified claims for compensation and he is compounding matters by making unwarranted allegations such as we cite above. It is not for us to advise your client, of course, but we would urge you to impress upon him the foolhardiness of his present actions.
May we please hear from you within the course of the next seven days.
There appears to have been no reply to that letter, and accordingly negotiations lapsed.
The statutory maximum compensation within the power of the tribunal to award was £7,500, together with a basic award of £725, making a total of £8,225.
On May 31 1985 the solicitors acting on behalf of Chestertons wrote a letter to the solicitors acting for Mr Collins. It is a letter of some importance and reads:
We refer to the above matter which, as you are aware, is listed for hearing before the Tribunal on July 9 to 12 next.
Both parties to this dispute will be bearing in mind the considerable costs and the Tribunal’s time that will be incurred in the preparation and attendance at a four-day hearing.
Without any admissions as to whether or not there was a dismissal, or that any such dismissal was unfair, nor taking into account any degree of contributory conduct on your client’s behalf, if there was such a dismissal, we are authorised to offer your client the sum of £8,200 in full and final settlement of all and any claim which he may have against our clients arising out of his employment with them or the termination thereof.
We have calculated the above sum, in consultation with our Counsel, as the maximum which the Tribunal has power to award being the maximum compensatory award of £7,500 together with the basic award appropriate to your client which amounts to £700.
I should interpolate at this point that the understatement by £25 of the offer in that letter was later clearly put right and nothing turns on that. These figures had been available to both sides for calculation purposes all along.
The letter continues:
We would emphasise that this is an open letter and if the offer is not accepted then we intend to produce this letter to the Tribunal.
We must make it clear that if the offer is not accepted and your clients’ application is being pursued on the footing that a principal motive in its pursuit is the denigration of our clients and the pursuit of publicity, and on that ground our clients feel obliged to attend the hearing to preserve their interests, we give you notice that our clients will be seeking an order for costs from your client pursuant to Rule 11 of the Industrial Tribunal (Rules of Procedure) Regulations 1980 on the ground that the bringing or conducting of the proceedings is vexatious or otherwise unreasonable. We look forward to hearing from you on the above shortly.
On June 7 1985 Mr Collins’ solicitors replied and said:
Thank you for your letter of May 31, the contents of which we have noted and reported to our client. His opinion is that your clients have offered nothing that might not reasonably have been expected 11 months ago, and in the interim he has expended a substantial sum of money on costs, both legal and otherwise.
It is to be noted that this is the first time your clients have made a positive step towards resolution since your letter of June 29 1984
that is an inaccurate statement, but nothing turns on it
despite our client’s flexibility which has been conveyed to you on several occasions throughout this period. In his search for alternative employment, our client has been made painfully aware of the damage done to his reputation as a result of your clients’ actions with the consequent devastating effect on his whole life.
Then a little later the letter continues:
The legislation under which Mr Collins has, thus far, been obliged to pursue his grievance is clearly designed for employees in other walks of life who could be adequately compensated by a payment within the limits to which you have referred. Those limits were clearly not designed to compensate employees of our client’s calibre and expectation, and £8,200 can in no way make up for the ruination of his career and his life.
Our client must look to the future and to the rebuilding of his life, and to this end he must be able to approach prospective employers and lending institutions as a man of honour and integrity. To do this, he needs to cast off the slur on his character created by your clients’ actions and to have his name publicly cleared of any involvement in the unsavoury dealings at Chestertons. As the year our client has waited for the Tribunal hearing is almost over and the bulk of the costs already paid, Mr Collins wishes to proceed to Court to re-establish his reputation.
The ‘Court’ mentioned in that last sentence must clearly refer to the tribunal, because there is a reference to the ‘bulk of the costs’ having been already paid. So far as was known, no action had been begun by Mr Collins at common law for wrongful dismissal or for an account of commission which is alleged to be due to him.
On June 14 1985 Chestertons’ solicitors wrote to Mr Collins’ solicitors concerning a matter which does not form part of the present appeal, but the letter concluded by saying this:
We note what you say in the remainder of your letter. As a result we have today written to the Tribunal, and a copy of that letter is enclosed.
The letter to the tribunal of even date is of importance and I will read it in full:
We write to draw your attention to the enclosed recent correspondence between ourselves and the solicitors for the applicant in this matter.
I interpolate that the correspondence which was sent to the tribunal included the letters of May 31 and June 7.
You will observe from Messrs Gray Marshall & Campbell’s reply of June 7 1985 that the applicant has declined to accept our clients’ open offer of payment to him of a compensatory and basic award at the maximum levels which the Tribunal has power to award in this case, and that he intends to proceed with the hearing notwithstanding the very substantial additional costs that will be incurred thereby.
In view of the fact that this application is listed for hearing over no less than four days, we feel that it is our duty to bring this correspondence to your attention at this stage and to confirm:
(a) That our clients admit, for the purposes of this application only, that the applicant was unfairly dismissed.
(b) That our clients further admit that the applicant is entitled to the maximum compensatory and basic awards, which we now calculate at £7,500 and £725 respectively or the maximum which the Tribunal has power to award if our figures are incorrect.
(c) That in view of the above, we regard it as unnecessary that this application be listed for hearing at all; but that in any event, should it be listed for hearing on July 9 1985 it is our estimate that the matter is likely to occupy the time of the Tribunal for 30 minutes only, with argument then being confined to the question of costs.
A copy of this letter is being sent to the applicant’s solicitors.
What happened thereafter was regarded by the industrial tribunal as important, some particulars of which are as follows. On June 18 1985 there was a file note of a telephone conversation between the two sets of solicitors recorded by the solicitors acting for Chestertons. That note said this:
Campbell stated that we had left him with little alternative but to advise his client that he had to accept the offer, although mindful of the attitude of Collins in the matter he was pretty certain that Collins would want some recompense towards his costs of the action . . . Informed Campbell that we would have been willing to discuss reasonable figures at any time as indeed we have tried to do throughout the matter but whilst his client was standing by ‘requirements’ of £25,000 down to £15,000 with other conditions, linked to a blackmailing attitude, it was hardly surprising our clients were not wishing or willing to make any open offers at that stage . . . Campbell said he still had to take his client’s instructions but would have thought that he will require a contribution towards costs of at least £2,000. I said I would take our clients’ instructions.
The following day, June 19, the conversation was renewed. The file note of the solicitors acting for Chestertons is as follows:
Telephoned Campbell, Gray Marshall & Campbell. Informed him that we were authorised to put forward an offer to settle of £8,225 plus £2,500|page:23| (totalling £10,725) on the basis that the additional £2,500 is only offered and added to our previous offer (which is to remain on the table) on condition that this is to finalise all claims against Chestertons (regarding) re-employment and dismissal. Collins would at all times keep secret any affairs and transactions of Chestertons in which he was involved and that the offer must be accepted by close of business Tuesday July 2. Campbell said he was sure JC would not accept this, as it did not cater for the commission he was claiming . . . At the beginning of the conversation I made it clear it was an open offer since I wished it to be on record for the Tribunal.
Again on the same day there was a further file note of a conversation between the parties’ solicitors recorded by the solicitors acting on behalf of Chestertons:
Campbell stated he had taken client’s instructions and would not accept the offer unless costs contribution of £2,500 paid ‘together with commission he should have earned on two properties totalling approx £2,000 and some £115 for telephone calls to Saudi Arabia’.
After some discussion I said I would take clients’ instructions and although I would be prepared to recommend to them to make some kind of gesture to get rid of the matter I could not see them going anywhere near the £2,500 for costs as mentioned. Campbell said he appreciated what I was saying but wanted to leave me in no doubt that he had no doubt Collins would refuse to do a deal unless we met those terms and would prefer to go to the Tribunal on July 9 to seek costs.
On June 20 1985 there was a further letter to the solicitors acting for Mr Collins from Chestertons’ solicitors which read:
In an attempt to settle this matter and the differences between our respective clients once and for all, and to save on any further costs, and to avoid the need to appear before the Tribunal purely for argument confined to the question of costs, we are authorised to make the following additional offer.
First, however, we should reiterate that the terms of the admissions and/or offer contained in our letter of June 14 to the Secretary of the Tribunals remains as set out.
In addition to those terms, our clients are willing to make an additional offer of £2,500 to your client, although such additional offer is subject to the following conditions:
1. That your client agrees to enter into a Consent Order in the terms of the enclosed draft Order, and
2. This additional offer will be withdrawn as at close of business on Tuesday 2nd July if the same has not been accepted by then . . . . .’
The suggestion was that payment of £10,725 was to be made
. . . within seven days of this Order in full and final satisfaction of these proceedings and of all or any other claims which the applicant may have against the respondents arising out of his employment with them or the termination thereof.
And second:
The applicant undertakes that he will not discuss with, disclose or otherwise seek to divulge information to any third party at any time concerning or relating to the business of the respondent or to any of the transactions in which the applicant was concerned during the currency of his employment with the respondents, and generally to keep secret all information given to him or gained during the currency of such employment.
Following that letter, there was a further telephone call in which Mr Collins refused the final offer which had been made. The file note made by solicitors acting for Chestertons says this:
His client was not of a mind to accept our offer . . . He does not consider he should be bound by any form of ‘declaration of secrecy’ on the figures we are offering. He is looking for full recompense of at least £25,000
so Mr Collins had reverted to his original figure. The note continues:
If Chestertons will not improve their offer then he wished to give notice that their client would accept the basic offer (14th June) —
that is to say, the offer set out in the letter to the tribunal
and will apply to the Tribunal for costs and will then consider he is entitled to sue for damages for loss of commission etc.
In other words, he was going to take the maximum statutory award from the tribunal, and consider himself free to pursue his other common law remedies. The parties, therefore, were too far apart.
Negotiations broke down, and without any knowledge of the merits or contentions of either side it is not possible to blame either of them for such breakdown in the negotiations.
Accordingly, the hearing before the industrial tribunal was solely directed to the question of costs, and the decision with regard to the question of costs was governed by the Industrial Tribunals (Rules of Procedure) Regulations 1980 (or 1985 — the one having very recently superseded the other, but the wording is the same in both cases) and
Regulation 11(1) reads (so far as relevant):
Subject to paragraphs (2), (3) and (4) of this Rule a Tribunal shall not normally make an award in respect of the costs or expenses incurred by a party to the proceedings, but where in its opinion a party (and if he is a respondent whether or not he has entered an appearance) has in bringing or conducting the proceedings acted frivolously, vexatiously or otherwise unreasonably, the Tribunal may make (a) an order that the party shall pay to another party either a specified sum in respect of the costs or expenses incurred by that other party; or a whole or part of those costs or expenses as taxed if not otherwise agreed.
So each party here was suggesting that the other party had acted frivously, vexatiously or unreasonably and therefore should be ordered to pay costs.
The decision of the industrial tribunal consisted of five pages of closely-typed script, which included a long recital of the facts leading up to the dispute, the conduct of the dispute and the letters which had been exchanged between the parties.
On page two of their decision they said this:
As we have heard no evidence in this case except briefly from the applicant, we are in no position nor do we propose to pronounce on the merits of the respective cases. All we say in respect of this correspondence was that attempts to negotiate in this fashion are something which solicitors normally undertake between them on the instructions of their clients in an attempt to dispose of litigation and cannot come within the ambit of Rule 11 of the Rules of Procedure.
The evidence which was taken from Mr Collins was referred to in this way:
At the hearing we heard evidence briefly from the applicant on what the position had been and the reasons why he felt obliged to resign — which we do not feel it necessary to set out in full here.
In other words, the material which was before the tribunal relating to the issue of costs was simply the bundle of correspondence and the file notes.
Their decision was that
. . . Chestertons (the respondents) in the opinion of the Tribunal had acted vexatiously and unreasonably in their conduct of the proceedings
and they therefore ordered that Mr Collins’ costs (if not agreed) should be taxed before the registrar of the county court and paid by Chestertons.
It was against that order that the present appellants (Chestertons) appealed to the Employment Appeal Tribunal.
The review of the documents which was made by the industrial tribunal proceeded on the basis that Chestertons were being vexatious because, from the outset, they knew that Mr Collins wanted to allege all the matters which were in his proof of evidence and, knowing the statutory limit on compensation, was ‘stringing him along’ with an inadequate offer of compensation of £5,000, when he was claiming, first, £25,000 and later £15,000. Chestertons take the point that, in any event, Mr Collins knew what the statutory limit was (just as they did) and that on no less than four occasions during negotiations they had specifically reminded Mr Collins’ solicitors of that fact.
The tribunal in its decision dealt with what they considered would have been the conduct of Chestertons, and involving what they considered could have been the outcome of the proceedings. We have been taken at length through para 5 of their decision — which perhaps can be summarised in this way: First, Chestertons knew of Mr Collins’ allegations because they had received proof of that evidence. Indeed, some of the allegations (and perhaps others) may have been included in earlier correspondence and interviews.
Second, they found that Mr Collins’ compensation was likely to have exceeded the statutory maximum and that
even if there had been a finding of contributory fault that the compensation would still have exceeded the statutory maximum unless the finding were to be of an exceptionally high order.
That statement, as one of the reasons for finding that Chestertons were vexatious or acting unreasonably, involved a finding by the tribunal of what they considered to have been the merits of the dispute and the amount of compensation which might well be awarded.
Third, they went on to say that Chestertons had waited until the last moment
before making realistic offers for settlement and who then intended to offer what they well knew all along was the statutory maximum of the Tribunal’s|page:24| jurisdiction, realising that the applicant would then have no alternative but to accept it.
Again, if they were to find that Chestertons had been vexatious or unreasonable because they had not made realistic offers before the last moment, that must mean they had formed an assessment of the merits of the dispute.
Fourth they went on to say:
We think also that their conduct in offering at a late stage the sum of £10,275 was also unreasonable bearing in mind that there certainly seemed grounds for supposing that the applicant’s costs would amount to between £2,000 and £2,500 and that he had outstanding other claims against the respondents which could not be pursued in the Tribunal but would have to be the subject of an ordinary County Court or High Court action, for example, for commission due and owing but not paid. In these circumstances we think that to offer £10,275 in full and final settlement of all claims, ie the Tribunal claim and any claims which could be brought into the County Court or the High Court, was unreasonable and was not an offer which the applicant ought to have accepted.
That rather composite finding by the tribunal of unreasonableness on the part of Chestertons involved two things; first, that they had formed a view upon the merits of the claim made by Mr Collins and, second, that they had formed a view not only upon the possible merits of common law actions but even on the question as to whether they were good ones and perhaps as to the amount which Mr Collins thought he might recover if he succeeded in them.
These were all matters as to which the tribunal had absolutely no information whatsoever. They held that Mr Collins was being taken advantage of unfairly by Chestertons — who were therefore being vexatious.
The matter can be put in this way: Chestertons were being vexatious because they were trying to take advantage of the position whereby the tribunal’s jurisdiction does not apply but was subject to a statutory maximum, and were being unreasonable because they allowed the case to run on until the last minute and then offered this sum in settlement.
For myself, I find great difficulty in seeing why it should be regarded as being vexatious to rely upon a figure of statutory maximum compensation which Parliament has laid down when negotiations are being conducted with another party who has brought proceedings in that forum. Accordingly, the tribunal made conclusions on what they considered ought to have been realistic offers of compensation by Chestertons, rather than such offers as had been made by them in the course of negotiations.
The decision did not advert to the hope of saving costs, which had been put forward in the letter from Chestertons of May 31, as a reason for making the offer to pay the statutory maximum.
Chestertons appealed to the Employment Appeal Tribunal, who criticised the industrial tribunal’s decision as being one which the members of the Employment Appeal Tribunal (either singly or collectively) would never have reached. They said this:
It [the decision] bristles with unsatisfactory matters. It is deservedly made the subject of criticism . . . As we have already observed, some of the conclusions we have found quite surprising.
But having dealt with those criticisms, they dismissed the appeal. It is emphasised by them that questions of fact are for an industrial tribunal — it is their function to decide upon the evidence and make factual assessments.
It is right that I should read the part of the decision of the Employment Appeal Tribunal in which they set out their conclusions:
But then, as we have been warned over and over again by the Court of Appeal, questions of fact are for an industrial tribunal. They have to read the correspondence; they have to decide upon the evidence, if any; it is their function to make a factual assessment. It has been said — certainly once, if not more than once — by the present Master of the Rolls that, however surprising a decision may seem to be to the Employment Appeal Tribunal or to the Court of Appeal, an appellate tribunal must not interfere unless the decision is plainly wrong. When we asked ourselves that critical question we were forced to admit that, although we did not like the decision one little bit, although we came to the conclusion that it was surprising, although we came to the conclusion that not one of us would have arrived at the same decision, and although we reminded ourselves that there was a grave danger if there were an award of costs in this case which would stultify the whole of the reasonable process of trying to dispose of a case, in all conscience we could not say that this was a decision which simply was not open to this industrial tribunal.
With very great regret, and most reluctantly, we have concluded that, unsatisfactory though the decision is, and despite the well-deserved criticism that has been made of it, we find ourselves unable to say that this appeal should be allowed.
I will come in due course to the argument which has been advanced on behalf of Mr Collins in this court as to why the decision of the industrial tribunal was correct. But for the present I say this, that in my opinion the Employment Appeal Tribunal ought to have allowed the appeal. The tribunal erred on a matter of law in saying that what the decision of the industrial tribunal did was to find questions of fact, and therefore there could be no interference with it. What the industrial tribunal in fact had to do was to exercise its discretion on a matter of costs. The order which it did make in regard to costs was plainly wrong, and was therefore subject to review. The discretion which is conferred by Rule 11 of the Rules is reviewable; it must be formed and exercised upon the facts. An appellate court will not interfere with such a discretion save in a very limited number of circumstances; one is when the court below acted under a misapprehension of the facts — and this is what the industrial tribunal did.
In my view Rule 11 can be applied whether the case has been fought out or not; if it is fought out and when it is all over, it is then in a position to decide whether the applicant or the respondent has behaved vexatiously or unreasonably. It is then in a unique position to decide questions of costs — although the basic rule is ‘no order as to costs’.
If the case is not fought out, then the industrial tribunal must have material before it upon which to decide whether the party before it has been vexatious or unreasonable. Here there were no pleadings to go on; in some cases it may be obvious (although it normally would not be) but there must either be admissions or correspondence. In this case it only had correspondence, and the defect in the decision of the industrial tribunal was that throughout the passage which found vexatious conduct on the part of Chestertons, it was assuming what had been alleged, but which had not been proved. It assumed that Mr Collins had established that he had been dismissed — and wrongfully dismissed. These were matters of comment and were not established. They assumed that if Mr Collins had been wrongfully dismissed, he would have recovered the statutory maximum. They assumed that the offers made by Chestertons were unreasonable — when they did not know whether they were reasonable or not. The tribunal assumed, in the teeth of the correspondence, that the final offer was made by Chestertons to ‘string’ Mr Collins along, and was not made in a genuine attempt to save costs on both sides which would result from a three-to-four-day hearing. The tribunal ignored the fact that the statutory maximum compensation was known to Mr Collins and his solicitors, just as much as it was known to Chestertons and their solicitors.
In my view, in these matters, the industrial tribunal misdirected itself and misapprehended such matters as were before it.
I have said I would deal with the argument which has been advanced on behalf of Mr Collins in this court. In the end, it comes down to one matter, which is this: in the letter of June 14, written by Chestertons’ solicitors to the industrial tribunal, in which they wished to place on record and make known to the tribunal that they were admitting, for the purposes of this application, that Mr Collins had been unfairly dismissed, and were admitting that the applicant (Mr Collins) ‘was entitled to the maximum compensatory benefits’, they were making an admission which bound them in this sense, that they were confessing that not only had they no longer a defence for the purpose of the hearing but never had had any defence.
If that submission is correct, it totally ignores the letters which were sent, together with the letter addressed to the tribunal, making it perfectly clear that the reason why the admissions were being made was to save the costs of the hearing, because there was total inability on the part of the parties to come to a settlement; that they were miles apart on amount, and that therefore the inference could not be drawn, in my view, that it was a confession that Chestertons had always been holding out against Mr Collins.
The industrial tribunal themselves did not appear to proceed upon that basis. The letter of June 14 was not, as they described it, an ‘admission’; it did not mean that Chestertons were liable and always had been liable and were therefore ‘stalling’ Mr Collins. If they proceeded on that basis it would have been a totally incorrect reading of the letter.
What the industrial tribunal obviously did — bearing in mind the reasons which they gave — was that they accepted, as a fact, what had|page:25| only been allegations. In those circumstances, having misdirected themselves on the evidence, their discretion would have been open to review and properly reversed by the Employment Appeal Tribunal, if that tribunal had approached the matter in the right way.
Accordingly, in my view, this appeal should be allowed, both on the basis that the industrial tribunal wrongly exercised its discretion, and also upon the basis that the Employment Appeal Tribunal was wrong in law in the way in which it approached the matter. I would therefore allow the appeal.
FOX LJ and SIR ROUALEYN CUMMING-BRUCE agreed and did not add anything.
The appeal was allowed and appellants’ costs ordered to be paid out of the Legal Aid Fund. Legal aid taxation of respondent’s costs was ordered.
