Veitch Penny LLP - Exeter | Crediton, Devon

Case

Health Development Agency v Parish
Employment Appeal Tribunal - (24 October 2003)

Issues

(1) Employment Tribunal Rules of Procedure
(2) Costs
(3) Assessment of Costs

Facts

Professor Richard Parish was given notice of his dismissal from his position as Chief Executive of the Health Development Agency in a letter dated 22nd November 2002. The letter gave him six months’ notice and consequently, his job would terminate on 25th May 2003.

He instructed solicitors and on 28th November 2002 they wrote to his employer formally requesting a statement giving the reasons for his dismissal, to which he was entitled under Section 91(1)(a) of the Employment Rights Act 1996. The Agency refused to provide Professor Parish with a written statement and on 2nd December 2002, it also refused to provide reasons for their refusal.

Professor Parish issued proceedings against his employer for a declaration of the reason for his dismissal, and claimed two weeks’ pay by way of compensation.

The Agency did not indicated any reason for the dismissal in their Notice of Appearance, or suggest that any reasons would be given in the future. However, the Agency then paid Professor Parish two weeks’ pay which was accepted without prejudice to the claim for a declaration. Then on 26th March 2003, the Agency wrote to the employee’s solicitors setting out the reasons for his dismissal.

On 15th April 2003 the employee made an Application for costs in connection with the refusal. The Agency argued that the tribunal had no jurisdiction to make the award in respect of costs incurred prior to the proceedings being commenced and that they had not behaved unreasonably after the proceedings had started.

The Tribunal concluded that the Agency’s representative had acted vexatiously and otherwise unreasonably in the conduct of the proceedings and accordingly made an Order that the Agency was liable for Professor Parrish’s costs running from 2nd December 2002 to the hearing in addition to the costs of the Originating Application.

The Agency appealed against the decision, arguing that the Tribunal had been incorrect in awarding costs relating to the period prior to the commencement of proceedings. It also contended that its conduct had not been characterised as either vexatious or unreasonable.

Decision

The Employment Appeal Tribunal (EAT) allowed the Appeal in part. It confirmed that the Tribunal had no power to award costs against a party until the time that proceedings had been commenced and conducted. The Tribunal’s ruling that the employer’s conduct had been unreasonable and vexatious was upheld.

The EAT also confirmed that the conduct of the party prior to the proceedings could not lead to an award of costs pursuant to Rule 14 of the Rules of Procedure. In order to find “vexatious conduct” it was necessary for there to have been conduct by the employer which had been brought out of spite or to harass the employee. On this point, the Tribunal had been correct. The Agency had been unreasonable prior to commencement of the proceedings through to its commencement. The Tribunal had correctly awarded costs incurred as a result of the proceedings being initiated.

Comments

This case confirms that the conduct of a party prior to proceedings cannot be the basis for an award of costs in the Tribunal. They can only be awarded as regards in response to the way a party has brought or conducted legal proceedings. Accordingly, there was no power to award costs for the period prior to the proceedings, which in this case was when the Agency had refused to supply reasons for Professor Parish’s dismissal.