Employment Bill

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Mr. Hammond: From the Minister's comments, it appears that litigants who are represented by a paid representative could be penalised, or see their representative penalised, if their behaviour was vexatious. Those who appear in person could also be penalised. Does that leave a gap in the middle for those who are represented by unpaid representatives, and does that give the Minister cause for concern?

Alan Johnson: No, it does not. I know that the hon. Gentleman has tabled amendments to change that situation. Citizens advice bureaux, trade unions and not-for-profit organisations are in a different category from those that represent litigants on the basis of receiving a profit from pursuing vexatious cases. There is no inconsistency, and we will not apply the measure to not-for-profit organisations.

Mr. Hammond: I can understand the Minister's logic if he views the award or disallowance as a penalty on the representative. However, there is another side to it. The award is a means of recompensing a third party who has been put to unnecessary expense as a result of the behaviour of the representative. Is it reasonable for the ability of a third party to recover his costs from a representative to vary according to whether that representative is paid or unpaid? The effect on the party who has suffered unnecessary costs will surely be the same.

Alan Johnson: I do not accept that point. The cost award is still made in those circumstances. The employment and employment appeals tribunals will still have the power, thanks to the clause, to make cost awards in the circumstances set out in the legislation, which will be in only a tiny minority of cases anyway. However, the award is against the party, not against the representative.

Mr. Hammond: Having heard the Minister's comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Brian Cotter: I beg to move amendment No. 1, in page 32, line 16, at end insert—

    '( ) In making an order under this section the tribunal shall take into account the circumstances of the party and their representative and in particular whether the representative is or may be paid for their services and any other relevant circumstances.'

Amendment No. 1 examines whether tribunals should have the power to require representatives to pay costs, which is an important issue. I support the intention of the clause, but I am concerned that distinctions between those who charge for their services and those who do not will be difficult to justify and hard to maintain.

What new funding arrangements will be developed around the regulations? Such arrangements could be designed to comply with the wording of the regulations but could also subvert their purpose. For example, if regulations sought to prevent charges against trade union representatives, it might be difficult to exclude from charges other types of representatives who are paid directly. A group of employers could form an association and pay an annual fee that secured representation as needed. How would the distinction be drawn between such indirect payment for services and the membership fees of union members?

Contingency fees of a no win, no fee nature are permitted by employment tribunals. The representative receives a proportion of the award if the claim is successful. In such circumstances, the representative does not charge for his or her services if the case is lost. The regulations will have to determine how representatives using such payment mechanisms and others not yet conceived will be treated.

Mr. Mark Prisk (Hertford and Stortford): Organisations such as the Institute of Directors and the Law Society have expressed concern about that. I would welcome the Minister's comments on an issue that affects small businesses. If a small business man or woman pays a membership fee to a federation for services that specifically include legal support, is there not a discrepancy between paid and unpaid? They are paying a fee, part of which is for legal services that may be required at some time.

Brian Cotter: That is a welcome and relevant addition to my comments. Many organisations that need such services combine in that way. It is preferable that any discretionary award of costs directly against representatives who behave inappropriately should rest with a tribunal that can take account of the circumstances. We must ensure that those who cannot benefit from legal advice or representation are not disadvantaged and that individual circumstances are taken into account. We accept the intention of the clause but would like the Minister to clarify the amendment further.

Mr. Hammond: The Law Society drafted the amendment, so I suppose that the hon. Gentleman can be forgiven for not checking it. As the debate proceeds, however, he may discover that that was a serious mistake. On a minor point, the amendment refers to orders made under ''this section''. The hon. Member for Weston-super-Mare may have in mind orders made under ''this subsection'', because otherwise the amendment would embrace orders made, for example, in relation to the provision for taxing and settling costs or expenses in subsection (1B). Will he indicate that he intended the amendment to refer to an order under ''this subsection'', and not ''this section''?

Substantively, the aim is to probe the Government's intention to discriminate between types of representatives. There will be other opportunities to consider the problem further, when we discuss other groups of amendments and amendment No. 14, which I and my hon. Friend the Member for Wealden (Mr. Hendry) tabled.

While the hon. Member for Weston-super-Mare reflected on the Minister's closing remarks in our last debate, it occurred to me that it is unnecessary, perhaps even perverse and detrimental to the interests of individuals who might instigate proceedings at a tribunal, to introduce this type of discrimination. I must ask myself why. Who is behind the intended discrimination? The only obvious beneficiaries would be the representatives of trade unions who appear on behalf of their members. They will, almost uniquely, be invulnerable to an award of costs, expenses, or a disallowance as a result of their behaviour in the tribunal.

As I understand the Minister, that means that it is tough luck not on the other party in the tribunal, but on the person whom they represent, because the tribunal will still have the power to award costs and expenses where an unpaid representative has behaved vexatiously or abusively. However, it will not be the representative or his wealthy trade union who will have to meet those costs, but the litigant, if I understand the Minister correctly. Will he clarify that?

Helen Jones (Warrington, North): Surely the hon. Gentleman is aware that in several cases applicants to tribunals are represented neither by qualified legal representatives nor by trade union officers, but quite often by people who work for organisations such as citizens advice bureaux. Does he seriously suggest that we should impose a power to make costs against volunteers who work for a CAB?

Mr. Hammond: The hon. Lady raises an interesting point, and I would be interested to hear the Minister's view on whether there should be any qualification for the ability to appear as a representative in tribunal proceedings. There is something unfortunate about the idea that anyone can appear as a representative, and that if they are not paid to do so, their incompetence in conducting themselves could result in the person whom they are supposed to be helping discovering that he is footing a hefty bill for costs and expenses as a result of a tribunal award.

The hon. Lady's point is interesting for another reason. She has rightly pointed out another class of unpaid representative: volunteers who work for a CAB. Common sense might dictate that such a volunteer is in a different category from a union representative who is a trained, and possibly full-time, paid employee. Do the Government intend that professionally involved people, irrespective of whether they are paid by the person whom they represent, should be included in the class of representatives who could be vulnerable under the clause?

10.30 am

That includes trade union representatives, officials of trade associations and employer bodies. Although those people may not be paid directly, they have many of the attributes of a solicitor representing a client at a tribunal, so they ought to know better than to behave abusively or vexatiously.

Helen Jones: I must take the hon. Gentleman up on that point. Surely he is aware that the role of trade union representative encompasses many people with different sorts of experience? Whatever their merits, they are not qualified solicitors.

Mr. Hammond: I appreciate that trade union representatives will not usually be qualified solicitors, but I would be interested to hear the Minister's reasons for excluding from jeopardy those regularly engaged in tribunal proceedings. The Minister could argue that a novice might have a stab at it out of the goodness of his heart—a case of the blind leading the blind where a well-intentioned person sought to represent someone and made such a complete hash of it that the tribunal was infuriated by their conduct. That person is in a different category from one who regularly participates in such proceedings.

The hon. Member for Warrington, North (Helen Jones) shrugs that notion off. She should remember that we are not debating the award of costs, but whether it is the representative or the applicant who bears them. A trade union member who accepts his union's offer to represent him at a tribunal should not be placed in financial jeopardy because the official is incompetent. The Minister would not allow an award of costs against such a representative, although he would allow that if the representative were a solicitor.

Committee members may tell me, if the Minister cannot, whether the idea of attacking representatives directly and forcing them to meet the costs of their conduct is a novel departure in English law. My understanding of our legal system is that the client sits in the background and the barrister conducts the case. Even if that takes six times as long as the client thinks it ought to, he still has to pay the bill. Are there other examples where the legal representative is forced to meet awards of costs? Has the Minister discussed that with the Lord Chancellor's Department? The process could be the thin end of a wedge that will ultimately result in the courts awarding costs against the representative of a party to proceedings.

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