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Baroness Miller of Hendon: I understand the noble Baroness, which is why I did not include her in those two remarks. She made a completely different point. She was talking about the competence. However, if the tribunal has already made a decision, presumably it took that matter into account—the competence of the case and the advice—otherwise it would not have come to the conclusion that it did. I think that is a fair point for us to consider in deciding whether the wording is right or the wording is not right, but not on whether I was being even-handed, which indeed I was.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): I agree that in many cases it would indeed be sensible for either party to have sought advice before embarking on a course of litigation or defending a complaint. But I think it would be quite wrong to place a requirement on parties to seek advice in every case from a source identified as competent by the tribunal, as the noble Baroness's amendment proposes.
Parties to employment tribunals are free to choose their own representatives or to represent themselves and to conduct their own cases if they so wish. In fact, in a majority of cases parties do seek advice in some form or another at some stage of the case, but the freedom to conduct one's own case is an important principle in employment tribunals and one which I do not believe should be undermined in any way.
The tribunal rules are framed to deal with the specific nature of employment tribunals. They are aimed at maintaining a system which is accessible. As far as possible procedures are simple and steer clear of legalism. The rules recognise that in some cases it may not be necessary or possible to engage representation.
Requiring parties to seek advice in every case or face costs is over-prescriptive. Tribunals already have powers to ensure proper case management and to tackle abuses of the system. I am not minded to fetter their discretion as the noble Baroness proposes. On a technical note, I am concerned that this amendment would require parties to disclose their legal advice to the tribunal, which would go against the principles of professional privilege.
In many cases it will be desirable to take advice. Changes to employment legislation, together with case law and the impact of European-derived rights, has meant that tribunals have inevitably become more complex and legalistic, but this is not true of every case. In a straightforward non-payment of wages case, for example, it may be possible to establish from the available literature that there is a basis for taking a complaint to an employment tribunal.
And what would happen, for example, if the deadline for making a complaint was drawing near and an applicant was unable to arrange a consultation with his local advice centre? Should he be automatically penalised for lodging an application? We know that resources are stretched in free advice centres and it can be difficult to get an appointment.
Furthermore, there are already a range of provisions for tackling weak cases, which will be strengthened by the Bill. The tribunal may, at the request of either party
or of its own volition, call a pre-hearing review to consider whether an application or defence has no reasonable prospect of success. If it considers that the case is weak it may order the party to pay a deposit as a condition for continuing with the case, and it may issue a cost warning. We also intend to provide a power for tribunals to strike out an application or defence after a pre-hearing review if it considers that it has no reasonable prospect of success. We shall discuss that in more detail later when we come to Clause 28.The tribunal also has a duty to consider an award of costs where it believes that the grounds for making a costs award are made out. In doing so the tribunal will consider all the circumstances of a case, and that might include whether a party has sought advice or ignored repeated advice to abandon a case.
In conclusion, I believe that taken together the provisions for tackling weak cases and defences under the present rules and in the Bill give tribunals a sufficient range of powers without being unduly prescriptive, and while maintaining the accessibility of employment tribunals. I therefore oppose this amendment, not least of all to avoid the possibility of exams being set by the noble Lord, Lord Wedderburn, on employment law.
4.15 p.m.
Baroness Gardner of Parkes: I want to take up what the Minister said about competence. In my experience and the experience of a number of others, people thought they were being represented by a competent person but that person was not competent. If they either represented themselves or they were represented by a friend the case often went perfectly well and the tribunal bent over backwards to help such people. If they were legally represented, the case also went quite well. However, from the moment one files one's case, it becomes public knowledge and there are firms who tout for business immediately. They produce unqualified people to help but very often the chairman will say, "This person is worse than no-one. He is absolutely destroying the applicant's case". Therefore, competence is important.
This does not concern my Opposition colleagues so much, because if one is a member of a trade union, one usually has good representation. However, if one is not and if, say, in my profession of dentistry one had to defend a case, one would presume that anyone making an approach was a reliable party and was somehow authorised, informed or well able to act. We saw so many cases ruined by people who were incompetent and those people were touting for business. I wonder what the Minister believes can or will be done about that in the Bill?
Lord Davies of Coity: Perhaps I may enter into the question of competence. My noble friend asked the noble Baroness, Lady Miller, representing the Opposition, how one measures competence. The noble Baroness made reference to trade union representation, legal representation and representation by a friend. However, there are other categories where competence seems not to be displayed. The question is: how does one possibly make a judgment on this?
I have sat for 11 years on the employment appeals tribunal and have seen all kinds of representation, whether by individuals, whether by legal representation, or representation by a friend or by somebody else. The fact is that it must be extremely difficult, if not impossible, to determine whether such people are competent or not. One yardstick would be: if you lose, you are considered incompetent; if you win, you are competent. So it strikes me as an extremely difficult concept with which to grapple particularly in an objective manner.
Lord Sainsbury of Turville: The noble Baroness, Lady Gardner, raised a point, but it is not one that is totally relevant to the amendment. The amendment requires people to have advice from a competent person, which raises the question of what a competent person is, and that is one of the major reasons against it. The point she raises is one about deterring people who are not competent but who are trying to take this work. Employment consultants would be subject to wasted costs orders against them under the provisions of the Bill where they behave unreasonably in these circumstances. Therefore, to that extent it would be covered by the Bill, but it is a different point from the amendment which requires people to have competent advisers.
Baroness Gardner of Parkes: I am grateful to the Minister for that comment and, of course, the courts would find against them. However, I am concerned about the poor applicant who believes himself to be in good, safe hands but who, instead, has fallen into a trap. I appreciate that it is not entirely relevant to the amendment but, nevertheless, I would be grateful if the Minister would take the point on board.
Baroness Miller of Hendon: I listened carefully to what my noble friend said about the difficulty of assessing competence and what happens when one does not have competence. As the noble Baroness said, it was quite easy to see in certain cases where someone was totally incompetent, though perhaps it was not quite so easy to see when they were competent. I have listened carefully also to what the Minister has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon moved Amendment No. 63:
- Page 32, line 14, at end insert ", in circumstances where the High Court would be entitled to make a 'wasted costs order' pursuant to Rule 48.7 of the Civil Procedure Rules 1998, or any statutory modification or re-enactment thereof, for the time being in force"
The noble Baroness said: I want to speak to Amendments Nos. 63, 65, 67, 69, 76, 77 and 78. First, I want to speak to Amendments Nos. 63 and 78, as they are identical amendments to Clauses 22 and 23. Clause 22 relates to employment tribunals and Clause 23 relates to employment appeals tribunals. Both clauses amend the Employment Tribunals Act 1996. In both of the new clauses it is sought to give the employment tribunal—or the employment appeals tribunal—the power to disallow all or part of the costs
of a representative of a party; to order that representative to meet all or part of the costs and expenses of any party; and to order a representative of a party to pay the Secretary of State any part of the allowances payable by her under Sections 5(2) and 5(3). In each case, the grounds for such an order are,
- "by reason of the representative's conduct of the proceedings".
The Government have paid lip service to the concept of improving access to justice before tribunals. Yet this draconian power, as it is currently drafted, can have the effect only of intimidating representatives from appearing before or assisting parties to proceedings. I do not refer only to the representatives of employers because the provisions apply also to representatives of a claimant. I do not refer only to professional representatives, such as solicitors or barristers, because the provisions apply equally to trade union representatives and even to work colleagues who may be more articulate than the claimant and who may volunteer to assist.
Nowhere in the Bill does it lay down what criteria the tribunals will follow in imposing the penalties on the representatives of the parties. For example, the tribunal might rule that one's client had such an obviously hopeless case that one should not have allowed him to bring it. Or, having brought it, one should not have allowed him to continue with it after one had heard the evidence against one. Or the tribunal might rule that it was wrong for one to try to impugn the evidence of witness X, whom others found to be entirely credible. In other words, the Bill as drafted would give the tribunal the right to usurp the functions and discretion accorded to advocates in regular courts—the normal things that they would have. They might even make an order under the power because the representative had been less than deferential, or perhaps had even been rude to the tribunal.
It is paradoxical that, so long as a claimant acts in person without a representative, that claimant, who may bring an absolutely hopeless or even vindictive case in the hope that his employer will pay something—as I mentioned earlier, he may do so because of the nuisance value—will not suffer any financial penalty under this section. The same consideration applies to an employer who defends an equally hopeless case and rakes up unfounded allegations against the claimant. That is not acceptable, and it will not be acceptable for the Minister to tell us that the criteria will be laid down by the regulations.
As I said at Second Reading, it is unusual for the High Court and a district court to make what are called "wasted costs orders" against the lawyers acting for a party on account of some misconduct or breach of the rules, or inordinate delay in the conduct of the proceedings. However, the rules enabling the court to do so are clearly laid down in civil practice rules. There are cases on the record that show how and when that sort of penalty has been exacted.
I mean no disrespect to tribunals. I have listened to Members of the Committee today and know that many of them sit frequently or have sat on tribunals and have great expertise. It cannot be right, however, that they should operate differently from our judges. It cannot be right that they may apply different criteria or standards from those that are applicable in ordinary civil litigation. The effect of the amendment is to make the rules about penalising the representative identical to those rules that would be applicable to civil ligitants.
The Minister for Employment Relations and the Regions discussed a slightly different aspect of this issue in Committee in the other place. He said that he knew how the civil courts operate and that that is the proper benchmark for them to use. On the issue of charges, with which we shall deal later, he said that he wished to mirror the civil courts and that it would be strange to introduce a system for employment tribunals that was different from that in the civil courts.
I certainly agree with the Minister. There is no reason why different rules and standards should apply in different forums; that is between the tribunals and the civil courts. There is also no reason why there should be a risk of different tribunals sitting in different places and applying different rules and standards. There is thus no reason why the Minister, in setting the tribunal regulations, should draft anything different from the tried and tested Civil Procedure Rules. His own words that I have just quoted support that.
My amendment simply incorporates the Civil Procedure Rules, and, by implication, the cases decided in applying them, to the procedures of the tribunals. In my opinion the deterrent effect of the provision as it is at present is to diminish a party's right to a fair trial represented by independent counsel of his choice. As such, it could be illegal under the European Convention on Human Rights. My amendment will help the Government repair the defect.
I would now like to turn to the three identical Amendments Nos. 65, 67 and 69 in this group. These qualify the provisions whereby the tribunal can, in effect, penalise the party's representative in respect of some misconduct in the proceedings. It is not clear whether that right to inflict such a penalty applies to any representative or only to a paid representative. This ambiguity arises because paragraph (1A)(a) refers to the costs or expenses of a representative. Therefore, we clearly have a paid representative, and it is possible that due to the normal rules of legal construction that could—I do not know sufficient about that—spill over into the subsequent paragraphs. Whether it does or not, the addition of the nine words included in the amendments does no harm to the clause, but removes one possible area of doubt and argument.
Amendment No. 76 requires a tribunal, which refuses to allow a successful party its costs or expenses, to explain why. It seems to be the accepted norm that costs and expenses will be awarded, so any departure from that should be explained to the person involved.
In the district courts, the High Court, and the criminal courts, judges are expected to give reasons for their decisions, and there is absolutely no reason why the tribunal should not do the same. If that gives rise to more appeals, so be it. If they have to explain themselves, then tribunals will be less prone to make arbitrary decisions. Delivering reasoned judgment is part of the process of letting justice be seen to be done.Lastly in this group, I would like to speak to Amendment No. 77. The amendment deals with the award of costs in the case of an appeal to the appeals tribunal. It is different in tenor to my Amendment No. 62 where I propose that a wholly unsuccessful party must pay the other party's costs if he or she cannot demonstrate that they have received competent advice. I would like to have taken that particular paragraph out of this speech so that we do not rediscuss the matter of what constitutes a viable case. In other words, as I said when I spoke to an earlier amendment, the loser has to convince the tribunal that the claim or defence was not just a time-waster.
When we come to an appeal, different considerations apply. One of the parties has already lost in the employment tribunal, and that should give them reason to pause just to consider whether in fact they were perhaps wrong. The other party, the respondent to the appeal, has already won once, and that should encourage him to think that perhaps he was in fact right. There can, therefore, be no grounds for ruling that the winner, who is dragged willy-nilly before the appeals tribunal, is simply acting contumaciously by losing the appeal. On the other hand, justice demands that both sides, including the former loser, should be treated equally as regards costs by the appeals tribunal.
The wording of the Bill is extremely weak. It simply provides that appeals tribunal rules may make provision for the payment of costs and expenses. On the other hand, they may not. The contents of the rules are extremely vague. They could provide an unequal liability for costs, as between an unsuccessful employer appellant and an unsuccessful employee appellant. What I propose in this amendment is that the loser of the appeal should automatically be liable for costs and expenses, except—and this is most important—where the tribunal considers it would be totally unjust for that to occur. That is a very wide exception and a wide discretion for the appeals tribunal. It could, for example, exercise that for a variety of reasons: after all, somebody has to lose. It could be exercised because the unsuccessful party had a very arguable case—and I stress the words "very arguable case"—because a novel point of law and procedure was involved. It may even be exercised because the winning party's case, although successful, had no moral merit whatever; or because the winning parties conducted the case in some unsatisfactory way, including adding to the costs or the time the case took.
Once again, I acknowledge that this amendment may act as a deterrent to one or other party to appeal or to oppose an appeal. Again, however, I remind the Committee that costs almost inevitably follow the event in civil litigation before the civil courts. Cases
brought to the employment tribunal or appeals tribunal are just that—civil litigation. There is no justification for different principles to apply merely because, to assist parties, the procedure is less formal and, hopefully, more speedy. In the United States of America, an unsuccessful party does not pay costs, which I believe is one reason there is so much purely speculative litigation. The number of cases before our tribunals is, as has often been said, increasing rapidly—a point that was mentioned in the consultation paper. It cannot be because there is more injustice to employees around, or one would hope that is not the case. It is because, with the vast amounts that tribunals are now able to award, and sometimes do, in what many consider to be over-the-top rulings, there is the temptation to launch entirely speculative proceedings in the hope of gaining the equivalent of a small lottery win.I hope to comfort the noble Lords, Lord Wedderburn and Lord McCarthy. I certainly do not believe that we should deprive anybody of the right to their day in court, or publicly to air a grievance or even to expose an injustice. However, there is a maxim in bookmaking circles that should be followed: you should not make a bet that you cannot lose. Especially before an appellate court, both parties—not just the appellant—should consider the implications of pursuing or defending the appeal. I beg to move.
4.30 p.m.
Lord Davies of Coity: I clearly understand what the noble Baroness, Lady Miller, is saying in respect of not making fish of one and fowl of another and making sure that litigants in person may be subjected to the same level of expenses as a representative would be in terms of costs. That is an extremely clinical approach, which on the face of it would seem correct. However, we need to recognise that when industrial tribunals were set up the intention was—as indeed the noble Baroness said—for them to be reasonably informal. As a result of, particularly employers, using legal expertise, authorities have been built up over the years. Following that, the procedures have certainly become more formal.
There would seem to be merit in imposing costs upon representatives who bring vexatious or unreasonable cases to a tribunal when perhaps they could have deterred or encouraged the litigant they represent, the applicant, from not taking a case because it was not sound. That is on the one hand. However, on the other, a litigant—an applicant who has been unfairly dismissed and who is unfamiliar with legal representation and with the legal requirements—might bring a case before a tribunal, perhaps mistakenly but certainly not vexatiously. It then seems somewhat harsh to treat that person in the same way as one would treat someone who is legally qualified, who recognises the law, is experienced in the field of industrial relations and brings the case in the knowledge that it is perhaps not a proper case to bring.
The legislation reflects a little of that—a little understanding and a little tolerance. To that extent, although it may require some adjustment, it should
still distinguish cases which are brought with legal support, if it is discovered that a case should not have been brought, and it should not compare a litigant in person—that is, an applicant who is quite ignorant of the circumstances and who might have been wrong but not necessarily vexatious.
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