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Watt (formerly Carter) (sued on his own on behalf of the other members of the Labour Party) (Respondent) v. Ahsan (Appellant)
HOUSE OF LORDS
 UKHL 51
on appeal from: EWCA Civ 990
OF THE LORDS OF APPEAL
FOR JUDGMENT IN THE CAUSE
Watt (formerly Carter) (sued on his own on behalf of the other members of the Labour Party) (Respondent)
Lord Rodger of Earlsferry
Lord Walker of Gestingthorpe
Lord Brown of Eaton-under-Heywood
Robin Allen QC
(Instructed by Commission for Racial Equality)
Gavin Millar QC
(Instructed by Thompsons)
16, 17 & 18 JULY 2007
WEDNESDAY 21 NOVEMBER 2007
HOUSE OF LORDS
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE
Watt (formerly Carter) (sued on his own on behalf of the other members of the Labour Party) (Respondent) v Ahsan (Appellant)
 UKHL 51
1. Between 1991 and 1998 Mr Raghib Ahsan was a Labour Party councillor for the Sparkhill Ward of Birmingham. The ward has a large Pakistani population and he is from Pakistan. When the 1998 local government elections were approaching, he hoped to be readopted as the Labour candidate. Ordinarily, the candidate would have been chosen by the Sparkhill branch of the party. But when the selection process was due to take place, late in 1997, the Sparkhill branch had been suspended for nearly three years. The reason was that, early in 1995, articles had appeared in the Observer and the Daily Mail in which it was alleged that local councillors of Pakistani origin or associated with the Pakistani community were helping Pakistani residents to jump the queue for housing grants. The journalists made free with words like sleaze and scandal". One of the councillors named in this connection was Mr Ahsan, who was known to be an aspirant for adoption as prospective parliamentary candidate for the Sparkbrook constitutency, which included the Sparkhill ward. The newspapers linked the housing grant story to another story that large numbers of Pakistanis, real or imaginary, had suddenly joined the Birmingham Labour party. The implication was that Mr Ahsan was recruiting or inventing countrymen to support his parliamentary ambitions.
2. The reaction of the Labour Party national executive was immediately to suspend four constituency parties and their branches, including Sparkhill. These were mainly the wards with the highest concentration of ethnic minority groups. In the event, after inquiry by the party, no evidence was found of any impropriety in connection with housing grants on the part of Mr Ahsan or the other Pakistani councillors. They appear to have been doing no more than advising or encouraging their constituents to exercise their statutory rights. The executives concerns about new members were addressed by requiring all members to attend in person at the Labour Party office to verify their membership. Again, no evidence of any abuse involving Mr Ahsan was found. Nevertheless eight branches remained suspended throughout the 1997 general election campaign and they remained suspended when it came to the selection of candidates for the council at the end of 1997. The suspended wards included (with one exception) all the wards with a significant Pakistani population.
3. As the branches were suspended, the National Executive Committee of the Labour Party decided that the candidates would be selected by a panel from the Regional Executive Committee. On 19 December 1997 Mr Ahsan and others were interviewed by the panel, consisting of five members. He was not chosen. The candidate chosen for the Sparkhill ward was a white man from the Fox Hollies branch, a Mr Ian Jamieson.
4. On 26 February 1998 Mr Ahsan made a complaint to an employment tribunal, alleging that the Labour Party had discriminated against him on racial grounds, contrary to section 12(1) of the Race Relations Act 1976:
It is unlawful for an authority or body which can confer an authorisation or qualification which is needed for, or facilitates, engagement in a particular profession or trade to discriminate against a person
(a) in the terms on which it is prepared to confer on him that authorisation or qualification; or
(b) by refusing, or deliberately omitting to grant, his application for it; or
(c) by withdrawing it from him or varying the terms on which he holds it.
5. By section 3, discriminate means to discriminate on racial grounds and by section 78(1), profession is defined to include any vocation or occupation". Mr Ahsan says that being a councillor is a profession, or at any rate an occupation, and that the Labour Party is able to confer its authorisation to stand as a Labour candidate, which he needs to be elected or which will facilitate his election.
6. The Labour Party objected that section 12 did not apply to them. They said they did not confer authorisations or qualifications within the meaning of the Act. Section 12 is headed Qualifying bodies and appears in Part II of the Act, which is headed Discrimination in the Employment Field. It is, they said, concerned with vocational or professional qualifications and not with politics.
7. The employment tribunal decided that they would decide the question of whether section 12 was applicable as a preliminary point. While that question was pending before the tribunal in July 1998, the secretary of the Birmingham Labour Partys Local Government Committee circulated to branches a draft list of approved candidates for selection by ward parties. Notwithstanding that Mr Ahsan was an approved candidate, his name had been taken off the list on the ground that he had brought proceedings against the Labour Party. This incident formed the subject of a second complaint to the employment tribunal on 22 September 1998, this time alleging victimisation contrary to section 2(1) of the 1976 Act:
A person (the discriminator) discriminates against another person (the person victimised) in any circumstances relevant for the purposes of any provision of this Act if he treats the person victimised less favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised has
(a) brought proceedings against the discriminator or any other person under this Act
8. On 25 August 1998 the tribunal found against the Labour Party on the preliminary point. The Labour Party said that they would appeal and the tribunal therefore adjourned the second complaint to await the outcome of the appeal.
9. On 14 July 1999 the Employment Appeal Tribunal (Lindsay J presiding) dismissed the Labour Partys appeal: see Sawyer v Ahsan  ICR 1. The tribunal gave the Labour Party leave to appeal to the Court of Appeal and ordered that, if they did not appeal, the case should be relisted for hearing on the merits.
10. On 26 May 2000 Mr Ahsan made another complaint of racial discrimination, again under section 12, in connection with the selection of candidates in that year and his candidature for the National Executive Committee. That made three complaints in all.
11. The Labour Party did not exercise their right to appeal against the decision of the EAT. In accordance with the tribunals direction, the first case was therefore heard on the merits and by agreement the other two complaints were heard at the same time, over 15 days between June and September 2001.
12. Meanwhile, the Labour Party had argued the same preliminary point on section 12 in another entirely unconnected case in the Reading Employment Tribunal, also concerning alleged discrimination in the selection of a candidate for council elections. The Employment Tribunal followed Sawyer v Ahsan  ICR 1 and rejected the Labour Partys objection. An appeal to the EAT (Lindsay J again presiding) was dismissed on the same ground. Again leave to appeal was granted. But this time the Labour Party took it up and pursued the appeal.
13. On 7 February 2002 the Court of Appeal gave judgment. The appeal succeeded: see Ali v McDonagh  ICR 1026. Peter Gibson LJ, who gave the judgment of the court, said (at p 1040) that the Labour Party was not the type of qualifying body to which the section is intended to apply.
14. At the time of the judgment in Ali v McDonagh, the judgment of the tribunal in Mr Ahsans case was still reserved. The Labour Party asked to make further submissions on the effect of the Court of Appeals decision and did so on 10 July 2003. It invited the tribunal to dismiss the applications on the ground that, following the decision of the Court of Appeal, the tribunal was now bound to hold that the Labour Party was not a qualifying body under section 12. It therefore had no jurisdiction to proceed with the case. But the tribunal decided that, as between the parties, it was still bound by the unappealed decision in Sawyer v Ahsan  ICR 1. On the merits, it found for Mr Ahsan on all three complaints.
15. The Labour Party appealed to the EAT (Burton P presiding)  ICR 938 on the preliminary point alone. The EAT dismissed the appeal in respect of the first complaint but allowed it in respect of the other two. The ground for distinction was that the EAT in Sawyer v Ahsan had directed a hearing on the merits of the first complaint but said nothing about the other two, of which it was not at the time seised. There followed an appeal to the EAT (Silber J presiding) against the employment tribunals decision on the merits of the first complaint. The EAT held that the tribunal had made no error of law and dismissed the appeal.
16. The Labour Party then appealed against the decision of the EAT presided over by Burton P which had dismissed their appeal on the preliminary point. The Court of Appeal (Buxton LJ and Rimer J, Sedley LJ dissenting)  ICR 1817 allowed the appeal, primarily on the ground that the earlier decision of the Court of Appeal had established that the employment tribunal had no jurisdiction to hear a complaint against the Labour Party under section 12. The majority were also of the opinion that Mr Ahsans case should have failed on the merits because he had not been discriminated against on racial grounds.
17. Mr Ahsan appeals to your Lordships House against the decisions of the Court of Appeal both on section 12 and the merits. On section 12, he argues that the Labour Party is a qualifying body and that Ali v McDonagh  ICR 1026 was wrongly decided. In any case, he submits, the interpretation given to section 12 by the EAT in Sawyer v Ahsan  ICR 1 is res judicata between him and the Labour Party, not only for the purposes of his first complaint but for the other two as well.
18. My Lords, it seems to me that logically the first question to be answered is whether the Labour Party is a qualifying body for the purposes of section 12. In my opinion, for the reasons given by Peter Gibson LJ in Ali v McDonagh  ICR 1026, it is not. The notion of an authorisation or qualification suggests some kind of objective standard which the qualifying body applies, an even-handed, not to say transparent", test which people may pass or fail. The qualifying body vouches to the public for the qualifications of the candidate and the public rely upon the qualification in offering him employment or professional engagements. That is why section 12 falls under the general heading of discrimination in the employment field". But that is far removed from the basis upon which a political party chooses its candidates. The main criterion is likely to be the popularity of the candidate with the voters, which is unlikely to be based on the most objective criteria. That will certainly be true of selection by vote of the branch and I doubt whether greater objectivity can be expected of a selection committee. The members or selection panel want to choose the candidate who, for whatever reason, seems to them most likely to win or at least put up a respectable showing in the election.
19. That does not mean that a political party is entitled to discriminate on racial grounds in choosing its candidates. It would be most surprising if it could lawfully do so. But the relevant prohibition is to be found, not in section 12, but in section 25, which deals with discrimination by associations against members or prospective members:
(1) This section applies to any association of persons (however described, whether corporate or unincorporate, and whether or not its activities are carried on for profit) if
(a) it has 25 or more members; and
(b) admission to membership is regulated by its constitution and is so conducted that the members do not constitute a section of the public within the meaning of section 20(1); and
(c) it is not an organisation to which section 11 applies....
(3) It is unlawful for an association to which this section applies, in the case of a person who is a member or associate of the association, to discriminate against him
(a) in the way it affords him access to any benefits, facilities or services, or by refusing or deliberately omitting to afford him access to them
20. As is well known, section 25 was enacted to fill a gap in the Race Relations Act 1968 revealed by the decisions of the House of Lords in Race Relations Board v Charter  AC 868 and Race Relations Board v Dockers Labour Club and Institute Ltd  AC 285. In the 1968 Act, there was nothing which dealt expressly with race discrimination in the admission of members to clubs or associations or the treatment of those who had been admitted. There was only the provision which is now section 20 of the 1976 Act (section 2(1) of the 1968 Act) which prohibits anyone concerned with the provision to the public or a section of the public of any goods, facilities or services from discriminating on racial grounds. When, in Charters case, the East Ham South Conservative Club refused on racial grounds to admit Mr Amarjit Singh Shah as a member, the Race Relations Board brought proceedings under section 2(1). But the club said that they were not supplying anything to the public. They were a private club which offered services only to members. This defence was upheld by the House of Lords. The same happened in the Dockers Labour Club case.
21. Section 25 was intended to reverse these decisions and prohibit racial discrimination in the choice or treatment of members in all but very small associations or clubs. The section contains two qualifications which are intended to prevent overlap with other sections of the Act. The first is the exclusion of the trade unions and employers organisations which come within section 11. The second is exclusion of cases which come within section 20 because, although the association or club is nominally supplying goods or services only to its members, the procedure for admission to membership is so conducted that the supply is in fact to the public or a section of the public. The formulation of secton 25(1)(b) appears to be based upon the way Lord Simon of Glaisdale put the matter in Charters case (at p 903):
The essential feature is that there should be a genuine screening at some stage as a pledge of general acceptability to fellow members. It is this screening that determines that membership is a private role. Without it the association remains a section of the public: see Panama (Piccadilly) Ltd v Newberry  1 WLR 610. The rules will determine prima facie whether the association is in this way a private club or a section of the public: omnia praesumuntur rite esse acta. But this is a rebuttable presumption; so it will always be open to any interested person (including the board) to show that the rules are a sham, that anyone who applies can join, that the mode of entry is, in other words, a mere formality.
22. The Act therefore starts with the requirement that admission to membership must be regulated by the constitution. It is the constitution which must provide the screening to which Lord Simon refers. But the statute allows for the possibility that in practice there is no regulation of membership and that anyone can avail themselves of the privileges to which, under the constitution, members are entitled.
23. There is no dispute that the Labour Party is an unincorporated association which has more than 25 members and a constitution which regulates admission to membership. It is not one of the organisations mentioned in section 11, which deals with trade unions and employers associations. But Mr Allen QC submitted on behalf of Mr Ahsan that admission to membership is so conducted that the members are a section of the public.
24. The reason why the Labour Party was said to be a section of the public was that it has a large membership and anyone who supports its objects can join. In my opinion, however, the distinction between an association and a section of the public does not depend upon whether the association has a large number of members or upon how easy it is to join. The qualification in section 25(1)(b) which excludes associations where admission to membership is so conducted that the members are a section of the public is directed at cases in which a business purports to be a proprietary club but such conditions of membership as the constitution may specify are in practice nugatory or not enforced, so that there is no genuine selection. An example may be found in Panama (Piccadilly) Ltd v Newberry  1 WLR 610 to which Lord Simon of Glaisdale referred.
25. The Labour Party, on the other hand, takes its admission procedures seriously. Applicants for membership must accept the principles and policies of the party and not belong to inconsistent or proscribed organisations. Constituency parties and the General Secretary have the right to object to applicants for membership. Members of the general public are not free, either in theory or in practice, to attend party meetings.
26. It is true that in emphasising the private nature of the Conservative Club, both Lord Reid  AC 868, 886 and Lord Morris of Borth-y-Gest (at p 895) said that Conservatives (but not members of the club) were a section of the public. But I suspect that what they had in mind was Conservative supporters rather than the persons admitted to membership under the Partys constitution. In any event, the remarks were obiter dicta.
27. It follows that the Labour Party comes within section 25. In the present case, however, that section does not help Mr Ahsan because it cannot be relied upon before an employment tribunal. Proceedings under Part III of the Act must be brought in the County Court. Back in 1998, after the Labour Party had first taken the point that it was not a qualifying body under section 12, Mr Ahsan started proceedings under section 25 (and, in the alternative, section 20) in the Birmingham County Court. But these proceedings have been on hold pending the resolution of the present dispute.
28. It follows that in my opinion the EAT was wrong in Sawyer v Ahsan  ICR 1 to hold that the Labour Party was a qualifying body within the meaning of section 12 and that the employment tribunal had jurisdiction to hear Mr Ahsans complaint. He should have been told to pursue his proceedings in the County Court under section 25. But there was no appeal against the decision of the EAT. So the question is whether, notwithstanding that it was wrong in law, the decision in Sawyer v Ahsan remains binding upon the parties.
29. The majority of the Court of Appeal held that it was not binding because it involved an error as to the employment tribunals jurisdiction. Rimer J said a party could not be estopped by conduct from disputing a tribunals jurisdiction (see, for example, Secretary of State for Employment v Globe Elastic Thread Co Ltd  ICR 706, 711 and Department of Health and Social Security v Coy  ICR 309, 315-316). It followed, in his opinion, that a decision on jurisdiction could not give rise to an issue estoppel either: see  ICR 1817 1836-1837. Buxton LJ likewise said (at pp 1840-1841) that:
if it becomes apparent through a decision of a court of superior authority that the tribunal lacks jurisdiction, then the [obligation of the tribunal to decline jurisdiction] arises; and that obligation, it is trite law, cannot be offset by any previous determination between, or lack of action by, the parties themselves.
30. Although it is well established that the parties cannot by agreement or conduct confer upon a tribunal a jurisdiction which it does not otherwise have, the question in this case is whether an actual decision by a tribunal that it has jurisdiction can estop the parties per rem judicatam from asserting the contrary. Neither Buxton LJ nor Rimer J cited any authority which decides that it cannot. The law on this point is not at all trite. Although estoppel in pais and estoppel per rem judicatam share the word estoppel, they share very little else. The former is based upon a policy of giving a limited effect to non-contractual representations and promises while the latter is based upon the altogether different policy of avoiding relitigation of the same issues. It is easy to see why parties should not be able to agree to confer upon a tribunal a jurisdiction which Parliament has not given it. And if they cannot do this by contract, it would be illogical if they could do it by non-contractual representations or promises. But when the tribunal has decided that it does have jurisdiction, the question of whether this decision is binding at a later stage of the same litigation, or in subsequent litigation, involves, as Sedley LJ explained in his dissenting judgment, quite different issues about fairness and economy in the administration of justice.
31. Issue estoppel arises when a court of competent jurisdiction has determined some question of fact or law, either in the course of the same litigation (for example, as a preliminary point) or in other litigation which raises the same point between the same parties: see Thoday v Thoday  P 181, 198. The question is therefore whether the EAT was a court of competent jurisdiction to determine whether the Labour Party was a qualifying body within the meaning of section 12.
32. The jurisdiction of an employment tribunal depends upon whether the facts fall within certain statutory concepts which the Act defines with varying degrees of precision. These include concepts such as a contract of employment (section 230 of the Employment Rights Act 1996), redundancy (section 139 of the 1996 Act) and, in the present case, body which can confer an authorisation or qualification". The decision as to whether the facts found by the tribunal answer to the statutory description is sometimes treated as a question of fact (from which there is no appeal to the EAT) and sometimes as a question of law (from which there is). In either case, however, the tribunal has jurisdiction to decide the question. I can see no basis for distinguishing between questions which go to its jurisdiction and those which do not. A decision that a contract falls outside the jurisdiction of the Tribunal because it is for services, or for service overseas, seems to me just as much a question which goes to the jurisdiction as the question of whether the Labour Party is within the jurisdiction because it is a qualifying body. Both are decisions of fact or law, which are (subject to appeal on questions of law) within the competence of the tribunal.
33. In my opinion, therefore, the decision that the Labour Party was a qualifying body for the purposes of section 12 was made by a competent court and is therefore binding upon the parties. It does not matter that a later decision, now approved by this House, has shown that it was erroneous in law: see In re Waring; Westminster Bank v Burton-Butler  Ch 221. The whole point of an issue estoppel on a question of law is that the parties remain bound by an erroneous decision.