Watt (formerly Carter) (sued on his own on behalf of the other members of the Labour Party) (Respondent) v. Ahsan (Appellant)
34. As Rimer J pointed out  ICR 1817, 1837, the issue estoppel is in principle binding between the parties in subsequent litigation raising the same issue, as in the second and third applications by Mr Ahsan. I cannot therefore see any basis for the distinction drawn by the EAT between the application of res judicata in relation to the first application and in relation to the second and third. It is true that the severity of this rule is tempered by a discretion to allow the issue to be re-opened in subsequent proceedings when there are special circumstances in which it would cause injustice not to do so: see Arnold v National Westminster Bank plc  2 AC 93. As Lord Keith of Kinkel said (at p 109), the purpose of the estoppel is to work justice between the parties. In the present case, however, I think it would be unjust if the issue estoppel did not apply to the second and third applications. Although the Labour Party knew that it had given notice of appeal in Ali v McDonagh  ICR 1026, it made no attempt to obtain an extension of its time for appealing in this case. Instead, it involved Mr Ahsan in a lengthy and expensive hearing over the summer of 2001, during which the merits of all three applications were examined. It would be quite unfair for Mr Ahsan now to be told that he must start again in the County Court.
35. In my opinion, therefore, the Labour Party is estopped from challenging the ruling that it was a qualifying body and was not entitled to discriminate on racial grounds in its choice of candidates for the council election. The tribunal found that it had done so. This finding was held by the EAT (presided over by Silber J) to involve no error of law. But the majority of the Court of Appeal expressed the opinion that if the tribunal had had jurisdiction to consider the complaints at all, their findings of fact would not have supported a conclusion that there had been discrimination. I must therefore consider the facts in greater detail.
36. The discrimination which section 12 makes unlawful is defined by section 1(1)(a) as treating someone on racial grounds less favourably than he treats or would treat other persons". The meaning of these apparently simple words was considered by the House in Shamoon v Chief Constable of the Royal Ulster Constabulary  ICR 337. Nothing has been said in this appeal to cast any doubt upon the principles there stated by the House, but the case produced five lengthy speeches and it may be useful to summarise:
(1) The test for discrimination involves a comparison between the treatment of the complainant and another person (the statutory comparator) actual or hypothetical, who is not of the same sex or racial group, as the case may be.
(2) The comparison requires that whether the statutory comparator is actual or hypothetical, the relevant circumstances in either case should be (or be assumed to be), the same as, or not materially different from, those of the complainant: section 3(4).
(3) The treatment of a person who does not qualify as a statutory comparator (because the circumstances are in some material respect different) may nevertheless be evidence from which a tribunal may infer how a hypothetical statutory comparator would have been treated: see Lord Scott of Foscote in Shamoon at paragraph 109 and Lord Rodger of Earlsferry at paragraph 143. This is an ordinary question of relevance, which depends upon the degree of the similarity of the circumstances of the person in question (the evidential comparator) to those of the complainant and all the other evidence in the case.
37. It is probably uncommon to find a real person who qualifies under section 3(4) as a statutory comparator. Lord Rodgers example at paragraph 139 of Shamoon of the two employees with similar disciplinary records who are found drinking together in working time has a factual simplicity which may be rare in ordinary life. At any rate, the question of whether the differences between the circumstances of the complainant and those of the putative statutory comparator are materially different is often likely to be disputed. In most cases, however, it will be unnecessary for the tribunal to resolve this dispute because it should be able, by treating the putative comparator as an evidential comparator, and having due regard to the alleged differences in circumstances and other evidence, to form a view on how the employer would have treated a hypothetical person who was a true statutory comparator. If the tribunal is able to conclude that the respondent would have treated such a person more favourably on racial grounds, it would be well advised to avoid deciding whether any actual person was a statutory comparator.
38. In this case, the tribunal did not do so. In relation to the first complaint, it began by saying that the Labour Party had provided no satisfactory grounds for the continued suspension of the Sparkhill branch and seven others for nearly three years. The allegations about housing grants had been laid to rest by the middle of 1995 and no single case of membership abuse had been established. Three of the four wards which had been reinstated were predominantly white and the fourth had a relatively low Pakistani population. By contrast, seven of the eight wards which remained suspended had a significant Pakistani population. The tribunal concluded (in paragraph 49):
As has been noted above, the respondent suspected membership abuse particularly within the Pakistani population. There clearly was a racial dimension to the consideration to suspend those branches where Pakistani members were numerous and where it was suspected that some at least of those members were guilty of abuses of the membership system.
39. The tribunal then considered the positive evidence from the Labour Party about the way in which the selection panel had made its choice. It declared itself extremely unhappy about the way in which the members appeared to have gone about the matter and was not satisfied with the explanation of the Partys failure to preserve vital documents, despite having been told within two days that there would be a challenge to the procedure.
40. Section 65 of the Act permits a person who complains of race discrimination to serve a questionnaire on the respondent asking about the reasons for doing a relevant act. If the questionnaire is not answered within a reasonable period or the reply is evasive or equivocal", the tribunal may draw such inference as it considers just and equitable. In this case, Mr Ahsan served his questionnaire on 17 March 1998 and received a reply on 30 June 2000. The tribunal noted that it was provided with no satisfactory explanation for that delay". One would expect such a questionnaire to be answered while memory was fresh and documents available, but even if the Labour Party had been waiting for the decision of the EAT on the preliminary point, that had been given in August 1999. The tribunal also found some of the replies to be evasive".
41. The candidate selected by the Panel, Mr Ian Jamieson, did not qualify under the rules, which required candidates to have been verified party members for 12 months. The tribunal said that different rules were applied to Ian Jamieson and asked itself why. They quoted the evidence of the National Constitutional Officer, Mr Penn: It was felt that he was best placed to counter some of the problems which had arisen in the ward". What were these problems? They were the adverse publicity on housing grants and the suspicions about membership abuse, both matters which were closely associated with the Pakistani community":
The respondent associated the applicants continuing representation of that ward with a continuation of those two perceived problems. In point of fact the applicant had been exonerated of any wrongdoing in connection with the allocation of grants, nor had anything been established - whether against the applicant or at all - in connection with the membership abuse allegation. Nevertheless, in the mind of the respondent, both of these remained problems. They were both intimately associated with the Pakistani community.
42. The tribunal reached its conclusion in paragraphs 55 and 56:
55. The applicant is himself of Pakistani Muslim origin. The respondent identified him with that section of the community and with those perceived problems and with the embarrassment which the party and the city council had suffered as a result of them. A councillor not of the same racial group would not in the respondents eyes be likely to identify with the Pakistani Muslim community in particular, or to pursue the same campaigns
56. It was perfectly plain to us on the evidence we heard that the respondent wanted the applicant off the council. There was more than one reason for that. However, the ethnic origins of the applicant, and of Ian Jamieson, were not irrelevant to the respondents considerations. Considerations relating to the applicants ethnic origins were a significant cause of his non-selection by the respondent in December 1997.
43. These two paragraphs are saying, as clearly as you could wish, that a significant reason why Mr Jamieson was chosen instead of Mr Ahsan was that Mr Jamieson was white and Mr Ahsan was Pakistani. It did not say that Mr Jamieson was a statutory comparator because in some respects his circumstances were obviously different. But it regarded his selection as evidence that a person whose circumstances were the same as those of Mr Ahsan but who was not Pakistani would not have been rejected. That is discrimination on racial grounds.
44. Buxton LJ, with the benefit of further reflection after the end of argument, was not satisfied that the findings were sufficient. After quoting extracts from the passages to which I have referred, he said that on their face, these findings are more than sufficient to ground a finding of discrimination. So they are. But, he said, the point was not so simple. The Labour Partys wish not to have a candidate who would be seen to identify with the Pakistani community was a legitimate objective provided that the perception that the problem was predominantly a Pakistani one was itself legitimate":  ICR 1817, para 93.
45. What is the difference between a legitimate and an illegitimate perception that the problem is a Pakistani one? Buxton LJ , at para 94, said it would have been illegitimate if the judgment that the problems were particularly associated with the Pakistani community had been influenced at least in part by the racial make-up of that community. But he said that there was no finding to this effect.
46. I must confess that I have great difficulty in understanding the distinction. How can one form a view that a problem is associated with the Pakistani community but reach that view uninfluenced by the racial make-up of that community"? Its racial make-up is what enables it to be described as a Pakistani community. The only meaning which I can ascribe to the distinction is that it would be acceptable for the Labour Party to discriminate against a Pakistani candidate if they held no racist views about Pakistanis but thought that it was better not to have a Pakistani candidate because the electorate would identify the problem with the Pakistani community.
47. If that is what the distinction means, it seems to me unacceptable. It is nothing more than the old plea that you have nothing against employing a black person but the customers would not like it. In essence it is a defence of justification based on political expediency. It may salvage the purity of the personal motives of the selection panel but it does not in my opinion satisfy the terms of the 1976 Act, which does not allow any justification for direct discrimination. It simply says that one shall not discriminate on racial grounds.
48. On the second complaint, the tribunal found the allegation of victimisation made out on the facts. On the third complaint, the allegations of racial discrimination and victimisation in relation to the shortlisting of candidates for the council in 2000 were again found proved. A separate allegation of discrimination in relation to election to the National Executive Committee was dismissed. All of these complaints turn upon findings of fact against which there is no appeal.
49. I would therefore allow the appeal and restore the decision of the employment tribunal.
LORD RODGER OF EARLSFERRY
50. I have had the privilege of considering the speech of my noble and learned friend, Lord Hoffmann, in draft. I agree with it and, for the reasons that he gives, I too would allow the appeal and restore the decision of the employment tribunal.
LORD WALKER OF GESTINGTHORPE
51. I have had the privilege of reading in draft the opinion of my noble and learned friend Lord Hoffmann. I am in full agreement with it, and for the reasons which Lord Hoffmann gives I would allow this appeal and restore the decision of the employment tribunal.
52. I have had the privilege of reading the speech of my noble and learned friend, Lord Hoffmann, in draft. I agree with it and, for the reasons that he gives, I too would allow the appeal and restore the decision of the employment tribunal.
LORD BROWN OF EATON-UNDER-HEYWOOD
53. I have had the privilege of reading in draft the opinion of my noble and learned friend Lord Hoffmann. I am in full agreement with it, and for the reasons which Lord Hoffmann gives I too would allow this appeal and restore the decision of the Employment Tribunal.
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