Appeal No.	 EAT/803/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On  1 February 2000
Judgment delivered on 6 April 2000

Before
THE HONOURABLE MR JUSTICE CHARLES
MR D J JENKINS MBE
MR J R RIVERS

MR F A HARAKIS	APPELLANT

DEPARTMENT OF HEALTH	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MS K MONAGHAN
(of Counsel)
Instructed By:
Mr D M Greene
Messrs Edwin Coe
Solicitors
2 Stone Buildings
Lincoln’s Inn
London WC2A 3TH	
For the Respondents	MISS J MULCAHY
(of Counsel)
Instructed By:
Miss E O’Neill
Office of the Solicitor
Department of Social Security
Department of Health
Room 523
New Court
48 Carey Street
London WC2A 2LS	

MR JUSTICE CHARLES:	The parties to this appeal are a Mr Harakis and the Department of Health.  The appeal is against a decision of an Employment Tribunal through a Chairman sitting alone at London (South), the Extended Reasons for which were sent to the parties on 1 May 1998.

1	The decision that is the subject matter of the appeal is the Order made by the Chairman that the Applicant’s claim for unlawful race discrimination (case No. 2300009/98) be struck out.

2	The Appellant made an application for review of that decision.  That application was refused by the Chairman sitting alone.  His reasons for refusing the review were sent to the parties on 19 May 1998.  

3	The reasons given by the Chairman for striking out the claim are set out in paragraphs 1 to 5 of the Extended Reasons sent to the parties on 1 May 1998.  These paragraphs are in the following terms:

“1.  The Applicant’s claim for unlawful race discrimination is Case No. 2300009/98 is struck out.
The following directions are given in relation to the Applicant’s claim for breach of contract Case No. 2305249/97.
2.  The Applicant will on or before the 24 April 1998 provide to the Respondent with a copy to this Tribunal the particulars requested in the paragraph numbered (6) of the Respondent’s letter dated the 22 December 1997.
3.  The Respondent will on or before the 24 April 1998 endeavour to explain to the Applicant in writing how the overtime rate of £10,994 is calculated.
4.  Following the request by the Applicant witness orders are made for Danny Clark and Darrin Hook.  Such witness orders to be served at the Respondent’s address at Hannibal House, Elephant and Castle, London SE1 6TE.
5.  The Applicant and the Respondent’s witnesses (and if possible the two witnesses under the witness orders) will prepare written witness statements for use at the hearing.”

4	The most relevant paragraphs setting out the Chairman’s reasons for refusing a review are contained in paragraphs 3 to 7 of the Extended Reasons sent to the parties on 19 May 1998.  These are in the following terms:

“3.  The striking out Order was made after consideration of the Originating Application and the Notice of Appearance and after I had listened to submissions on behalf of both parties.  In addition and pursuant to Rule 13(3) I gave the Applicant an opportunity to show cause orally why the striking out Order should not be made.  The reasons are set out in the Order.
4.  In his application for a review the Applicant disputes that his claim is out of time and appears to allege that the act of discrimination is continuing.  This is not a submission I agree with and does not accord with the facts as I have heard them.  It is not in dispute that the Applicant’s employment ended on the 30 September 1997 when he voluntarily agreed to take early retirement and when, at the same time, he agreed that he would take no further action against the Respondent in respect of earlier disciplinary matters.
5.  It is not in dispute that the Originating Application was presented outside the statutory time limit and I find nothing in the Applicant’s present application to persuade me that on review I would reach a different conclusion.
6.  The Applicant’s application for review also refers in detail to the case of another person, Mr Danny Clarke but that is not new evidence which would persuade me to take a view different from the one I took on the 14 April.
7.  I have considered all that the Applicant has said in his letter of the 12 May but I am satisfied that the application for review has no reasonable prospect of success and I therefore refuse the Applicant’s application.”

5	Rule 6 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993 (the 1993 Regulations) provides as follows:

“6(1)  A tribunal may at any time before the hearing of an originating application, on the application of a party made by notice to the Secretary or of its own motion, hear and determine any issue relating to the entitlement of any party to bring or contest the proceedings to which the originating application relates.
(2)  A tribunal shall not determine such an issue unless the Secretary has sent notice to each of the parties giving them an opportunity to submit representations in writing and to advance oral argument before the tribunal.”

6	It is common ground that no notice under Rule 6 was sent.  In view of this (and in our judgment correctly) the Respondent did not seek to argue that the decision to strike out, or not to allow the proceedings to continue, could be justified, or supported, on the basis that the claim had been brought out of time.  This had the consequence that we did not have to consider further arguments put on behalf of the Appellant that the jurisdictional issues as to whether the claim had been brought out of time and whether it was just and equitable to extend time should have been heard by a full Tribunal.

7	The Respondent’s argument was that the basis of the decision of the Employment Tribunal (through the Chairman) for striking out the Appellant’s claim was not that the Originating Application was presented more than three months from the last act complained of but rather was that the Tribunal concluded and acted on the basis that the Appellant’s claim was frivolous and/or vexatious and should be struck out under Rule 13(2)(d) of the 1993 Regulations.

8	In our judgment the lack of any reference to a consideration of the possibility of extending time support the conclusion that the Chairman of the Employment Tribunal was not directing his attention to the jurisdictional issues raised in relation to the statutory time limit but was directing his attention to his powers under Rule 13.  This view is also supported by the reasons given by the Chairman for refusing the Appellant’s application for a review.

9	The Respondent also asserted that included within the power to strike out proceedings on the basis that they were frivolous and/or vexatious, is a power to strike out proceedings which are an abuse of the process of the Tribunal (see E T Marler Ltd v Robertson [1974] ICR 72).  We accept that this is the case and return to the Marler case later for the guidance it gives as to what amounts to an abuse and/or frivolous or vexatious conduct.

10	Rules 13(2)(d) and 13(3) of the 1993 Regulations are in the following terms:

“13(2)  A tribunal may -
(d)  subject to paragraph (3), at any stage of the proceedings, order to be struck out or amended any originating application or notice of appearance, or anything in such application or notice of appearance, on the grounds that it is scandalous, frivolous or vexatious.
(3)  Before making an order under sub-paragraph (d), (e) or (f) of paragraph (2) the tribunal shall send notice to the party against whom it is proposed that the order should be made giving him an opportunity to show cause why the order should not be made; but this paragraph shall not be taken to require the tribunal to send such notice to that party if the party has been given an opportunity to show cause orally why the order should not be made.”

11	It was common ground (and it appears from the reasons given by the Chairman) that no such notice was sent to Mr Harakis but that he was given an opportunity to show cause orally why the Order striking out his application should not be made.  Mr Harakis appeared in person.  

12	We should also refer to Rule 7 of the 1993 Regulations.  Rule 7(4) provides as follows:

“7(4)  If upon a pre-hearing review the tribunal considers that the contentions put forward by any party in relation to a matter required to be determined by a tribunal have no reasonable prospect of success, the tribunal may make an order against the party requiring the party to pay a deposit of an amount not exceeding £150 as a condition of being permitted to continue to take part in the proceedings relating to that matter.”

13	The Appellant contends that paragraph 5 of the Extended Reasons sent to the parties on 1 May 1998 demonstrates that the reason, or the principal reason, that the Employment Tribunal concluded that the Appellant’s claim was frivolous and therefore struck it out, was that
(a)	it had very little prospect of success, and
(b)	it was presented outside the time limit.

14	The Appellant then submitted that an Employment Tribunal cannot strike out an Originating Application pursuant to Rule 13(2)(d) of the 1993 Regulations simply on the basis that it has concluded that the application has little prospect of success.  

15	In support of that submission the Appellant relied on:
(a)	Rule 7(4) of the 1993 Regulations, and
(b)	the approach taken in E T Marler Ltd v Robertson [1974] ICR 72 in particular at 76 D/H. 
The Marler case is concerned with the power to award costs but in it Sir Hugh Griffiths makes some comments as to what constitutes conduct that is frivolous and/or vexatious or an abuse at 76 D/H he states (amongst other things) that:

“ … If the employee knows where there is no substance in his claim and that it is bound to fail, or if the claim is on the face of it so manifestly misconceived that it can have no prospect of success, it may be deemed frivolous and an abuse of the procedure of the Tribunal to pursue it.  If an employee brings a hopeless claim not with any expectation of recovering compensation but out of  spite to harass his employers or for some other improper motive, he acts vexatiously and likewise abuses the procedure.  ----------------
It is for the tribunal to decide if the applicant has been frivolous or vexatious and thus abused the process.  It is a serious finding to make against an applicant, for it will generally involve bad faith on his part and one would expect the discretion to be sparingly exercised. ---------”

This passage provides the link, or demonstrates the overlap between conduct that is frivolous and/or vexatious and conduct that amounts to an abuse.  It also shows that such a finding is a serious one and generally involves a finding of bad faith or improper motive. 

16	We agree with this submission made on behalf of the Appellant and recorded in paragraph 14 above.  We add that, in our judgment, this does not mean that the prospects of success are not a factor in determining whether or not proceedings are an abuse of process, or frivolous and/or vexatious.  However, a conclusion that a claim has “little prospect of success” is not the same as a conclusion that it is manifestly misconceived and further, it does not found a conclusion that it is being brought for an improper purpose or in bad faith.  Here there is no finding that the Appellant was bringing his claim for an improper purpose or that he was in any way acting in bad faith.  

17	Further, we agree that the existence of Rule 7(4) (which provides a specific power in respect of contentions of a party which an Employment Tribunal concludes have no reasonable prospect of success) has the consequence that an Employment Tribunal would err in law if it struck out a claim, or part of a claim, solely on the basis that it had “little prospect of success”, which we note is a better prospect than that referred to in Rule 7(4).  

18	The Appellant also submitted that an Employment Tribunal has no power under Rule 13(2)(d) of the 1993 Regulations to strike out an Originating Application simply on the ground that it was presented out of time.  We agree.  In our judgment this is a separate jurisdictional issue and before an Employment Tribunal decides that it should not hear a complaint on the basis that it was brought outside the statutory time limit, it has to consider whether in all the circumstances it would be just and equitable for it to hear the claim out of time (see Section 68(6) of the Race Relations Act 1976). 

19	However we add that in our judgment it would be permissible in some cases for an Employment Tribunal to have regard to the fact that a claim was brought out of time in the overall consideration of the issue whether or not a claim amounts to an abuse, or is frivolous or vexatious in, for example, the sense that it is being brought for an improper purpose or in bad faith.  

20	The Respondent (in our judgment correctly) accepted that if the reasons for the Employment Tribunal’s decision to strike out were that the application had little prospect of success and had been brought out of time, the Employment Tribunal had erred in law.  This is because for the reasons we have given these points simply or together do not of themselves constitute conduct that is frivolous or vexatious or an abuse.  

21	However Counsel for the Respondent argued that when the Extended Reasons for the decision to strike out are read as a whole the reason, or primary reason, for the decision appears from paragraph 3 and is brought into paragraph 5 by the opening phrase to that paragraph namely: “in all the circumstances”.

22	Reading those Extended Reasons alone we do not agree.  In our judgment a natural reading of those Extended Reasons is that paragraph 3 sets out the history and paragraph 5:
(a)	shows what the reasons, or main reasons, for the decision were, and 
(b)	demonstrates that the Chairman of the Employment Tribunal was of the view that proceedings would be frivolous, if they had little prospect of success and had been brought outside the statutory time limit.  
We add that in our judgment the reasons given by the Chairman for refusing the review support this conclusion.

23	As appears above in our judgment by concluding that proceedings were frivolous  because they had little prospect of success and had been brought outside the statutory time limit, the Chairman of the Employment Tribunal erred in law.  

24	In our judgment it follows that the Extended Reasons for the decision to strike out demonstrate that the Chairman of the Employment Tribunal erred in law in striking out the proceedings, or further alternatively, that he has failed to provide adequate reasoning in support of his conclusion that the Originating Application should be struck out, having regard to all the circumstances of the case.

25	We add that Counsel for the Respondent referred us to the letter dated 30 June 1997 referred to in paragraph 3 of the Extended Reasons on which the Applicant had agreed that he would take no further action in respect of the earlier disciplinary matters.  In our judgment the fact that the Applicant had so agreed does not, of itself, indicate that his claim has little prospect of success or that he is bringing it for an improper purpose or in the knowledge that it has little prospect of success.  This is because the remedy (or one of the remedies) sought under the Race Relations Act (i.e. damages) is different to the possible results or remedies under the internal grievance procedure and  those results or remedies may not provide the Appellant with any practical benefit after he has left employment.  

Final Conclusion

26	For the reasons given above we allow this appeal.

27	The result is that the Originating Application remains before the Employment Tribunal who will have to consider whether it is out of time (which was not disputed before us) and if it is, whether it would be just and equitable to consider the complaint in all the circumstances of the case.  Further, it would be open to the Respondent or the Tribunal to initiate a reconsideration of the issue whether this complaint should be struck out.