Harada Limited v Turner

An adjudicative tribunal must be impartial, and apparent bias is established where the material circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility or real danger of bias. Generalised disparaging remarks about a party’s litigation history, followed by an indication that the party should settle, may demonstrate that the tribunal will not approach the issue with an open mind. A tribunal’s assertion that it felt no bias is not conclusive. Nor is a party’s withdrawal from the hearing necessarily fatal to an appeal. Once a legitimate fear of bias is established, the decision ordinarily must be set aside. A subsequent hearing will cure the defect only in an exceptional case.

Harada Limited appealed from the Employment Appeal Tribunal, which had dismissed its appeal against an Employment Tribunal decision that it had jurisdiction to hear Mr Turner’s claims for unfair dismissal, unlawful deduction from wages and wrongful dismissal.

The jurisdiction issue concerned Harada’s Irish domicile and Mr Turner’s work in Spain. At the preliminary hearing, the tribunal chairman made adverse remarks about Harada’s previous litigation and suggested that the parties take time to discuss the matter. Harada withdrew and requested that the tribunal recuse itself. The tribunal proceeded, heard evidence, and decided that it had jurisdiction.

The central issues were whether the remarks created apparent bias, whether Harada’s withdrawal prevented it relying on that bias, and whether the subsequent hearing and decision cured any defect.

1. Appeal allowed unanimously. The Employment Tribunal’s decision was set aside and the matter was remitted for rehearing by a differently constituted tribunal.

2. Applying the principles in R v Gough [1993] AC 646, R v Inner West London Coroner ex parte Dallagio and Anor [1994] 4 All ER 139 and Director General of Fair Trading v Proprietary Association of Great Britain & Anor (unreported, transcript 21 December 2000), the court made its own objective assessment of all the circumstances. The applicable question was whether a fair-minded and informed observer would conclude that there was a real possibility, or real danger, that the tribunal was biased.

3. The chairman’s remarks were not directed to a specific issue or to difficulties Harada might face on the jurisdiction question. They amounted to a general slur based on alleged conduct in other litigation. The chairman’s subsequent suggestion that the parties discuss settlement reinforced the real danger that Harada’s case would be viewed with disfavour. The fact that the lay members could outvote the chairman did not remove the possible influence of his remarks.

4. The chairman’s statement that neither he nor the other members felt biased was not conclusive. Nor was Harada’s decision to withdraw conclusive against it. The propriety of leaving a hearing depends on all the circumstances, including the nature of the case, the statement complained of and the circumstances in which it was made. The caution in Peter Simper & Co v Cooke [1996] IRLR 19 did not prevent relief in this case.

5. The procedure after withdrawal was unsatisfactory. Harada’s witnesses remained at court and were effectively called and materially cross-examined by Mr Turner’s counsel without Harada’s representation. Their evidence was rejected. The hearing was not fair, and the defect was not cured by the subsequent proceedings. Even if a later fair hearing could exceptionally cure bias, this was not such a case.

The case was transferred, by consent endorsed by the court, to the London Stratford region. Harada was awarded costs, subject to detailed assessment.

• Court of Appeal (Civil Division): Appeal allowed. The Employment Tribunal decision was set aside and the matter remitted to a differently constituted tribunal.
• Employment Appeal Tribunal: On 3 November 1999, dismissed Harada’s appeal from the Employment Tribunal.
• Employment Tribunal for London North: On 10 September 1998, decided that it had jurisdiction to hear Mr Turner’s applications.