Gee v Shell UK Ltd

An employment tribunal may warn a party about possible costs where there is a real and sufficient risk of an adverse costs order. The warning must accurately reflect both the likelihood and the possible extent of that order.

A warning which exaggerates a remote risk may exert improper pressure and deny the party a fair hearing. Tribunals must take particular care with litigants in person. The governing legal rules remain equal, but effective access may require attention to each party’s capabilities.

Under the former employment tribunal costs regime, costs were exceptional and depended on misconduct of the prescribed kind. It was therefore unlawful to deter a claimant from pursuing reasonably arguable issues by suggesting that failure exposed her to substantial costs.

Mrs Gee claimed unfair dismissal after Shell UK Ltd terminated an agreement under which she operated a service station. Preliminary issues concerned whether she was an employee and whether she had completed the required two years’ continuous service.

At the hearing, the Employment Tribunal rejected Shell’s abuse of process argument but repeatedly warned Mrs Gee, who represented herself, that continuing unsuccessfully could expose her to substantial costs. Concerned that her home was at risk, she withdrew her claim.

The Employment Appeal Tribunal held that the warnings had exerted unfair and oppressive pressure. It directed a rehearing before a differently constituted tribunal. Shell appealed. The central issue was whether the warnings had crossed the boundary between robust case management and improper pressure, thereby denying Mrs Gee a fair hearing.

1. Appeal dismissed unanimously. Scott Baker LJ, with whom Sedley and Simon Brown LJJ agreed, held that the Employment Tribunal had exerted unfair pressure which caused Mrs Gee to withdraw her claim. The Employment Appeal Tribunal had correctly directed a rehearing before a differently constituted tribunal.

2. A tribunal may discuss weaknesses in a party’s case and may give an appropriate warning about costs. It must, however, have regard to the actual likelihood and possible extent of any order. Simon Brown LJ emphasised that tribunals enjoy a wide margin of discretionary judgment in case management. Appellate intervention is justified only where it is plain that the tribunal has overstepped the bounds of propriety. A warning may be improper where it presents a merely conceivable costs order as probable, or suggests exposure to the whole costs when only a limited order could realistically arise.

3. Under Regulation 12(1) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993, costs depended on frivolous, vexatious, abusive, disruptive or otherwise unreasonable conduct. Costs were exceptional, and the threshold was high. The expression “otherwise unreasonably” contemplated misconduct, consistently with Kovacs v Queen Mary and Westfield College and Another [2002] EWCA Civ 352. The subsequent addition of “misconceived” proceedings to the costs regime reinforced the conclusion that mere weakness or ultimate failure would not have met the earlier threshold.

4. Mrs Gee had a clearly arguable case on continuity of employment. The Tribunal had also held that pursuing the employment-status issue was not an abuse of process and was not precluded by the Griffiths decision. No costs order, especially an unlimited one, was realistically in prospect. The warnings nevertheless conveyed a real risk of substantial liability and caused Mrs Gee to abandon her claim. They were disproportionate and denied her a fair hearing.

   Sedley LJ added that the same legal rules apply to represented and unrepresented parties, but a tribunal must assess the parties’ actual capabilities and secure equal access to its processes. Employment tribunals must preserve the accessible and ordinarily cost-free character of their jurisdiction.

1. Court of Appeal (Civil Division): Shell’s appeal was dismissed unanimously. The order for a rehearing before a differently constituted Employment Tribunal was affirmed: [2002] EWCA Civ 1479 .
2. Employment Appeal Tribunal: On 16 January 2002, the Tribunal allowed Mrs Gee’s appeal. It held that unfair and oppressive costs warnings had caused her withdrawal and remitted the claim for a fresh hearing.
3. Employment Tribunal: On 8 March 2000, the Tribunal dismissed Mrs Gee’s application upon her withdrawal after warning her of possible substantial costs.