Ako v Rothschild Asset Management Ltd

An Employment Tribunal order dismissing an application following its withdrawal does not invariably create cause of action or issue estoppel. The court may consider the objective circumstances of withdrawal to determine whether the claimant intended to abandon the claim, or merely to discontinue the particular proceedings and pursue the untried claim in another form.

Reasons for withdrawal matter only to that limited inquiry. Where there was no intended abandonment, a later claim is not barred unless allowing it would amount to an abuse of process. The absence in tribunal procedure of a discontinuance mechanism reinforced that conclusion.

The respondent employee brought claims for unfair dismissal and race discrimination. She withdrew her first Employment Tribunal application after receiving advice that she should make a fresh application naming both her employer and an alleged transferee. The tribunal chairman dismissed the first application on withdrawal under Employment Tribunals (Constitution etc) Regulations 1993, regulation 13(2)(a).

Within a week, she presented a second application repeating the allegations. The Employment Tribunal held that the dismissal created cause of action estoppel. The Employment Appeal Tribunal allowed her appeal, distinguished Barber v Staffordshire County Council [1996] ICR 379, and remitted the case for a merits hearing. The employer appealed.

1. Appeal dismissed unanimously. The tribunal's dismissal of the first application did not bar the second application. The employee had never intended to abandon her claims against the employer. She withdrew only to replace the application with one joining the additional respondent.

2. Per Mummery LJ, whose reasons were accepted by Dyson LJ and Jonathan Parker LJ, Barber v Staffordshire County Council [1996] ICR 379 and Lennon v Birmingham City Council [2001] IRLR 826 did not require a mechanical application of cause of action estoppel. The objective factual matrix may be examined to identify the extent of the consent to a dismissal order and the estoppel, if any, arising from it. Direct evidence of subjective intention is not admissible for that purpose.

3. The ordinary consequence of a consent dismissal remains that the cause of action is extinguished. But an Employment Tribunal withdrawal may, in substance, be a discontinuance. A discontinuance ends the particular proceedings without releasing the untried cause of action. The tribunal rules then lacked the ordinary courts' procedural distinction between dismissal and discontinuance.

4. Per Dyson LJ, a withdrawal or consent judgment creates no inflexible estoppel. The reason for withdrawal is relevant only where it illuminates whether the claimant intended to abandon the claim or issue. If there was no such intention, later proceedings remain possible unless they would constitute an abuse of process. There was no unfairness or abuse on these facts. Jonathan Parker LJ likewise held that withdrawal under the tribunal procedure was equivocal between abandonment and continuation of the claim in another form.

5. Mummery LJ added, as practical guidance, that until the tribunal regulations are amended, a tribunal should seek a statement of the circumstances before deciding whether to dismiss an application on withdrawal. The court did not decide the submissions based on the Human Rights Act 1998 and article 6.

• Court of Appeal (Civil Division): dismissed the employer's appeal and upheld the remittal for a merits hearing.
• Employment Appeal Tribunal: on 8 February 2001, allowed the employee's appeal, distinguished Barber v Staffordshire County Council [1996] ICR 379, and remitted the claim to the Employment Tribunal.
• Employment Tribunal: in extended reasons sent on 20 October 1999, held that dismissal of the first application on withdrawal created cause of action estoppel and prevented the second application against the employer from proceeding.