Legal Services Commission v Patterson Rev 2

The Court of Appeal considered whether the Employment Tribunal had jurisdiction under the Race Relations Act 1976 to entertain a sole practitioner's claim of race discrimination arising from the Legal Services Commission's accreditation/franchise process (LAFQAS) and the award of a three-year General Civil Contract. The court held that the tribunal had no jurisdiction under section 4 (employment) because the contractual scheme did not impose an obligation on the contractor personally to execute work or labour and thus the dominant purpose of the contract was not the personal execution of work by the applicant. However, the court held that the tribunal did have jurisdiction under section 12 (qualifying bodies) because the Commission, as a public body with power under the Access to Justice Act 1999 to accredit and confer franchises, did confer an authorisation which facilitated engagement in the solicitor's profession and thereby fell within the scope of section 12.

This appeal concerned Ms Yvonne Patterson, a sole principal of Patterson Sebastian & Co, who claimed race discrimination in relation to the Legal Services Commission's refusal to grant full franchise status (and thereby a three-year contract) following a Pre-Franchise Audit under the Legal Aid Franchise Quality Assurance Standard (LAFQAS). The proceedings before the Employment Tribunal alleged discrimination under the Race Relations Act 1976. The Commission contended the ET lacked jurisdiction under sections 4 and 12 of the Act. The ET found no jurisdiction under either section; the Employment Appeal Tribunal reversed and held there was jurisdiction under both sections. The Court of Appeal was asked to resolve the jurisdictional points only; it did not determine the merits of the discrimination allegations.

Procedural history:

• Employment Tribunal decision sent 11 September 2001: no jurisdiction under s4 or s12.
• Employment Appeal Tribunal decision 21 February 2003: reversed as to both s4 and s12, holding ET had jurisdiction under both.
• Permission to appeal to the Court of Appeal granted 21 March 2003; hearing 15–16 October 2003; judgment delivered 11 November 2003.

Nature of the claim/application: Ms Patterson alleged race discrimination in connection with her application for a Legal Services Commission franchise and related loss; she sought the Employment Tribunal's jurisdiction to hear and determine those claims under the Race Relations Act 1976.

Issues framed by the court:

• Whether the contractual relationship between a sole practitioner and the Commission constituted "employment" within section 4 of the Race Relations Act 1976 (i.e. a "contract personally to execute any work or labour").
• Whether the Commission was a "qualifying body" within section 12 so that refusal or terms of conferring a franchise could constitute unlawful discrimination.

Court's reasoning (concise):

• On section 4 the court applied the established test (Mirror Group v Gunning; Kelly v Northern Ireland Housing Executive): identify who contracted, whether the contract imposed a personal obligation to execute work, and whether that personal performance was the dominant purpose. The detailed contract (One-Year/Three-Year Contract, Schedule, Contract Standard Terms, Specification and LAFQAS) permitted the contractor to use approved representatives and personnel, required notification of changes in personnel, and allowed replacement of franchise representatives and supervisors. The dominant purpose was to enable provision of publicly funded legal services in compliance with standards, not to require personal performance by the sole practitioner. Therefore the ET lacked jurisdiction under s4.
• On section 12 the court held the Commission is a public body with an express statutory power to accredit and to grant franchises under the Access to Justice Act 1999. Granting a franchise and the right to display the Commission's logo were found to be an authorisation which "facilitates engagement in" the profession because it makes practising (and obtaining publicly funded work) easier. The franchise therefore fell within the class of authorisations or qualifications contemplated by s12 and the ET had jurisdiction to adjudicate claims under that provision.

The court therefore allowed the appeal in part: appeal allowed as to section 4 (no ET jurisdiction) and dismissed as to section 12 (ET has jurisdiction).

Appeal allowed in part. The Court of Appeal held that the Employment Tribunal had no jurisdiction under section 4 of the Race Relations Act 1976 because the contractual scheme between the Legal Services Commission and a sole practitioner did not impose personal obligations to execute work such that personal performance was the dominant purpose. The appeal was dismissed in relation to section 12: the Commission's grant of a franchise and logo was an authorisation which facilitated engagement in the solicitor's profession and therefore fell within section 12, so the Employment Tribunal has jurisdiction to hear claims under that section.

Employment Tribunal decision (11 September 2001): ET held it had no jurisdiction under sections 4 or 12 of the Race Relations Act 1976. Employment Appeal Tribunal (21 February 2003): reversed, holding the ET had jurisdiction under both sections. Permission to appeal to the Court of Appeal granted by Mummery LJ (21 March 2003). Court of Appeal judgment delivered 11 November 2003 ([2003] EWCA Civ 1558).