Johns v Solent SD Ltd.

A claim should not be struck out for having no reasonable prospect of success where that conclusion depends on predicting the failure of pending proceedings which may invalidate the statutory rule presently barring the claim.

Where the pending challenge may succeed, the court should not speculate on an unresolved objective-justification issue. If an immediate hearing would extinguish the claim under the existing rule, but a stay preserves a potentially viable claim, the balance of prejudice ordinarily supports a stay.

Mrs Johns was compulsorily retired by her former employer under a policy applying at age 65. She brought claims for unfair dismissal and age discrimination. At the time, Employment Equality (Age) Regulations 2006 regulation 30 and section 98 ZG of the Employment Rights Act 1996 appeared to bar those claims.

An Employment Tribunal Chairman struck out the claims after a telephone hearing. The Employment Appeal Tribunal allowed Mrs Johns’s appeal and stayed them pending the outcome of the Heyday proceedings, which challenged regulation 30’s compatibility with the age-discrimination Directive. Solent appealed. The central issue was whether the claims had no reasonable prospect of success, or should instead be stayed pending that challenge.

1. Appeal dismissed. Smith LJ, with whom Keene and Pill LJJ agreed, held that the claims could not properly be struck out. Even if the Employment Tribunal Chairman had directed himself by reference to the correct test, his conclusion rested on unwarranted speculation about the likely result of the pending Heyday proceedings.
2. The Chairman could not safely infer the result from Palacios de la Villa v Cortefiel Servicios SA, C-411/05, [2007] IRLR 989. The Spanish legislation considered there was materially different from regulation 30. The European Court had upheld that legislation only because, in its particular context, the discrimination had been objectively justified.
3. On the material available, it was possible that regulation 30 would have to be objectively justified and that the challenge to it would succeed. The Court of Appeal could not assess the prospects of that justification issue. If regulation 30 were struck down as unjustifiable and incompatible with the Directive, Mrs Johns would have real prospects of success. Her claims therefore did not satisfy the no-reasonable-prospect threshold for strike-out.
4. The balance of prejudice strongly favoured a stay. Solent would face delay and an outstanding claim, but an immediate hearing would require the tribunal to apply regulation 30 as it stood and would effectively extinguish Mrs Johns’s claims before the validity of that rule was resolved.
5. Smith LJ additionally observed that telephone hearings may be suitable for case-management matters, but are generally unsuitable for determining a substantive and legally complex issue such as strike-out.

• Court of Appeal (Civil Division) — dismissed Solent’s appeal and upheld the stay of the claims ([2008] EWCA Civ 790).
• Employment Appeal Tribunal — Nelson J allowed Mrs Johns’s appeal from the Employment Tribunal, set aside the strike-out, and stayed the claims pending the Heyday proceedings.
• Employment Tribunal — a Chairman struck out the unfair-dismissal and age-discrimination claims following a telephone hearing.