Smith v Chelsea Football Club Plc

Findings by an employment tribunal may create an issue estoppel in later High Court proceedings where they determine an issue essential to the claimant’s legal entitlement. Recasting the same claim as one based on an implied term or quantum meruit does not avoid the estoppel. A claim under the unlawful deductions provisions requires a legal entitlement to the sums claimed, although the entitlement need not be contractual and the amount need not be quantified when proceedings begin. The claim must nevertheless be capable of quantification. Re-litigation of matters already determined may also amount to an abuse of process.

The claimant, a former football-club executive, had previously brought employment tribunal claims for unpaid salary, bonus and employment benefits. The tribunal rejected those claims, save for declaring an entitlement to a salary of £400,000 per annum, and also determined the contractual basis of his remuneration.

He later brought High Court proceedings claiming the same or substantially the same sums, alternatively as reasonable remuneration under an implied term or on a quantum meruit basis, and included related wrongful-dismissal claims. The defendant applied to strike out the overlapping claims or obtain summary judgment, contending that the tribunal’s findings created an issue estoppel and that the proceedings were abusive.

1. Application granted. The claims for unpaid salary, bonus and employment benefits, together with the bonus and benefits elements of the wrongful-dismissal claim, were struck out. The salary element of the wrongful-dismissal claim remained for determination, subject to mitigation and credit for compensation already received.
2. The unlawful deductions provisions concern sums legally payable to the worker. The entitlement may arise contractually or otherwise, but the sum must be capable of quantification. The present claims were quantifiable and had in fact been quantified before the employment tribunal. Coors Brewers Limited v Adcock & Ors concerned a loss-of-chance claim arising from the absence of a substitute incentive scheme and did not prevent the tribunal from determining ordinary disputes about the calculation or entitlement to wages.
3. The employment tribunal had determined the claimant’s salary entitlement, including the increases to £330,000 and £400,000, and had found that the salary was paid. It had also determined that there was no entitlement to bonus or employment benefits. Those findings were essential to its declaration and determination of the unlawful-deductions claims.
4. Issue estoppel applies where a court of competent jurisdiction has determined an issue which is common to a later cause of action. The principle applies to findings made by an employment tribunal in later High Court proceedings. The claimant could not avoid it by presenting the same dispute as a claim for reasonable remuneration or quantum meruit. The tribunal’s judgment had to be read as a whole, rather than dissected phrase by phrase.
5. The overlapping claims were therefore both barred by issue estoppel and an abuse of process. It was just and proportionate to strike them out after the claimant had received a full three-day tribunal hearing.

First-instance decision. The judgment records the claimant’s earlier employment tribunal proceedings, whose reserved judgment was promulgated on 11 August 2008, but gives no citation for that decision.