Godfrey Morgan Solicitors Ltd v Marzan & Ors

An Employment Tribunal may award costs or preparation time costs where a party’s conduct unreasonably frustrates the efficient resolution of the real dispute. A solicitor must facilitate justice and should not exploit an immaterial misdescription of a respondent while withholding information that would correct it.

The Tribunal’s case-management discretion under Employment Tribunals Rules of Procedure 2004 must be exercised logically, relevantly and justly. It cannot be used to obtain irrelevant credibility material, to discipline a solicitor, or to compel production of a document not in the person’s possession. An unless order must state with sufficient clarity what is required and the consequence of default.

Miss Marzan claimed notice pay after working as a paralegal. Her ET1 named “Godfrey Morgan Solicitors t/a GMS Law”, omitting “Limited” from the name of the company which employed her. The firm denied employing her without identifying the company or disclosing the contract held by that company. The Employment Tribunal joined the company and made a preparation time and costs order against the firm.

Later Employment Judges required Mr Morgan to produce evidence of his overseas travel on the date of the first hearing. An imprecise unless order requiring a copy of the “relevant air line ticket” led to the response being struck out, judgment for Miss Marzan, and a further preparation time order. The appeals raised the validity of the first costs order and of the disclosure, unless, strike-out, merits and later costs orders.

1. The first appeal was dismissed. The Tribunal was entitled to find that the firm had acted unreasonably. The omission of “Limited” was, at most, an immaterial technical error. A professionally competent representative should have identified the correct employer, notified the claimant, and disclosed the employment contract held within the associated company. The firm instead denied employment in terms which wasted the listed hearing and delayed determination of the real dispute.

   The EAT rejected the submission based on Ridehalgh v Horsefield and Anor [1994] EWCA Civ 40. That authority concerned wasted costs against representatives, whereas this was an order against a party under the Tribunal costs regime. The Tribunal was entitled to conclude that the conduct was unreasonable and to compensate the claimant for time spent preparing for an abortive hearing. The result also accorded with rules 38 and 40(3) of the Employment Tribunals Rules of Procedure 2004.

2. The remaining four appeals were allowed. Although rule 10 confers a broad case-management discretion, it must be exercised by reference to logic, relevance, reason, justice and the overriding objective. The existence of an airline ticket bearing only on whether Mr Morgan had attended an earlier hearing was irrelevant to the notice-pay dispute. Disclosure solely on a tangential issue of credibility was not necessary for fair disposal or to save expense.

   The Tribunal could not use disclosure as a disciplinary mechanism or require a non-party to obtain a copy of a document he did not possess. The unless order was also hopelessly unclear: it did not identify the ticket or state the consequence of non-compliance.

3. Because the disclosure and unless order were invalid, the strike-out, unopposed merits judgment and further preparation time order founded upon them could not stand. The notice-pay claim was remitted for hearing before a freshly constituted Tribunal. Employment Judges Warren, Pritchard-Witts and Moore were not to sit.

• Employment Appeal Tribunal: The appeal against the first preparation time and costs order was dismissed. The appeals concerning disclosure, the unless order, strike-out, merits judgment and later preparation time order were allowed. The claim was remitted to a freshly constituted Employment Tribunal.
• Employment Tribunal: At the February 2011 hearing, the company was joined as a second respondent and a preparation time and costs order was made against the firm.
• Employment Tribunal: Subsequent orders required production of airline-ticket evidence. Non-compliance with an unless order led to strike-out, judgment for the claimant against the company, and a further preparation time order.