Labinjo v The University of Salford

An appellate tribunal may interfere with a discretionary case-management decision only for legal error, disregard of principle, factual misapprehension, an irrelevant or omitted relevant consideration, or a conclusion outside the generous ambit of reasonable disagreement.

A deposit order may be justified where a claimant lacks evidence for the representation alleged to have induced a compromise. Proof that the stated reason for termination was inaccurate is insufficient without proof of a material misrepresentation inducing the agreement.

An unless order must impose a proportionate sanction. Striking out an entire claim for failure to explain the relevance of peripheral documents is excessive where an evidential restriction would suffice. Legal professional privilege is distinct from without-prejudice privilege and cannot be displaced by applying authorities concerned only with the latter.

The claimant sought to set aside a compromise agreement ending his employment, so that earlier claims of race discrimination, victimisation and harassment could proceed. He alleged that the University had represented that his post would be redundant even if he succeeded in those claims. He also relied on pension information and subsequent statements to third parties that his employment ended by redundancy.

The Employment Tribunal ordered a £500 deposit, later refused a review, made an unless order concerning the relevance of disclosed documents, recorded a consequential strike-out, refused permission to amend, and ordered disclosure of the claimant's former solicitor's file. The claimant brought five interlocutory appeals.

The central issues were the claimant's prospects of establishing misrepresentation, the proportionality of the unless order and strike-out, the amendment application, and whether privileged solicitor-client communications could be disclosed.

1. Appeal allowed in part. The appeals against the deposit order and the refusal to review it were dismissed. The appeal against the order of 5 July 2011 was allowed in part: the unless order and the disclosure order were set aside, while refusal of permission to amend was upheld. The appeals concerning the consequential strike-out and review became academic.

2. Under section 21(1) of the Employment Tribunals Act 1996, the Appeal Tribunal could intervene in factual or discretionary decisions only within its limited appellate jurisdiction. Applying Noorani v Merseyside Tec Ltd [1989] IRLR 184, a case-management decision is challengeable for legal or factual error, failure to apply principle, improper consideration of relevant matters, or a conclusion outside the generous ambit of reasonable disagreement.

3. The deposit order under rule 20(1) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 was lawful. The decisive issue was whether the claimant could prove that his solicitor had been told that his post no longer existed and that he would lose it through redundancy. Without evidence from the solicitor or another source supporting that alleged representation, the claim had little reasonable prospect of success. The admitted absence of a genuine redundancy did not itself establish a misrepresentation entitling the claimant to avoid the agreement.

4. The whole-claim strike-out sanction was disproportionate. The underlying order was directed only to identifying the relevance of documents outside a core period. Non-compliance could properly have resulted in exclusion of those peripheral documents, but not in debarring the claimant from pursuing the entire claim. The unless order was therefore set aside.

5. The original pleading sufficiently stated the misrepresentation case. The proposed references to the University's statutes, later communications, and the date of the agreement were unnecessary or peripheral. Refusal of permission to amend was accordingly upheld.

6. The disclosure order could not stand. Evidence from without-prejudice negotiations may be admissible to establish or rebut a claim that a compromise should be set aside for misrepresentation, fraud or undue influence. However, the relevant issue was legal professional privilege in confidential solicitor-client communications, whose rules and exceptions are distinct and more confined. The Tribunal had applied an authority concerning without-prejudice privilege and had not addressed the correct privilege. No waiver had been shown.

• Employment Appeal Tribunal: Allowed the appeal in part. It upheld the deposit and amendment decisions, set aside the unless and disclosure orders, and made no order on the academic appeals concerning the consequential strike-out and review.
• Employment Tribunal, Manchester: Made interlocutory orders including a deposit order dated 4 August 2010, refusal of review by letter dated 10 March 2011, and orders dated 5 July, 20 July and 8 September 2011.