National Oilwell Varco (UK) Ltd v Van De Ruit

Under rule 40 of the Employment Tribunals (Constitution & Rules of Procedure) Regulations 2004, an Employment Tribunal should assess the whole conduct of proceedings when deciding whether a party acted unreasonably. It need not classify each isolated act separately. Even conduct that appears unreasonable in isolation may not make the overall conduct unreasonable.

If unreasonable conduct is established under rule 40(3), the Tribunal then has a separate discretion under rule 40(2) as to whether expenses are appropriate. A late withdrawal is not necessarily unreasonable. A litigant may reasonably take a cold, hard look at an arguable claim and withdraw because of litigation risks and personal consequences.

The claimant had brought claims for constructive dismissal, disability discrimination, race discrimination and unlawful deductions from wages. A Pre-Hearing Review was listed to address time bar and disability status.

The day before that hearing, the claimant withdrew all claims. The respondent sought expenses, contending that the late withdrawal and an alleged failure to provide additional information were unreasonable conduct. Employment Judge Hosie refused the application in a decision sent on 14 November 2013.

The respondent appealed. The central issue was whether the Employment Judge had erred in law by finding that the claimant’s conduct, viewed overall, was not unreasonable and by declining to award expenses.

1. Appeal dismissed. The Employment Judge was entitled to refuse an award of expenses. His decision disclosed no error of law.

2. Rule 40 establishes a two-stage structure. The Tribunal first considers, under rule 40(3), whether the paying party’s bringing or conduct of proceedings was vexatious, abusive, disruptive, otherwise unreasonable, or misconceived. If that threshold is met, it then considers under rule 40(2) whether it is appropriate to award expenses.

3. The rule 40(3) inquiry concerns the conduct of the proceedings as a whole. The Tribunal need not decide whether every separate act was reasonable or unreasonable. It may conclude that one act was unreasonable in isolation but that the party’s overall conduct was not unreasonable. If no conduct is properly categorised as unreasonable, there is no need for a separate exercise under rule 40(2).

4. The Employment Judge was entitled to find that the withdrawn claims were at least stateable and had been pursued with legal advice. The claimant’s concern about the effect of continuing litigation on new employment and family life, and the risk of an expenses award if unsuccessful, were valid and understandable reasons for withdrawal. Although the withdrawal was late, it was open to the Employment Judge to conclude that it was not unreasonable.

5. The alleged failure to comply fully with an order for additional information did not compel the opposite conclusion. The information concerned quantification, which was not to be addressed at the Pre-Hearing Review, and the Employment Judge was entitled to take account of the disputed breach and apparent absence of prejudice in assessing the overall conduct.

6. The Employment Appeal Tribunal will not lightly interfere with an Employment Tribunal’s discretionary decision. The decision was within the range open to the Employment Judge and therefore stood.

• Employment Appeal Tribunal: dismissed the respondent’s appeal and upheld the refusal of expenses: [2014] UKEAT 0006_14_2705.
• Employment Tribunal: Employment Judge Hosie, sitting alone at Aberdeen, refused the respondent’s application for expenses in a decision sent to the parties on 14 November 2013.