Wilsons Solicitors Llp & Ors v Roberts (Rev 1)

A lawful expulsion or termination of an LLP member does not automatically break the causal link between earlier unlawful detriments and later financial loss. In a compensation claim under Employment Rights Act 1996, whether post-termination loss is attributable to the detriments is ordinarily a fact-sensitive question for the Employment Tribunal, requiring evidence. The LLP-law rule that a purported acceptance of repudiatory breach cannot terminate membership does not determine statutory compensation. It may defeat a claim based on constructive termination while leaving a claim for loss caused by earlier unlawful treatment arguable. Strike-out is appropriate only where, even accepting the pleaded facts, the claim cannot succeed as a matter of law. The phrase attributable to imports but-for causation, although the Tribunal retains its broader just-and-equitable discretion.

The claimant, a solicitor and member of an LLP, brought a whistleblowing detriment claim under the Employment Rights Act 1996 after alleging unlawful treatment, withdrawing his labour and eventual expulsion. The Employment Tribunal struck out the part of the claim relating to membership termination and resulting losses, treating Flanagan v Lion Trust Investment Partners LLP and others [2015] EWHC 2171 (Ch) as an insurmountable obstacle. The Employment Appeal Tribunal, in P UKEAT/0339/15, allowed the claimant’s appeal. The respondents argued that LLP law, lawful termination and Western Excavating v Sharp precluded recovery. The central issues were whether strike-out was permissible and whether lawful termination necessarily broke causation.

1. Appeal dismissed. The Court of Appeal unanimously dismissed the appeal, with Lord Justice Singh giving the judgment and Lady Justice Hallett and Lord Justice Longmore agreeing. Under rule 37(1)(a) of the Employment Tribunal Procedure Rules 2013, a claim may be struck out for having no reasonable prospect of success only where, assuming the pleaded facts are true, it cannot succeed as a matter of law. The power is reserved for plain and obvious cases. Here, factual issues required evidence.
2. LLP membership and compensation were distinct issues. Flanagan v Lion Trust Investment Partners LLP and others [2015] EWHC 2171 (Ch) held that the common-law doctrine of repudiatory breach was implicitly excluded in relation to multi-party section 5 agreements, so acceptance of an alleged breach had no legal effect on LLP membership. That rule could defeat the claimant’s case based on constructive termination, but it did not determine whether post-termination losses were attributable to earlier unlawful detriments. The Employment Tribunal had wrongly elided membership termination with the losses said to flow from it.
3. Statutory compensation. Section 49 of the Employment Rights Act 1996 requires compensation to be just and equitable, with regard to the infringement and any loss attributable to it. Lord Justice Singh considered, although the point was not decisive, that attributable to imports the common-law concept of but-for causation. That question is distinct from the Tribunal’s overall just-and-equitable discretion.
4. No automatic break in causation. The court rejected the proposition that a lawful termination or expulsion necessarily breaks the chain of causation as a matter of law. Whether earlier unlawful detriments caused post-termination loss is a question of fact and judgment for the Tribunal. Prison Service v Beart (No. 2) [2005] EWCA Civ 467 was confined to reliance on an employer’s own unlawful dismissal; the passage suggesting that lawful dismissal might be an intervening act was obiter and only tentative. Ahsan v The Labour Party UKEAT/0211/10 was fact-specific. Reynolds v CLFIS (UK) Ltd and others [2015] EWCA Civ 439 and Royal Mail Ltd v Jhuti [2017] EWCA Civ 1632 supported the possibility of recovering losses occasioned by dismissal consequent on unlawful detriment.
5. Constructive dismissal. Western Excavating (ECC) Ltd v Sharp [1978] ICR 221 concerned the contractual test for constructive dismissal, not causation under section 49. The Employment Appeal Tribunal had not applied an unreasonableness test and had correctly allowed the appeal. The relevant claim was therefore not suitable for strike-out.

• Court of Appeal (Civil Division): On 26 January 2018, the appeal was dismissed. The court held that the Employment Appeal Tribunal had correctly allowed the claimant’s appeal.
• Employment Appeal Tribunal: Simler J allowed the claimant’s appeal on 21 April 2016 under P UKEAT/0339/15, holding that post-termination losses might be attributable to earlier unlawful detriments and required factual assessment.
• Employment Tribunal, Southampton: On 8 November 2015, the Tribunal struck out the part of the claim concerning termination of LLP membership and losses flowing from it under rule 37 of the Employment Tribunal Procedure Rules 2013.