Roberts v Wilsons Solicitors LLP

The Court of Appeal dismissed the Respondents' appeal against the Employment Appeal Tribunal. The central legal points were: whether an Employment Tribunal was entitled to strike out a claimant's claim for post-termination losses arising from alleged unlawful detriments in circumstances where membership of an LLP had later been lawfully terminated; and the correct approach to causation under section 49 of the Employment Rights Act 1996. The court held that the Employment Tribunal had erred in striking out the element of the claim concerned because questions of causation and attribution under section 49 are matters of fact for the Tribunal to decide on evidence, not issues suitable for strike-out. The decision in Flanagan v Lion Trust Investment Partners LLP [2015] EWHC 2171 (Ch) did not, as a matter of law, preclude a member-worker from claiming post-termination losses if those losses were attributable to earlier unlawful detriments.

Background and parties:

The claimant was a solicitor and member of an LLP who held positions including Managing Partner, COLP and COFA and sat on the board. After investigating a bullying complaint about the senior partner, the claimant was removed from posts, alleged that the other members repudiated the members' agreement, gave notice that his membership would terminate, was asked to return to work, confirmed his membership would cease, did not return to work and was subsequently expelled on 30 April 2015. The claimant issued ET proceedings under the whistleblowing provisions (section 47B of the Employment Rights Act 1996) and sought compensation under section 49, claiming substantial future losses.

Procedural history:

• The Employment Tribunal (EJ Salter) struck out the part of the claim relating to the termination of membership and losses flowing from that termination, relying on Flanagan v Lion Trust Investment Partners LLP.
• The claimant appealed to the Employment Appeal Tribunal (Simler J), which allowed the appeal on 21 April 2016 and held that post-termination losses could be claimed if attributable to earlier unlawful detriments; the EAT refused permission to appeal to this Court, but permission was later granted to the respondents.
• The present appeal to the Court of Appeal followed, heard on 20 December 2017.

Nature of the claim / relief sought: The claimant sought compensation under the whistleblowing provisions of the Employment Rights Act 1996 for detriments suffered as a worker, including substantial claimed future loss of earnings.

Issues framed by the Court:

• Whether the ET was right to strike out the claim element dealing with alleged constructive termination and post-termination losses.
• Whether the EAT was right to allow the claimant's appeal.
• Whether a later lawful termination of membership necessarily breaks the chain of causation as a matter of law.
• Whether the EAT's decision conflicted with Western Excavating v Sharp.

Court's reasoning:

• The Court of Appeal held the strike-out power should be reserved for plain and obvious cases. Because the ET had to assume the claimant's pleaded facts were true at the preliminary stage, factual questions remained about whether the post-termination losses were attributable to the earlier unlawful detriments; those questions required evidence and findings of fact at a substantive hearing.
• The Court accepted that Flanagan established there is no concept of "constructive termination" in LLP law for the purpose of LLP membership, but it did not follow that post-termination losses could never be recoverable as compensation for earlier unlawful detriments under section 49 of the 1996 Act.
• On causation, the Court considered the meaning of the phrase "attributable to" in section 49(2)(b). While the Court accepted that "attributable to" is capable of reflecting ordinary common law causal principles (including but-for causation), it was unnecessary to decide that point definitively because the essential error below was procedural: the ET should not have struck out the claim before evidence was heard.
• The Court rejected the submission that a lawful termination of membership necessarily breaks the chain of causation as a matter of law; authorities such as Reynolds and Royal Mail v Jhuti show that post-termination losses may in principle be recoverable where they flow from earlier unlawful acts, subject to factual inquiry.

Appeal dismissed. The Court held that the Employment Tribunal had erred in striking out the claimant’s claim for post-termination losses because whether losses are "attributable to" unlawful pre-termination detriments is a question of fact for the tribunal to decide on the evidence; Flanagan does not as a matter of law bar such claims and a lawful termination of membership does not automatically break the chain of causation.

Employment Tribunal (Southampton) decision (EJ Salter) 8 November 2015: struck out element of claim relating to termination of membership; Employment Appeal Tribunal (Simler J) judgment 21 April 2016 (UKEAT/0339/15): allowed claimant's appeal and restored claim to proceed; permission to appeal to Court of Appeal granted 18 July 2016 (Lewison LJ); Court of Appeal judgment [2018] EWCA Civ 52 (dismissal of appeal) 26 January 2018.