Royal Bank of Scotland Plc v AB

The Court of Appeal dismissed the employer's appeal against the Employment Appeal Tribunal's decision. The central legal principle concerned assessment of a claimant's capacity to litigate under the Mental Capacity Act 2005 and the purpose of such an assessment: to determine how the litigation should proceed (including whether a litigation friend is required), not as a forensic tool to supply evidence for one party's substantive case. Although the Employment Tribunal erred in declining to reconsider a request for a formal capacity assessment, that procedural error did not invalidate the remedies proceedings nor justify remission because any assessment would have been unlikely to assist the appellant's case and the Tribunal's findings on exaggeration and damages were open to it on the evidence.

Background and parties:

• AB was a former employee who brought claims including disability discrimination and constructive dismissal against Royal Bank of Scotland Plc. The Employment Tribunal found in AB's favour and awarded £4,670,535 in damages (plus agreed pre-judgment interest).
• The remedies hearing involved disputed psychiatric evidence from two consultant psychiatrists and major contested items of future care costing many millions; the overall claim value exceeded £10.5 million.

Procedural history and nature of the applications:

• At the remedies hearing AB presented in a florid manner and did not give evidence when expected. The employer applied for an assessment of AB's capacity to litigate; the Employment Tribunal refused that application, relying on the presumption of capacity under section 1(2) of the Mental Capacity Act 2005 and other factors (availability of experienced legal representatives, a recent report by Dr Ornstein assessing capacity, and the absence of any expert saying she lacked capacity).
• The employer renewed its request in light of observations of AB's presentation; the Tribunal again refused. The employer appealed to the Employment Appeal Tribunal which allowed one ground: that the Tribunal had wrongly failed to reconsider its refusal to order an assessment of capacity to litigate. The EAT nevertheless did not remit the case for reconsideration of remedies.

Issues framed:

• Whether the Employment Tribunal should have ordered a formal assessment of AB's capacity to litigate after her presentation at the remedies hearing.
• If the Tribunal erred, whether that error required remission to the Employment Tribunal (or a fresh tribunal) to reassess capacity and to reconsider remedies or the quantum of the award.
• Whether an assessment might have produced material evidence helpful to the employer on credibility, exaggeration or the scale of AB's claimed future needs.

Court of Appeal reasoning and resolution:

• The Court agreed that AB's presentation on 25 July 2017 gave good reason for the Tribunal to require an assessment of capacity. The purpose of such an assessment is procedural and time- and issue-specific: to determine whether a litigation friend is required and how the proceedings should continue.
• However, the Court held that ordering or conducting such an assessment would not have been likely to advance the employer's substantive case. The requested assessment was not a tool for speculative forensic discovery and any material that might arise from an assessment was at most a mere possibility; it did not justify remission. The Tribunal had proceeded on the basis that AB had capacity and had considered the question of exaggeration on the evidence, including the expert evidence; its findings were open to it and were not infected by the procedural irregularity.
• Accordingly, the Court of Appeal dismissed the employer's appeal and did not remit the remedies award.

Appeal dismissed. The Court accepted that the Employment Tribunal should have reconsidered whether a formal assessment of AB's capacity to litigate was required in light of her presentation, but concluded that the absence of such an assessment did not invalidate the remedies proceedings nor justify remission because an assessment would not have materially assisted the employer's substantive case and the Tribunal's findings on credibility and damages were open on the evidence.

Employment Tribunal: liability judgment and two remedies judgments (First Remedies Judgment and Second Remedies Judgment, remedies notified March/April 2018). Appeal to the Employment Appeal Tribunal (Swift J, UKEAT/1087 & 0266/18/DA) allowed in part on the point that the ET had wrongly failed to reconsider an application for a capacity assessment but did not remit. Appeal to the Court of Appeal: [2021] EWCA Civ 345 (this judgment) — appeal dismissed.