Layla Dean-Verity (formerly Anjum Tahirkhell) v Khan Solicitors Limited

When deciding whether to extend time for an application to reconsider an employment tribunal judgment, the tribunal must weigh the prejudice caused by refusal as a distinct factor. It must not discount that prejudice merely because the applicant’s delay was unjustified.

An error of law arises where the assessment overlooks or misunderstands material facts bearing on the practical effect of the earlier judgment, including its relevance to related regulatory or civil proceedings and its continuing effect on the applicant’s reputation. The delay and the reasons for it remain central, but they do not remove the need for a proper balancing exercise under the ET Rules.

The claimant, formerly a director and employee of the respondent solicitors’ firm, was found to have committed serious financial impropriety in an employment tribunal remedies judgment promulgated in 2014. Her unfair-dismissal compensation was eliminated on Polkey and contributory-conduct grounds.

Nearly six years later, she sought reconsideration after documents disclosed in related High Court litigation allegedly undermined the tribunal’s findings. Employment Judge Cox refused an extension of time and therefore refused reconsideration. The claimant appealed, contending in particular that the judge had underestimated the prejudice flowing from the continuing 2014 judgment in regulatory and High Court proceedings.

The central issue was whether the refusal to extend time involved an error of law in the assessment of prejudice.

1. Appeal allowed. Employment Judge Cox erred in law in assessing the prejudice to the claimant if time were not extended for her reconsideration application.

2. The appellate court accepted that the employment judge had adopted the correct basic approach: time limits promote promptness and finality, and the exceptional delay required cogent explanation. A case-management appeal nevertheless succeeds where the tribunal overlooks a relevant consideration, takes account of an irrelevant consideration, proceeds on a material factual misunderstanding, or reaches a perverse conclusion.

3. The conclusion that refusal would cause no substantial prejudice rested on material omissions or misunderstandings. The 2014 findings continued to be relied upon in the related High Court litigation, including the respondent’s appeal from the strike-out decision. The judge also failed properly to address the likelihood that the findings would influence the Solicitors Regulation Authority’s treatment of the claimant, and overlooked the outcome of the judicial-review proceedings.

4. The continuing existence of a judgment containing grave adverse findings was itself capable of causing reputational prejudice. Although the claimant’s delay and lack of good reason for it were highly material, they could not be used to discount prejudice before it was weighed in the overall balance.

5. The decisions dated 23 March and 27 October 2020 were set aside. The matter was remitted to Employment Judge Cox to reconsider the extension of time in light of the circumstances as they then stood. If time is extended, she must decide whether reconsideration should occur, its form, and whether the 2014 judgment should be set aside.

• Employment Appeal Tribunal: allowed the appeal from Employment Judge Cox’s paper decisions of 23 March and 27 October 2020, set them aside, and remitted the extension and reconsideration issues.
• Employment Tribunal: Employment Judge Cox had refused an extension of nearly six years for reconsideration of her judgment promulgated on 7 April 2014, and consequently refused reconsideration.