Addison Lee v H Afshar & Ors

For a deposit order under rule 39, an employment tribunal may treat the result and reasoning of earlier litigation on identical facts as a relevant indicator of the prospects of a specific allegation or argument. The rule in Hollington v Hewthorn, which protects the independence of a final trial, does not exclude that material from the tribunal’s preliminary and non-binding assessment.

A refusal to strike out does not prevent a deposit order. The tests are different. Deposit orders may be made through a fair staged process, provided the final order identifies the relevant parties and sums. The tribunal must consider ability to pay and proportionality, but may make an order for each claimant affected by a weak argument. It need not investigate funding arrangements or determine separate limitation issues.

Hundreds of drivers brought substantially identical claims against Addison Lee, alleging worker status and consequential entitlement to payment. Their claims overlapped in time and substance with earlier successful proceedings brought by three other drivers.

The Employment Tribunal refused applications to strike out Addison Lee’s pleaded arguments but made deposit orders under rule 39 of the Employment Tribunals Rules of Procedure 2013. Following a staged process, the final orders required deposits totalling £125,000 in respect of 329 named claimants.

Addison Lee brought three appeals against the tribunal’s Decisions 1, 2 and 3. It contended, among other matters, that the earlier litigation was inadmissible under Hollington v Hewthorn, that the strike-out reasoning was inconsistent with deposit orders, and that the orders were procedurally invalid, disproportionate, or affected by funding and limitation issues.

1. Appeals dismissed. The tribunal was entitled to make the deposit orders. Rule 39 requires a summary, non-binding assessment of whether a specific allegation or argument has little reasonable prospect of success. It does not require a mini-trial.

2. The rule in Hollington v Hewthorn did not exclude the earlier Addison Lee litigation from that assessment. The tribunal was not treating its outcome as proof of facts or as determinative. It could regard fully reasoned prior decisions, in which Addison Lee had participated and which concerned the same arrangements and period, as a reliable indicator of prospects. The final tribunal remained free to decide the evidence for itself.

3. The refusal to strike out was consistent with making deposit orders. Strike out and deposit orders serve different functions and apply different thresholds. A deposit order leaves the paying party able to continue the argument on payment, whereas strike out conclusively removes it.

4. The tribunal had jurisdiction to decide the merits and general scale of the proposed orders before finalising their beneficiaries. Its staged case-management process was fair. Decision 3 completed the process by naming 327 claimants, later increased by agreement to 329, and fixing the sums attributable to each category of argument.

5. The total was neither penal nor disproportionate. Rule 39 permits a deposit of up to £1,000 for each specific argument and affected claimant. The tribunal had considered affordability and capped the aggregate total well below the amount sought. A deposit order properly creates an incentive to reconsider weak points, while preserving access to justice for a party able to pay it.

6. The tribunal was not required to investigate damages-based agreements or to weigh limitation arguments when deciding whether Addison Lee’s specified arguments had little reasonable prospect of success. Those were separate matters and their examination would improperly expand the summary rule 39 exercise.

• Employment Appeal Tribunal: dismissed Addison Lee’s three consolidated appeals: [2024] EAT 114.
• Employment Tribunal: Employment Judge Tynan refused strike out, determined that specified arguments had little reasonable prospect of success, and ultimately made deposit orders for 329 named claimants in Decisions 1, 2 and 3.