Alexander Pady & Ors v HMRC & Ors

An Employment Tribunal’s power to strike out proceedings for abuse of process is exceptional. Re-litigation in civil proceedings is not presumed abusive. The question is whether, in all the circumstances, it would be manifestly unfair to the opposing party or would bring the administration of justice into disrepute.

In large-scale proceedings managed through sample claims, a party who knew that a common issue would be determined, had a fair opportunity to participate, but did not do so, may abuse the process by later seeking to re-litigate that issue. Fresh evidence is part of the factual assessment. It will not alter that conclusion where it could reasonably have been obtained or raised earlier and would not entirely change the aspect of the case.

Twenty civil servants, supported by the FDA union, brought complaints of direct age discrimination under the cap and taper provisions of the Civil Service Compensation Scheme. Their claims were brought after a Presidential Case Management Order had grouped comparable claims and provided for common case management.

A preliminary hearing in sample claims determined that the respondents had justified the discriminatory scheme. The FDA claimants knew before that hearing that the common issue of justification would be decided, but did not apply to participate or seek to adduce evidence. They later resisted the proposed disposal of their claims and relied on a proposed expert report.

The Bristol Employment Tribunal struck out the claims as an abuse of process under rule 37 of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013. The central issue on appeal was whether that evaluative conclusion involved an error of law.

1. Appeal dismissed. The Employment Tribunal had applied the correct test for abuse of process and had permissibly struck out the claims under rule 37 of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013.

2. The jurisdiction is exceptional and requires a fact-specific, broad merits-based assessment. Its foundation is the public interest in finality and in preventing a party from being twice vexed. Re-litigation of a civil issue is not, without more, abusive. The controlling question remains whether it would be manifestly unfair to a party or bring the administration of justice into disrepute: Hunter, Johnson v Gore Wood and Allsop.

3. The particular management of large-scale litigation through sample claims can make a later attempt to re-open a common issue abusive. The FDA claimants were parties to proceedings covered by the Presidential Case Management Order. They knew that justification would be determined at the December 2021 hearing, had liberty to apply, and could have sought to provide sample claimants, evidence or submissions. The Tribunal was entitled to find that their involvement would have been accommodated.

4. It was open to the claimants to take no procedural step. It was not open to them to do so while preserving an option to re-litigate the same justification issue after the sample claimants had lost. That course would undermine the careful marshalling of the litigation, expose the respondents to repetitive litigation, and be manifestly unfair. It would also undermine the administration of justice.

5. The proposed Gibson expert evidence did not alter that conclusion. The Tribunal did not treat the Phosphate Sewage test as a universal rule for civil re-litigation. It considered the evidence as part of the factual matrix and was entitled to find both that similar evidence could reasonably have been obtained or flagged before the sample hearing and that it would not entirely change the aspect of the justification case. It addressed only part of the respondents’ proportionality case and did not undermine the finding that the cap and taper formed part of an overall package bridging redundancy and access to an unreduced pension.

6. The absence of a binding lead-case order under rule 36, the observer’s attendance, and the other matters relied on by the claimants disclosed no error of principle, omission of a material matter, reliance on an immaterial matter, or impermissible evaluative conclusion.

• Employment Appeal Tribunal: dismissed the claimants’ appeal and upheld the strike-out.
• Bristol Employment Tribunal: struck out the FDA claimants’ direct age-discrimination claims as an abuse of process by a decision sent to the parties on 23 December 2022.