Vexatious tribunal claims - what can the employer do
What is Vexatious litigation?
A 2001 court case defined it as follows:
“The hallmark of a vexatious proceeding is…that it has little or no basis in law (or at least no discernible basis); that whatever the intention of the proceedings may be, its effect is to subject the defendant to inconvenience, harassment and expense out of all proportion to any gain likely to accrue to the claimant; and that it involves an abuse of the process of the court…”
This is a very wide definition, and can cover many different areas of vexatious claimant conduct. Those can include claims designed to cause financial damage to the employer, either in terms of lost time and money defending that claim, or the sheer inconvenience of having to deal with the issues raised, often over a prolonged period of time.
Why might claimants engage in vexatious litigation?
It’s hard to say exactly why this behaviour might arise. Some claimants may have a grievance that they feel very strongly about and will refuse to accept the contrary view, no matter how well it’s argued and evidenced.
For others, legal advice or guidance may be beyond their means and they are attempting to pursue their claim without any proper legal knowledge, unaware of the weakness or low prospects of their case.
There will always be a small proportion of claimants who have taken a grudge against their employer and are determined to make life difficult for them. This last group may well use delaying tactics, obstruction and obfuscation to prolong things, even if they know that they have no ultimate chance of success in their Employment Tribunal claim.
Regardless of the motivation behind vexatious claims, the employer will find them difficult and challenging to respond to; the consequences may be out of all proportion to the case itself. Financial costs, time spent defending the case, effects on productivity and, significant in today’s digital age, the possibility of reputational damage if the claimant knows what they are doing on social media; it is entirely possible for something false or misleading to nevertheless gain traction if someone is determined to make it so, particularly if it relates to a contentious social issue.
What employers can do
In some cases, this may not be the first time that an employee has lodged a claim against their employer, or, indeed, against other employers. The first port of call will be long-serving employees who may recall such activity. HR files can shed light on an employee’s history; claims or grievances will likely be logged and recorded, even if nothing came of them. Examination may reveal a pattern, which could illuminate the current claim.
If no light is shed on the claim by HR records, the next step is to check online records of Employment Tribunal judgments, which may reveal a history of previous claims and the reason for them. This will only show the cases where a decision was reached; those where the parties settled before the tribunal reached a decision won’t be listed.
While checking, it is also worth seeing if the claimant is on the Attorney General’s Vexatious Litigants list, or whether a Civil Restraint Order (CRO) has been made against them.
Once the ET1 has been lodged, the employer needs to respond to it on a form ET3 – this is usually done in co-operation with their legal adviser, who will help them prepare the best possible response. What they have discovered about the claimant’s previous history can be used to support their response, and it can also support a cost application later in the process if the tribunal looks like it will strike out the claim.
Tribunals generally do not award costs against a losing party but this is not to say they never do. A well-presented case could increase the likelihood of a successful costs application, which could significantly reduce the financial consequences of having to defend a vexatious claim.
Further and Better Particulars
When the ET1 is received, it is usually accompanied by details of the particulars behind the claim; once these have been reviewed by the employer and their legal adviser, it is sometimes worth making an application for Further and Better Particulars (FBPs) requesting further and more detailed information on the pretext of being better able to respond through the ET3. This can – but is not guaranteed to - have the effect of causing the claimant to come to their senses once they realise that they do not have the wherewithal to further substantiate their claim. If the claimant fails to respond to a request for FBPs, the employer can apply to the Tribunal for an unless order and/ or a strike out of the claimant’s claims.
Strike out and deposit orders
When the employer receives the ET1, they and their legal adviser can look at it and judge whether the claim appears weak and without any reasonable prospect of success. If it is felt that this is the case, the employer can apply for the claim to be struck out, or failing this, ask for a deposit order to be made.
The Tribunal rules
Rules 37 (1) of the Employment Tribunals Rules of Procedure 2013 says:
“At any stage of the proceedings, either on its own initiative or on the application of a party, a Tribunal may strike out all or part of a claim or response on any of the following grounds—
(a) that it is scandalous or vexatious or has no reasonable prospect of success;”
It is often the application of the respondent (the employer) which prompts this action or, at the very least, its consideration by the tribunal.
Rule 39(1) refers to deposit orders:
“Where at a preliminary hearing (under rule 53) the Tribunal considers that any specific allegation or argument in a claim or response has little reasonable prospect of success, it may make an order requiring a party (“the paying party”) to pay a deposit not exceeding £1,000 as a condition of continuing to advance that allegation or argument.”
Once again, this may serve to concentrate the mind of the claimant on the consequences of their continued action.
Should this fail to achieve the required result, the employer could discuss with their legal adviser the step of a costs warning letter; this will suggest to the claimant that they should withdraw their claim within a particular timeframe, and failure to do so will cause the employer to apply for costs, even if the claim is withdrawn later before the tribunal judgment.
It's worth bearing in mind, however, that costs awards are rare in employment tribunals and it’s not a good idea to rely on them being made as part of your approach. The tribunal often takes into account the ability of the other party to pay costs, and since the claimant is likely to be out of work, or on a limited income, then even if a costs award is made, it will likely be for a small amount, meaning the employer may not recoup what they had envisaged.
Civil Restraint Orders
If all else fails, a last resort may be applying to the court for a Civil Restraint Order (CRO). This is a court order issued by a judge, and is usually employed when someone has issued a claim to a court or tribunal, that claim has been refused but they refuse to accept the decision and continue to pursue their action by other means, including repeated claims. The CRO will then prevent that person from any further claims.
The judge will decide which type of order is the most suitable to issue.
There are three types.
(1) Limited CRO (LCRO)
If a person is issued with an LCRO, it means they have to get the judge’s permission before making any application to the court covered by the order.
(2) Extended CRO (ECRO)
If the person continues to go back to the court, a judge can issue an ECRO.
This order is limited to a specified group of courts. ECROs last 2 years, but can be renewed for a further 2 years.
(3) General CRO (GCRO)
In the most extreme cases, the judge will grant a GCRO.
This order applies to all the County Courts and the High Court. GCROs last 2 years, but can be renewed for a further 2 years.
If this order is ignored, the person will be in contempt of court and may receive a prison sentence.
The Judicial Sift
It’s not just the employer who can take action if they suspect a claim is vexatious. The tribunal service’s 2013 Rules of Procedure allow an Employment Tribunal to carry out what’s known as a Judicial Sift, which is where the judge takes a look at the ET1 and ET3 and can strike out a claim if they feel that it has no reasonable chance of success.
A decision to strike out a claim can be the subject of an application for a reconsideration and/or an appeal to the Employment Appeal Tribunal.
In practice, this power isn’t used very often unless it is clear there is no jurisdiction to deal with the claim, such as less than 2 years’ service in an unfair dismissal claim, and if the ET is considering striking out the claim they will usually deal with it at a hearing rather than on the papers.
A judicial sift is intended to stop weak claims, or those without merit, from proceeding to the tribunal stage where they would take up tribunal time and resources (already heavily stretched) proving what was already known at the outset.
However, the number of claims that are struck out at this stage is low, as tribunals prefer to err on the side of caution, following a case in 2001 (Anyanwu and Another v. South Bank Student Union and Another And Commission For Racial Equality) where the House of Lords said that:
“…discrimination issues of the kind which have been raised in this case should as a general rule be decided only after hearing the evidence. The questions of law that have to be determined are often highly fact-sensitive. The risk of injustice is minimised if the answers to these questions are deferred until all the facts are out. The tribunal can then base its decision on its findings of fact rather than on assumptions as to what the claimant may be able to establish if given an opportunity to lead evidence.”
It's therefore unwise to rely solely on the Judicial Sift to produce a desired outcome.