Memorandum by the Department of Trade
2001 (S.I. 2001/1770)
2001 (S.I. 2001/1771)
1. At its meeting on 8 May the Committee requested
a memorandum about the above instruments on the following points:
"(1) Rule 12(11) of
the Employment Tribunals Rules of Procedure (as set out in Schedule
1) provides that where that rule requires a document to be signed
by the chairman but by reason of death or incapacity, the chairman
is unable to sign it, the document must be signed by the other
members or member of the tribunal, who must certify that the chairman
is unable to sign. Explain the omission of a corresponding rule
in the Rules set out in Schedules 4, 5 and 6.
(2) In rule 14(3)(a) (as set out in Schedule
1), the maximum amount which a tribunal may order a party to pay
to another party in respect of the expenses incurred by the latter
has been increased from £500 to £10,000. Explain the
reasons for this sharp increase."
The first point
2. The above instruments are consolidations, with
amendments, of the Employment Tribunals (Constitution and Procedure)
(Scotland) Regulations 1993 (S.I. 1993/2688) and the Employment
Tribunals (Constitution and Procedure) Regulations 1993 (S.I. 1993/2687).
Schedules 3, 4 and 5 to the 1993 Regulations (which correspond
to Schedules 4, 5 and 6 to the 2001 Regulations) did not contain
a rule dealing with the death or incapacity of the chairman of
a tribunal, and nor did their predecessor rules which date back
to 1965. This has not caused any difficulties as far as the Department
is aware. The Department does not consider it necessary to insert
such a rule into Schedules 4, 5 and 6, for the following reasons.
3. The special procedures covered by Schedules 4,
5 and 6 (appeals by employers against industrial training levies,
health and safety prohibition and improvement notices) are used
in approximately 0.1% of tribunal cases, and contain shortened
and simplified sets of rules compared to the main procedure for
ordinary disputes contained in Schedule 1. Schedules 4, 5 and
6 confer on tribunals power to regulate their own procedure, subject
to the provisions of the rules (rule 14(3), 14(1) and 12(1), respectively).
In the unlikely event that a chairman was unable, by reason of
death or incapacity, to comply with the requirement for him to
sign the document recording the tribunal's decision, the other
member or members of the tribunal could find an appropriate way
of certifying the decision as being that of the tribunal. This
would be done in reliance on their power to regulate their procedure.
The second point
4. Rule 14(3)(a) (as set out in Schedule 1) provides
for the maximum amount which a tribunal may order one party to
pay towards another party's costs, in the absence of agreement
between the parties as to an amount, and without an assessment
of those costs. Costs may only be awarded in the circumstances
set out in rule 14(1), that is, where the first party has behaved
unreasonably in some way. Between 1972 and 1993 there was no limit
on the amount of the costs which a tribunal could award in this
way. The Department considers that a limit is required but that
£500 is far too low, in view of the high amounts of legal
fees which can be incurred in respect of a tribunal claim.
5. There is already no limit on the amount of costs
which can be awarded following an assessment, but the Department
understands that the process of assessment is rarely used and
adds to the costs of both sides. Tribunals therefore need a more
realistic power to determine the amount of costs themselves.
6. The tribunal retains a discretion whether or not
to make an order and as to the amount, and the Employment Appeal
Tribunal has held that it is normally desirable for tribunals
considering making costs orders to take into account the means
of the party concerned. It may also be noted that the Employment
Appeal Tribunal has power itseelf to make a costs order which
is both unlimited and unassessed, in circumstances where proceedings
were unnecessary, improper or vexatious (rule 34(2) of the Employment
Appeal Tribunal Rules 1993 (S.I. 1993/2854)).
7. In the Department's view, the increase in the
limit to £10,000 will act as a deterrent to opportunistic
parties, while those with arguable cases who behave reasonably
will have nothing to fear.
1 June 2001