Amendments to add whistleblowing claims and EAT powers to make the ET’s case management orders

February 6, 2017

Kuznetsov v The Royal Bank of Scotland ([2017] EWCA Civ 43)

Case Summary

Introduction

In Kuznetsov the Court of Appeal again considered circumstances in which amendments to permit new causes of action should be allowed, and gave guidance encouraging litigants to consent to the EAT re-making case management decisions overturned due to errors of law.

Mr Kuznetsov was employed by RBS in October 2010 and dismissed in December 2011, purportedly on the grounds of redundancy.  His claims in the Employment Tribunal (ET), pleaded in person, included unfair dismissal and failure to pay wages for his notice and holiday periods. He stated, as ‘additional information’ that he had been promised a bonus that had not been forthcoming.

The Proceedings

In November 2014 the parties were directed to agree a list of issues.  The Claimant identified an issue claiming his dismissal was a result of his making one or more of two alleged protected disclosures (‘whistleblowing’), namely complaints that he had not been given a bonus and that he had refused to entertain re-location.

At first instance, the ET (EJ Glennie) identified a new issue, not expressly raised by the Claimant, that he might have been dismissed in order to avoid payment of the bonus, but refused to allow the claim to be amended to so allege.  EJ Glennie found that an allegation of a whistleblowing claim could only be made if the claim was amended and that it went beyond what was fairly in issue in an unfair dismissal complaint.  The ET found it to be out of time and, there being no suggestion that it would not have been reasonably practicable to present the claim in time, refused the application. The Judge found it would not be just to allow the claim, applying the Selkent v Moore ([1996] ICR 836) principles.

The EAT (HHJ Eadie QC) refused the Claimant’s appeal and upheld the decision of the ET that the documents disclosed by the Respondent, as a result of the Claimant’s subject access in August 2014, did not reveal new information which could have alerted him to a whistleblowing claim of which he had been unaware.  She did, however, allow the appeal against the decision to refuse to permit the bonus avoidance ground to be included in the list of issues in relation to dismissal only.

In the Court of Appeal, Elias LJ set out the four legal principles in issue: (1) the broad discretion held by the ET in the exercise of case management powers (Carter v Credit Change Ltd [1980] 1 All ER 252); (2) the circumstances of the exercise of discretion, including particularly whether an amendment changes the basis of an existing claim rather than re-labelling already pleaded facts; (3) that the focus should be on the decision of the ET not the EAT (Hennessy v Craigmyle and Co Ltd [1986] ICR 461 (CA); and (4) that an unlawful decision must be remitted to the ET save, exceptionally, where the EAT is able to conclude what the decision must have been without the error (Jafri v Lincoln College [2015] QB 781).

The second ground of appeal, that the ET failed to have regard to the reason for the delay in the application to amend, was found to be wholly without merit for the reasons given by HHJ Eady QC.

The first ground of appeal was that the ET’s decision could not stand in view of the fact that it was materially affected by EJ Glennie’s refusal to allow amendment of the unfair dismissal claim to allege that it was due to avoiding the Claimant’s bonus.  Had the ET not erred in refusing the amendment to the unfair dismissal claim, it was suggested, the factual framework within which it considered the protected disclosure amendment would have been very different.  In those circumstances, it was said to be impossible to say whether or not the ET would have come to a different result and the matter ought to be remitted.  Only then could the ET judge determine the prejudice of permitting a protected disclosure claim, given that bonus avoidance would have to be considered in relation to the alleged unfair dismissal.

This argument did not find favour with the Court of Appeal.  Any new protected disclosure claim would add to potentially relevant evidence, whether or not the facts of the non-payment of the bonus had to be considered.  It was not inevitable that key facts relating to the whistleblowing complaint – such as the nature and date of the disclosure – would be admissible in a claim limited to unfair dismissal.  An appellate court must be ‘robust and realistic’ and, taking this approach, it could not be said that the ET might have come to a different decision had it permitted the amendment to the unfair dismissal claim (which it should have done).

The application for a costs limiting order in the Court of Appeal, pursuant to CPR 52.9A, was also rejected on the grounds that it was out of time.

Guidance

Elias LJ noted that the rule in Jafri, requiring remittance wherever a case management decision erred in law save in the clearest cases, often had unfortunate consequences contrary to the overriding objective.  EAT judges would be in just as good a position to make a new decision where it was unnecessary to make new findings of fact and remitting the matter would, in those cases, simply cause unnecessary delay and increase costs.  While the EAT was required to remit in the absence of the consent of the parties, it was encouraged to ask the parties, in advance of the hearing, to consent to it making the case management decision afresh.

Lessons

Kuznetsov reaffirms that the Tribunal will scrutinise applications to amend on the grounds of new facts with care and that only exceptionally will it be possible to persuade it that causes of action could not have been pleaded in the absence of later disclosure.  It is also notable that the late disclosure occurred as a result of a subject access request some two and a half years after dismissal, so there is no suggestion that an earlier request would not have uncovered the same material.

It is not enough for a Claimant to show overlap between relevant facts in one claim and those relating to a proposed amendment.  The particular elements of a different cause of action are likely to require the investigation of different factual issues (even if closely related to those already ‘in play’); and an additional cause of action will always involve additional time and cost.  These considerations will always weigh heavily against the Tribunal granting amendments.

The judgment is available here.

Barristers