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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> East Dunbartonshire Council v. Murray [2004] UKEAT 0072_04_1412 (14 December 2004) URL: http://www.bailii.org/uk/cases/UKEAT/2004/0072_04_1412.html Cite as: [2004] UKEAT 72_4_1412, [2004] UKEAT 0072_04_1412

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APPEARANCES

 

 

For the Appellant	Mr D Strang, Solicitor Of- Messrs Brechin Tindal Oatts Solicitors 48 St Vincent Street GLASGOW G2 5HS
For the Respondent	Mr M Conaghan, Solicitor Of Messrs Maxwell McLaurin Solicitors 100 West Regent Street GLASGOW G2 2QB

SUMMARY
EXPENSES


 


LORD JOHNSTON:

1. This appeal arises in a rather unusual way, being taken against an award of expenses made against the Appellants in favour of the original Applicant, consequent upon the discharge of hearing scheduled to take place on 7, 8 and 9 June, in respect of the Applicant's claim against the now Appellants.
2. The discharge was achieved by agreement between the parties late on the Friday afternoon preceding the week that the hearing was to take place, arising principally out of the fact that neither party was ready to proceed, having regard to the fact, particularly, that the Appellants had failed to comply properly with an Order from the Tribunal to exchange Witness Statements and also to agree a Statement of Facts. Before us Mr Strang, appearing for the Appellants, did not seek to justify that position, but the issue that was raised was whether or not any expenses had been properly awarded in terms of the rules.
3. The relevant rule is paragraph 14 of the first schedule to the Employment Tribunals (Constitution and Rules of Procedure) (Scotland) Regulations 2001.
4. The governing submissions is as follows:

"(4) Where the tribunal has on the application of a party postponed the day or time fixed for or adjourned the hearing, the tribunal may make orders, of the kinds mentioned in paragraphs (1)(a) and (1)(b), against or, as the case may require, in favour of that party as respects any expenses incurred or any allowances paid as a result of the postponement or adjournment."

5. Subsection (1)(a) is in the following terms:

"an order containing an award against that party in respect of the expenses incurred by another party"

6. The reasoning of the Tribunal was as follows:

"I am satisfied that it is appropriate to make an award of expenses in this case and that the criteria for an award of expenses are fulfilled both in relation to Rule 14 (4) and (5) of the Employment Tribunals Rules of Procedure (Scotland) 2001. The explanation advanced by the respondents for the delay in obtempering the appropriate order is that the only person who had the requisite information and knowledge of the whereabouts of the appropriate documents was, herself, on maternity leave and it did not prove possible to obtain the necessary information from her until just before compliance with said order. I do not regard this explanation as adequate and am satisfied that an award of expenses is appropriate.

Mr Cockburn sought an award of expenses of £1,000 plus VAT. The hearing had been postponed on Friday 3rd June after normal business hours and he did not learn that it had been postponed until the morning fixed for the hearing. He had, of course, taken steps to find and carry out other remunerative work and had been successful in doing so to a degree, but it had proved impossible to fill his diary.

I am also satisfied that it is appropriate to award the sum of £1,000 plus VAT .Mr Cockburn had set aside three days for the hearing. I have no doubt that he did what he could to find other work, but am also satisfied that it was impossible for him to "fill the gap" completely as such short notice, and that an award of the sum is appropriate."

In terms of subsection (4) and subsection (1)(a) is the phrase "expenses incurred" which appears in both provisions.

7. The essential position of Mr Strang was that the sum awarded was stated to be a
   fee-note, subsequently rendered to the client, the Applicant, by her representative in respect of the hearing which had been postponed. It was not a claim for preparation time or for any other expense or allowance. This, said Mr Strang, could not be regarded as "expenses incurred", since it was looking to the future and not seeking reimbursement of expenses already incurred at the time of the discharge, namely the Friday. He pointed out that in the normal course of events, in both the Sheriff Court and the Court of Session, solicitors could not claim for expenses in relation to discharge diet, while counsel could, in appropriate circumstances, the rationale behind that being counsel would be unlikely, in the short time available, to obtain alternative work, while a solicitor should always have alternative things that he could do of an administrative nature to "fill the gap", to use the expression used by the Tribunal Chairman.
8. It follows that at the time of the discharge of the hearing, the expenses now being claimed, namely the sum of £1,000 plus VAT, had not been incurred by the Applicant. If the terms of business as between the solicitor and his client, namely the Applicant, permit him to charge for abortive work not yet incurred such would have to be expressly brought to the attention of the Tribunal, it was submitted, and this was not done in this case.
9. Mr Cockburn appearing for the Applicant Respondent, submitted that, properly understood, this was a loss incurred which required to be met by his client having regard to the discharge which, in this context, was brought about by the conduct of the Appellants. It was not compensation for work in relation to the representative's time but compensation for a loss incurred by the client. The fee-note had been subsequently issued, but that was not necessarily required. He accepted that the position of counsel was different from that of a solicitor in both the Court of Session and the Sheriff Court, although he did not concede that a solicitor could not necessarily claim for abortive expensive in relation to discharge diet.
10. We do not find the reasoning of the Tribunal convincing or, indeed, sufficient. The question of business terms has not been addressed, and while the figure of £1,000 may be a reasonable estimate on one view, it is not an estimate in relation to work already done, i.e. a preparation fee, but rather looking to the future. In our opinion, under the rules that we are required to consider in the 2001 Regulations, what is contemplated is reimbursement for abortive expense incurred by the time of the start or at it. It is not looking forward to the potential fee loss by the representative, charged out to the client. In any event, if we had to speculate on the matter, we cannot accept that Mr Cockburn, the representative in question, would not have had other administrative work to do in place of appearing at this hearing.
11. In our view the Tribunal has misdirected itself by making this award, which looks to the future and cannot be regarded as falling within the phrase "expenses incurred" if we gloss that with the qualification "at the time of the discharge".
12. Two further things should be noted. Under the new rules, preparation time can now fall within a claim for expenses in relation to discharged hearing. Secondly, this fee-note was rendered in respect of work not done and we have great difficulty in seeing how that can be a VATable charge. Solicitors' services are, of course, a VATable supply, but they have to be rendered. Properly understood, the approach of the Tribunal is more making an award of damages than a fee for work done and the former are not VATable.
13. In these circumstances and for these reasons we consider this Decision cannot stand. We considered whether or not further investigation should be ordered into the Applicant's representative's terms of business, but consider that it is now too late for that to happen. In these circumstances this appeal will be allowed and the Decision quashed.