[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Sutton v. The Ranch Ltd [2006] UKEAT 0072_06_3003 (30 March 2006) URL: http://www.bailii.org/uk/cases/UKEAT/2006/0072_06_3003.html Cite as: [2006] UKEAT 0072_06_3003, [2006] UKEAT 72_6_3003

[New search] [Printable RTF version] [Help]

APPEARANCES

 

For the Appellant	MS SCHONA JOLLY (Of Counsel) Instructed by: Messrs Mayo & Perkins Solicitors 20 Gildredge Road Eastbourne East Sussex BN21 4RP
For the Respondent	MR FRANK IRONS (Representative) Peninsula Business Services Ltd Riverside New Bailey Street Manchester M3 5PB

SUMMARY

8C and 8P

Practice and Procedure – appearance/response; costs

The employers put in no response to the employees' various claims. The Tribunal awarded the employee a sum of £14,000 and £5,500 costs. At a review hearing the Tribunal revoked the costs order; the employee appealed. Held that the Tribunal had correctly applied Rule 38(4) of the 2004 Rules; an order for costs could only be made against a Respondent who had not put in a response and had, therefore, not had a response accepted in relation to any part he had taken in the proceedings; and the employers had not taken any part in the proceedings within Rule 9. Failure to put in a response cannot be taking any point in proceedings. Appeal dismissed.


 


HIS HONOUR JUDGE J BURKE QC

The history

1. This is another appeal arising out of the new rules which govern the procedures and powers of the Employment Tribunals, namely the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, in this case Schedule 1 of those Regulations. It is an appeal against part of the judgment of the Tribunal sitting at Southampton in the person of Mr Craft, sitting as Chairman alone, sent to the parties on 1 December 2005 with written reasons after a hearing on 18 November 2005.
2. In order to describe the issue which arises in this appeal I need to set out the history of the proceedings between Ms Sutton, the Claimant before the Tribunal, and The Ranch Ltd, her employers. Ms Sutton claimed that she had been constructively unfairly dismissed by her employers in December 2004 from her job as manager of the employers' restaurant in Eastbourne, principally by their refusal on her return from maternity leave to allow her to resume the same duties as those which she had carried out before she went on such leave and by their requiring her to work in a demoted position. She claimed that she had also been the victim, on those facts, of sex discrimination; and she claimed that arrears of maternity pay and holiday pay were due to her, that she did not have a proper statement of her terms and conditions of employment and that the employers had been guilty of serious breaches of the statutory procedures which applied under the provisions of Schedule 2 to the Employment Act 2002.
3. She presented her claim to the Tribunal on 25 February 2005. The employers did not file any Response. Accordingly, pursuant to Rule 9 of the Rules set out in Schedule 1 of the Regulations, to which I will come in more detail later, the employers were not entitled to take any part in the proceedings except as set out in that rule; and on 21 April 2005, pursuant to rule 8(1) and (2A) of the Rules, the Tribunal issued a default judgment in favour of Ms Sutton against the employers. On 27 May the Tribunal, consisting again of Mr Craft sitting alone, held a remedies hearing. Ms Sutton was represented by Miss Jolly of counsel, as she has been at all subsequent stages; the employers did not attend. The Tribunal awarded (i) for unfair dismissal, a basic award of £270 and a compensatory award of £2,179.63; (ii) £5,000 for injury to feelings arising from the sex discrimination, (iii) £902.80 for breach of contract, i.e. for unpaid maternity pay and (iv) holiday pay.
4. The Tribunal then made a 50 per cent increase in their award, pursuant to section 31(3) of the 2002 Act.
5. There were further awards. The Tribunal awarded the sum of £1,080 for the employers' failure to provide Ms Sutton with a written statement of particulars and awarded another sum for failure to allow her to be accompanied at a grievance procedure meeting.
6. The total amount was in excess of £14,000. The Tribunal also made an award of costs to Ms Sutton in the sum of just under £5,500.
7. The Tribunal said, at paragraph 33 of their written reasons:

"33 The Claimant made application for costs against the Respondent. The Employment Tribunal accepted Miss Jolly's submissions that the Respondent had conducted these proceedings unreasonably and with disregard for the Claimant and the Employment Tribunal. The Employment Tribunal was also able to review the full details of costs provided by Miss Jolly in support of this application. The Employment Tribunal find that the Respondent has conducted these proceedings unreasonably and make an order for costs against the Respondent in the sum claimed in the Schedule provided by the Claimant"

8. On 6 July 2005 Peninsula Business Services Ltd, well-known employment consultants, wrote to the Tribunal indicating that they had just been instructed. They applied for a review. They said that their clients, the employers, had received the claim from the Tribunal and had posted a Response but then heard nothing more from the Tribunal until they received the Tribunal's remedies judgment and had not received either a notice of the hearing or of the default judgment. They sought an extension of time to apply for a review of the default judgment. They did not enclose any copy of the alleged Response or say anything in their letter about the merits of any Response which the employers might have wanted to make.
9. The application for an extension of time to apply for a review of the default judgment was rejected by the Tribunal on 18 August; and there has been no appeal against that rejection; but the application for a review of the remedies judgment was granted; and the Chairman indicated of his own motion that he proposed to review the costs order made at the remedies hearing, for reasons to which I shall come later in this judgment.
10. The review hearing resulted in the order from which this appeal is brought. Although it was the employers who sought the review, somewhat surprisingly, to say the least, they did not attend; and no representative appeared for them. The Tribunal had received no communication from them or from Peninsula since the review hearing had been fixed. The review of the remedies judgment failed; and there is no appeal against the dismissal of the review or of the review of the remedies judgment.
11. However, the Chairman went on to consider the costs order made at the remedies hearing. He decided to revoke that order; but he did award Ms Sutton her costs of the review hearing, although it might be said that the employers, albeit not present and not having taken the point which led to that revocation, had by accident achieved some success. There is no appeal against the Tribunal's award to Ms Sutton of her costs of the review hearing. This appeal is brought by Ms Sutton against the revocation by the Chairman at that hearing of the costs order made in her favour at the remedies hearing.

The law

12. It is necessary to refer to some of the relevant Rules set out in schedule 1 to the 2004 Regulations. Rules 4 to 6 prescribe the procedure in relation to a Response. Rule 4(1) sets out the time within which a Response is to be presented if a Respondent wishes to present one. The Rules go on to provide for the contents of a Response and for the form in which such a Response is to be presented. There are detailed provisions, which it is not necessary for me to go into in this appeal, as to what happens when a Response is presented; I need only say that, pursuant to Rules 5 and 6, the Tribunal has to decide whether the Response will or will not be accepted.
13. Rule 9 provides as follows:

"A respondent who has not presented a response to a claim or whose response has not been accepted shall not be entitled to take any part in the proceedings except to-

(a) make an application under rule 33 (review of default judgments);

(b) make an application under rule 35 (preliminary consideration of application for review) in respect or rule [rule 34(a), (b) or (e)];

(c) be called as a witness by another person; or

(d) be sent a copy of a document of corrected entry in accordance with rule 8(4);

and in these rules the word "party" or "respondent" included a respondent only in relation to his entitlement to take such a part in the proceedings, and in relation to any such part which he takes."

14. Rule 8(1) to (3) provides as follows:

"8 Default judgments

(l) In any proceedings if the relevant time 1imit for presenting a response has passed, a chairman may, in the circumstances listed in determine the claim without a hearing if he considers it appropriate to do so.

[(2) Those circumstances are when either-

(a) no response in those proceedings has been presented to the Employment Tribunal Office within the relevant time limit;

(b) a response has been so presented, but a decision has been made not to accept the response either by the Secretary under rule 6(1) or by a chairman under rule 6(3) and the Employment Tribunal Office has not received an application under rule 34 to have that decision reviewed; or

(c) a response has been accepted in those proceedings, but the respondent has stated in the response that he does not intend to resist the claim]

(3) A default judgment may determine liability only or it may determine liability and remedy. If a default judgment determines remedy it shall be such remedy as it appears to the chairman that the claimant is entitled to on the basis of the information before him."

15. Rule 38(4) provides:

"A costs order may be made against or in favour of a respondent who has not had a response accepted in the proceedings in relation to the conduct of any part which he has taken in the proceedings."

16. Rule 40(1) to (3) provide:

"40 When a costs or expenses order may be made

(l) A tribunal or chairman may make a costs order when on the application of a party it has postponed the day or time fixed for or adjourned a Hearing or pre-hearing review. The costs order may be against or, as the case may require, in favour of that party as respects any costs incurred or any allowances paid as a result of the postponement or adjournment.

(2) A tribunal or chairman shall consider making a costs order against a paying party where, m the opinion of the tribunal or chairman (as the case may be), any of the circumstances in paragraph (3) apply. Having so considered, the tribunal or chairman may make a costs order against the paying party if it or he considers it appropriate to do so.

(3). The circumstances referred to in paragraph (2) are where the paying party has in brining the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived."

The Tribunal's decision

17. The basis for the Chairman's revocation of his earlier order can be set out quite succinctly. He directed his attention to Rule 9; and at paragraphs 10 and 11 of his judgment he set out, as he saw it, the effect of that Rule 9, identifying that Rule 9 provides that a Respondent who has not presented a Response which has been accepted by the Tribunal cannot take any part in the proceedings other than pursuant to one or more of the four exceptions set out in Rule 9.
18. He then proceeded, in paragraphs 12 to 14, as follows:

"12. The Employment Tribunal is constrained by the Rules under which it must operate. Rule 9 makes it clear that, except in defined circumstances, the Respondent is not entitled to take part in the proceedings if it has not presented a Response. Although Rule 38(4) enables the Employment Tribunal to make a Costs Order either against or in favour of a Respondent who had not had a Response accepted in the proceedings. However, in this case the Respondent had not presented a Response and by operation of Rule 9 has taken no part in the proceedings except in respect of Review applications.

13. The terms of Rule 38(4) determine that the Employment Tribunal cannot make a Costs Order against the Respondent in respect of the costs incurred by the Claimant up to and including the hearing in respect of remedy.

14. The Employment Tribunal therefore has no option but to revoke the Order for costs which it made at the hearing on 27th May 2005. It does so with considerable reluctance particularly in view of the circumstances of this case and the costs which the Claimant has incurred in taking forward a justified claim in respect of the discrimination shown to her by the Respondent and the detriment caused by it."

19. For those reasons the Chairman concluded that the Tribunal had no power to make the costs order which had been made at the remedies hearing and, expressing considerable reluctance, revoked that order. He went on, plainly correctly, to hold that the review proceedings fell within the exceptions to Rule 9 and, therefore, Rule 38(4) enabled him to make a costs order in respect of the review proceedings, although it did not enable him properly to make a costs order in respect of the earlier proceedings prior to the review.

Submissions

20. Miss Jolly, in support of Ms Sutton's appeal, submits that, if the Tribunal's decision to revoke the costs order was sound in law, firstly, a Claimant in a case in which there has been no Response is at risk of having to pay a double burden of costs because the Respondent, on discovering the judgment against him, is likely to or at least has the right to seek a review which, if exercised, the Claimant will have to resist and, thus, incur further costs. Secondly, it is absurd, she submits, that a Claimant who, when a Respondent does not put in a Response, has to prove his or her case should be unable to obtain an order for costs whereas, if a Respondent puts in a Response which is hopeless or puts the Claimant to prove unreasonably, the Claimant may obtain an order for costs if the Respondent has behaved unreasonably or has otherwise fallen within the terms of Rule 40(3). In many cases, she submits, once the nature of a Response is seen, a Claimant may be able to limit the costs which he or she incurs by reference to admissions in the Response, can seek to settle on the basis of knowledge of what the issues really are and can deal with the proceedings in a much more efficacious way than if there is no Response.
21. In contrast, Ms Jolly submits, in the absence of a Response, the Claimant is forced to prepare and prove everything, at least as to remedy should there be a default judgment on issue of liability, and may have to prove her case down to the last detail of small amounts of outstanding holiday pay, statutory maternity pay and the like.
22. She submits that, by failing to put in a Response, a Respondent is acting unreasonably and creating costs which it should not be for the Claimant to bear. She relies on the well-known dictum of the Employment Appeal Tribunal, presided over by Mummery P, in Kwik Save Stores v Swain [1997] ICR 49 at paragraphs 6 and 7 in these terms:

"Failure to comply with the rules causes inconvenience, results in delay and increases costs. It is also indicative of an unacceptable attitude on the part of the defaulter; not only to the rights conferred and asserted but also to the industrial tribunal system itself. This case is a striking illustration of the detrimental consequences of disregarding time limits."

23. Those words appear in the context of an application to serve a Notice of Appearance out of time under the 1993 Tribunal Rules; but they are of course of general application. The Rules must, therefore, be taken, Miss Jolly submits, to permit a Claimant to obtain an order for costs when he has incurred costs unreasonably by reason of the conduct of the other party, even if that other party has not put in a Response or has put in a Response which has not been accepted. She submits that, in looking at the Rules, one must first interpret Rule 38(4) as including in the words "a Respondent who has not had a Response accepted in the proceedings", both a Respondent who has put in a Response which has been rejected and a Respondent who has put in no Response.
24. As I see it, on a fair reading of his judgment, the Chairman is not to be taken as having put his decision on the basis or principally on the basis that a case in which a Respondent has not put in a Response, as opposed to a case in which a Respondent has put in a response but not had it accepted, does not fall within Rule 38(4). The basis of the Chairman's decision was that he should not have made the costs order which he made at the remedies hearing and was obliged to revoke that order because the employers had, prior to the review, not been permitted by Rule 9 to take and had not taken any part in the proceedings in relation to which a costs order could be made within the terms of Rule 38(4); and Miss Jolly has to succeed in persuading me that the Chairman was wrong in deciding to revoke the costs order on that basis, if this appeal is to succeed.
25. Miss Jolly tackles that point in this way. She submits that the subject matter of Rule 9 is wholly distinct from the subject matter of Rules 38 to 40; Rule 9 deals with what happens to a Respondent who does not put in a Response, or whose Response is not accepted, in relation to his ability to take part in the proceedings, whereas Rules 38 to 40 deal separately with costs. These Rules, she argues, have a different function and should be applied distinctly from and not as interlocking with rule 9. Secondly, she submits that, in the context of the costs provisions, if a Respondent neglects to put in a Response at all, he is to be held or may be held by omission to be conducting himself in the proceedings, and, thus, vulnerable to an award of costs under Rule 38(4) on the basis that such an award could be made in relation to his conduct of a relevant part of the proceedings in not putting in a response, not turning up at the hearing and thereby forcing the Claimant to prove his or her case.
26. If this argument be not correct, Miss Jolly asks rhetorically, what is the purpose of rule 38(4)? What does it add to rule 40(3) which itself limits an award for costs to circumstances in which a party has acted vexaciously, abusively, disruptively or unreasonably on his bringing or his conducting of the proceedings has been misconceived. Alternatively, she submits that the employers here have taken a positive part in proceedings by receiving the Claim Form and by, (if they did which must be highly doubtful), preparing a Response and by contacting and carrying on negotiations through ACAS, (which it is accepted were carried on before the remedies hearing).
27. On behalf of the employers, Mr Irons of Peninsula, in his Skeleton Argument submits that, insofar as the Chairman concluded that rule 38(4) only permits a costs order to be made against a Respondent whose Response has been presented but not accepted and did not permit such an order in the case of a Respondent who had never presented a Response at all, the Chairman was right. He has, however, on hearing Miss Jolly's submission on that point and the comments which I made in response not persisted in that submission and has accepted that Rule 38(4) in its terms is wide enough to embrace both the situation in which a Respondent has put in a Response which has not been accepted and the situation in which a Respondent has not put in a Response at all.
28. I shall, however, when I come to express my conclusions say a few words about that point for the sake of clarity.
29. Mr Irons submits secondly, that a Respondent cannot be held to have taken part in proceedings simply by omission to present a Response or by doing nothing thereafter. He argues that rule 9 provides that, in the absence of a Response, a Respondent cannot take any part in the proceedings, save under one or more of the exceptions set out in that Rule and is immune to an order for costs, as a result, other than to such an order in relation to a part which the Respondent has played under one or more of those exceptions. Had it been intended to treat an omission or some act including an omission, other than in pursuance of one or more of the parts which a Respondent is allowed by rule 9 to take, then rule 38(4) would have said so; but it does not say so.
30. Mr Irons submits thirdly, that costs orders are rare, that a Claimant who makes a claim to the Tribunal does not ordinarily expect to receive his or her costs of doing so and that a Respondent who does not put in a Response does not increase the costs of the Claimant beyond those which the Claimant ordinarily has to expect to incur when he launches a claim; the costs of such a Claimant would be greater if the Respondent were to put in a Response which was then pursued but failed at the hearing. In answer to Miss Jolly's last submission, Mr Irons submits that, whether or not the Respondent in this case prepared a Response makes no difference; preparing a Response could not be taking part in proceedings; and joining negotiations through ACAS likewise could not be taking part in proceedings.
31. In the absence of direct authority, and there is no direct authority, not surprisingly having regard to the newness of the relevant Rules, Mr Irons has referred me to a sequence of cases in which the Employment Appeal Tribunal has considered what amounts, in a case where a Respondent claims sovereign immunity, to submission to the jurisdiction. Mr Irons has referred me to those cases with understandable diffidence; and I have to say that it does not seem to me, although I have considered them all, that they assist in the problem which I have to resolve.

My conclusions

32. I shall first briefly address the issue as to whether Rule 38(4) should be construed as applying only to a Respondent who has put in a Response which has not been accepted and as not applying to a Respondent who has failed to put in a Response at all. I have already indicated that Mr Irons resiled from an argument in favour of that construction; but since the point has been raised I regard it as important that I should say something about it lest the point arises again hereafter; and the point was certainly fully argued by Miss Jolly and fully canvassed by Mr Irons in his Skeleton Argument.
33. I did not, I have to say, entirely follow why Mr Irons originally sought to argue for that construction; for the consequence would be, if his argument were correct, that Rule 38(4) would not apply to limit the circumstances in which an order for costs could be made against the employers in this case. However, leaving that on one side, in my judgement Rule 38(4) is intended to include both the case of the Respondent who puts in a Response which is not accepted and the case of the Respondent who does not put in any Response at all. I can see no logical reason why Rule 38(4) should have been intended to distinguish between those two situations.
34. In both cases the Respondent is automatically barred, by Rule 9, from taking part in the proceedings other than under one or more of the four exceptions set out in Rule 9. As the parties agree and as the Employment Appeal Tribunal has already decided in the case of Butlins Skyline Ltd v Beynon [2006] EAT 0042-45/06, the application of Rule 9 is automatic once no Response has put in within the prescribed time or a Response which has been put in has not been accepted. In both cases a default judgment may be issued under Rule 8, which judgment may, pursuant to Rule 8(3), determine issues of liability only or determine issues of liability and remedy. In both cases the Respondent can play no further part in the proceedings.
35. Rule 38(4), in my judgment, has the effect of providing that, in both cases, an order for costs can only be made against or in favour of a Respondent in relation to his conduct of a part which he has played in the proceedings, which part must fall within one or more of the exceptions to Rule 9. I accept that Rule 8 and Rule 9 address each of the two cases separately; but there was, and is, no need to address them separately in Rule 38(4), and it is to be noted that Rule 8 and Rule 9 use different language to describe the case of the Respondent who has put in a Response which has not been accepted from the language which is used in Rule 38(4). Rule 8 uses the words:

"a response has been presented but a decision has been made not to accept the response."

Rule 9 uses the words:

"Whose response has not been accepted."

Rule 38(4) by contrast speaks of a Respondent who has not had a Response accepted. Those words appear to me to have been intentionally used to include both cases. Both a Respondent who has not put in a Response and a Respondent who has done so but whose Response has not been accepted, fall within the words:

"a respondent who has not had a response accepted."

36. I must, therefore, move on to address Miss Jolly's arguments as to the construction and application of Rule 38(4), on the basis that Rule 38(4) does include within its effect a Respondent who has not put in a Response, as is the case here; and I must address the argument as to the need for what Miss Jolly described as a purposive construction of Rule 38(4) which would, as she puts it, enable costs to be ordered against a Respondent where it is reasonable to do so, such as in this case where the employers have paid no respect to the law in their conduct leading to the dismissal, have paid no proper attention to the statutory procedures applying under the 2002 Act, have not bothered to put in a Response and have subsequently alleged that they did send a Response to the Tribunal but have never given the Tribunal or the Claimant a glimpse of the contents of any such Response.
37. I start by respectfully acknowledging and accepting the importance of what the Employment Appeal Tribunal said in Kwik Save, in the passage which I have cited above. However, Miss Jolly accepted, when I put the point to her, that this is not a case of a Respondent seeking leave to put in a response out of time, as in Kwik Save. The Rules which were relevant at the time were different from the current Rules. Now the Rules require a Response, if one is to be presented, to be presented in time, that is to say within 28 days of the date on which the Claim Form was sent; see Rule 4(1). An employer may seek an extension of time under the 2004 Rules, pursuant to Rule 4(4); but he has to do so within the same 28 day period and if he does not do so, then Rule 9 will come into effect; and he will be at risk of a default judgment under Rule 8. He can then seek to set aside the default judgment under Rule 30(3).
38. There is, however, no requirement in the rules that a Respondent should provide a Response. Rule 4(1) sets out how and when a Respondent must present a Response if he wishes to do so. The context of the present case is materially different to that of Kwik Save. If a Respondent does not put in a Response, as I have said, Rule 9 applies, and so does Rule 8. The effect is that the Claimant does not have to face a contested hearing. The Respondent cannot take a part in the proceedings of any nature other than under one of the exceptions to Rule 9; as a result the costs of the Claimant are likely to be less than if the Claimant had to prepare for an opposed and, perhaps, hard-fought hearing on the merits or as to remedies or both before the Tribunal.
39. The Tribunal's jurisdiction is not a cost free jurisdiction; but, as has often been said, an award of costs is the exception rather than the rule and can only be made in a disputed case in restricted circumstances as set out in Rule 40(3). Normally, the costs of a fully opposed hearing, in which one party loses and the other wins, are not recoverable. There is a plain saving in costs to a Claimant in the normal run if the Respondent does not seek to oppose his or her claim. It is right that there may be a reduction in costs if admissions are made; but admissions are not required; and even when full admissions of everything alleged are made, the Claimant will still need to establish his entitlement to remedy and will incur costs in doing so, although I accept that it may be easier for an appropriate settlement to be made if the issues have been identified by admissions at an early stage.
40. While I understand the force of Miss Jolly's appeal to unfairness in the present situation, when seen in the context of the ordinary costs regime the picture is, in my judgment, rather different. Miss Jolly indeed restricted her unfairness argument to a case with special circumstances where, for instance, a Respondent seeks to put in a Response late, or as here, says at a late stage in the proceedings that he has sought to put in a Response which was never received. In such a case, however, the Respondent will only be able to make such an assertion by bringing himself within one of the exceptions to Rule 9, and, in the examples I have given, by applying for a review under exceptions (a) or (b) to Rule 9. If the Respondent does make such an application, he is, thereby, taking a part in the proceedings which he is permitted by Rule 9 to take; and a costs order can be made against him, or indeed in his favour, pursuant to Rule 38(4). Thus, to a large extent, the special circumstances to which Miss Jolly refers are covered by Rule 38(4).
41. In my judgment, while it may perhaps be correct that it was strictly unnecessary in the light of the provisions of Rule 40(3) for Rule 38(4) to find a place in the rules at all, Rule 38(4) can only be properly construed as being tied in with and not operating wholly divorced from or disjunctively from Rule 9. Perhaps the draftsman felt that, having set up a system by which, pursuant to Rule 9, a Respondent who had not put in a Response or whose Response had not been accepted was barred from playing any part in the proceedings, it was necessary to clarify or set out in plain terms what the costs consequences should be in relation to such a Respondent, lest Rule 40 did not make the position sufficiently clear. But, whatever the reason for its existence, I have no doubt that the effect of Rule 38(4) is to allow the Tribunal to make an order for costs against or in favour of a Respondent who has not put in a Response or whose Response has not been accepted only in relation to the conduct of any part which he has taken in the proceedings such part being restricted to a part which he is permitted to take in the proceedings by Rule 9.
42. It follows, in my judgment, that the Chairman reached the right result when he revoked the order for costs which had been earlier made at the remedies hearing. I do not accept that a costs order can be made against a Respondent who has not put in a Response or not had a Response accepted, on the basis that, other than in relation to Rule 9, that Respondent has either by some act or omission acted in a way such as is described by Miss Jolly in this case i.e. by receiving a claim form, by thinking about what should go into a Response or by drafting a response, if that Response is not received and never has any effect.
43. It surely is the case that, in some respects, an omission to do something required by the Rules or required by an Order of the Tribunal can attract an order for costs. The obvious example of a party's refusal or neglect to obey a specific Order will occur to anybody who considers the situation which I am addressing; but that does not mean that an omission such as an omission to put in a Response can give rise to an order for costs against a Respondent who makes that omission within the terms of rule 38(4). Rule 38(4) must be construed as cutting down the width of or at least explaining, in the context to which it applies, the circumstances in which the jurisdiction under rule 40(3) can be exercised.
44. Finally, I do not take the view that the acts or omissions consisting of failing to put in a Response or in seeking or conducting negotiations through ACAS could properly be regarded as taking part in the proceedings.
45. For those reasons, with some reluctance as to which I share the view expressed by the Chairman, this appeal must be dismissed.