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Rothschild Asset Management Ltd v Ako


Court of Appeal

Until the procedural rules for employment tribunals were amended, applicants who withdrew their complaints should be asked for a statement outlining their reasons for doing so to ascertain whether they were merely discontinuing the litigation.

Appeal by an employer ('R') from a decision of the Employment Appeal Tribunal ('EAT'), that a tribunal had erred by holding that the complaint by the respondent employee ('K') was barred by reason of cause of action estoppel. The tribunal so held because K had previously withdrawn her complaint to the tribunal. That withdrawal led to a tribunal chairman formally dismissing the complaint in the exercise of his discretion under reg.13(2)(a) Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993, which were then in force. That decision was not made in open court. Shortly afterwards, K had presented a fresh complaint repeating the same allegations against R and another company, which she believed had been a relevant transferee of undertakings from R. The tribunal that struck out the second complaint did so in reliance on Barber v Staffordshire County Council (1996) ICR 379. The EAT held that Barber was distinguishable. R submitted in its appeal that Barber bound the present Court and meant that an action dismissed by a tribunal on withdrawal was a judicial act of a competent court. It further relied on Lennon v Birmingham City Council (2001) IRLR 826.
HELD: (1) Whereas in Barber the court had known the reasons for the withdrawal of the action, the court in Lennon had not. Lennon was binding on the Court of Appeal and had been correctly decided. Neither case was authority for the proposition that it was impermissible to have regard to the circumstances surrounding a consent order in order to determine the extent of the consent given. (2) There was a procedural problem peculiar to employment tribunals that had not been mentioned in the authorities. In the ordinary courts there was a significant distinction in the rules of procedure governing withdrawal of proceedings between: (a) an order dismissing proceedings, which was capable of creating cause of action estoppel; and (b) discontinuance of proceedings under CPR 38.7, which did not operate as a release or extinction of a cause of action and hence as a bar to further proceedings. No such distinction existed in the employment tribunals. For those reasons, neither Barber nor Lennon required cause of action estoppel to apply in employment tribunals, in the manner in which it applied in the ordinary courts, where it was clear on an examination of the surrounding circumstances that the withdrawal of the complaint was in substance a discontinuance of the proceedings. (3) Discontinuance did not release or discharge the cause of action. It preserved the right to establish an untried claim on the merits in other proceedings. There was no reason for employment tribunals to adopt a more strict approach than the ordinary courts. (4) Unless and until the procedural rules for employment tribunals were amended, applicants who withdrew their complaints should be asked to state the circumstances of the decision to withdraw before an order that the proceedings be dismissed was made.
Appeal dismissed.

Deshpal Panesar instructed by Eversheds for R. Karon Monaghan instructed by the Commission for Racial Equality for K.
LTL 1/3/2002 : (2002) 2 All ER 693 : (2002) ICR 899 : (2002) IRLR 348 : Times, April 2, 2002 : Independent, March 6, 2002

Document No. AC8800797


(2002) 2 All ER 693 : (2002) ICR 899 : (2002) IRLR 348 : Times, April 2, 2002

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