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EMPLOYMENT CASE UPDATE - Deposit Order cannot be overturned

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Addison Lee Ltd v (1) Afshar & Others (2) Mushtaq & Others (3) Akinyeye & Others [2024] EAT 114


Addison Lee who many will know is a British car service company were told by the Employment Appeal Tribunal that the Deposit Order made against them cannot be overturned. This means that they have to pay £125,000 to continue relying on certain arguments in its defence as it fights hundreds of drivers claiming worker status.


The Legal Facts


Addison Lee had previously lost cases brought by different claimants (the Lange claimants) on identical issues regarding worker status and working time. Hundreds of new claimants brought claims against Addison Lee, alleging they were workers and making similar claims to the successful Lange claimants.


The Employment Tribunal made deposit orders requiring Addison Lee to pay deposits in respect of certain arguments it was advancing that the Tribunal considered had little reasonable prospect of success.


Addison Lee argued the following:-


  1. That the Employment Tribunal erred in relying on the previous Lange decisions, as that was contrary to the rule in Hollington v Hewthorn (see below).

  2. The deposit orders were disproportionate and should not exceed £1,000 per argument.

  3. The Employment Tribunal should not have made deposit orders in respect of claimants with damages-based agreements.

  4. The Employment Tribunal failed to consider limitation issues.


The Law


Employment Tribunal Rules of Procedure 2013, Rule 39 (deposit orders)


Hollington v Hewthorn [1943] KB 587 (rule on admissibility of prior judgments)

Civil Evidence Act 1968


Courts and Legal Services Act 1990, section 58AA (damages-based agreements)

Damages-Based Agreements Regulations 2013


The Ruling and Rationale behind the decision


  1. The rule in Hollington v Hewthorn does not apply to a non-binding assessment of merits under Rule 39. So what are those Rules.


Hollington v Hewthorn - This rule dictates that factual findings from other tribunals are generally inadmissible as evidence in subsequent civil proceedings. This principle was affirmed in the case, where the court held that a criminal conviction could not be used as evidence in civil proceedings to prove the facts underlying the conviction. The rationale behind this rule is to ensure that the decision in the current trial is made by the judge appointed to hear it, based on the evidence presented in that trial, rather than relying on the findings of another tribunal. As will be seen it is an old case and it has been subject to some statutory modifications, notably by section 11 of the Civil Evidence Act 1968, which allows criminal convictions to be adduced as evidence in civil proceedings. However, the general principle that findings from other civil proceedings are inadmissible remains intact. The justification in this rule is rooted in the right to a fair trial, which requires that the decision be based on the evidence presented to the trial judge, rather than on the findings of another tribunal.


Exceptions to this rule do exist, particularly where the findings are admissible on other grounds, such as hearsay evidence or expert opinion.


Rule 39 of the Employment Tribunal (ET) rules pertains to deposit orders. It allows the Tribunal, during a preliminary hearing, to order a party to pay a deposit not exceeding £1,000 if it considers that any specific allegation or argument in a claim or response has little reasonable prospect of success. This deposit must be paid as a condition of continuing to advance that allegation or argument.


2. The Employment Tribunal was entitled to consider the previous decisions as they were relevant indicators of the prospects of success, even if not conclusive.


3. The Employment Tribunal acted within its case management powers in making initial decisions of principle on deposit orders before finalizing the details. The final orders properly identified the beneficiaries.


4, The deposit orders were within the £1,000 per argument limit in Rule 39 and were not disproportionate given Addison Lee's ability to pay. Splitting the total across multiple claimants did not make the orders penal.


5. The existence of damages-based agreements was irrelevant to the making of deposit orders, which serve a purpose beyond simply compensating legal costs.


6. The Employment Tribunal was not required to consider limitation issues when assessing the specific arguments challenged under Rule 39. Limitation was a separate issue that could be argued later.


The Decision


The appeals against the employment tribunal's deposit orders were dismissed. The deposit orders requiring Addison Lee to pay deposits totaling £125,000 in respect of certain arguments were upheld.


If you are unsure about the risks of bringing or defending an Employment Tribunal and the costs involved that could be ordered or potential of having to pay what could be substantial sums to continue with a claim or defence we can advise you.

 

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