Practical Law

Certain claims may be better suited to the County Court or the High Court than the employment tribunal. These include claims for breach of contract and personal injury. There are a number of reasons why the County Court or the High Court might be a more attractive option to claimants, including the more generous time limit (three years as opposed to three months) and the absence of a cap on awards.

But what happens if a claim has already been issued in the employment tribunal before the claimant realises that it is better suited to the civil jurisdiction? Claimants should be alive to cause of action estoppel. If they’re not, they may be prevented from pursuing the claim elsewhere.

What is it?

Broadly speaking, cause of action estoppel is a doctrine that prevents claimants from pursuing a claim twice. If there has been a final determination in the case, this acts as a bar to any future proceedings being brought in respect of the same subject matter.

Why does the doctrine exist?

Primarily for reasons of public policy. The doctrine supports the finality of litigation. As Mummery LJ found in Staffordshire County Council v Barber [1996] ICR 379, “if a court of competent jurisdiction has reached a final and conclusive decision on the merits of a case, it is against public policy to allow it to be reopened (save on an appeal), even if that decision appears to be wrong in the light of the law as then understood or as subsequently evolved and clarified by judicial decision.”

What constitutes a decision or determination?

Importantly, a “final determination” does not just encompass a judgment on the merits of the case but also includes any “actual decision of a competent court dismissing the process” (Lennon v Birmingham City Council [2001] IRLR 826).

Why does it apply to any determination?

Cause of action estoppel applies to any determination or final decision because, by withdrawing, the claimant is presumed to have chosen “of his own free will, not to pursue the claim, and he must therefore be deemed to have fought it unsuccessfully.” (Staffordshire County Council v Barber, Mummery LJ).

What if the claimant has not chosen of their own free will to discontinue?

The claimant’s intention on withdrawal is important. The claimant should communicate to the tribunal, at the time of withdrawal, that they wish to pursue the claim in another jurisdiction.

The civil jurisdiction does not present the same problems as there is a distinction between an order governing withdrawal of proceedings (which is capable of creating cause of action estoppel) and discontinuance under CPR 38.7 (which does not operate as a bar to further proceedings).

The problem in the employment tribunal is a procedural one: historically there has been no distinction between withdrawal and discontinuance.

The court can take into account the factual circumstances of withdrawal in order to understand its meaning and effect and to ascertain whether the reasons for withdrawal “shed light on the crucial issue of whether the person withdrawing the application … intended thereby to abandon his claim or cause of action.” (Ako v Rothschild Asset Management Ltd [2002] IRC 899, Mummery LJ at paragraph 27 and Dyson LJ at paragraph 35.).

How do you ensure the court has taken the claimant’s intention into account?

Fortunately, the rules have been amended since Ako v Rothschild so that in Schedule 1 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, rule 52 permits a claimant to express their intention at the time of withdrawal (Rule 52, ET Rules).

Where a claim, or part of it, has been withdrawn under rule 51, the tribunal shall issue a judgment dismissing it (which means that the claimant may not commence a further claim against the respondent raising the same, or substantially the same, complaint) unless:

• The claimant has expressed at the time of withdrawal a wish to reserve the right to bring such a further claim and the tribunal is satisfied that there would be legitimate reason for doing so.
• The Tribunal believes that to issue such a judgment would not be in the interests of justice.

Note the presumption that the claim will be dismissed upon withdrawal unless the claimant states an intention to bring a further claim.

What if there has been no decision on the merits?

If there has been no decision on the merits, it is arguable that the claimant should be allowed to continue the claim elsewhere. However, once again, the claimant must make their intention to pursue the claim elsewhere known at the time of withdrawal.

In Nayif v High Commission of Brunei Darussalam [2015] ICR 517, the claimant lost a preliminary hearing to determine whether the tribunal would exercise its discretion to extend time. The question of issue estoppel then arose when the claimant sought to pursue a claim in the High Court. The Court of Appeal found that the claimant was not estopped. There were two important considerations:

• Owing to the nature of the preliminary hearing on limitation, the substantive issues had not been determined; there had been no actual adjudication of the relevant issue. This was found despite the fact that the tribunal may have considered the merits of the case in determining whether it was just and equitable to extend time (Elias LJ at paragraphs 30-32).“I do not accept the fact that there was such a hearing is enough to bring the principle of res judicata into play. That principle is rooted in a legitimate concern for finality which will generally make it unjust for a claimant to pursue the same point in two sets of proceedings. But I see no justification for treating as though it were the final disposal of a claim a determination that the issue cannot be considered at all… This would in my view be to work an injustice and does not advance the public policy involved.” This was found despite the fact that the Tribunal may have considered the merits of the case in determining whether it was just and equitable to extend time (see Elias LJ at paragraphs 31-32).
• The fact that the party attempted to have the claim brought within the tribunal’s jurisdiction, and failed, was “enough to counter a submission that the party has chosen of his own free will not to pursue the claim and must therefore be deemed to have unsuccessfully fought it” (Elias LJ at paragraph 32).

What if the claimant realises at an early stage that they are time-barred in the employment tribunal but has (say in the case of a stress at work claim) a personal injury claim with a limitation period of three years?

The best course of action for claimants seeking to withdraw an employment tribunal claim in order to progress a County Court or High Court action would seem to be to write to the tribunal, applying to withdraw the claim under rule 52, explaining the legitimate reasons for so doing and how they are in the interests of justice.

Should the respondent argue that the claimant is estopped from bringing a claim in the County Court or the High Court, the following arguments could be available to the claimant:

• The employment tribunal did not have jurisdiction to hear the claims as the claim was outside the time limit. Therefore, there can be said to have been no withdrawal of the claim as it was not within the tribunal’s jurisdiction in any event.
• There has been no final determination on the issues as the merits of the claims have not been addressed.
• The claimant did not agree that the claim should be dismissed. On the contrary, as explained in the application for withdrawal under rule 52, they intend to bring a claim in the County Court or the High Court.
• The public policy underlying the principle of issue estoppel has not been offended. If the principle of res judicata is “rooted in a legitimate concern for finality which will generally make it unjust for a claimant to pursue the same point in two sets of proceedings”, it cannot be right that, where the matter has not been litigated upon and the claimant has made the sensible decision of pursuing the matter in the County Court, this should mean that “the issue cannot be considered at all”. This, surely, would be “to work an injustice and does not advance the public policy involved.” (Elias LJ, at paragraph 30.)
• Withdrawing the matter at an early stage would prevent further costs being incurred and further time being wasted. It cannot be right that a party who has proceeded to a preliminary hearing on limitation and lost (as in Nayif) is in a better position than one who takes an early view on the merits and seeks to pursue the matter in a more appropriate jurisdiction. It would not be in the interests of public policy for claimants to be compelled to proceed to a preliminary hearing on jurisdiction and lose in order to be able to pursue a claim in the County Court.