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No prospects? Deposit orders in discrimination and whistleblowing cases

In my last blog post I looked at the tribunal’s power of strike out and debunked the myth that strike-out is never appropriate in discrimination and whistleblowing claims. There will, however, be cases that the tribunal may not be minded to strike out, but in which it will be willing to make a deposit order or orders as a condition of their being allowed to continue.

The tribunal has the alternative power to make a deposit order under rule 39(1) where it “… considers that any specific allegation or argument in a claim or response has little reasonable prospect of success”.

The test for a deposit order invites the tribunal to make a more prosaic assessment of an allegation or argument, discarding the straightjacket often applied in strike out applications. This was recognised by Elias J in Van Resnburg v RB Kingston-upon-Thames UKEAT/0095/07 as providing “greater leeway” than an order for strike out, particularly where the doubt is over facts rather than law.

It is worth noting that the 2013 rules make explicit that which was implicit in the earlier rules: that deposit orders can be made in relation to individual “allegations or arguments” (where the 2004 rules referred to “a matter required to be determined”). A party can therefore line up a series of allegations which it says have little prospects and seek deposits in relation to each, although the tribunal must in the end “stand back and look at the total sum awarded and consider the question of proportionality before finalising the orders made” (Wright v Nipponkoa Insurance (Europe) Ltd UKEAT/0113/14).

Deposit orders have the three clear benefits:

  • Most importantly, deposit orders lay down a clear judicial marker that a particular argument or allegation is likely to fail. The import of such a warning to a sensible party should not be underestimated.
  • Second, forcing a party to pay up front to continue a claim, coupled with a warning that a claim has little prospects, focuses the mind and the wallet on what can really be achieved in the litigation.
  • Third, the function of a deposit order is to create a rebuttable presumption that continuing with an allegation that subsequently fails was “unreasonable” for the purposes of any application for costs and to provide a deposit on account of the other parties’ costs. This is particularly significant in cases where costs will inevitably be in issue at the end of a hearing.

Practical guidance

There is little persuasive value in merely stating that a case lacks prospects; any application for strike out or a deposit should pick out the real hole(s) in the other party’s case. For example:

1. There is a clear point of law which determines the case in the applicant’s favour (see P v Commissioner of Police).

2. There is no apparent causal link between a protected act or protected characteristic and an alleged detriment. In which case, a judge is likely at the very least to push the party to explain that link, and without an adequate explanation, may strike a case out or make a deposit order.

3. Obvious pleading difficulties, for example where a claimant has not set out any basis for claiming that a class of persons are at a disadvantage, are also liable to be struck out or have a deposit order made (see Sivanandan v Independent Police Complaints Commission).

4. Where the documents reveal a clear and cogent explanation for a decision and there is no sensible basis to doubt such evidence, it is probable that a tribunal will at least make a deposit order and may strike out a claim.

Unless it is clear than a claim is not amenable to strike out or turns on a short but decisive point of law, it is always worth making applications for strike out or a deposit in the alternative. This leaves the deft advocate on the day to set out their stall, having taken into account which way a tribunal is leaning.

Finally, whilst it will not always be possible to strike out a whole case, it may well be worth striking out, or obtaining deposit orders, in relation to parts of it. This will reduce the issues between the parties, potentially curtail the length of hearing or the number of witnesses to be called, and ultimately minimise the cost and burden involved in disputing a case.

Devereux Jesse Crozier

One thought on “No prospects? Deposit orders in discrimination and whistleblowing cases

  1. The EJ had been entitled to conclude that claims 2 and 3 had no reasonable prospect of success and should be struck out. Save in respect of claim 6, the EJ had applied the correct test and was entitled to reach the conclusion that the allegations had little reasonable prospect of success and should therefore be made subject to deposit orders.

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