Employment lawyers, particularly those acting for respondents, will be used to having case strategy discussions about whether to apply for strike out or a deposit order in respect of a claim. Clients are often keen to make such applications, seeing them as an opportunity to dispose of claims at an early stage, thereby avoiding cost and inconvenience.
Frequently, however, the situation is more nuanced, and the possible pitfalls of such applications may outweigh the perceived advantages. That is particularly true when the application relates to a claim for discrimination, which Tribunals are particularly reluctant to strike out. This article provides a reminder (and, perhaps, an update) to the position regarding such applications, as well as offering some strategic and practical considerations.
The Tribunal rules
The key powers of the Tribunal which are relevant for the purposes of this article are contained in rule 37 and rule 39 Employment Tribunals Rules of Procedure 2013.
Rule 37(1) provides the following in respect of strike out:
“At any stage of the proceedings, either on its own initiative or on the application of a party, a Tribunal may strike out all or part of a claim or response on any of the following grounds—
Rule 39(1) deals with deposit orders:
“Where at a preliminary hearing (under rule 53) the Tribunal considers that any specific allegation or argument in a claim or response has little reasonable prospect of success, it may make an order requiring a party (“the paying party”) to pay a deposit not exceeding £1,000 as a condition of continuing to advance that allegation or argument.”
The orthodox position: Anyanwu, Ezsias etc.
The general caution against striking out discrimination claims is something that appears to be indelibly etched in the minds of both employment practitioners and employment judges alike. The most commonly cited authorities are as follows:
“For my part such vagaries in discrimination jurisprudence underline the importance of not striking out such claims as an abuse of the process except in the most obvious and plainest cases. Discrimination cases are generally fact-sensitive, and their proper determination is always vital in our pluralistic society. In this field perhaps more than any other the bias in favour of a claim being examined on the merits or demerits of its particular facts is a matter of high public interest.”
And at [37] per Lord Hope
“I would have been reluctant to strike out these claims, on the view that discrimination issues of the kind which have been raised in this case should as a general rule be decided only after hearing the evidence. The questions of law that have to be determined are often highly fact-sensitive. The risk of injustice is minimised if the answers to these questions are deferred until all the facts are out. The tribunal can then base its decision on its findings of fact rather than on assumptions as to what the claimant may be able to establish if given an opportunity to lead evidence.”
While the test for making a deposit order is necessarily lower than for strike out, these authorities tend to colour a Tribunal’s approach to assessing the merits of a discrimination claim at an interim stage.
A shift towards greater flexibility?
Recent authorities may indicate that a slightly more flexible and pragmatic approach is appropriate, stressing that it is a matter for the Tribunal’s judgment to decide whether a claim should be struck out.
The question was considered at EAT level by Langstaff P in Chandhok v. Tirkey [2015] ICR 527. Citing Anyanwu, his Lordship went on to say at [20]:
“This stops short of a blanket ban on strike-out applications succeeding in discrimination claims. There may still be occasions when a claim can properly be struck out—where, for instance, there is a time bar to jurisdiction, and no evidence is advanced that it would be just and equitable to extend time; or where, on the case as pleaded, there is really no more than an assertion of a difference of treatment and a difference of protected characteristic which (per Mummery LJ in Madarassy v Nomura International plc [2007] ICR 867 , para 56):
“only indicate a possibility of discrimination. They are not, without more, sufficient material from which a tribunal ‘could conclude’ that, on the balance of probabilities, the respondent had committed an unlawful act of discrimination.”
Or claims may have been brought so repetitively concerning the same essential circumstances that a further claim (or response) is an abuse. There may well be other examples, too: but the general approach remains that the exercise of a discretion to strike out a claim should be sparing and cautious.”
The position was considered further by the Court of Appeal in Ahir v. British Airways Plc [2017] EWCA Civ 1392. While acknowledging the weight of the older authorities, Underhill LJ stated at [16]:
“Employment tribunals should not be deterred from striking out claims, including discrimination claims, which involve a dispute of fact if they are satisfied that there is indeed no reasonable prospect of the facts necessary to liability being established, and also provided they are keenly aware of the danger of reaching such a conclusion in circumstances where the full evidence has not been heard and explored, perhaps particularly in a discrimination context. Whether the necessary test is met in a particular case depends on an exercise of judgment”
It is also apparent from the judgment in Ahir – at [21] and [23] – that the “inherent implausibility” of the claimant’s case was something which Underhill LJ considered the Tribunal could properly take into account in deciding whether to strike out the claim.
The above authorities (coupled with the dicta in Anyanwu at [39] and Ezsias at [29]) arguably provide more scope for the argument that the Tribunal should more often grasp the nettle and strike out hopeless claims (or, as a lesser alternative, to make a deposit order). The battle will often continue to be an uphill one, and in practice many Tribunal judges continue to follow the better-worn path established by the mantras of Anyanwu and Ezsias. But Tribunals may now begin to be more responsive to these sorts of applications than they have previously been.
Strategic considerations and practical tips
Black-letter law aside, there are a number of strategic and practical considerations for a party considering making an application for strike out or deposit order. These include:
The decision whether to make an application for strike out or deposit order is therefore, in many ways, as much a strategic one as it is a legal one.
Conclusion
There will, of course, always be discrimination cases in which strike out and deposit order applications are entirely appropriate and in which they will be successful. These are likely to include claims where there is nothing more than assertion of difference of treatment and difference of protected characteristic (per Madarassy), or where the claim as framed is simply implausible (per Ahir), as well as the more typical cases where there are limitation issues etc. (as mentioned in Chandhok).
But it is important, when deciding whether to make such an application, both to realistically assess the likelihood of its success, and also to consider the longer-run strategic implications of the application (particularly an unsuccessful one). While this might make litigation feel more like a marathon than the sprint that clients would like it to be, the benefits of a more measured and considered approach are potentially considerable.
Kieran Wilson is a specialist employment and commercial law practitioner. He is frequently instructed to appear in the Employment Tribunal for both Claimants and Respondents, and has a particular interest in discrimination and whistleblowing matters.
