Staying Tribunal Proceedings; Paymentshield Group Holdings Ltd –v- Halsted (2011) UKEAT/0470/11/DM

October 13th, 2011 by Simon Devonshire QC

Tribunals have usually been prepared to stay the statutory proceedings where the claimant has launched a parallel action in the High Court, and there is a considerable overlap between the two sets of proceedings.    Typically, it is said that the High Court is the more appropriate forum for the resolution of complex factual matters, and should not find itself embarrassed or constrained by the findings of the tribunal, particularly where the High Court action is the more valuable of the two claims.     Given the substantial expansion of the Tribunal jurisdiction over recent years, these ‘traditional’ assumptions will not always hold true, but the conventional approach recently received substantial endorsement by the EAT in Mindimaxnox LLP –v- Gover & Ors (HHJ McMullen; UKEAT/0225/DA), a case where the ex-employer relied on proceedings it had launched for declaratory and other relief in the High Court, to stay tribunal claims for unfair dismissal.  

In Paymentshield Group the same judge has gone a step further.   A tribunal claimant had also served a letter before action and draft particulars on his former employer.  By agreement, the tribunal proceedings were stayed.   The Claimant applied to have the stay lifted – he had not started his High Court Action and argued that he could only afford to do so with his tribunal award.   The Tribunal lifted the stay.   The EAT reinstated it.   It said that there was no difference in principle between a case where tribunal proceedings had been issued and a case where they had been threatened ina pre-action letter in accordance with the CPR.   The position would have been different had he not ‘uttered’ the letter before action – “he could have gone ahead with his employment tribunal case and the issues of concurrence, and embarrassment of the High Court would not have arisen, because it would be simply hypothetical” .

Can this really be right?   The EAT acknowledged that a respondent couldn’t keep the claimant out of the Tribunal for 6 years “just because he might possibly issue proceedings”.   Why should it make a decisive difference that he has issued a letter before action?   Why is this any different to the statutory claimant who expressly reserves the right to pursue his (valuable) contractual claims in the High Court in his ET1, but proceeds in the statutory forum first?   The High Court proceedings are more than ‘a glint in his eye’ (to use one of the touchstones identified by the EAT), but it is unlikely that the tribunal would stay in those circumstances.   Theoretically at least, the tribunal is intended to provide a forum for the prompt resolution of statutory employment claims, whereas the Limitation Act affords the employee a 6 year waiting period for pursuing his statutory claim.

What, then, are the ‘morals’.   An employee who wants to preserve his right to litigate in the tribunal first should be wary of taking any pre-action steps under the CPR to pursue his civil claim.   An employer who wishes to litigate in the High Court first, by contrast, might be well advised to consider forcing the issue by issuing some form of declaratory proceedings.   No doubt an employee would argue that a stay of tribunal proceedings should not be granted where the employer’s action is an obvious ‘spoiler’ (see, e.g., Charles Reynolds & Associates Ltd –v- Dand (1999) EAT/585/99).   However, such an argument would be more difficult to sustain where the employee had indicated an intention to launch High Court proceedings and the employer might justify his initiation of a civil action on the basis that he wanted to ensure that the resolution of the ‘senior’ claim was not compromised or embarrassed by the tribunal action.