Although tribunals have the power to make deposit orders if they think a claimant’s case has little chance of success, the Employment Appeal Tribunal (EAT) has held in Tree v South East Coastal Ambulance Service NHS Foundation Trust that they cannot use them just because the basis of the claim is not clear.
Basic facts
Subsequent to the termination of her employment by reason of redundancy, Ms Tree came to believe that her dismissal had been unfair and that her disability (she suffered from a degenerative spinal disc disease) had played some part in the decision.
As a result, she lodged tribunal complaints of unfair dismissal and disability discrimination under section 13 (direct discrimination) and section 15 (discrimination because of something arising in consequence of disability) of the Equality Act 2010.
Tribunal decision
At a preliminary hearing the tribunal raised the issue of a deposit order on the basis that Ms Tree’s disability discrimination claims had little reasonable prospect of success.
Her representative then had a short discussion with the judge, pointing out that it was inappropriate to make a deposit order without first hearing all the evidence. There was then a discussion about her means after which the judge announced that she had to pay a deposit of £1,000 if she wanted to continue with the disability claims.
Relevant law
The power of tribunals to make a deposit order is laid down in rule 39, schedule 1 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013. This states that tribunals can make a deposit order not exceeding £1000 at a preliminary hearing if they consider that a claim has little reasonable prospect of success.
The rule also states that tribunals must make reasonable enquiries into the paying party’s ability to pay and have regard to any such information when deciding the amount of the deposit.
EAT decision
When making a deposit order, the EAT emphasised that tribunals must ensure they have a proper basis for doubting the likelihood of a claimant being able to establish the facts essential to back up their claims.
In respect of the section 13 claim in this case, the tribunal was entitled to look at the likelihood of the case being made out at the “reason why” stage and to conclude there was little prospect of her succeeding at that point. However, the tribunal judge was wrong to make a deposit order regarding the section 15 claim. Although the basis of her claim was not clear in her ET1, Ms Tree had clarified it at the preliminary hearing so that it was consistent with what she had originally pleaded and the tribunal itself had recorded it in the same way in its case management orders.
As the EAT was not convinced that the tribunal had focused on the case she was actually pursuing when it made its deposit order, it allowed the appeal with regard to the section 15 claim.
The EAT added that if there was a problem clarifying a claim, tribunals should use case management orders (such as further and better particulars, or an order to formally amend a claim or even Unless Orders), rather than using deposit orders.
As there was no appeal against the amount awarded, the EAT set aside the deposit order of £1,000 and substituted it with an order for £500 in respect of the section 13 claim alone.