In a recent appeal it was confirmed that where the Defendant has, in Employment Tribunal proceedings, made written and oral submissions that the Claimant was free to pursue her claim for personal injury in the County Court, an estoppel arises to prevent the Defendant relying on the rule in Henderson v Henderson and striking out the subsequent County Court proceedings.
The Claimant was a regional manager in the Defendant’s employment. She brought a claim against the Defendant in the Employment Tribunal for bullying and harassment, which was heard in July and August 2018. Although some aspects of her claim were dismissed, the ET upheld six findings of harassment.
Following Judgment and before the remedies hearing the Claimant was examined by a jointly instructed psychiatrist and was diagnosed with PTSD. This was first time such diagnosis had been made.
Thereafter an application was made to amend the tribunal proceedings to include a claim for personal injury, increasing the value of her claim to over £1.6 million. The application was heard on the morning of the remedies hearing.
In response to the application the Defendant submitted that there would be little or no prejudice if the application was dismissed as the Claimant was “free to pursue her claim (if so advised) through the Civil Courts”, and further they stated “if the Claimant feels that her personal injury claim with associated losses…has merit and is arguable, she is of course free to pursue this in the Civil Courts, and accordingly there is little to no prejudice to the Claimant in refusing the amendment and significant prejudice to the Respondent (Defendant) in allowing it.”
The Claimant’s representative in the ET had at first argued that any claim subsequently pursued in the County Court would be a duplication of proceeding thereby causing immense prejudice to the Claimant if her amendment was not permitted. Following the Defendant’s submissions, he changed his position; he accepted that the Claimant could bring a claim in the County Court and conceded that the balance of prejudice in allowing the amendment would therefore be against the Defendant. The application to amend was dismissed in the interests of justice, the balance of prejudice favouring the Defendant.
Subsequently, the Claimant commenced a claim for damages for personal injury in the County Court, with the allegations of breach of duty including the six findings of harassment as found by the ET. However, the Defendant applied to strike out her claim, arguing that it should have been brought and pursued in the ET and the principle in Henderson v Henderson applied and that the claim was therefore an abuse of process.
Notwithstanding the clear representations made by the Defendant’s representatives in the ET that the Claimant was free to pursue her claim in the County Court, the Deputy District Judge ordered that the claim be struck out and that the Claimant pay the Defendant’s costs of the County Court action. He dismissed the Claimant’s argument that the Defendant was estopped from bringing its application by virtue of its representations in the ET proceedings.
On appeal in the Liverpool County Court, heard on 24th June and 12th September 2022, Her Honour Judge Sykes set aside the strike out order and restored the claim.
Her reasoning was that despite the rule in Henderson on the face of it applying to the County Court claim, there was a clear case of estoppel preventing the Defendant from deploying the rule against this Claimant.
The Judge cited Lord Bingham in Johnson v Gore Wood Co (No.1)  2 A.C. 1 that “there will rarely be a finding of abuse unless the second proceedings amount to “unjust harassment” of the other party”.
HHJ Sykes further relied on Lord Bingham’s speech where he favourably cited the well-known extract of the judgment of Lord Denning MR in Amalgamated Investment and Property Co. Ltd v Texas Commerce International Bank Ltd  Q.B. 84, 122, in which he said;
“The doctrine of estoppel is one of the most flexible and useful in the armoury of the law…. When the parties to a transaction proceed on the basis of an underlying assumption – either of fact or of law – whether due to misrepresentation or mistake makes no difference – on which they have conducted dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so…”
Further, the Judge cited a passage from Lord Steyn’s speech in Republic of India v India Steamship Co. Ltd  A.C. 878 at 913-914,
“An estoppel by convention may arise where parties to a transaction act on an assumed state of facts or law, the assumption being either shared by them both or made by one and acquiesced by the other…a concluded agreement is not a requirement.”
She also referred to Snell’s Equity 34th Ed Ch 12, 12-011, which states that estoppel by convention is now regarded as a variant of equitable estoppel and seen as defining a particular set of circumstances in which it is “unjust” or “unconscionable” to allow a party to go back on an underlying assumption that formed the basis of a transaction.
Her Honour Judge Sykes found that this was a clear example of an estoppel arising from the representations made by the Defendant in the ET and that it was unfair and unconscionable for the Defendant to make its application to strike out the claim under the rule in Henderson. She found that the Deputy DJ had fallen into error by failing to properly consider the estoppel argument and attaching too high a bar, namely “reliance”, as the test for whether an estoppel existed in the circumstances.
Despite the willingness of the Court to restore this claim on its own particular facts, employment law practitioners must pursue all possible remedies for an employee in the ET, including damages for personal injury, as this case would likely have been struck out but for the Defendant’s representations.
Although the facts of this case are perhaps unusual, it seems that the same principle is likely to apply in the more common situation of a settlement agreement being reached in the ET proceedings with a clause in the COT3 providing that the Claimant is free to bring a claim for damages for personal injury in the County Court.
The Claimant was represented by Maurice Rifat of 1 Chancery Lane and Laura Giachardi of 42 Bedford Row.
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