Vexatious litigation can take many forms – from persistently making unmeritorious applications in one set of proceedings to bringing or continuing unmeritorious proceedings in order to cause disruption to or extract settlement from another party.
Recent case example of Vexatious litigation
The recent case of Ramos v Lady Coco Limited T/A Shamela’s Fresh Hot and Cold Food [2023] EAT 99 serves as a stark reminder of challenges presented by vexatious litigation.
Mr Ramos brought a claim for sex discrimination against a Glasgow restaurant based on its online job advertisement seeking female takeaway staff. He claimed that because he was a male he could not apply for the job and sought compensation for injury to feelings and loss of earnings from the respondent.
In the course of the proceedings, it transpired that there had been a pattern of similar claims brought by Mr Ramos against various employers in the past. Ultimately, the Employment Tribunal (ET) found against Mr Ramos because:
- Mr Ramos was settled in Hounslow, London and had no connection with Scotland nor any genuine interest in moving his life to Scotland.
- He last worked in hospitality in the 1990s and his work experience was inconsistent with the desire to apply for the role.
- He did not contact the respondent to enquire about the role nor take any steps to seek information about the position nor did he, in fact, apply for the role.
Whist the advertisement was discriminatory the ET concluded that, from the evidence presented, Mr Ramos had no genuine desire of applying for the role the respondent had advertised and he was solely using the Tribunal process to seek money from the respondent. Accordingly, it made a preparation time order (PTO) in favour of the respondent. Mr Ramos appealed to the EAT, but his appeal was dismissed.
It is inevitably challenging to manage vexatious litigation but there are a number of tools available to employers.
Applications in the Employment Tribunal toolkit
There are applications available in the ET toolkit, including:
- Applications to strike out a claim if it is considered to have no reasonable prospect of success; or
- Applications for a deposit order.
The latter may be granted where a Tribunal considers that an allegation or argument made in a claim (or in a response) has little reasonable prospect of success. It requires the party against whom the order is made (more usually the claimant) to pay in a certain amount – up to £1,000 – as a deposit, as a condition of continuing to advance such allegations. This alone may be a deterrent to pursue their claim and what is more, if they pay and later the relevant claim fails, they will be treated as having acted unreasonably in pursuing that specific allegation or argument, for the purpose of the tribunal considering whether to award costs or order a PTO.
Costs recovery in the Employment Tribunal
Costs orders in the ET are more the exception, than the rule, but the ET does have the discretion to make an award of costs, or a PTO, in some circumstances, including based on the vexatious, abusive, disruptive or otherwise unreasonable conduct of a party, or their legal representative, in bringing or conducting proceedings.
Unfortunately, even where a costs order or PTO is made, a vexatious litigant may not have the resources to pay it. The employer will then be faced with a conundrum of whether to incur further costs in seeking enforcement of the award via the civil courts. However, if the claimant has means – this may be worth doing.
Early dispute resolution
Employers may understandably be reluctant to settle any claims that are totally without merit solely to save management time and cost – not least since it may encourage further claims of similar nature in the future.
However, sometimes claims will have some merit or may involve issues that justify seeking early settlement for largely commercial reasons. This could provide justification for early settlement. If proceedings have been commenced and particularly where the claimant is unrepresented, Judicial Mediation can be a useful tool. The ET will encourage the parties’ participation in appropriate cases.
Civil Restraint Orders
In more extreme or clear-cut cases, an employer may be able to apply for a civil restraint order (CRO) to curtail the activities of a vexatious litigant – namely:
- Limited Civil Restraint Order (LCRO), which restrains a party from making a further application in the proceedings to which the LCRO relates – this requires two or more applications to be “totally without merit”.
- Extended Civil Restraint Order (ECRO), which restrains a party from issuing certain claims or making certain applications in specified courts – which requires three or more applications to be “totally without merit”.
- General Civil Restraint Order (GCRO) – where an ECRO would not suffice.
These are not often used but worth bearing mind. If the claimant has the makings of a vexatious litigant, it is worth asking the tribunal or courts early on, where appropriate, to label any rejected claims or applications as being “totally without merit”. They will not necessarily do so automatically and, if they don’t, subsequent courts may be reluctant to deem them as such retrospectively.
In appropriate cases, it is worth considering such orders at the earliest opportunity to keep the costs down and limit the applications and claims that have to be actively defended.
It is important to note that these orders are limited in their duration – this used to be two years but has recently been extended to three for ECROs and GCROs. Therefore, some litigants could simply issue proceedings again once the CRO against them expires.
In such cases, it may be worth considering an indefinite civil proceedings order under section 42(1) of the Senior Courts Act 1981, which can be made on an application of the Attorney General. The High Court will grant this if the litigant has “habitually, persistently and without any reasonable ground, instituted vexatious civil proceedings and/or made vexatious civil applications”. It has the effect of requiring the litigant to seek permission of the High Court to institute or continue proceedings and/or make an application. Given its draconian effect, it is a difficult order to obtain – and a premature application may be unsuccessful.
It is crucial to take specialist advice at an early stage to help manage suspected vexatious litigation which can become unwieldy, reputationally damaging, time consuming and costly.