The case of Daleside Nursing Home v Mathew is a very unusual one in that the Employment Appeal Tribunal interfered with the decision of the tribunal below not to award costs. In his reasons, Justice Wilkie is careful to emphasise that the case does not raise any issue of legal principle but it is difficult to see how it can avoid doing so, in light of the conclusion that a deliberate and cynical lie amounts to unreasonable conduct necessitating an award of costs. On its face, this appears uncontroversial, but the problem is that, in most cases, one or other of the parties is lying and most lies are both deliberate and cynical. It would seem to follow that any claimant who is alleging an act of discrimination or, indeed, any employer who is denying one, is at serious risk of such an award.

Suffice to say, this is highly unsatisfactory in light of other dicta that costs in the Employment Tribunal should be exceptional. There is a real danger that people with genuine claims will be deterred at least as much as those with fraudulent ones. Even worse, authorities that appear to be widely applicable but which purport to establish no general principle are prone to result in inconsistency and uncertainty such that all parties could legitimately fear an award of costs against them without any confidence of recovering their own costs if they are successful, which is worse than the situation they would face if costs were automatically paid by the losing party. This cannot have been the intention of the drafters of the Rules of Procedure and undermines the purpose of the tribunal system.

As the appellate courts have been quiet over the last few days, I would like to take the opportunity to write about the concept of “dark law”. Just as many physicists believe that a large proportion of the universe consists of an undetectable but weighty substance, it is well known to legal practitioners that there are many principles which are applied by courts and tribunals almost as second nature but that never find their way into reported case law.

There are several problems with this. Dark law offends against the rule of law in that it makes it hard for people to understand the extent of their obligations. However, there is a particular difficulty for employment law because many parties to tribunal litigation are not represented or are represented by relatively inexperienced people such as pro bono volunteers, consultants or trade unionists. Experienced barristers of many years call are undoubtedly knowledgeable about dark law and they are able to pass their wisdom onto their pupils. Others have nothing to guide them expect for those bad days in tribunal when cases unexpectedly fail. Some Employment Judges are very good at elucidating dark law principles in their judgments and this can help a lot but others, regrettably, are reluctant to rely on anything for which there is little authority for fear of an appeal. Thus, dark law remains dark.

It is a frequent complaint that too many weak cases are brought and that too many weak defences are run. This clogs up the system and hinders other forms of dispute resolution. Various draconian solutions are suggested, including a greater use of deposits and costs awards. In my view, a wider dissemination of the understanding of dark law would go some of the way to solving this problem because it would make it easier for parties and their representatives to evaluate the merits of their arguments. So far, no-one has tried to do this in a written format.

Over the next few weeks, I shall attempt to outline some dark law concepts which I have encountered in practice in order to share them with a wider audience. I am aware that this is a risky venture. By definition, they are invisible and elusive and, while I believe that many are almost universally applied, there is no obligation for all tribunals to follow them.  It is, strictly speaking, impossible to give legal advice where dark law is concerned and so you cannot sue me if you rely on something that I have written in this column and it all goes horribly wrong. However, if you disagree with me, I would very much encourage you to engage me in debate. To be continued…

There has been a long-running dispute in the civil courts as to whether compensation for a breach of contract or a tort should be calculated from facts known at the date the wrong was committed (based on the idea that it should be foreseeable) or if information discovered subsequently can be taken into account. In what has become known as the Bwllfa principle, the House of Lords has confirmed in a series of decisions that the latter is to be preferred.

However, the application of the Bwllfa principle to employment tribunals has resulted in controversy. In particular, in McDougall v Richmond Adult College, the Court of Appeal overturned the decision of the Employment Appeal Tribunal that it can be used to determine the question of whether an impairment is likely to recur, which could allow it to qualify as a disability. It stated that the Bwllfa principle applies only to the assessment of damages rather than to liability and jurisdiction issues. However, it remained silent about its application to the calculation of compensation for unfair dismissal, which is just and equitable and so departs slightly from contractual principles.

In Aryeetey v Tuntum Housing Association, any lingering doubts were resolved by a decision that an act justifying the dismissal of the claimant would bring his losses to an end, even though it took place between the liability and the remedies hearing, and even though the tribunal had hinted, at the end of the liability hearing, that it saw no reason for making a Polkey reduction. The Bwllfa principle was not explicitly mentioned but McDougall was cited.

Unless orders were introduced by the 2004 Employment Tribunal Rules in order to allow tribunals to strike out parties without a finding that a fair trial is no longer possible. However, they must still exercise their discretion judicially. EPI Coaches v Lafferty confirms that the merits of the case is one of the factors to be considered. It is also an important reminder that, where a respondent is struck out, it does not follow that the claimant will automatically succeed. The tribunal must nevertheless make findings of fact and, if the claim is misconceived, it will fail. The appeal in this case was successfully conducted by Rad Kohanzad of Employment Law Advocates.

Today, both the statutory disciplinary dismissal procedure and the statutory grievance procedure ceased to exist, subject to some very messy transitional provisions. It is hoped this will achieve two things, firstly that employers and employees will no longer suffer draconian consequences for non-compliance and, secondly, that there will be less litigation about the meaning of the terms in the procedures. The former has been achieved but it is doubtful whether the same can be said of the latter. The ACAS Code of Practice which replaces them is just as ambiguous.

For one thing, the procedures in the Code of Practice apply to “employees” but it is not at all clear whether this includes those who have left employment, even less so for those who have raised grievances in employment but have resigned shortly afterwards, a not uncommon scenario. The old grievance procedures certainly did apply in these cases but parties had the option to use a much less onerous modified procedure under the circumstances.

The modified procedure has now been abolished. Michael Scutt, aka Jobsworth, who has provided an extremely useful summary of the changes here, welcomes this as he interprets it as saying that there is no duty to respond to the grievances of ex-employees. We have to hope that a similar view is taken by the appellate courts because, if not, I for one will certainly be mourning the abolition of the modified procedure and tribunals will be required to exercise their just and equitable discretion not to award uplifts where parties have acted sensibly in this regard. In any event, we can be sure that the law reports will be continuing to report cases regarding procedural issues.

It is usually considered to be a fundamental principle of justice and the finality of litigation that an appeal court cannot overturn a decision unless it identifies an error of law, such as a misdirection, a perverse finding of fact or a procedural error. However, in the case of Hose Express Thurrock v Jacomb, all of the findings reached by the tribunal were overturned as it had used the Clark v Novacold comparator for disability-related discrimination, the House of Lords having not yet given judgment in Lewisham v Malcolm. Justice Silber, in the Employment Appeal Tribunal, reasonably considered that findings of constructive dismissal and victimisation could not stand under the circumstances but he also came to the same conclusion regarding a failure to make reasonable adjustments.

I respectfully disagree. Malcolm does not affect the scope of the duty to make adjustments (except, if anything, to make it wider) so there is no basis on which a tribunal which directed itself correctly can be said to have fallen into error. It is true that some criticisms of the finding were made in the notice of appeal and argument was heard on them but no conclusion was reached on their merits and so it should have been allowed to stand. What is particularly curious is that Justice Silber cites the case of Stockton on Tees Borough Council v Aylott (discussed here) but ignores the slightly earlier case of Stafford Rural Homes v Hughes, which comes to a quite different conclusion about the necessity of remitting a reasonable adjustments point when Malcolm has not been applied.