Court of Appeal Civil Division
Canadian Imperial Bank of Commerce v Beck
Neutral Citation Number: [2009] EWCA Civ 619
Case No: A2/2009/0449
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
His Honour Judge McMullen QC, sitting alone in the Employment Appeal Tribunal (EAT) on 2 March 2009
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 26/06/2009
Before :
LADY JUSTICE SMITH
LORD JUSTICE WALL
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Between :
CANADIAN IMPERIAL BANK OF COMMERCE
Appellant
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BECK
Respondent
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(Transcript of the Handed Down Judgment of
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Daniel Oudkerk (instructed by Messrs Allen & Overy – Solicitors) for the Appellant
Danile Stilitz (instructed by Messrs Lewis Silkin – Solicitors) for the Respondent
Hearing date: 11th June 2009
Judgment
Lord Justice Wall:
This is the judgment of the Court, to which both of its members have contributed.
1. The questions in this appeal are: (1) whether or not the judge in the Employment Tribunal (ET) made an error of law in refusing an application by the claimant, Mr. Achim Beck, for discovery against his former employers, Canadian Imperial Bank of Commerce (the Bank) and, if so, (2) whether or not His Honour Judge McMullen QC, sitting alone in the Employment Appeal Tribunal (EAT) on 2 March 2009, was right to allow Mr. Beck’s appeal and to make an order for specific disclosure against the Bank.
2. On 9 March 2009, Pill LJ directed that the Bank’s application for permission to appeal to this court should be adjourned to be listed on notice to Mr Beck, with the appeal to follow if permission was granted. Pill LJ granted a stay on the EAT’s order for discovery until the determination of the Bank’s application. His reasons for taking that course were succinctly expressed: “The EAT has reversed a case management decision. It is appropriate to hear both sides”.
3. Although Pill LJ allowed one and a half hours for the application, it raised a number of issues of importance and, despite being extremely well argued on both sides, comfortably exceeded the time set aside for it. As will also be apparent, the issues raised were such that we reserved judgment at the conclusion of the argument. We would accordingly grant permission to appeal.
The facts: how the application for disclosure arose
4. As the case is still at an interlocutory stage, we propose to record only those facts which are necessary for the proper determination of the appeal. Nothing in this judgment should, therefore, be taken as an indication of the merits of Mr Beck’s claims.
5. By his Form ET1 dated 7 August 2008, Mr. Beck makes a number of claims against the Bank, by which he was employed from 15 January 2007 to 8 May 2008, when his employment was terminated by reason of redundancy. Mr. Beck was the Head of Marketing for the Bank’s Debt Capital Markets and Equity and Commodity Structured Products Divisions, at the level of a Managing Director. Amongst his claims was one of race discrimination. That claim is pleaded in Mr. Beck’s amended particulars of claim in the following way:-
35. In the light of the matters cited above, it is the claimant’s belief that he may have been the subject of race discrimination in contravention of section 1 of the Race Relations Act 1976.
36. In particular, it is clear to the claimant that when looking at the people who have had their employment terminated and those who have been allowed to remain in employment during this and previous waves of redundancy, there is a sharp distinction between how those people of Canadian nationality and/or national origin and/or who were hired in Canada have been treated by the Respondent compared to those who were not Canadian and/or were not hired in Canada. (The claimant is German and was hired in London). Had the claimant been of Canadian nationality and/or national origin and/or hired in Canada, he believes he would not have been dismissed.
37. To the extent that the claimant has been treated less favourably on the grounds of his non-Canadian nationality and/or national origin, such action is contrary to section 1(b) and/or 1A of the Race Relations Act 1976.
38. To the extent that the place where an employee is hired was treated as a provision criterion or practice affecting treatment of employees, such provision criterion or practice put the claimant and other employees of non-Canadian nationality and/or national origins at a disadvantage and could not be justified contrary to section 1(b) and/or 1A of the Race Relations Act 1976.
6. In its grounds of resistance, the Bank describes the allegation of discrimination as “entirely frivolous and vexatious” and denies that any such discrimination has taken place. A number of other points are taken, which are not material to this appeal. It is not, however, disputed by the Bank – indeed, it forms part of its ground of resistance – that due to what it describes as “the collapse of the credit markets in 2007”, the Bank’s senior management “commenced a review of business strategy for its Fixed Income and Currencies (FIC) Division” with the consequence that, at the material time, the Bank was conducting what can be described in shorthand as a “down-sizing exercise”; or, to put the matter in the language of the pleadings:
8. there would likely to be significant reduction in the marketing and structuring roles required and potentially a shift in the skills and experience required of any future roles. Management’s assessment was that only a reduced staffing would be required pending finalisation of the revised strategy for FIC and that the remainder of the roles were therefore at risk of redundancy.
7. Mr. Beck has obtained a witness statement from a Mr. Ian Howard, an unsigned copy of which is in our papers. Mr. Howard had worked for the Bank from 1995 to 2008, ending up as its head of “structured credit run-off” business in Europe. On any view, he had been a senior employee of the Bank.
8. Mr Howard describes some aspects of the Bank’s staff reduction exercise. For present purposes, the relevant paragraphs of his statement are the following:-
14. Altogether I had 5 flow traders, 4-5 sales people, 3 lawyers and Darcy Hall’s Correlation team of 3 people to consider. Two of these individuals were Canadian (Darcy Hall and Milton Bonellos). One, Alex Tchernitser, was Russian but had been hired in Canada and had relocated to London. For all intents and purposes, Alex was treated as a Canadian employee.
15. There were several conversations with Sharon Marshall (who was Head of HR for London), Peter Letley (Head of Europe); Wayne Halenda (who was my counterpart based in Toronto) and Ron Lalonde (Vice-President Technology and Operations as well as Head of Run-Off activities). Throughout these conversations I was left with the clear impression that the Bank regarded it to be more important to look after the Canadian employees.
16. I remember, in particular, having a conversation with Ron Lalonde in late March when I was in Toronto talking about this subject. Ron was very senior in the Bank: he reported directly to the Chairman. I said to Ron that I sensed there was more of a moral obligation to look after Canadians based in the UK (i.e. Darcy and Milton) than the others. I cannot remember the exact words he used in response but I recall that he indicated that he agreed.
17. This indeed was reflected in the destiny of those that were retained by the Bank compared with those that were made redundant. Both Darcy and Milton were kept on. Further, Alex would have been offered a job in Canada had he wanted one.
9. Mr. Howard goes on to say that he “very much felt that looking after the Canadians” was a part of the culture of the Bank.
10. Also in our papers is a note of a conversation with Mr. Howard on 7 August 2008 prepared by one Steven Gardner, another Bank employee, together with an email from Mr. Howard to Mr Gardner dated 7 August 2008 in which Mr Howard writes: “Also it would be fair to say that Ron (i.e. Ron Lalonde) felt a moral obligation to find jobs for the returning Canadians rather than the rest of us”.
11. The context of both Mr. Gardner’s conversation with Mr Howard and the latter’s email was the investigation of a grievance raised by another of the Bank’s employees, one Aboud Nsouli, in which differential treatment of Canadians and non-Canadians was alleged. Mr. Nsouli was not Canadian. His grievance was not connected with Mr. Beck’s redundancy and the manner in which the documents came into Mr. Beck’s possession is unclear. However, Mr. Beck wished both to use the material generated by Mr Nsouli’s grievance in support of his discrimination claim and also to ascertain if there was correspondence or other documentation passing between senior employees of the Bank to like effect. He therefore applied to the ET for discovery against the Bank of :-
(1) all documents relating to Mr. Nsouli’s grievance and appeal. Including all handwritten interview notes and electronic correspondence between Steve Gardner and any person interviewed as part of Mr. Gardner’s investigation (including Ian Howard); and
(2) all correspondence (either handwritten notes or email correspondence) between senior management (including Ron Lalonde) regarding the decision to offer guarantees and/or redeployment opportunities to employees of the Bank since January 2007.
The decision of the ET
12. Mr. Beck’s application for discovery was resisted by the Bank and refused by the ET. We do not have written reasons from the judge in the ET. All we have is the relevant correspondence passing between the parties, which the ET incorporated by reference into its decision. For reasons which will become apparent, we will concentrate on the second of the two requests. The Bank’s solicitors wrote on 4 December 2008:-
we would point out that Mr. Beck’s claim relates to an allegation of direct and/or indirect discrimination in relation to the proposal to make him redundant in April 2008. The redundancy proposal which affected Mr. Beck was made by Franck Risler and Jim Meloche and the relevant correspondence has already been included within (the Bank’s) disclosure documents. Ron Lalonde was not in any way involved in this redundancy proposal and is not responsible for the conduct of the Fixed Income and Currencies Division of which Mr. Beck formed a part. We therefore do not accept that our client has any obligation to carry out a search for and/or provide any correspondence which may exist in respect of the second request.
13. In their letter of 15 December 2008, the Bank’s solicitors state in relation to the second request:-
It is the (Bank’s) position that again these documents are irrelevant to the proceedings. (Mr Beck’s) claim relates to an allegation of direct and/or indirect discrimination in relation to the proposal to make him redundant in April 2008. The redundancy proposal which affected (Mr. Beck) was made by Franck Risler and Jim Meloche and the relevant correspondence has already been included within the documents disclosed by (the Bank) in accordance with the Tribunal’s order. Ron Lalonde played no part whatsoever in the redundancy proposal affecting (Mr. Beck) and Mr. Lalonde is not responsible for the conduct of the (FIC) Division of which (Mr. Beck) formed a part. We therefore respectfully submit that (Mr. Beck’s) application should be refused.
14. In short, the Bank’s contention was that the documents requested were not relevant to the issues in Mr Beck’s claim. It appears that the employment judge accepted that contention.
The decision of the EAT
15. The EAT allowed Mr Beck’s appeal. Judge McMullen’s conclusions are contained in paragraphs 18 to 23 of his judgment, where he said:-
1. I accept the argument of (Mr. Beck) preferring it to that of (the Bank) on both of the subject matters of the application. I do hold that the Employment Judge made an error in his approach to these documents. Careful attention should be given to them. The first relates not simply to what Mr Nsouli said in his grievance or what his grievance was about. In order to show that there is a culture of discrimination, in statutory terms that there is a provision criterion or practice, it is relevant to look at what leading lights within (the Bank) say and do. In this case, to use Mr Oudkerk’s graphic imagery, (Mr Beck) appears to have found a “smoking gun” for he has found a statement by a former employee, who had occupied the senior position of Managing Director of an organ of the Bank, which supports his case as set out in the letter from (Mr Beck)’s solicitors on 27 November 2008. It was plainly enough to cause the (Bank) some anxiety for an investigation was called for and a reference has been made to the approach of Mr Steve Gardner.
2. It cites from a document which I am told is the Bank’s response of 24 September 2008 to the allegation based upon Mr Nsouli’s case that there was unfair treatment of non Canada connected people. This document has not been disclosed. An edited extract from it has been quoted. It seems to me, therefore, that that document was bound to be disclosed since it does include at least in part an admission by (the Bank) of a differential treatment of Canadians. (The Bank) is of course most anxious, as it was to Mr Nsouli, to demonstrate that there was a reason for that different treatment. In part it relates, it appears from the document, to Canada connected employees’ different status under Canadian law. But doing the best I can at this stage, this at least has the makings of a prima facie case which calls for an answer from (the Bank) and in order to do that I consider that these documents are relevant. It is no answer to say that following this paper trail Mr Howard has now been summoned to appear at the Employment Tribunal and his witness statement is before me which was not before the Judge. Mr Howard may well want to look at documents. There may be other documents relating to interviews which he has had. The result of an investigation carried out by a senior officer of a bank into an allegation of unfavourable treatment of an employee who is different by race from others is one that is disclosable. If individual names are resisted on the grounds of confidentiality a redaction process can be put in place. This document relates to the allegation of differential treatment. It contains a statement by senior officers of (the Bank) and there is at least more to this than this simple extract sent by the solicitors and thus it is wrong in law not to include disclosure of all that material.
3. I turn then to the second request. As (the Bank’s) solicitors themselves acknowledge, there is a connection between the two requests. That should say it all. Mr Ron Lalonde, the “Ron” referred to in the original email correspondence, is a senior manager and since it is acknowledged that there is a connection between the two that at least ought to be grounds for eliciting the same answer. If there has been correspondence indicating that in certain circumstances, where, for example, there is to be a shrinkage of staff, there will be a different approach taken to those Canada connected from those not, those documents should be disclosed. Lest it be said that now in the open floodwaters of employment practice a fishing expedition has now been let loose, it is simple to respond that in this case most unusually there is evidence by senior officers of (the Bank) of the differential approach to employees who are Canada connected from those who are not. It is relevant to the claim (Mr Beck) makes as is clear from the depiction of the issue by the Employment Judge.
4. Thus for those reasons the Judge did err when he did not make the connection which this document plainly points to and so I will allow the appeal. It is now for me to exercise my discretion. I have not been addressed in detail about it but I have been minded to order it in terms of the narrowed approach now commending itself to (Mr Beck) but I will hear further argument about that.
5. No difficulty having been presented in respect of an Order in the terms of bullet point one on page 102 of the bundle nor as to completion of this exercise by Wednesday 4 March at 4 pm. I will make an Order in those terms which Counsel will kindly draw up for me.
6. As to the second bullet point I will make the Order as sought – Friday 4 pm. Liberty is given to the parties to apply to the Employment Tribunal if difficulties emerge in relation to Mr Risler and Mr Phillips for I acknowledge that there are different circumstances attending upon them from those of the other employees or former employees who are giving evidence. It may well be that the material is easily exigible but I will give an allowance to the parties to make an application to the Employment Tribunal and to explain such difficulties as there are and I see no reason why that cannot be done by the beginning of the hearing on Tuesday. I am probably looking at the Respondent here so if you substantially complied and the other side are still not happy then you can apply for relief from sanctions and for a change in my Order I will leave that entirely to the Tribunal.
The two orders made by the EAT
16. Before dealing with the substantive arguments addressed to us, it needs to be pointed out that although, as we understood it, the Bank was appealing against the whole of the EAT’s order, we were informed by Mr. Oudkerk, for the Bank that we were not to be “troubled” with paragraph 1 of the EAT’s order, which had, we were told, been complied with. It is, we think, nonetheless instructive to look at this paragraph, which reads as follows:-
The (Bank) shall provide disclosure to (Mr. Beck) of all documents relating to Mr Aboud Nsouli’s grievance and appeal which record any comments and/or opinions and/or decisions (of individuals other than Mr. Nsouli) on the issue of race discrimination, specifically including the investigations which were carried out into Mr. Ian Howard’s comments as referred to in (the Bank’s) letter to (Mr Beck) of 4 December 2008 and the original records of Mr Ian Howard’s comments which were made during his conversation with Mr. Steven Gardner of 7 August 2008.
17. Mr. Oudkerk submitted that the Bank’s pragmatic decision to obey paragraph 1 of the EAT’s order did not affect its principled stand on paragraph 2. This paragraphs reads as follows:-
The (Bank) shall provide disclosure to (Mr. Beck) by list and with simultaneous provision of copies of all correspondence between Franck Risler, Richard Phillips, Ron Lalonde, Ian Howard, Peter Letley, Jim Meloche and Sharon Marshall regarding decisions to offer guarantee and/or redeployment opportunities to employees of the (Bank’s) London office (including any employees assigned to the (Bank’s) London Office) since January 2007.
18. We find it difficult to draw a bright line between paragraphs 1 and 2 of the EAT’s order but, for the purposes of this appeal, will attempt to do so.
The law relating to disclosure and to appeals against the exercise of a judicial discretion
19. In our judgment, it is important to put the arguments advanced on the Bank’s behalf in context. Fortunately, for our purposes, the law governing the two critical issues in this appeal is clear and derives from decisions of the House of Lords, which are plainly binding on us.
20. The leading case on disclosure of documents in a case involving race or sex discrimination remains the decision of the House of Lords in Science Research Council v Nasse [1979] ICR 921 (Nasse). The test for whether or not discovery is to be ordered is whether it is necessary for disposing fairly of the proceedings. Mr. Stilitz, for Mr. Beck, took us to two passages in the speech of Lord Salmon which seem to us particularly apt. First, at page 932/3, Lord Salmon said:-
“It is plain from the Industrial Tribunals (Labour Relations) Regulations 1974 that Parliament did not intend to deprive the person against whom such discrimination is alleged to have been committed of any of the facilities enjoyed by the ordinary plaintiff suing for damages for tort. One of the most useful of these facilities is the right in certain circumstances to obtain an order for discovery and inspection of documents. This right is of particular importance in cases of alleged discrimination such as the present for it is the employer alone who will ordinarily be in possession of the documents likely to throw light upon the question as to whether or not the employer has unlawfully discriminated against the complainant. I do not think that the importance to the complainant of his right to claim an order for inspection of the relevant documents is diminished by the statutory machinery which exists to allow the complainant and indeed the industrial tribunal to question the employer and at an early stage to obtain answers relating to whether the employer has unlawfully discriminated against his employee. It is, no doubt, possible that the answers, if reliable, might establish or negative the alleged unlawful discrimination and therefore make inspection of any documents unnecessary. On the other hand, there is the danger that the answers may be exiguous or unreliable and misleading. The only way of testing the accuracy of the employer’s answers may often be by comparing them with the reports and records in their possession. The statutory machinery for obtaining early information from the employers was not, in my view, intended to be a substitute for, but an addition to the complainant’s rights to discovery and inspection of documents.
21. Second, at [1979] ICR 921 at 935, Lord Salmon said:-
The law has always recognised that it is of the greatest importance from the point of view of public policy that proceedings in the courts or before tribunals shall be fairly disposed of. This, no doubt, is why the law has never accorded privilege against discovery and inspection to confidential documents which are necessary for fairly disposing of the proceedings. What does “necessary” in this context mean? It, of course, includes the case where the party applying for an order for discovery and inspection of certain documents could not possibly succeed in the proceedings unless he obtained the order; but it is not confined to such cases. Suppose, for example, a man had a slim chance of success without inspection of documents but a very strong chance of success with inspection, surely the proceedings could not be regarded as being fairly disposed of, were he to be denied inspection.
22. In our judgment, the law on disclosure of documents is very clear, and of universal application. The test is whether or not an order for discovery is “necessary for fairly disposing of the proceedings”. Relevance is a factor, but is not, of itself, sufficient to warrant the making of an order. The document must be of such relevance that disclosure is necessary for the fair disposal of the proceedings. Equally, confidentiality is not, of itself, sufficient to warrant the refusal of an order and does not render documents immune from disclosure. “Fishing expeditions” are impermissible.
23. As to the correction of an error of law committed by a judge who is exercising a judicial discretion, the law is equally clear. The leading case is G v. G [1985] 1 WLR 647, which contains references to the well-known judgment of Asquith LJ in Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343 at 345. For an appeal to succeed, the exercise of discretion which is challenged must, in Asquith LJ’s words: “exceed the generous ambit within which reasonable disagreement is possible”.
24. There is no particular magic in the fact that we are here dealing with an appeal from the ET to the EAT and then to this Court. G v G principles apply in the instant case as they would apply to any other appeal which involves the exercise of a judicial discretion.
25. We make this point because Mr. Oudkerk, for the Bank, came near to submitting that it was simply not open to Judge McMullen QC to reverse the ET on a case management decision. In our judgment, that submission is manifestly untenable. Whilst, of course, a judge who makes a case management decision exercises a very broad judicial discretion and such decisions will be treated with deference by superior courts, the exercise of a judicial discretion which falls foul of G v G is an error of law and is capable of being corrected on appeal.
26. Mr. Oudkerk placed considerable reliance on the decision of this court in Noorani v Merseyside TEC Ltd [1999] IRLR 184 (Noorani). In our judgment, however, the case does not assist him. Apart from the fact that the case is not about disclosure, Noorani seems to us to be a classic example of this court refusing to permit interference with the proper exercise of a judicial discretion. At paragraphs 34 and 35, Henry LJ, who gave the leading judgment, said:-
34. It is clear to me that in indicating that they were not minded to issue witness summonses going to the collateral and subsidiary issue of whether other employers had been racially discriminated against, the ET were properly exercising their discretion, taking into account whether the likelihood that those subsidiary issues would affect the outcome. If the allegations as to his conduct were true, genuine and not trumped up, race was extremely unlikely to have played any part. If it was a conspiracy, as Mr Noorani says, matters might be different, but whether it was could be judged by the evidence that was called. If it were necessary to widen the ambit having heard that evidence, that was possible.
35. Such proactive judicial case management in the law courts becomes more and more important now that it is generally recognised that, unless the judge takes on such a role, proceedings become overlong and over costly, and efforts must be made to prevent trials being disproportionate to the issue at stake, and thus doing justice neither to the parties, to the case at point or to other litigants.
27. Thus, in our judgment, Noorani is an example of the appropriate exercise by the ET of its discretion in a case management decision. It does not provide an answer to this appeal.
The arguments for the Bank
28. Mr. Oudkerk advanced six grounds of appeal in his skeleton argument. When initially drafted, the skeleton predated the receipt of Judge McMullen’s judgment. At that point, there was also a degree of urgency in the case, as the decision of the EAT preceded the date fixed for the hearing of Mr. Beck’s claims by only a matter of days. The urgency has now gone from the case, since the hearing date has been re-fixed for September. In consequence, we do not propose to address the arguments which Mr. Oudkerk initially advanced based on the unfairness to the Bank in having to comply urgently with a complex order. The remaining five grounds are as follows:-
1. The EAT erred in law in interfering with the classic exercise of discretion by the Employment Judge in a decision which had been entrusted to the discretion of that Judge at first instance. The EAT did not identify any adequate grounds for interfering with the ET Order.
2. The EAT erred in law in overturning the decision of the Employment Tribunal in respect of the second request for all disclosure of “all correspondence between senior management (including Ron Lalonde) regarding the decision to offer guarantees and/or redeployment opportunities to employees of the Bank since January 2007” (i) is not relevant to the Claimant’s claim; (ii) the Claimant’s claim relates to a separate allegation of direct and/or indirect discrimination in relation to a proposal to make the Claimant redundant in April 2008; and (iii) Ron Lalonde was not involved in the Claimant’s redundancy proposal and is not responsible for the conduct of the Fixed Income and Currencies Division in which the Claimant was employed.
3. Judge McMullen QC erred in law when, in effect, he directed himself that (i) the change in the burden of proof since Noorani; and (ii) the difficulty in proving allegations of discrimination, were matters that the EAT was entitled to have regard to in interfering with the Employment Tribunal’s discretion. There was no basis for concluding that the Employment Tribunal had failed to take such matters into account or that those factors in any way detracted from the binding guidance on the approach to appeals against the discretionary orders of an Employment Judge set out in Noorani.
4. The EAT erred in law when, in effect, it directed itself that where an employee alleges a culture of discrimination (i) the employee is entitled to seek disclosure of the documents in any other grievance where an employee of the company has made an allegation of race discrimination; (ii) the employee is entitled to disclosure of any documents which he asserts may show a culture of discrimination in other parts of the business; and (iii) a tribunal which refuses disclosure will make an error of law. Those propositions are misconceived and would make disclosure in the tribunal system unworkable.
5. The documents which fall to be disclosed under the EAT Order are confidential. The EAT erred in law in failing to give any or any proper weight to the principle that where the documents which form the subject matter of the application are confidential the House of Lords has held that disclosure should not be ordered unless it is necessary for disposing fairly of the proceedings that the confidence be overridden, see Science Research Council v Nassé [1979] ICR 921 , at p.938B-C.
29. In his supplementary skeleton argument dated 27 May 2009, Mr Oudkerk advanced additional arguments as follows:-
(1) Five of the seven individuals named in the Order are no longer employed by the Bank (namely Franck Risler, Richard Phillips, Ian Howard, Peter Letley and Jim Meloche);
(2) Four of the seven individuals are and/or were at the material time based in Canada;
(3) In order to conduct electronic searches it will first be necessary to restore the entire mailboxes of the five individuals who are no longer employed by the Bank (Stage 1). Following the EAT Order approximately eight individuals in the Bank’s IT departments were tasked with working on the restoration of mailboxes. To date approximately 170 man hours have been spent. The work of restoring the mailboxes – as a precursor to any search – is still not complete;
(4) Once the mailboxes have been restored it is likely that in excess of 500,000 emails will be recovered and material will need to be subjected to electronic searches (Stage 2). Given the volume of material this is likely to have to be outsourced to a third party;
(5) A manual review of identified emails will then need to be carried out for relevance, commercial sensitivity and, if necessary, redaction of any irrelevant parts (Stage 3). Given the nature of the search and the broad category of documents covered by the EAT Order this is likely to involve the manual review of a very large number of emails and will be time-consuming and expensive;
(6) It is highly likely that many of the emails will contain confidential and commercially sensitive information as set out in the Particulars. The emails will also contain the personal data of a large number of employees who have no involvement in the claim brought by Mr Beck.
30. Mr Oudkerk also advanced a proportionality argument. He submitted that the exercise was entirely disproportionate (as to which, he relied on W Midlands Transport v Singh [1988] ICR 614 at 621A-C). As matters stood, he argued, there was no pleaded allegation that any of this correspondence was relevant to Mr Beck’s case. He also pointed out that the ET had only a limited discretion to award costs against Mr. Beck. He submitted that there was no proper basis for Judge McMullen to add to the principles enunciated in Noorani and made the following points: –
(1) Even if a Claimant can put forward “some credible grounds” of discrimination it did not follow that an Employment Tribunal must order disclosure of all correspondence between senior managers or that, as the EAT Judge in effect held, a Tribunal which does not order disclosure of such correspondence will thereby make an error of law;
(2) Whether or not there are “credible grounds” is not the touchstone for disclosure. The touchstone remained necessity.
(3) If the EAT judgment were correct in any race discrimination case involving, say, the Metropolitan Police, a Claimant would be able to insist upon disclosure of unrelated correspondence between senior officers, in unrelated cases, on the grounds that there was a credible case of institutional racism which the Claimant wished to prove;
(4) The “credible grounds” relied upon by the EAT Judge consisted principally of an email dated 7 August 2008 (from an ex-employee of the Bank) and an unsigned witness statement from the same ex-employee who, according to the unsigned statement, makes a complaint about the circumstances of his own redundancy from the Respondent. There is no principle that where a Claimant puts forward an unsigned witness statement from an ex-employee of the Respondent the Claimant is entitled to wide-ranging disclosure in relation to matters which are not directly relevant to the Claimant’s claim.
(5) In any event, notwithstanding the EAT’s direction to itself that “it is relevant to look at what leading lights with the Bank say” (Judgment at paragraph 18 referring to Mr Howard):
(a) whatever is meant by “leading light” Mr Howard was not employed by the Bank either at the date of his email or when the unsigned statement was provided. As is clear from the unsigned statement Mr Howard had been made redundant earlier in the year following substantial restructuring of the Respondent in the wake of the credit crunch;
(b) the EAT made no reference to Mr Howard’s explanation recorded at the time in a note which was before the EAT and the Employment Tribunal which states: “I asked [Mr Howard] whether he felt that the decision about whether or not to include Aboud [Nsouli] in the retention programme had been decided based on his race and Ian replied ‘of course not’… He said that the allegations brought by Aboud were in his view ‘hogwash’…”
(c) notwithstanding repeated requests in correspondence to date no signed statement from Mr Howard has been provided by the Claimant’s solicitors.
(All emphases are in the original)
31. Mr. Oudkerk also criticised the EAT’s citation of Anya v. University of Oxford [2001] IRLR 377 and countered with a citation from the judgment of Mummery J (as he then was) giving the judgment of the EAT in Qureshi v Victoria University of Manchester (Note) [2001] ICR 863.
Discussion and Analysis
32. We have set out Mr. Oudkerk’s arguments in some detail because, forcefully and skilfully though they were developed, we found them wholly unconvincing.
33. The correct test is that set out by Lord Salmon in Nasse, namely “is an order for discovery necessary for fairly disposing of the proceedings?” That was not the test apparently applied by the employment judge (see paragraph 13 above). He appears only to have considered whether the documents were ‘relevant’. We recognise that that might have been a shorthand way of saying that the documents were not of such clear relevance that disclosure was not necessary for fair disposal but we do not have anything which leads us to think that that was his thought process.
34. If the correct question were considered, we do not see how it could possibly be answered in the negative. Mr Beck has alleged that there was a general policy within the Bank (not limited to any one division or section) of treating Canadian employees differently from non-Canadians. That was not a bare allegation; it was supported by a statement (albeit unsigned) from Mr Howard and an email from him in the context of the investigation of Mr Nsouli’s grievance. It is common ground that there was a general reduction in the number of Bank employees in the UK due to the credit crunch. Decisions had to be taken as to who was to go and who was to stay. If there was such a general policy of differential treatment, it is likely to be revealed in communications between the senior executives during the period of decision-making. If there was no such policy, that too is likely to be revealed.
35. In our view, the documents are plainly relevant to Mr Beck’s pleaded case supported as it is by some evidence. This is clearly not a fishing expedition. The fact that some documents may be confidential does not confer any immunity on them. There is clearly a proper basis for the order sought. It must follow, in our judgment, that the judge in the ET was in the words of G v G “plainly wrong” not to make an order for discovery. An appeal thus properly lay to the EAT from his decision.
36. In our judgment, Judge McMullen was right to exercise his discretion in favour of making the order for disclosure. The principles set out in Science Research Council v Nasse, when applied to its facts, are fatal to the appellant’s arguments. Plainly, Mr. Beck is not entitled to go on a fishing expedition. He cannot simply demand discovery on the basis of a hope that it will turn something up. But here, he has a powerful basis for seeking discovery. He has a statement from a former senior employee of the Bank (Mr Howard) with an indication of how at least one other senior executive felt. These are highly relevant to his pleaded case that the Bank applied differential treatment on the grounds of the nationality of its employees. We also consider that the pleading is quite adequate; the Bank knows the case it has to meet.
37. We are also of the view that the Bank has recently shifted its ground. Before the ET and the EAT, it made no complaint of practical difficulty in the implementation of the order sought. Now, it seeks to advance a raft of arguments against disclosure based on the difficulty in retrieving and redacting parts of the material. Mr Oudkerk suggested that the reason these difficulties had not been raised before was that the Bank had only become aware of them since it had made some effort towards compliance. We find that hard to accept. The Bank must be well aware of the technical limitations of its own IT system.
38. There are in any event several answers to the Banks’ claim of difficulty and expense. As Smith LJ pointed out in argument, the way in which the Bank chooses to retain and archive its records is a matter for it. If those methods create difficulty of retrieval, that is not something which should be allowed to disadvantage Mr Beck. In any event, we consider that the Bank is exaggerating the difficulties and does not appear to have devised a sensible method of approaching the task of retrieval and sorting. We consider it likely that, if the Bank wished to rely on documents archived in its IT system, it would be able to access the relevant material without difficulty. In short, we do not consider that the alleged difficulties in retrieving the documents, or the in terrorem argument about their volume, are good arguments against necessary disclosure.
39. Finally, it is clear from the correspondence that Mr. Beck’s solicitors are more than willing to discuss with the Bank’s solicitors how disclosure can be facilitated. That, in our judgment, is an offer which should be further explored.
40. Mr. Oudkerk made the point that the disclosure must be unnecessary because at one stage in the correspondence Mr. Beck was prepared to go on without it. This strikes us very much as a ‘jury’ point. We all know the stresses of litigation. The fact that a hearing was to be lost and delay and additional costs incurred are factors which may well influence pragmatic decisions about whether or not to proceed. Mr Oudkerk’s point does not carry much weight in the context of the issues which we have had to decide in this appeal.
41. If and in so far as the paragraphs which we have cited from the EAT’s judgment place emphasis on relevance as opposed to the test of necessity laid down in Nasse this does not, in our judgment, affect the outcome of this appeal. The summary of the judgment in the EAT accurately states that:-
“Disclosure of specific documents is necessary (our emphasis) where evidence in a different employee’s grievance, of a “smoking gun” supporting the claimant’s case of race discrimination, is found and sought to be pursued. Employment Judge’s refusal set aside and a fresh narrower application granted.
Summary
42. It appears to us that, in opposing this application for disclosure, the Bank had brought forward a plethora of points, none of which was of any real merit. The disclosure sought by Mr. Beck is necessary for fairly disposing of the proceedings. The ET was wrong to refuse to make an order. That was an error of law, and Judge McMullen was right to correct it. He has done so properly by focusing the order upon named individuals. Accordingly, this appeal is dismissed.
