Section 1 of the Mental Health Act 2005 (MA 2005) states that a person must be assumed to have mental capacity unless the contrary is established. The EAT confirmed in the case of Jhuti v Royal Mail Group  that where a party does not have capacity to make decisions relating to their legal claim, an Employment Tribunal has the power to issue a case management order to appoint a “litigation friend” to act on behalf of that party.

In this case, the Claimant had successfully won claims of constructive unfair dismissal and disability discrimination against her employer, Royal Bank of Scotland Plc (RBS), in the ET. A remedy hearing was listed to consider the amount of award to AB, who was claiming damages of £10million on the basis that RBS’ actions had caused severe depression and psychosis meaning she required 24/7 care.

Although the Claimant was due to give evidence during the first day of the hearing, her counsel told the court that she was not able to give evidence or instructions on that date. Instead, her psychiatric expert gave evidence. The following afternoon, the Claimant attended the hearing and was asked a number of simple questions by her barrister. It quickly became apparent that the Claimant did not recognise her own legal team and gave unintelligible answers, including responding with “sounds and grunts”.

RBS applied for an order staying proceedings in order for an assessment of the Claimant’s capacity to take place. The ET refused the bank’s application on the basis that the presumption of capacity had not been displaced. The Judge relied on the fact that the Claimant’s legal team were satisfied they could act; that the assessment of the Claimant’s Medical expert did not raise concerns about capacity; and, neither of the experts who had given evidence during the hearing had raised concerns about capacity.

RBS then made a further application, to be taken either as an application for a reconsideration of this decision or as a fresh application for a stay, taking into account a note from their psychiatric expert that, if the Claimant’s behaviour during the hearing was taken at “face value”, then there were grounds to doubt her capacity to litigate. This application was also rejected by the ET who felt there had been no material change in circumstances. The Tribunal went on to award AB £4.6million.

RBS appealed to the EAT on the basis that the ET had erred in failing to adjourn the hearing for a formal assessment of AB’s capacity, and in not reconsidering that decision.

On the first ground, the EAT held that the Tribunal had erred in concluding there was no need to assess AB’s capacity. The Judge found that, whilst the case of Jhuti cautioned that Tribunals should “tread carefully” when it came applications concerning capacity to litigate, there are still “logical limits” to the presumption of capacity. In rejecting RBS’ application the ET had relied on a “Catch-22” argument that unless there was already evidence of a lack of capacity, no assessment of capacity would be required. This was incorrect: the ET was not being asked to determine if the Claimant lacked capacity, but whether sufficient concerns had been raised which would justify an assessment to determine that question.  Plainly there was concern for AB’s capacity given the manner in which she had presented at the remedy hearing and so refusing the application was irrational. It was also wrong to attempt to justify the refusal on medical evidence provided by the two psychiatric experts in the case, whose reports were prepared prior to the remedy hearing and who had not had a chance to examine the Claimant following that hearing.

Although the ground of appeal was upheld, the Judge rejected RBS’ argument that the ET’s error rendered the award of damages void. The Judge was satisfied that the ET had reached its decision on damages based on full argument from both sides and therefore there was no need to remit any issue for determination. Had RBS’ application for a stay been successful, this would have only led to an adjournment of proceedings for a period of time in which the assessment would have taken place and (if necessary) a litigation friend appointed for the Claimant.

Comment: The facts of this case are relatively unusual, however it is a useful reminder that the presumption of capacity can be displaced even in the face of medical evidence to the contrary and Tribunals should be live to situations where this may be appropriate.  

LINK: https://assets.publishing.service.gov.uk/media/5e5cee9086650c53a09af60a/Royal_Bank_of_Scotland_PLC_v_AB_UKEAT_0266_18_DA.pdf

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