In this post, Mitchell Abbott, a solicitor in the disputes team at CMS, previews the case of Anwar v The Advocate General (Representing the Secretary of State for Business Energy and Industrial Strategy), which concerns the availability (or lack thereof) of interim protective measures for claimants in employment tribunal claims in Scotland, and whether the EU law principles of effectiveness and equivalence are breached by the Scottish regime.

On 25 February 2021, the UK Supreme Court heard the appeal in Anwar v The Advocate General (Representing the Secretary of State for Business Energy and Industrial Strategy). In this case, Ms. Anwar appeals the lower courts’ finding that, despite employment tribunals being granted exclusive jurisdiction to hear discrimination claims such as hers, she could have sought orders from the courts preventing her employer from dissipating funds and frustrating the enforcement of her eventual tribunal award. Ms. Anwar also appeals the courts’ findings that the EU principles of effectiveness and equivalence were not breached.

The factual background                                                                                            

Ms. Anwar brought proceedings before an employment tribunal against her former employer and former line manager alleging harassment on the grounds of her sex, race, and religion. Ms. Anwar was successful, obtaining an award of £75,000 plus interest and expenses.

Following the award but before payment had been received, Ms. Anwar’s legal advisor was informed that the former employer intended to close the existing business and transfer its funds to another entity to avoid making payment to Ms. Anwar. Ms. Anwar has not received any payment in fulfilment of the award from her former employer or line manager.

Ms. Anwar raised judicial review proceedings against the Secretary of State for Business, Energy, and Industrial Strategy, arguing that Scots law breached the EU law principles of effectiveness and equivalence by failing to provide for provisional measures in employment tribunal claims to protect against the insolvency of respondents. Ms. Anwar seeks compensation for that failure.

The legal principles & Ms. Anwar’s arguments

  1. The availability of interim security

Scots law – like many other legal systems – permits a pursuer (claimant) to seek an order from the court preventing a defender (defendant) from dissipating funds so as to frustrate the claim. In Scots law, this is known as diligence on the dependence and can take the form of an inhibition (relating to heritable property, i.e. land and buildings) or an arrestment (where movable property in the hands of a third party is seized, e.g. money in a bank account).

Ms. Anwar argued that diligence on the dependence was unavailable in employment tribunal claims such as hers on two grounds. Firstly, on the basis that the Equality Act 2010 grants exclusive jurisdiction to employment tribunals to hear claims relating to workplace discrimination, Ms. Anwar argued it was not competent to seek diligence in relation to such claims from the courts. Secondly, Ms. Anwar argued that the 2007 reforms to the Scottish law of diligence comprehensively prescribe the courts’ power to grant diligence on the dependence. As those reforms do not expressly permit actions to be raised in Scottish courts to obtain diligence on the dependence of an action in another court or tribunal – such as an employment tribunal – Scottish courts cannot grant diligence in such cases.

  1. The EU principle of effectiveness

The relevant provisions of the Equality Act 2010 were introduced to enact EU directives governing sexual, racial, and religious discrimination at work. As such, EU law mandates that there must be sufficient remedies in national legal systems “to ensure effective legal protection.”

Ms. Anwar argued that, even if diligence was available to a claimant in employment tribunal proceedings, that remedy was ineffective as it could not be obtained directly from the employment tribunal; the requirement to obtain it in separate proceedings before a court rendered it ineffective. As such, the principle of effectiveness was breached.

  1. The EU principle of equivalence

Again, as the Equality Act 2010 was introduced to enact EU directives, EU law mandates that the remedies available to an individual enforcing their EU law rights must be substantially the same as a person who wishes to enforce an equivalent right derived solely from domestic law.

In determining whether an equivalent remedy was available, Ms. Anwar argued that the appropriate comparator is non-employment discrimination claims also based on EU law but instead brought through the courts. As diligence on the dependence was directly available in these claims but not in claims before employment tribunals, the principle of equivalence was breached.

The Decision of the Inner House

The Inner House of the Court of Session (Scotland’s highest civil court), by a 2 – 1 majority, rejected Ms. Anwar’s appeal on substantially the same grounds as before the lower court at first instance (the Outer House).

  1. The availability of diligence

The Inner House noted that historically Scottish courts have had jurisdiction to grant diligence on the dependence even where they do not have jurisdiction over the merits of the action. For example, a litigant in England or parties to arbitration proceedings have historically been able to obtain diligence when the defender held property situated in Scotland.

The Inner House strongly rejected the argument that the 2007 reforms changed that position by prescribing the extent of the courts’ power in relation to diligence. The Inner House noted that the 2007 reforms were concerned with procedure only, and, as they failed to deal with fundamental matters such as defining the terms used or the effect of diligence, they could not be regarded as a complete and exhaustive framework of the courts’ powers. As such, the Inner House held that the 2007 reforms did not affect the power of the courts to grant diligence in support of ancillary proceedings – noting as a matter of practice diligence had been regularly used in such (non-employment tribunal) proceedings post-2007 reforms.

The Inner House also held that the exclusive jurisdiction granted to employment tribunals over the merits of claims such as Ms. Anwar’s did not prevent an action being raised in the Scottish courts for the purpose of obtaining diligence. In doing so, the Inner House  drew parallels with the courts’ historic power to grant diligence in support of foreign proceedings and arbitration. In such scenarios, the Scottish courts will have no jurisdiction, or the courts’ jurisdiction will have expressly been excluded (as is the case under the Equality Act 2010). However, it is still competent for the courts to grant diligence in support of such proceedings.

As a result, Ms. Anwar’s argument that diligence was not available to claimants in employment tribunal claims was rejected – and on that basis the Inner House also rejected an argument that the availability of diligence was too uncertain.  Ms. Anwar’s first ground of appeal was therefore rejected.

  1. The EU principle of effectiveness

The Inner House adopted the test for effectiveness set out in Impact v Minister for Agriculture and Food [2008] 2 CMLR 47, that national procedures should not make it “practically impossible or excessively difficult” to enforce rights based on EU law. The Inner House rejected that the more recent cases relied upon by Ms. Anwar established an obligation on states to provide a “general remedy” to enforce EU law unconstrained by national procedures. In doing so, the Inner House undertook a detailed review of the cases relied upon by Ms. Anwar, in each instance holding that they were instead consistent with Impact and other prior case law.

The Inner House held that the necessary precursor to obtaining diligence in support of employment tribunal claims – raising a court action – did not impose such an additional burden on a pursuer so as to render the remedy “excessively difficult”. The Inner House noted that the additional procedural requirements are likely to be “short, simple and inexpensive.”

As such, Scots law provided litigants in Ms. Anwar’s position an effective opportunity to obtain diligence on the dependence of an employment tribunal action, and therefore  Ms. Anwar’s second ground of appeal was rejected.

  1. The EU principle of equivalence

To determine whether there are equivalent remedies for EU law anti-discrimination rights as there are under national law for similar such claims – and as such to determine whether there was a breach of equivalence – the Inner House held that the appropriate comparator was employment claims based on national law; not other discrimination claims based on EU law but brought via the courts, as Ms. Anwar argued should be the case.

In finding this, the Inner House placed weight on the need for such claims to be similar in subject matter; noting that it was logical for domestic law to adopt different types of procedure for different categories of claim. The Inner House held that adopting a test based on the origin of parties’ legal rights and obligations – as Ms. Anwar argued – would mean that EU rights could never be compared against domestic rights, subsuming the principle of equivalence into effectiveness. As such, Ms. Anwar’s third ground of appeal was rejected.

Referral to the Supreme Court

Ms. Anwar’s appeal was heard on 25 February 2021 before Lord Hodge, Lord Lloyd-Jones, Lord Briggs, Lord Leggatt, and Lord Burrows. A decision is expected in due course.