Employment Cases Update

Irwell Insurance Company Ltd v Watson & Ors [2021] EWCA Civ 67

Date published: 25/01/2021

Appeal against an EAT decision that the ET is a court within the meaning of s2(6) of the Third Parties (Rights against Insurers) Act 2010. Appeal dismissed.

Mr Watson was employed by Hemingway when he brought claims of unfair dismissal and discrimination. Hemingway had taken out indemnity insurance with Irwell. The policy would indemnify Hemingway against any claims from ex-employees as long as certain conditions were met. Hemingway became insolvent and Mr Watson brought a claim, in the ET, against Irwell. The issue here was whether the ET had jurisdiction to hear the claim. The case hinged on the Third Parties (Rights against Insurers) Act 2010 (the 2010 Act), in particular s2(6). The question was whether an employment tribunal falls within the words "the court" in s2(6) of the 2010 Act. If it does, then the 2010 Act has conferred jurisdiction on the employment tribunal to make a declaration as to the insurer's liability under s2(2)(a) of that Act. If an employment tribunal is not included in the meaning of "the court" in s2(6) of the 2010 Act, the employment tribunal has no power to make a declaration under s2(2)(a) of the 2010 Act. The ET dismissed an application by Irwell to strike out disability discrimination claims as having no reasonable prospect of success but stayed the ET proceedings pending determination of the issue as to whether Irwell was liable to Mr Watson under the 2010 Act. Mr Watson appealed to the EAT which ruled against the ET judgment saying that in all the respects, the ET functions like a court. Irwell appealed to the Court of Appeal.

The Court of Appeal dismissed the appeal and did not accept the argument that the ET's lack of enforcement powers is a reason why it should not be considered a "court" within s2(6). The court also rejected the suggestion that Parliament could not have intended ETs to deal with questions of insurance law. ETs regularly have to deal with difficult questions of law across a variety of topics, not confined to what would be regarded as mainstream employment law.

Read the full text of the judgment on BAILII or download the file by clicking the link below.