CA-2024-000624 & CA-2024-000625 - [2025] EWCA Civ 1162

Discussion

Did the ET apply the wrong test to the s 4 issue?

EJ Brown’s carefully reasoned decision shows that she was well aware that the critical question on the s 4 issue was whether the Claimant’s functions were sufficiently close to the exercise of sovereign authority, as opposed to being merely ancillary and supportive. I have set out the relevant section of her decision at paragraphs [181]-[195]. Paragraph [183] includes findings that “all the Claimant’s duties were truly ancillary and supportive” and that Ms Alhayali “did not have any important decision-making functions, but referred any non-standard matters to her Head of Department”. She provided reports on proposals for cultural events but had no decision-making role in whether to approve them or make funding available for them. All these, said the judge, “were functional, practical, supportive duties”. The judge develops these points further before saying at paragraph [188]:

“I did not agree with the Respondent’s submission that because the Claimant’s job role assisted the Respondent to carry out its governmental functions as described in Article 3 of the Convention on Diplomatic Relations, her employment was an exercise of sovereign authority.”

I am entirely satisfied that the employment judge was applying the correct test in accordance with the guidance given by Lord Sumption in Benkharbouche. By contrast, the relevant section of the judgment of Bourne J seems to accept the submission on behalf of the Embassy that once it is shown that the department or section of the Embassy in which the Claimant worked was exercising any of the functions listed in Article 3.1 of the Vienna Convention, that is sufficient to establish the defence of sovereign immunity. At paragraph [92] of his decision, Bourne J says that:

“The test was not whether the Claimant’s work was ancillary and supportive to the exercise of sovereign authority. It was whether her ancillary and supportive work was sufficiently close to that exercise.”

I have to say, with respect, that this seems a very hairline distinction..

The examples given by Lord Sumption of employees in the category of technical and administrative roles which are sufficiently close to the exercise of sovereign authority for claims by them to attract immunity are very limited. At paragraph [55], he gives the example of cypher clerks and “certain confidential secretarial staff”. At paragraph [58], having cautioned against “the suggestion that the character of the employment is always and necessarily decisive”, he goes on to consider employment disputes, which engage the state’s sovereign interests even if the contract of employment itself was not entered into the exercise of sovereign authority, giving examples of dismissals for reasons of state security or claims arising out of a state’s recruitment policy.

The critical paragraph [97] of Bourne J’s judgment states that “by sifting compliant and non-compliant guarantee requests, writing reports and funding requests and discussing art exhibits with visitors and British students and teachers she played a part, if only a small one in protecting the interests of the Saudi state and its nationals in the UK and in promoting Saudi culture in the UK”. He goes on to say that “she was participating in the public service of the Embassy and not merely in the private administration of the Embassy.” This suggests that any outward-facing activity such as “discussing art exhibits with visitors” is sufficiently close to the exercise of sovereign authority to attract immunity. That seems to me to cast the net of immunity very widely indeed, certainly in comparison with the very specific examples given by Lord Sumption. The earlier reference to “sifting compliant and non-compliant guarantee requests” and “writing reports on funding requests” gives no weight to the findings of fact by EJ Brown that the Claimant did not have a decision-making role and that her activities were relatively low-level.”.

Can there only be one legally correct answer?

Where a state is entitled to assert diplomatic immunity, courts and tribunals in this jurisdiction are obliged to give effect to that immunity. A decision as to whether an employee is on the right or wrong side of the line for a claim by her to attract sovereign immunity is not a question of discretion. It is, however, an evaluative judgment by the fact-finder. I am doubtful about the bold proposition in paragraph [89] of the EAT judgment that, while the employment judge’s findings of primary fact cannot be disturbed, her conclusion, based on those facts was “either legally right or legally wrong”. The EAT has no jurisdiction except where the appellant has shown that the ET has made an error of law.

I agree with the observations of Judge Tayler in the EAT case of Webster v USA [2022] IRLR 836; [2022] EAT 92 where he said:

“In BenkharboucheLord Sumption distinguished between three types of employees in diplomatic missions; those who have inherently governmental function at one end and those whose domestic duties are inevitably private. In the middle there are technical and administrative roles that may, or may not, be sovereign or governmental. Determining which side of the line an employee in the middle category falls is inherently a matter of factual assessment that is for the employment tribunal.”

I do not accept that sovereign immunity cases (in particular those involving employees in the middle category of Lord Sumption’s classification) have become a unique category of case where the party losing before the ET can appeal as of right on the grounds that the conclusion of the tribunal is always a question of law. Moreover, if that is true of the appeal to the EAT, it must likewise be true of an appeal from the EAT to this court. Even if the question for us is whether, on EJ Brown’s findings of primary fact, the Embassy has or has not established the defence of sovereign immunity under s 4 of the 1978 Act, I would answer that it has not, for the same reasons that she gave at paragraphs [181]-[195] of her judgment.

Accordingly, in what Bourne J himself described as a “borderline and difficult case”, I consider that EJ Brown’s decision on the s 4 issue involved no error of law. I would accordingly allow the appeal and restore the decision of the ET that the Embassy does not have state immunity by virtue of s 4.

That makes it strictly unnecessary to deal with the other two issues, but I will nevertheless refer to them briefly, and express my view on the first of them.

The s 5 issue: was this a personal injury claim to which state immunity does not apply?

In Federal Republic of Nigeria v Ogbonna [2012] 1 WLR 139, Ms Ogbonna, who was employed as a member of a diplomatic mission, brought a claim for associative disability discrimination in respect of her dismissal, which she said had occurred because she sought time off to look after her sick daughter. She claimed to have suffered both physical and mental injuries as a consequence. The employer claimed state immunity, arguing that s 16(1)(a) of the 1978 Act prevented her from relying on s 4 to bring an employment claim, and that she could not rely on s 5, either (i) because s 16(1)(a) applied state immunity in respect of all employment claims by members of diplomatic missions regardless of s 5, or (ii) because s 5 applies only to a claim for damages for physical injury and not to harm to mental health unless it was consequent on a physical injury.

In the ET, the employer’s claim to state immunity was dismissed by EJ Walker. On appeal to the EAT, this decision was upheld by the President, Underhill J (as he then was). He held that ss 4 and 5 of the Act were separate and free-standing exceptions to the general rule of state immunity even where, on a claim for personal injury by an employee, both exceptions might be engaged. He also held that the phrase “personal injury” in s 5 bore its normal meaning in domestic law so as to cover cases of psychiatric as well as physical injury.

The second of these two issues appears to have been the main focus of the submissions in Ogbonna. Underhill J’s ruling to that effect has recently been shown to be correct by the decision of this court (Lady Carr CJ, Males and Warby LJJ) in Shehabi v Kingdom of Bahrain [2025] 2 WLR 467; [2024] EWCA Civ 1158. The claimants alleged that employees of the defendant state while located abroad had caused spyware to be installed remotely on the claimant’s computers located in the UK, which had caused the claimants psychiatric injury when they discovered that the defendant had been spying on them in that way. The court held that a standalone psychiatric injury was a personal injury within the meaning of s 5 of the 1978 Act. Ogbonna was cited and approved on this issue: see paragraphs [96]-[107] of the judgment of Males LJ. Ms Darwin accepted that Shehabi resolves this issue authoritatively at the level of this court.

However, Shehabi was not an employment case and tells us nothing about the interaction of ss 4 and 5. There is no authority at the level of this court deciding whether Ogbonna was correct on the first issue. Although it is not necessary to determine the point, I consider that on the first issue Ogbonna is wrong. It would be very peculiar if an employee of an embassy, perhaps a very senior diplomatic agent, could be precluded from bringing any employment claim by virtue of ss 4 and 16, including a claim for compensation for discrimination, with the exception that if the discrimination caused psychiatric injury that element of the claim could not be defeated by state immunity. That would drive a coach and horses through the careful scheme of exceptions created under ss 4 and 16.

The exception created by s 5 is in my view linked to the cause of action, not the nature of the damage. If a chandelier at an embassy in London drops from the ceiling and causes injury to the person standing beneath it, there is no obvious rationale for conferring immunity on the state occupying the premises, whether the injured person is a diplomatic agent, a member of the technical and administrative staff, a member of the domestic staff, or simply a visitor to the premises. That would apply whether the injury caused was physical, psychiatric or both. But a claim by an employee that her employer had discriminated against her and thereby caused her harm of various kinds including psychiatric injury falls squarely within the scheme of ss 4 and 16.

The waiver issue

Since, if the President and Coulson LJ agree, we will be restoring the decision of the ET that the Respondent cannot claim state immunity in respect of the Claimant’s EU-derived employment claims, the question of whether there was a valid waiver of immunity by an email sent by the Embassy’s solicitors Howard Kennedy in April 2019 is academic, and for that reason I would set aside Bourne J’s order remitting that issue for re-hearing. But I should set out briefly my concerns about the Embassy’s argument and, in particular the decision of this court in Republic of Yemen v Aziz [2005] ICR 1391; [2005] EWCA Civ 745 on which Mr Andrew Legg, who presented this part of the Embassy’s case with great skill, relied.

At a preliminary hearing in the ET on 19 March 2019, the Embassy was ordered to make clear whether or not it agreed that the tribunal had jurisdiction over claims derived from the European Charter, following Benkharbouche. On 9 April 2019, a partner in Howard Kennedy LLP wrote to the ET in the following terms:

“... we confirm [that] the Respondent does not consider it necessary to amend the grounds of resistance, but accepts the Tribunal has jurisdiction over claims which are derived from EU law (as reflected in paragraph 8(c) of the existing Grounds of Resistance).”

I note that on the same date an email in effectively identical terms was sent to the ET by the solicitors acting for the Embassy in Royal Embassy of Saudi Arabia (Cultural Bureau) v Costatine [2025] 1 WLR 1207; [2925] UKSC 9: see paragraph [11] of the judgment of Lord Lloyd-Jones JSC in that case.

Courts and tribunals proceed on the basis that where parties are represented by solicitors on the record the solicitors act with the authority of their clients. The Howard Kennedy email was, or appeared to be, a clear submission to the jurisdiction. By s 2(1) of the Act, a state is not immune from proceedings in respect of which it has submitted to the jurisdiction of the courts of the UK.

During a period of more than two years following this email, the solicitors acting for the Claimant and for the Respondent respectively took numerous steps in the tribunal proceedings. Again, this appeared to come within s 2(3)(b), whereby a state is deemed to have submitted if it has taken any step in the proceedings (subject to subsections (4) and (5), which do not appear to be relevant in the present case). Section 2(7) provides that the head of mission or the person performing the functions of the head of mission for the time being shall be deemed to have authority to submit on behalf of the state in respect of any proceedings.

On 4 August 2021, Howard Kennedy, still on record as the Embassy’s solicitors, made an application that the final hearing in the ET be vacated. The application stated that “our client is reasserting state immunity in these proceedings and we are instructed to engage for this purpose only”. A few days before the tribunal hearing, a stamped but unsigned document was sent to the tribunal as an attachment to a witness statement. It is set out in full at paragraph [82] of the ET judgment. It asserted that neither the Ambassador nor anyone working on his behalf had waived state immunity in these proceedings, and that the Ambassador was the only person authorised to do so. This applied in 2019, the time the email was “purportedly sent by Howard Kennedy on behalf of the Royal Embassy of Saudi Arabia (Cultural Bureau)”.

A witness, Ms Trabelsi, was called to give evidence in the ET stating that she had been the person at the Cultural Bureau communicating with the firm of Howard Kennedy; that she had not been in a position to give authority to submit to the jurisdiction; and that only the Ambassador could do that. EJ Brown decided that Ms Trabelsi had been authorised by the Ambassador or his deputy to give instructions to Howard Kennedy. She said:

“I cannot believe that the Respondent submitted to the jurisdiction on 9 April 2019 and continued to do so for more than two years without the ambassador being aware of this and having agreed to it. I decide that the Respondent submitted to the jurisdiction in respect of the Claimant’s EU law derived claims and the head of mission or his deputy authorised this.”

Bourne J held that the ET failed to give sufficient weight to the unsigned statement and accordingly remitted the issue of waiver for re-hearing. But suppose for the moment that the ET had accepted the truth of what was said in the unsigned statement, namely that Howard Kennedy had never been authorised to submit to the jurisdiction. There was no reason for Ms Alhayali or her advisors to know that the Embassy’s solicitors were acting without the authority of the head of mission. Nevertheless, Ms Darwin relied on the decision of this court in Republic of Yemen v Aziz [2005] ICR 1391 to say that the point could be raised at any time.

Aziz was an employment case where solicitors for the respondent state entered notice of appearance and served grounds of defence on the instructions of an embassy attaché. The ET held that the state had submitted to the jurisdiction. On appeal, the embassy lodged a statement from the attaché that he had misunderstood the nature of the proceedings and a statement from the Ambassador that he had not authorised the attaché to instruct the solicitors. This court (Pill, Sedley and Gage LJJ) held that the rule against adducing new evidence on appeal had to give way to the right of a state to claim on appeal that it had not submitted to the jurisdiction. (That part of the decision was expressly approved by the Supreme Court in Costatine. The Supreme Court did not, however, consider issues of waiver: again, see paragraph [11] of the judgment of Lord Lloyd-Jones JSC, referred to above.)

On waiver, Pill LJ said:

... the fact that the step in proceedings alleged to constitute the waiver is taken by solicitors instructed by the Embassy does not conclude the matter. A solicitor acting without authority cannot waive the immunity. A solicitor’s actions establish a waiver only if they have been authorized by the state, which includes authority exercised or conferred by the State’s diplomatic mission. That would include a step authorized by the head of mission himself or herself. Authority may be confirmed on the solicitors either directly or in my view indirectly by a member of the mission authorized by the head of mission to do so.

...

I do not consider that the doctrine of ostensible authority applies either to the solicitors or to Mr Alkhader or that jurisdiction can be created by an estoppel. The state has protection against unauthorised action taken by a solicitor or member of the mission. The respondents were entitled, in the circumstances, to assert before the EAT that there had been no waiver of immunity under section 2, and hence no jurisdiction because the earlier steps in the proceedings were not steps taken by the state. As already noted, it is necessary to determine the factual issue arising in order to decide whether there has been a waiver under section 2. It would be open to the fact-finding tribunal to infer from all the circumstances that Mr Alkhader was acting with the authority of the head of mission in his dealings with the solicitor and to infer that, through Mr Alkhader, the solicitor was authorised to act as he did. If that happened, the state has taken the step or steps and is deemed to have submitted. The same process of reasoning applies to the steps taken after the employment tribunal’s decision as to jurisdiction as to the steps before the decision. The court is entitled to expect that a state which does not wish to have its authorisation procedures enquired into by the fact-finding tribunal will put in place readily ascertainable procedures for waiver.”

In the earlier case of Baccus SRL v Servicio Nacional del Trigo [1957] 1 QB 438, cited in Aziz, Parker LJ had referred to:

“… the rather alarming prospect that a foreign sovereign may allow proceedings to continue for years in this country before taking the point; but for my part I think that is a theoretical difficulty. I do not think any person, even a foreign sovereign, would be likely to be believed if in such an extreme case he were to come forward and assert that he had had no knowledge whatever of the proceedings.”

It is worrying to think that a claimant could be led on for years and incur substantial costs in litigation, only to be told that solicitors who had apparently submitted to the jurisdiction on behalf of the respondent state had no authority to do so. But that is a matter for another case and another day.