Damages; collateral benefits; insurance. Money received by an injured claimant under a policy of insurance for which he has himself paid the premiums is not to be deducted from the damages payable by the wrongdoer. The benefit is the fruit of the claimant's own contract and prudence, res inter alios acta, and the tortfeasor cannot appropriate it. The foundation of the collateral benefits rule, applied and explained in Parry v Cleaver [1970] AC 1.
Malicious prosecution; costs of criminal defence as damages. A passenger prosecuted for pulling a train's communication cord was acquitted with an award of part of her costs, then sued for the shortfall between the award and what her defence had actually cost. The Court of Appeal held the unrecovered balance could constitute damage: the fiction that a party-and-party costs award fully compensates does not extend to criminal proceedings, where an award of costs is no complete indemnity, and an assessment of costs and an assessment of damages are two different exercises (Devlin LJ).
(1966) 117 CLR 118 - Contract; damages; exemplary damages.
Damages; collateral benefits; pensions and insurance. A disablement pension received by the claimant was not to be deducted from damages for loss of earnings, whether payable as of right or at discretion. The House of Lords treated such a pension as analogous to the proceeds of insurance bought by past service and contributions and therefore collateral, applying Bradburn v Great Western Railway Co (1874) LR 10 Ex 1. To deduct would transfer to the wrongdoer the benefit of the claimant's own thrift. Contrast Hussain v New Taplow Paper Mills Ltd [1988] AC 514, where payments under a scheme funded by the employer were deductible. The rule applies to damages for wrongful dismissal, Hopkins v Norcros plc [1994] ICR 11, and to a tribunal's assessment of lost earnings: in CJ v PC [2024] EAT 182 the EAT accepted that a tribunal erred by setting an ill-health retirement pension off against loss of earnings, Smoker v London Fire and Civil Defence Authority [1991] ICR 449 having settled that the rule holds even where the respondent funds the pension, though it refused to let the point be taken for the first time on appeal [IDS 9.154].
Damages; exemplary damages are only available for oppressive, arbitrary or unconstitutional action by servants of the government.
Unfair dismissal; compensatory award. The foundational authority on computation of the compensatory award. Sir John Donaldson (NIRC) held that the compensatory award is to compensate the claimant for actual and prospective loss flowing from the dismissal, assessed on the balance of probabilities. The award covers: immediate loss of earnings (from EDT to hearing), future loss of earnings (calculated on the chance of obtaining equivalent employment), loss of statutory rights (including the qualifying period for a new job, typically a nominal sum), loss of pension rights, and loss of any benefits in kind. The award must be 'just and equitable in all the circumstances' (ERA s.123(1)). No element of punishment of the employer is permitted.
Remedies; Future Loss; Earning Capacity. The landmark case establishing the 'Smith v Manchester award' for a 'handicap on the labour market'. It compensates an employee who currently has no loss of earnings but who, due to their disability/injury, would be at a competitive disadvantage if they were to lose their current job.
Unfair dismissal; remedy; contributory fault. The Court of Appeal set the three-stage test under what is now s.123(6) ERA 1996: the employee's conduct must be culpable or blameworthy, meaning perverse, unreasonable or foolish, whether or not it also breached the contract; it must have caused or contributed to the dismissal; and the reduction must be just and equitable. The dismissal was unfair because the BBC could have found the claimant other work, but his refusal of any transfer was 'perverse or foolish ... or ... bloody minded' and the compensatory award was reduced to nil. There is no floor to a s.123(6) deduction.
Mitigation of loss; setting up own business. Where a dismissed employee mitigates by setting up his own business the question is whether what he in fact did was reasonable in all the circumstances, not whether he sought paid employment. To establish a failure to mitigate it must be shown what step should have been taken, the date on which that step would have produced alternative income, and the amount of that income; compensation is then reduced by that amount. A blanket percentage reduction across the whole loss period is impermissible. Approved in Dore v Aon Training Ltd at [33].
Unfair dismissal; remedy; 'Polkey' principle (pre-Polkey) discussion.
Unfair dismissal; compensatory award; just and equitable. Following a finding of unfair dismissal the claimant accepted GBP 9,500 in full and final settlement, which was paid. The agreement did not bind him, but the tribunal held it not just and equitable to award any further compensation even though his loss was greater, and the EAT upheld that at 881A-C. HHJ Auerbach confessed misgivings about the reasoning in SPI Spirits (UK) Ltd v Zabelin at [35], and in Edward v North London NHS Foundation Trust held it offers no assistance on the scope of the consent order power, being a decision on the statutory compensatory award.
Unfair dismissal; compensation; if a dismissal is procedurally unfair but the employee would have been dismissed anyway, compensation is reduced.
Discrimination; remedies; established principles for awarding injury to feelings (pre-Vento).
(1989) 58 DLR (4th) 193 - Wrongful dismissal; damages; punitive damages are rare.
Discrimination; remedies; the statutory cap on compensation for sex discrimination was unlawful under EU law. The ECJ also held that interest on discrimination compensation is an essential component of the award, establishing the principle that gave effect to the Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996.
Exemplary damages are generally not available in breach of contract claims.
Remedies; injury to feelings; principles. Awards for injury to feelings are compensatory, not punitive: an award must be sufficient to mark the gravity of the discriminatory act, but not so high as to be extravagant nor so low as to be derisory, and the tribunal must look at all the circumstances to assess a fair and reasonable sum, bearing in mind the value of the award in everyday life. Reported as Armitage, Marsden and HM Prison Service v Johnson; the principles were later absorbed into the Vento band framework.
Remedies; discrimination; 'but for' causation in compensation. Affirmed that losses flowing from a discriminatory dismissal are recoverable on the orthodox tortious 'but for' basis under s.124(2)(b) EqA 2010 (formerly s.65(1)(b) RRA 1976). The claimant is entitled to be put in the position they would have been in but for the unlawful act, all financial losses consequent on the dismissal are in principle recoverable, including contractual benefits the claimant would have received had they not been dismissed.
Compensatory award; order of deductions. Governs the sequence in which credit for sums received and percentage reductions are applied in computing the compensatory award for unfair dismissal: credit for payments and earnings received falls to be given as part of the assessment of loss under s.123(1) ERA 1996, before the statutory cap is applied.
Unfair dismissal; reinstatement; re-engagement is rarely ordered where trust has gone.
Damages; exemplary; exemplary damages can be awarded against police for oppressive conduct.
Remedies; injury to feelings; established the three 'Vento bands' for compensation.
Compensatory award; mitigation; refusal of re-employment. The Court of Appeal set out the principles where a dismissed employee refuses the former employer's offer of re-employment: the employee must act as a reasonable person unaffected by the prospect of compensation; the onus is on the employer to show that the refusal was unreasonable; the test is objective, on the totality of the evidence, but the tribunal takes into account the circumstances in which the offer was made and refused, the employer's attitude, the way the employee was treated and all the surrounding circumstances, including the employee's state of mind; and the tribunal must not be too stringent in its expectations of the injured party. Decided on unfair dismissal and disability discrimination compensation, the principles apply equally to wrongful dismissal claims [IDS 9.142].
Unfair dismissal; remedies; the compensatory award under s.123(1) ERA 1996 is confined to financial loss, non-pecuniary loss (injury to feelings, manner of dismissal) is not recoverable. The House of Lords unanimously confirmed the orthodox position that had prevailed in all tribunals prior to the Court of Appeal's contrary decision.
Discrimination; remedy; reinstatement to a hostile environment is not practicable.
Mitigation of loss; expenses of mitigation. Approving Gardiner-Hill v Roland Berger Technics Ltd, the conventional method where an employee mitigates by setting up his own business is that the tribunal first calculates the loss of remuneration, then adds the costs reasonably incurred in mitigating that loss, then deducts the earnings from the new business, all on the assumption that mitigation in that form was reasonable [33]. Section 123(2)(a) ERA 1996 provides that loss includes any expenses reasonably incurred in consequence of the dismissal. The case concerns business start-up costs and loan interest; it is not authority for the recovery of solicitors' fees as a head of loss.
Unfair dismissal; remedy; Polkey reduction; compensatory award. The Court of Appeal confirmed that where a dismissal is procedurally unfair but the employment tribunal concludes that a fair procedure would inevitably have resulted in dismissal, it is open to the tribunal to reduce the compensatory award to nil under the Polkey principle. The issue is one of causation: the claimant's loss must be caused by the dismissal, not merely by the circumstances that would have led to dismissal in any event. Scope clarifies that the tribunal has a broad discretion in assessing the chance, but that a finding of 100% Polkey reduction is permissible where it is truly inevitable that dismissal would have followed.
Remedies; reinstatement; a tribunal rarely orders reinstatement if the relationship of trust has irretrievably broken down.
Pension loss; new employment on better terms. Where a claimant moves to new employment on an overall better remuneration package, pension benefits have no special or unique status entitling a tribunal to treat continuing final-salary pension loss separately: the remuneration package must be assessed as a whole and the same test applied to all its elements.
Remedies; stigma damages; a claimant can recover loss for the difficulty in finding new work due to the stigma of taking legal action.
Costs; causation; the tribunal must look at the whole picture of unreasonable conduct.
Remedies; tribunals can take a reasonably optimistic view of a claimant’s future employability to limit loss.
Remedies; the 'Fox Principle'; established that an employee's estate can claim compensation for the loss of a death-in-service benefit resulting from an unlawful dismissal. The benefit is treated as part of the employee's remuneration and its loss is a real loss to the individual.
Remedies; personal injury; a medical report is not strictly required to award personal injury damages in discrimination cases, though it is unusual.
EAT held that s.207A TULRCA (ACAS Code uplift of up to 25%) applies symmetrically: it can increase or decrease an award depending on which party failed to follow the Code. The section is not a claimant-only provision. Where both parties have breached the Code the tribunal has a broad discretion as to the net adjustment.
Discrimination; personal injury; divisibility and apportionment of psychiatric injury. The governing authority. Where psychiatric injury has multiple extrinsic causes the tribunal must seek a rational basis for apportioning the harm between the part caused by the employer's wrong and the part which was not; the exercise 'is concerned not with the divisibility of the causative contribution but with the divisibility of the harm' [71]. Hatton proposition 15 preferred to the contrary obiter view in Dickins v O2 plc [70]. Propositions 15 (apportionment between concurrent causes) and 16 (quantification for pre-existing vulnerability) are distinct and must not be conflated [62]. On the facts no apportionment was made, the medical evidence showing the claimant's diagnosable illness manifested only after the acts complained of.
Unfair dismissal; remedy; reinstatement and re-engagement; practicability under s.116 ERA 1996. 'Practicable' means more than possible: the order must be capable of being carried into effect with success. Re-engagement is not practicable where the employer genuinely and rationally believes that the employee cannot perform the role, or that the employee's conduct has broken down trust and confidence. The tribunal must test the employer's belief for genuineness and rational foundation rather than substitute its own view, and an employer cannot defeat the remedy by bare assertion. The re-engagement order was set aside because the claimant did not speak Mandarin, an essential requirement of the role.
ACAS Code uplift; s.207A TULRCA 1992. Four-stage approach at [77]: (i) is the case such as to make it just and equitable to award any uplift; (ii) if so, what percentage, which must not exceed 25 per cent though it may equal it; (iii) does the uplift overlap, or potentially overlap, with other awards, and what adjustment to the percentage is required to avoid double counting; (iv) a final sense check that the sum of money represented by the uplift is not disproportionate in absolute terms. The 25 per cent maximum is for the most serious cases, but such cases need not be exceptional. The EAT upheld a 25 per cent uplift applied to the compensatory award, injury to feelings and aggravated damages. Full name (1) Sir Benjamin Slade Bt (2) Andrew Hamilton v (1) Melissa Biggs (2) Roxanne Stewart (3) Aethelbert Ltd; there is no official neutral citation and no ICR report.
Remedies; pension; calculation of complex pension loss.
Remedies; Chagger deduction; the tribunal erred by failing to construct a proper counterfactual, it did not ask whether the claimant's thoughts about leaving were themselves affected by the discrimination before applying a 35% deduction. Also: sexual harassment formed part of a continuing discriminatory state of affairs, keeping an otherwise out-of-time claim within jurisdiction.
ET - Remedies; pension loss; complex calculation of police pension loss.
Remedies; interest; the EAT ruled that employment tribunals must consider awarding interest on discrimination compensation regardless of whether the parties have applied for it, following the principle in Marshall (No.2) that interest is an essential component of discrimination compensation. Stacey J held it was not correct for the tribunal to rely on the absence of an application to justify not awarding interest. The appeal also raised the placing of the injury to feelings award in the lower rather than the middle Vento band. HHJ Stacey held there was no error: the tribunal had correctly directed itself, per Cadogan Hotel Partners Ltd v Ozog UKEAT/0001/14 and Essa v Laing Ltd, to the effect of the treatment on the claimant rather than the gravity of the respondent's acts, and there is no rule confining the lower band to one-off acts. The claimant had shown remarkable resilience over several years of discrimination and recovered near the top of the lower band. The EAT also applied the Simmons v Castle uplift, substituting a total of GBP 12,757.
Mitigation of loss; a dismissed employee is not required immediately to lower their sights and accept any inferior role; reasonableness of mitigation is fact-sensitive and the duty does not require relinquishing advantageous arrangements.
Unfair dismissal; contributory fault; a 100% reduction in compensation is possible where the employee is wholly to blame.