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PI/ employment crossover. Matthew White 10/1/12 1

The Crossover between Personal Injury and Employment Law

Notes of a talk given by Matthew White, St John’s Chambers, Bristol, on 10th

January 2012.

PRELIMINARY

1. It is not uncommon for a client to have legal issues involving a crossover

between employment and personal injury law. The aim of this talk is to

equip personal injury and employment lawyers with knowledge of the

essentials of the law where the two fields cross over, to enable them to

give complete and accurate advice to the client with a crossover problem.

2. This is not an advice. Please do not treat it as containing the definitive

answers on crossover issues:- there is a lot to both PI and employment

law which cannot be covered in a 1 hour talk. The aim here is to identify

issues which you might need to look up in more detailed sources.

3. Note at the outset that a worker might be an “employee” for some

purposes but not for others.

THE BASICS

PI law for an Employment Lawyer

4. If D owes C a duty of care and injures C in breach of that duty, C has a

potential claim against D. The most common situations in an employer/

employee setting are:-

• Injury caused through breach of a regulation (e.g. Manual Handling

Operations Regulations 1992, Workplace (Health, Safety and Welfare)

Regulations 1992, etc).

• Injury caused through negligence.

5. The employee can be found to be partially responsible (called

“contributory negligence” in civil claims; this is essentially the same idea

as “contributory fault” in the ET).

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6. The injury sustained can be purely physical, purely psychological or a

combination of physical and psychological. You need to be a little careful

about purely psychological/psychiatric injuries:-

(6.1) If the only injury sustained is psychological/psychiatric, C generally

has to establish that (s)he has suffered from a “recognisable

psychiatric illness” which is “not merely grief, distress or any other

normal emotion, but a positive psychiatric illness…” (McLoughlin

v. O’Brian [1983]1 AC 431 per Lord Bridge at 431). There is no

statutory definition of “recognisable psychiatric illness”, and there

is unlikely to be one. That can cause problems. Psychiatrists tend

to try to classify a mental condition by reference to one of two

major diagnostic manuals:- The Diagnostic and Statistical Manual

of Mental Disorders, 1994 (DSM-IV), or the ICD-10 Classification of

Mental and Behavioural Disorders: Clinical Description and

Diagnostic Guidelines, 1992. Lawyers need to be careful not to

think that if a condition is described in one of those publications

the threshold test is met and vice versa. By way of example:-

(a) “Acute Stress Reaction” is described in both DSM-IV and

ICD-10. The 1996 Oxford Textbook of Psychiatry describes

this condition, however, as a normal response to highly

stressful events.

(b) On the other hand “Pathological Grief Reaction” appears in

neither DSM-IV nor ICD-10, but has been held to satisfy the

test (Vernon v. Bosley (No 1) [1997]1 All ER 577; Tredgett v.

Bexley HA [1994]5 Med LR 178).

(6.2) A mistake sometimes made by PI lawyers is to think that the

McLoughlin requirement of a recognisable psychiatric condition

also applies where there has been physical injury (thus, it is

wrongly argued, the whiplashed claimant whose psychological

reaction is sub-clinical is not entitled to damages in respect of the

additional suffering occasioned by the sub-clinical psychiatric


reaction). In fact, the mental anxiety acts as an aggravator to the

physical injury.

7. Loss is assessed to (so far as is reasonably possible) put C in the position

that (s)he would have been in but for the wrong. Typically damages in a

PI claim are made up as follows:-

(i) General damages

• Damages for pain, suffering and loss of amenity (assessed by

reference to the Judicial Studies Board guidelines and previous

comparable cases).

• An award for handicap on the labour market where

appropriate (if C is at risk of being on the open labour market

before retirement and will be disadvantaged by reason of his

injury, damages can be awarded to compensate for that).

(ii) Special damages

These are specifically assessable financial losses such as loss of

earnings, loss of pension, cost of medication, etc. Care costs often

form part of claims (whether the care was provided gratuitously or

at a commercial cost). The Defendant can deduct certain benefits

paid from the compensation for relevant heads of claim (but the

Defendant has to pay the deducted sum back to the state).

8. Miscellaneous rules for the assessment of damage apply as in the ET:- the

egg-shell skull rule applies, C must mitigate his/ her loss in the usual way,

the breach of duty must be proved to have caused the loss.

9. Note that in a PI claim, generally injury must be foreseeable. That can be

a significant difference between the jurisdictions.

10. Possibly the most common crossover area between PI and employment

law is stress at work; that is dealt with below.


Employment Law for a PI Lawyer

11. Note that even more than with PI law, a little knowledge is a dangerous

thing. The aim here is to sketch the basics, but there are plenty of

exceptions and traps for the unwary.

12. There are three main types of claim which a PI lawyer needs to

understand:-

(i) Unfair dismissal;

(ii) Wrongful dismissal; and

(iii) Discrimination.

Unfair dismissal

13. This is a creature of statute.

14. Requirements for bringing a claim before the Tribunal (which has sole

jurisdiction):-

(i) Usually a 3 month limitation period. Time extendable if it was not

reasonably practicable to present the claim in time.

(ii) Claimant must have been employed by respondent under a

contract of employment. Save for some exceptions the

employment must have lasted for at least a year before dismissal.

(iii) Claimant must have been dismissed. Sometimes this is not an

issue. It can be in dispute in “constructive dismissal” cases. This is

shorthand for termination of the contract by the employee in

circumstances where (s)he is entitled to terminate by reason of the

employer’s repudiatory breach of contract.

15. If there is a qualifying dismissal, the employer must establish that it was

for a fair reason (incapability, lack of qualifications, misconduct,

redundancy, retirement, breach of statutory provisions, or “some other

substantial reason which would justify dismissal”). Assuming that the

reason for dismissal is potentially fair, the question is whether or not the

dismissal was fair in the circumstances:- Did the employer act reasonably


in all the circumstances in treating the reason for dismissal as sufficiently

serious to dismiss? (This can, and often does include consideration of

whether or not procedure was fair, an investigation of alleged

misconduct was fair, selection for redundancy was fair and/or whether

dismissal was within the range of reasonable responses for the employer).

16. A finding of unfair dismissal can lead to an order for reinstatement or

reengagement and/or damages. Damages are assessed as a “basic

award” (fixed by reference to the employee’s age, length of service and

weekly pay) and a “compensatory award”. Compensation is assessed on

the basis of what is “just and equitable”. In practical terms, that means a

similar approach to a loss of earnings claim in PI:- expected earnings less

actual earnings (subject to the usual mitigation rule). The Tribunal will

award other ‘special damages’ in the same way:- costs of getting a new

job; loss of company car/health plan; pension loss; nominal sum to reflect

loss of statutory rights (i.e. the need to be employed for 12 months

before an unfair dismissal claim can be brought in new employment).

There are recoupment of benefits provisions which are similar to CRU

provisions. The notion of “contributory fault” applies as “contributory

negligence” would in a PI claim. Failure to follow an ACAS code of

practice can result in an uplift to or reduction in damages. The rules on

causation in the ET have become rather tangled, but in broad terms the

employer can contend that the employee would probably have been fairly

dismissed if he had not been unfairly dismissed. There is a statutory cap

on awards for unfair dismissal (currently £68,400, £72,300 from 1/2/12).

17. Note that damages for unfair dismissal do not include non-pecuniary loss

(see Dunnachie v. Kingston-upon-Hull City Council [2004] UKHL 36,

[2005]1 AC 226):- hence the absence of remedy where psychiatric injury

arises from dismissal - see below.


Wrongful dismissal

18. If the employee is dismissed in a way which breaches the contract of

employment, that is “wrongful dismissal”. The claim is in contract.

Typically the claim arises when the employee is dismissed without cause

and without full notice (or pay in lieu of notice). The limit of the

Employment Tribunal’s jurisdiction is £25,000 (but larger claims can be

sustained in the civil courts - see below).

19. Note that a wrongful dismissal claim is one type of contractual claim. The

ET has jurisdiction over contracts connected with employment providing

that the claim arose or was outstanding on the termination of

employment. The jurisdiction limit is £25,000 for all contract claims. PI

claims are excluded from the contractual jurisdiction.

Discrimination

20. A dismissal can be an act of discrimination (so the same facts can give rise

to claims for unfair dismissal, wrongful dismissal and discrimination).

Discrimination law has been shaken up recently by the Equality Act 2010.

Essentially an employer cannot (subject, as always, to some exceptions)

discriminate on grounds of 9 protected characteristics including age,

disability, race, and sex. Discrimination can be “direct” (i.e. less

favourable treatment on the grounds of the characteristic in question), or,

in appropriate circumstances, indirect (i.e. the employer applies a

provision, criteria or practice to everyone, but the proportion of e.g.

women who can comply is smaller and there is no justification for the

practice). Additionally discrimination can take the form of victimization or

harassment. A failure to make reasonable adjustments can be disability

discrimination. It is hard to avoid vicarious liability for discrimination. A

real problem for employers is that once a claimant has raised facts from

which an inference of discrimination could be drawn, the burden of proof

is reversed. The limitation period is 3 months, then extendable on a “just

and equitable” basis (a bit like Limitation Act 1980 s.33). Note that there

is no upper limit to the award for damages for discrimination in the ET.


21. It is worth giving separate mention to what “disability” means, as it has

potential to be relevant to PI practitioners not only because Ogden 6 (and

7) has adopted the definition. A disability is “a mental or physical

impairment which has a substantial and long-term adverse impact on…

ability to carry out… normal day-to-day activities” (Equality Act 2010 s.6).

We are currently in a state of flux between the old guidance on the

meaning of disability and expected new guidance. Some pointers from

the old law:-

• “Long-term effect” means lasted or likely to last at least 12 months

(and if it doesn’t last that long but is likely to recur, the clock keeps

ticking). Likely does not mean “over 50% chance”, but “could well

happen” (SCA Packaging v. Boyle [2009] UKHL 37).

• “Normal day-to-day activities” are affected only if one of the

following is affected:- (a) mobility; (b) manual dexterity; (c) physical

coordination; (d) continence; (e) the ability to lift, carry or otherwise

move everyday objects; (f) speech, hearing or eyesight; (g) memory or

ability to concentrate, learn or understand; or (h) perception of the

risk of physical danger. However, the fact that the impaired activity is

not in the list does not exclude a finding of disability (Hewett v.

Motorola [2004] IRLR 545).

• “Substantial” means more than minor or trivial.

• Whilst it will surprise PI lawyers, lack of knowledge of the disability is

no defence (save possibly in an adjustments claim)

Goodwin v. Patent Office [1999] IRLR 4 gives guidance.

22. Damages in discrimination claims are assessed in like manner to any other

claim in tort:- so far as possible C should be put in the position that (s)he

would have been in but for the unlawful act. The egg-shell skull rule

applies. Whilst injury has to be foreseeable for damages to be recoverable

at common law, that is not the case in discrimination claims involving

harassment on grounds of race (see Essa v. Laing Ltd [2004] EWCA Civ

02, [2004] IRLR 313), and the logic of this decision would apply to other


forms of discrimination. The injury has to be proved to flow from the

discriminatory act. The Employment Tribunal takes a less scientific

approach than the civil courts when it comes to discounting awards on

the basis that injury is not solely attributable to the discrimination (e.g. in

instances of a pre-existing problem or contributory facts). See by way of

example HMPS v. Salmon [2001] IRLR 425.

23. In a discrimination claim the ET has jurisdiction to hear claims for

damages which include claims indistinguishable from PI claims (Sheriff v.

Klyne Tugs [1999] ICR 1170). Thus in a discrimination claim C might

recover:-

(i) Damages for PSLA (typically a psychiatric injury) caused by the

discrimination;

(ii) ‘Special damages’ as in a PI claim (although the ET doesn’t call

them “special damages”); and

(iii) An award for “injury to feelings”.

The last of the above points will seem odd to a PI lawyer. Claimants who

are discriminated against can claim damages for the upset. Awards are

supposed to bear some general similarity to the levels in PI cases. The

clearest advice on valuation came from the Court of Appeal in Vento v.

Chief Constable of West Yorkshire Police [2003] ICR 318, (2003) IRLR

102. The bands of compensation were updated in Da’Bell v NSPCC

[2010] IRLR 19:- a “lower band” of £750 to £6,000 (for less serious cases

such as an isolated or one-off occurrence), a “middle band” of £6,000 to

£18,000 for “serious cases” which don’t merit an award in the top band,

and the “top band” of £18,000 to £30,000 (for the most serious cases

such as where there has been a lengthy campaign of discriminatory

harassment).

24. An award for injury to feelings includes compensation for loss of

congenial employment (MoD v. Cannock [1995] 2 All ER 449, [1994] ICR

918).


Other

25. There are various other claims which can be brought in the ET, but they

will be less likely to cross your radar.

Pension loss

26. One other “basic” of employment law which PI lawyers might find useful

relates to calculating damages for loss of pension. There is a publication

entitled Employment Tribunals’ Guidelines on Compensation for Loss of

Pension Rights. It is a very detailed guide to how to work out what loss of

pension has been suffered. Deployment of the method in the Guidelines

sometimes results in a larger pension loss figure than is arrived at in civil

claims using the traditional approach to calculation. It is worth taking

some time to read the Guidelines if you are ever struggling with a

pension loss claim.


STRESS AT WORK

27. The most obvious area where PI and employment law cross over is in

claims for stress.

Excluded claims

28. Courts cannot award damages for loss arising from the manner of

dismissal. See Johnson v. Unisys [2001] UKHL 13, (2003) 1 AC 518,

[2001]2 WLR 1076, [2001] ICR 480. The rationale of the decision is that

there is a statutory scheme governing remedies on dismissal, and the

courts ought not to develop a parallel common law remedy. Thus if an

employee is psychiatrically injured by the manner of their dismissal, (s)he

has no remedy in respect of that injury (since it is covered by neither the

law of wrongful nor unfair dismissal).

29. From the above rationale it will be observed that it is only the dismissal

itself in respect of which there is a limitation on entitlement to damages.

Accordingly if injury is sustained by reason of pre-dismissal conduct of the

employer (perhaps putting C through the mill in the investigation (rather

than dismissal) process), that can sound in damages (see Eastwood v.

Magnox and McCabe v. Cornwall CC [2004]UKHL 35, (2005) 1 AC 503,

(2004) 3 WLR 322, (2004) 3 All ER 991, (2004) ICR 1064, (2004) IRLR

733). Thus a claimant psychiatrically injured by the manner of their

sacking has no remedy. That said, if a cause of action had already arisen,

the subsequent sacking does not defeat it.

30. A recent attempt to get around the Johnson exclusion has failed at the

Supreme Court in Edwards v. Chesterfield Royal Hospital [2011] UKSC 58

(a 4:3 decision in favour of the employers, overturning the Court of

Appeal). Cs were summarily dismissed in breach of express terms of their

contracts of employment relating to disciplinary procedures. They brought

claims for breach of contract. The Supreme Court held that the allegedly

breached terms were not “ordinary contractual terms” and that


Parliamentary intention was to limit an unfairly dismissed employees’

remedy to that provided by the statutory framework.

31. Edwards also serves to show the difficulty of deciding whether or not a

claim falls within the Johnson exclusion area. Lords Kerr and Wilson

would have allowed Edwards’ claim to proceed as falling outside of the

exclusion area (on the basis that a disciplinary panel’s finding of fact

separately (a) damaged Edwards’ reputation; and (b) led to his dismissal,

the loss from the damaged reputation not falling within the Johnson

exclusion area).

Civil claims

Negligence

32. The most common type of claim for personal injury caused by stress at

work is in negligence (albeit sometimes underpinned by a statutory

obligation to risk assess). Some essential points are:-

• The duty on an employer is to take reasonable care for the safety of

employees.

• Claimants have to prove that their psychiatric injury was foreseeable

to the employer. This can be hard. Oddly, the employer who does

most to try to avoid stress at work can find itself weakened when it

comes to defending a claim on the grounds of unforeseeability.

• There are no occupations which give rise to the presumption of

foreseeability of psychiatric harm. One needs to look at the

occupation and the personal characteristics of the claimant.

• A claimant telling management that (s)he is struggling to cope will

probably fall short of putting the employer on notice of a foreseeable

risk of injury.

• Breach of the Working Time Regulations does not mean that there is a

foreseeable risk of injury (see Sayers v. Cambridgeshire County

Council [2006] EWHC 2029, [2007] IRLR 29).

• If C gets over the foreseeability hurdle, it is still necessary to establish

that there has been a breach of duty.


• Causation is often an issue.

• If considering a claim of this nature, essential reading is paragraph 43

of the decision in Hatton v. Sutherland [2002]2 All ER 1 (see too the

House of Lords in Barber v. Somerset CC [2004]1 WLR 1089).

33. Similar common law principles apply to bullying/abuse at work. Particular

problems for claimants in many such cases include:-

• Often the alleged “bullying” is no more than people not getting on.

• Commonly, mutual complaints of bullying are made. An employer is

thus in a difficult position and a court will be slow to criticise.

Protection from Harassment Act

34. For a time it appeared as though the Protection from Harassment Act

1997 was going to have a very significant impact on bullying-type claims.

Section 1 of the Protection from Harassment Act 1997 provides that a

person must not pursue a course of conduct which amounts to

harassment of another and which (s)he knows or ought to know amounts

to harassment, and s.3 imposes civil liability for breach. Some advantages

of a claim under the Act are:-

• There is no need to establish foreseeability of harm (a major stumbling

block in a civil claim).

• The limitation period is 6 years.

• The damage which is compensable under the Act is wider than at

common law, since mere “anxiety” sounds in damages (see s.3(2) of

the Act).

• There is no defence that the employer took all reasonably practicable

steps to prevent the harassment.

• Not only employees are protected (customers etc are too).

35. The Act does not define “harassment”. Assistance on the meaning is

found in Thomas v. News Group Newspapers [2001] EWCA Civ 1233 at

para 30. There must have been conduct (a) targeted at C; (b) calculated

to alarm or distress; (c) which is oppressive and unreasonable. Also note


that there must be a ‘course of conduct’ which (by s.7(3)) means conduct

occurring on at least 2 occasions. (See too Green v. DB Group Services

[2006] EWHC 1898 at para 14.)

36. There was significant excitement about this Act following Majrowski v.

Guy’s & St Thomas’s NHS Trust [2007]1 AC 224. It was determined that

an employer could be vicariously liable for an employee’s breach of the

Act. With that good news for claimants came some less good news:-

Majrowski also made clear that “Courts are well able to recognise the

boundary between conduct which is unattractive, even unreasonable, and

conduct which is oppressive and unacceptable. To cross the boundary

from the regrettable to the unacceptable the gravity of the misconduct

must be of an order which would sustain criminal liability under s.2.”

37. The effects of Majrowski have not (yet, at least) been as significant as was

initially expected. In Conn v. Sunderland City Council [2007] EWCA Civ

1492, [2008] IRLR 324 the claim failed because whilst there was one

incident when the relevant employee threatened to hit the claimant (and

that was sufficiently oppressive conduct to constitute harassment), the

other incident complained of (in which the employee shouted and

threatened to smash a window) was not sufficiently serious to attract

criminal sanction, and accordingly there was not a “course of conduct”

since that requires 2 instances which both cross the threshold of

seriousness.

38. Insofar as it is possible to see a trend, however, things appear to be

getting easier for claimants:-

• In Green v. DB Group Services (above) “mean and spiteful” behaviour

was found to constitute harassment.

• Conn came next and the shouting/ threatening to smash a window

was not enough to constitute harassment (perhaps suggesting that

things were getting harder for claimants).


• In Ferguson v. British Gas Trading [2009] EWCA Civ 46 it was held (in

a strike out application) that it was at least strongly arguable that

British Gas sending automatically computer-generated bills and

threatening letters to a former customer was harassment covered by

the Act.

• In Veakins v. Kier Islington [2009] EWCA Civ 1288, the trial judge

found that allegations of D picking on C did not cross into the realms

of being sufficient to sustain criminal liability… “…it plainly does not,

very largely because I cannot see that any sensible prosecuting

authority would pursue these allegations criminally; or, even if a

prosecution were somehow brought, say perhaps by the claimant

herself in a private prosecution, I cannot see that any prosecution

would suffer any fate other than to be brought to an early end as an

abuse of process.”

The Court of Appeal held that the trial judge applied the wrong test

and that his focus ought to have been on whether or not the conduct

was “oppressive and unreasonable”.

“The account of victimisation, demoralisation and the reduction of a

substantially reasonable and usually robust woman to a state of

clinical depression is not simply an account of “unattractive” and

“unreasonable” conduct (in Lord Nicholl’s [sic] words) or “the ordinary

banter and badinage of life” (in Baroness Hale’s words). It self-

evidently crosses the line into conduct which is “oppressive and

unreasonable”. It may be that, if asked, a prosecutor would be

reluctant to prosecute but that is not the consideration, which is

whether the conduct is “of an order which would sustain criminal

liability”. I consider that, in the event of a prosecution, the proven

conduct would be sufficient to establish criminal liability. I do not

accept that, in a criminal court, the proceedings would properly be

stayed as an abuse of process.”

39. I suspect that the most important lesson to take from Veakins is

encapsulated in paragraph 11 (per Maurice Kay LJ) “since Majrowski,


courts have been enjoined to consider whether the conduct complained

of is “oppressive and unacceptable” as opposed to merely unattractive,

unreasonable or regrettable. The primary focus is on whether the

conduct is oppressive and unacceptable, albeit the court must keep in

mind that it must be of an order which “would sustain criminal liability”.”

That feels like something of a moving of the goalposts to me.

40. The Court of Appeal appear to have tried to limit the effect of the

decision in Veakins with this (para 17, Maurice Kay LJ again):-

“Since Hatton v Sutherland [2002] EWCA Civ 76, [2002] ICR 613, it has become more difficult for an employee to succeed in a negligence action based on stress at work. It seems that this may be causing more employees to seek redress by reference to harassment and the statutory tort, although it is doubtful whether the legislature had the workplace in mind when passing an Act that was principally directed at “stalking” and similar cases. Nevertheless, there is nothing in the language of the Act which excludes workplace harassment. It should not be thought from this unusually one-sided case that stress at work will often give rise to liability for harassment. I have found the conduct in this case to be “oppressive and unacceptable” but I have done so in circumstances where I have also described it as “extraordinary”. I do not expect that many workplace cases will give rise to this liability. It is far more likely that, in the great majority of cases, the remedy for highhanded or discriminatory misconduct by or on behalf of an employer will be more fittingly in the Employment Tribunal.”

Claims in the Employment Tribunal

41. The Tribunal has no jurisdiction in relation to negligence claims or

Protection from Harassment Act claims. The crossover arises because a

claim for injury can be tacked on to a discrimination claim as explained

above (and the ET has exclusive jurisdiction over discrimination claims in

the employment field). Some key differences between common law and

ET claims are:-

• The time limit is much shorter in the ET.

• The ET is not concerned with foreseeability (which can be a

problematic hurdle in a negligence claim). Rather in the ET the

question is whether or not the employer caused the injury (by the

discrimination).


• There might be a defence available in the ET which is not available in

a Protection from Harassment Act claim. Section 109(4) of the

Equality Act 2010 provides a defence if the employer can prove that

he took such steps as were reasonably practicable to prevent the

employee from acting in a discriminatory way.


OTHER KNOWLEDGE FOR BOTH DISCIPLINES

Summary of main jurisdictions

42. The civil courts have exclusive jurisdiction over:-

(i) Common law claims (including negligence).

(ii) Claims for breach of statutory duty where the ET has not been

expressly given jurisdiction (so the civil courts have exclusive

jurisdiction over, amongst other things, “6-pack” claims).

(iii) Equity.

(iv) Contract claims:-

• exceeding £25,000;

• relating to restrictive covenants/confidential information;

and/or

• for PI.

(v) Claims for discrimination outside the employment field.

43. The ET has exclusive jurisdiction over:-

(i) Discrimination in the employment field on grounds prohibited by

various statutes (race, sex, disability, age etc). Damages for

personal injury can be claimed in a discrimination claim before the

ET.

(ii) Unfair dismissal.

44. There is shared jurisdiction over claims for breach of the contract of

employment for less than £25,000 (provided that the conditions of the

Employment Tribunals Extension of Jurisdiction Order 1994 are met:-

main points are that the claim has to arise or be outstanding on

termination of employment and the limitation period is 3 months).

45. Additionally, the same set of facts might give rise to various causes of

action, some of which would be justiciable in the courts, some in the ET.


The Court and ET policing jurisdictional choice

46. In Abdulla & Others v. Birmingham City Council [2011] EWCA Civ 1412

Cs issued equal pay claims in the High Court outside of the time limit for

bringing the claims in the ET. The employer applied to strike out the

claims on the basis that the court had a statutory discretion to strike out

an equal pay claim if it could more conveniently be disposed of by an ET.

The judge and Court of Appeal refused to strike out the claims on that

basis:- it could not be “more convenient” to require Cs to proceed in the

ET where their claims were already out of time. The court treated this as

an attempt to use a discretion conferred for the convenient allocation of

judicial business to stifle claims.

47. In Halstead v. Paymentshield Group Holdings [2011] UKEAT/0470/11/DM

(HHJ McMullen QC, 9/9/11) the EAT stayed an ET claim in circumstances

in which C had also sent a pre-action protocol letter intimating a High

Court claim. It was held that the fact that the High Court claim had not

been issued did not operate so as to make the stay inappropriate. Rather,

applying the principles in Mindimaxnox LLP v Gover & Ho

UKEAT/0225/DA, a stay of the ET proceedings ought to be ordered. The

Mindimaxnox principles include the facts that complex factual matters

(particularly with a lot of documentation) are better addressed in the High

Court, and where there is factual overlap it is generally preferable for the

ET to have the High Court Judge’s decision first.

Res judicata, estoppel, abuse of process etc

Estoppel

48. It might be that C has causes of action some of which fall to be litigated

in the ET, some in the courts. The first decision made by tribunal/court

might well give rise to an issue estoppel or res judicata (i.e. cause of

action estoppel) in subsequent proceedings. Note that there must be a

final decision on the merits, between the same parties (or privies to the

original parties), and the subject matter must be the same (same cause of

action for cause of action estoppel, same issue for issue estoppel (the


issue also has to have been necessarily determined in the first case - a

party is not bound by an unnecessary finding of fact)).

49. There is a significant risk area for claimants here. If C starts proceedings in

the ET but then decides to abandon them to pursue a civil claim, C might

well withdraw the ET claim and it might then be dismissed on

withdrawal. That has been treated as a final decision on the merits even

though the ET had not considered the merits at all. There has been a

string of apparently contradictory cases dealing with whether, if a

claimant withdraws a claim before the ET, he is entitled to bring

subsequent proceedings in the civil courts or not. Barber v. Staffordshire

CC [1996]2 All ER 748 and Lennon v. Birmingham City Council [2001]

IRLR 826 suggested that if an ET claim was dismissed on withdrawal, a

claimant could not bring subsequent proceedings, since the dismissal

order was treated as a judicial act which created an estoppel. Sajid v.

Sussex Muslim Society [2002] IRLR 113, Ako v. Rothschild Asset

Management [2002]2 All ER 693 and Enfield v. Sivanandan [2005] EWCA

Civ 10 suggested that this was not an inflexible rule (rather it was

necessary to look at the circumstances of and purpose for which the

claim was withdrawn/dismissed on withdrawal).

50. Amendment to r.25 of the ET Rules (in force since 6/4/09) has supposedly

sorted this out (although the drafting is somewhat ambiguous). The

position is that if a claim is withdrawn with the purpose of proceeding

elsewhere, a claimant will be entitled to proceed elsewhere unless the

claim is dismissed on the respondent’s application (and claimants ought

to be careful not to agree to this).

51. In British Association for Shooting and Conservation v. Cokayne [2008]

ICR 185 it was held that the Ako approach is no longer open to claimants

given the introduction of r.25 of the ET rules. It was also noted that that

has potential to trap claimants (particularly unrepresented ones), and

Tribunals are encouraged not to allow dismissal on withdrawal if there is


material on file which would suggest that dismissal would be unjust.

Furthermore, if a claim has been dismissed in unjust circumstances, it

might be open to a claimant to apply for review of the dismissal.

52. The basic points are these:-

(1) If you represent a defendant/respondent, you want the claim

dismissed on withdrawal (and see Verdin v. Harrods [2006] IRLR

339 and Khan v. Heywood & Middleton PCT [2006] IRLR 793 for

use in argument in any second claim if necessary; old rule cases,

but sound principles).

(2) If you represent a claimant and there is a second claim to come, if

the first claim is withdrawn you must not let it be dismissed on

withdrawal.

(3) If you are representing C in a potential second claim where the

first claim was dismissed on withdrawal, do not abandon hope,

but look to review the dismissal.

53. If there is a mind-change during litigation, claimants should make sure

that everyone knows that they are withdrawing to pursue an alternative

claim.

54. An example of issues which can arise in multi-jurisdiction cases is Johnson

v. AWE PLC unreported, EAT 27/6/08 (Lawtel AC0118450). The claimant

settled PI claims against his employer, settling “causes of action herein”.

His claim included the assertion that he had retired 2 years earlier than he

would have done but for the injury. He subsequently brought a claim for

disability discrimination alleging a failure to make reasonable adjustments

which would have allowed him to stay at work for those 2 years. The

DDA claim was struck out on the basis of issue estoppel. It was agreed

that an appeal ought to be allowed because the “causes of action

herein” were claims for negligence/ breach of statutory duty:- that is

what had been settled, not any DDA claim. The EAT made clear that

when considering the DDA claim, the ET ought to consider whether or


not there was a breach of the DDA. If so, an award for injury to feelings

would be made, but the ET ought to consider whether or not to make an

award for loss of earnings/ pension given the settlement in the PI claim.

The EAT said that the ET hearing the DDA claim would have to consider

(a) whether those heads had already been compensated in the PI

settlement; and (b) “the subject of issue estoppel arising out of the

proceedings between the parties in the County Court”. I have doubts as

to the latter point:- the PI claim was settled. Accordingly there was no

adjudication by the court. Absent judicial determination it is not clear

how issue estoppel can arise. See further below on double recovery.

55. Note that a claimant with a breach of contract claim over £25,000 cannot

bring a claim in the ET first and them claim for the balance of the same

claim in the civil courts. In Fraser v. HLMAD Ltd [2006] EWCA Civ 738,

[2006] IRLR 687, [2007] 1 All ER the claimant claimed unfair dismissal and

wrongful dismissal in the ET. He expressly reserved the right to pursue a

High Court claim for wrongful dismissal. The ET valued the wrongful

dismissal claim at £80,000 odd, but capped the award at £25,000. Fraser

claimed for the balance in the High Court. His claim was struck out:- the

cause of action had merged into the ET judgment such that there was no

cause of action left. Fraser would have done better to have brought his

unfair dismissal claim in the ET, and then relied upon determination of

issues by the ET in a wrongful dismissal claim brought in the civil court.

Note that application of the doctrine of merger is strict (cf abuse of

process below).

Abuse of process

56. The rule in Henderson v. Henderson (1843) 3 Hare 100 is potentially

important with regard to issues of crossover between PI and employment

law. It might be an abuse of process to make a claim which could and

should have been brought in earlier proceedings.

(i) In Sheriff v. Klyne Tugs [1999] IRLR 481 C brought a claim in the

ET for race discrimination as a result of which he claimed to have


suffered a nervous breakdown. The ET claim was settled. C’s

subsequent PI claim was struck out by the county court and the

Court of Appeal held that C could and should have claimed PI

damages in the ET claim.

(ii) The rule has been relaxed somewhat. In Johnson v. Gore Wood

[2002]2 AC 1 the House of Lords considered that a broad

approach, considering all the circumstances, was required. The

fact that a claim could have been raised in earlier proceedings

does not necessarily mean that it should have been. The critical

question is whether or not C is misusing or abusing the process of

the court by seeking to raise an issue which could have been

raised before.

Life is accordingly easier for claimants these days, but it is still worth

thinking about the issue carefully if it is planned to have different issues

arising from substantially the same facts dealt with in 2 jurisdictions.

57. A second claim can be an abuse of process when the parties are not the

same (although this is less likely).

Double recovery

58. Courts will be astute to prevent double recovery. Where there have been

2 sets of proceedings the lawyers in the second set will need to know

what happened in the first, both to see if there are any relevant issues

which have been determined, but also to make a proper assessment of

damages.

(i) A straightforward example would be a claimant who succeeds in

an unfair dismissal claim and gets 6 months-worth of loss of

earnings as part of his compensatory award who then brings a

claim for personal injury:- (s)he cannot recover loss of earnings for

that 6 month period again.

(ii) Problems arise when there is lack of clarity as to how sums should

be attributed from a first decision. This might arise if a judgment is


not sufficiently clear, but it is more often a problem if a claim is

settled without making clear what sums reflect what parts of the

claim. Representatives should be astute to agree attribution where

it has scope to impact on a subsequent claim.

(iii) Note Assinder v. Griffin, 25/5/01, unreported, QBD. C was

dismissed because of an injury. In her PI claim C was required to

give credit for the compensation received in the Tribunal, but she

was entitled to deduct from that the costs which she had paid to

her solicitor in respect of the Tribunal proceedings (i.e. she gave

credit only for the net benefit of the ET proceedings).

Choice of jurisdiction

59. From the above it will be observed that there are instances in which a

claim is capable of being sustained in either the civil courts or the ET. The

“classics” are claims for breach of contract and claims where C has been

psychiatrically injured. When deciding where to bring a claim, claimant

lawyers need to have the following in mind:-

(i) What do you know? A harassed employee might or might not

know that the treatment was because of race, sex, disability or

whatever. That has potential to impact on jurisdiction choice.

(ii) What causes of action are available and what loss has been

suffered? This might drive the decision one way or another.

(iii) Can all claims be brought in 1 jurisdiction?

(iv) Costs:- The usual rule in the civil court is that the loser pays. The

usual rule in the ET is that each side bears its own costs. There are

exceptions to these general rules, but typically C is at a greater risk

on the other sides’ costs in the civil court (but has a greater chance

of getting his/her own cost paid in the event that the claim

succeeds). There are court fees to be paid in the civil courts.

(v) Funding:- The usual “no costs” rule in the ET has led the

Employment Law Bar Association to recommend that its members

do not carry out ET work on a conditional fee basis. It might be

easier to find conditional fee representation in the civil courts.


(vi) Limitation:- As a rule the time limit for bringing a claim in the ET is

much shorter than in the civil court. The importance of this cannot

be overstated. If a client approaches a solicitor at a time when

there is a choice of jurisdiction to be made, the solicitor must

advise the client of the time limit and the need to make a decision

before the choice is taken out of their hands. The typical time limit

is 3 months in the Tribunal (with acts extending over a period

being taken to have been done at the end of the period in

discrimination claims). That compares to (typically) 3 years in a PI

claim, but 6 years in a Protection from Harassment Act claim.

(vii) Time:- Claims generally come to a conclusion more quickly in the

ET. That might be preferable to a client who wants to see an end

to wrangles with their (ex-)employer. That said, in case of

psychiatric injury, a time lag is not necessarily a bad thing for a

claimant (as it enables prognosis to be assessed more accurately).

(viii) Procedure:- Is there anything about the procedure in one

jurisdiction or the other which has potential to be an advantage?

(E.g. the emphasis on pre-action steps in the civil courts and/or its

more formal case management procedure.)

(ix) Proof issues:- There are things which have to be proved in the civil

court which do not have to be proved in the ET. Particularly

noteworthy is foreseeability which has to be proved in a

negligence claim, but not in a discrimination claim (or a civil claim

under the Protection from Harassment Act).

Settlement

60. There are some large pitfalls here for the unwary.

(i) If you want to settle an employment claim (at the same time as

settling a PI claim or otherwise) you have to jump through the

right hoops if the employee is to be bound by the compromise. To

settle a statutory employment right claim either a conciliation

officer must be involved, or the conditions of a statutorily valid

compromise agreement must be followed (and that includes the


need for the agreement to be in writing and for the employee to

have had independent advice from an insured adviser who is

named in the agreement). If these steps are not taken the

employee can bring a claim even though there was a compromise

agreement (albeit that any sum paid is taken into account in

assessing damages).

(ii) If settling a PI claim at the same time as settling an employment

claim it will be important for the employee to exclude personal

injury claims of which he is presently unaware from the

settlement. The safest thing for an employee to do is to settle a

specific injury claim along with his ET claim (and vice versa). The

employer would do better to have all potential claims identified

and settled.

61. Note that where there is more than 1 claim, it can be helpful if the basis

of settlement or judgment in the first claim is reasonably detailed (to

make it easier to identify any double recovery in the second claim).

Tax

62. Bear in mind the tax differences between awards for damages for PI (tax

free by virtue of s.406 of the Income Tax (Earnings and Pensions) Act

2003) and other damages. Tax provisions in the ET are beyond the scope

of this talk, but some basics are:-

• Awards for injury to feelings are considered to be tax free (see Orthet

v. Vince-Cain [2004] IRLR 857).

• There is essentially a £30,000 “tax free” limit on termination

payments.

• Above £30,000 the employee has to pay tax. This can result in a

substantial additional liability.

• The practice in the Employment Tribunal is to “gross up” awards of

damages so that C is left with the intended amount of money after

having to satisfy the tax liability.


• This creates a particular problem in Tribunal claims. Consider the

claimant who was discriminated against and psychiatrically injured by

the discrimination so as to be unable to work. There is a potentially

large loss-of-earnings claim. Ignoring injury to feelings, beyond the

£30,000 tax free element there might be a very large award for loss of

earnings. Is that sum to be grossed up? Arguably it flows from the

injury (so it is tax free). Tribunals are, however, reluctant to get into

the question of what part of an award flows from injury. In my

experience HMRC default to saying that the whole is taxable.

• I have yet to find a satisfactory solution to this problem, but the best

approach (depending on the circumstances) might well be for the

employer to give an undertaking that it will satisfy liability to tax, with

an undertaking from C to cooperate in discussions with HMRC. The

employer can then take the issue up with HMRC.

• It is also worth trying to agree to a spread of payments over tax years

(to reduce the proportion on which tax might have to be paid at 40%

or 50%).


THE MAIN POINTS AGAIN

63. Some claims (including psychological injury when it is linked to

discrimination) require a choice of jurisdiction to be made by a claimant.

A respondent does not get to choose.

64. If there is a change of mind about jurisdiction after one claim has started,

there is a chance of a procedural bar to a second claim being created.

Defendant/ Respondents should be astute to (a) have claims dismissed on

withdrawal in the ET; and (b) spot any estoppel/ abuse of process in

second proceedings.

65. If settling PI and employment claims together, the statutory rules for valid

compromise agreements should be followed. Care should also be taken

only to settle what you mean to settle and all of what you mean to settle.

MATTHEW WHITE

St John's Chambers,

101 Victoria Street,

Bristol, BS1 6PU.

0117 921 3456.

10 January 2012.

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