The Court of Appeal has handed down guidance on how to assess compensation in cases where a claimant’s injury has multiple causes. The decision will apply to those cases where an employer’s conduct acts together with other factors to cause psychiatric harm, such as depression, to an employee.

The court endorsed the guidance given in obiter comments in Barber v Somerset CC [2002] EWCA Civ 76, [2002] 2 All E.R. 1 in relation to the apportionment of damages for psychiatric injury caused by an employer's wrongdoing. In cases where there are multiple extrinsic causes of psychiatric injury, a sensible attempt should be made to apportion the harm, but there might be cases where the harm was indivisible and apportionment would be wrong.

Background

The claim was pursued in the employment tribunal and the defendant-employer appealed against an award of damages of over £360,000 to the employee in respect of sex discrimination, disability discrimination and unfair dismissal.

The defendant-employer appealed against an award of damages of over £360,000 to the respondent employee in respect of sex discrimination, disability discrimination and unfair dismissal.

The employee had made allegations of sexual harassment against colleagues and had been moved to a new role at a different site. She was unhappy there and her line manager suggested that she should return to her previous team. She rejected that proposal because it would involve working with the same colleagues. Her manager made a comment to the effect that ‘women took things more emotionally then men, who tended to forget things and move on’. Following that conversation, the employee was certified by her GP as unfit to work due to work-related stress.

The employer dismissed her in July 2007, claiming that it was inappropriate for her to return to her old job and there were no other positions for her. The tribunal dismissed most of the employee's sex discrimination claims, but found that the line manager's comment amounted to sex discrimination. It also found that the employee had been unfairly dismissed and subjected to disability discrimination. In relation to assessment of damages, the employee acknowledged that she had a history of stress and problems at work before the line manager's comment. However, the tribunal found that it was inappropriate to apportion damages because the psychiatric injury was indivisible and had been triggered by the comment. The employer also asserted that the employee should have mitigated her losses by accepting treatment. The tribunal found that it had been reasonable for the employee not to take psychotropic medication until July 2010, but that she had failed to mitigate her losses after that date because the agreed plan of waiting until the outcome of the tribunal proceedings was no longer appropriate in light of the delay in the proceedings. The EAT upheld both findings.

The decision

The Court of Appeal was invited to consider divisible and indivisible harm. Much consideration was given to the judgment of Lady Justice Hale in Hatton v. Sutherland, Lord Justice Underhill quoted LJ Hale in Hatton when he said:  

Hence if it is established that the constellation of symptoms suffered by the claimant stems from a number of different extrinsic causes then in our view a sensible attempt should be made to apportion liability accordingly. There is no reason to distinguish these conditions from the chronological development of industrial diseases or disabilities.”

This translated into “Proposition 15” in Hatton:

“Where the harm suffered has more than one cause, the employer should only pay for that proportion of the harm suffered which is attributable to his wrongdoing, unless the harm is truly indivisible. It is for the defendant to raise the question of apportionment …”

Underhill then considered Dickins v O2 in which Smith LJ criticised this guidance. Smith LJ said in Dickins:

“My provisional view… is that, in a case which has had to be decided on the basis that the tort has made a material contribution but it is not scientifically possible to say how much that contribution is (apart from the assessment that it was more than de minimis) and where the injury to which that has led is indivisible, it will be inappropriate simply to apportion the damages across the board.”

In that case Lord Justice Smith questioned in practice whether Proposition 15 could ever apply because psychiatric injury is always indivisible. LJ Underhill did not follow this reason and instead, in Konczak has expressed his agreement with Keith J in Thaine v London School of Economics:

“I too believe that, to the extent that there is a difference between the views expressed by Smith and Sedley LJJ in Dickins (and by Smith LJ in her article) and the propositions enunciated in Hatton, we should follow the latter; and I would therefore endorse what Keith J said in Thaine. Strictly, as Smith LJ pointed out, Hatton is not binding so far as concerns these issues. Nevertheless, it represents the considered, and fully reasoned, opinion of the Court in what was intended to be a decision giving guidance for the future in cases of psychiatric injury caused by the wrongdoing of an employer.”

Underhill LJ said that the court should try to identify a rational basis on which the harm suffered can be apportioned between a part caused by the employer’s wrong and a part which is not so caused.

The thrust of the judgment is at paragraphs 71 and 72, where Underhill LJ said that where there is no rational basis or distinguishing between a part of the illness which is due to the employer’s wrong and a part which is due to other causes then the injury will indeed be, in Hale LJ’s words, “truly indivisible”, and principle requires that the claimant is compensated for the whole of the injury – though, importantly, if (as Smith LJ says will be typically the case) the claimant has a vulnerable personality, a discount may be required in accordance with proposition 16.

(Proposition 16 of Hatton is: “The assessment of damages will take account of any pre-existing disorder or vulnerability and of the chance that the claimant would have succumbed to a stress related disorder in any event.”)

The summary of LJ Underhill’s judgment is that there is a conceptual distinction between propositions 15 and 16, set out at para. 43 of Barber v Somerset CC [2002] EWCA Civ 76, [2002] 2 All E.R. 1. Proposition 15 states that where psychiatric harm has more than one cause, the employer should only pay for that proportion attributable to his wrongdoing, unless the harm was truly indivisible. Proposition 16 states that assessment of damages would take account of any pre-existing disorder or vulnerability, and of the chance that the claimant would have succumbed to a stress-related disorder in any event. Proposition 15 is applicable where the injury has multiple causes, one or more of which is attributable to the employer's wrongful acts, but one or more of which is not. Proposition 16 applies where the claimant has a pre-existing vulnerability which is not a cause in itself but which might have led to a similar injury even if the wrong had not been committed. There might be cases where both propositions apply and there might be cases where the harm is truly indivisible and that in such cases apportionment might be wrong. In conducting the apportionment exercise the question is whether the tribunal can identify, however broadly, a particular part of the suffering which was due to the wrong; not whether it could assess the degree to which the wrong caused the harm.

What this means for you

This decision adds weight to the argument that in cases where the psychiatric injury has multiple causes, the harm and the resulting damages should be apportioned, wherever possible. However, it does recognise that there might be cases where the injury is truly indivisible. Cases of this nature turn on their own facts. It will therefore remain important, where possible, to get medical evidence from a psychiatrist to confirm the divisible nature of the injury.