In London Borough of Hackney v Sivanandan, the EAT has confirmed that tribunals do not have the power to apportion liability for damages in discrimination cases where more than one party is found guilty of discrimination. In certain circumstances, there can be more than one respondent to a claim for discrimination, commonly the employer together with the individual employee(s) alleged to have carried out the discriminatory act. When it comes to remedy, tribunals have previously operated under the assumption that they have discretion to apportion compensation between respondents. This assumption has however been successfully challenged, with the EAT holding that tribunals have previously misunderstood the law. Instead, liability is joint and several between the parties, meaning the claimant can opt to either recover compensation in full from one single respondent, or recover it between them.
Ms Sivanandan successfully brought race and sex discrimination claims against five respondents, and the tribunal made an award of compensation joint and severally against four of them. One of the respondents appealed against the decision that the award be joint and several. The claimant, however, argued that the tribunal had no power to apportion in the first place, and the EAT accepted the claimant's argument as "entirely correct". As discrimination is a statutory tort, the approach to compensation should follow the ordinary principles of the law of tort. Where more than one person has contributed to the same act of discrimination, or has contributed to the same loss by different acts, these "concurrent discriminators" should be jointly and severally liable.
Impact for employers
- This decision will entitle claimants to opt to recover their compensation in full from the employer, which is likely to be easier than trying to recover a portion of the damages from any individual respondents.
- It would however be similarly open to claimants to recover the sum in full from an individual respondent, with potentially disastrous consequences for the individual concerned. In fact, any individual respondent to an action, alongside an employer company, may now find themselves 100% responsible for any award where the employer has become insolvent, which is not uncommon in the current economic climate, or where there are large awards of compensation. Individuals named as respondents should therefore be aware of the potential implications of this, and take advice as to what they need to do to defend their interests in discrimination proceedings.
- This decision does not however prevent parties from agreeing an apportionment between themselves, or from the employer agreeing to indemnify any individual respondents, and be responsible for the full award. However, this is a private arrangement between the employer and the employee respondents and does not affect the claimant's entitlement to recover the full extent of the compensatory award from the employee respondent. If the employer respondent is unable to honour any indemnity to the employee respondent, then the employee respondent will be unable to recover the compensation it has paid to the claimant.
- Under the previous principles of apportionment, it sometimes happened that, faced with an award of compensation, a limited company went into liquidation with the effect that the claimant could not recover the portion of compensation allocated to the company (which was normally the significant part). If a director (or other employee) was also a respondent to the action, he would only remain liable for the (normally much smaller) portion allocated to him individually. Now, however, he would remain liable for the full sum on the basis of joint and several liability.