England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE Case No: CCRTI 98/1436/2

IN THE COURT OF APPEAL (CIVIL DIVISION )

(MR RECORDER CROME )

Royal Courts of Justice

Strand, London W2A 2LL

Thursday 24th June 1999

B e f o r e

LORD JUSTICE STUART-SMITH

MR JUSTICE SUMNER

ABBANUR SHERIFF Appellant

v.

KLYNE TUGS (LOWESTOFT) LTD . Respondent

(Transcript of the handed down judgment

Smith Bernal Reporting Limited

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Official Shorthand Writers to the Court)

MR ANDREW BUCHAN (instructed by Messrs Morgan Jones & Pett, Great Yarmouth) appeared on behalf of the Appellant (Claimant).

MR NIGEL PLEMING QC and MR COLIN McCAUL (instructed by Messrs Mears Hobbs & Eurrant, Lowestoft) appeared on behalf of the Respondent (Defendant).

J U D G M E N T

(As approved by the court)

LORD JUSTICE STUART-SMITH:

1. This is an appeal from an order of Mr Recorder Crome sitting at Norwich County Court on 23 October 1998 whereby it was ordered that the Appellant’s action for damages for personal injury be struck out as an abuse of the process of the court. Permission to appeal was granted by the Recorder. The appeal raises a point of some general importance as to the jurisdiction of Employment Tribunals to award compensation for personal injury.

2. The Appellant is a Muslim of Somali origin. He was employed by the Respondent as a second engineer on their vessel ‘Anglian Salvor’. In the course of his employment he alleged that he suffered racial harassment, abuse, intimidation and bullying at the hands of the master. He was made to work longer hours than white employees; he was made to eat pork, which was against his religious beliefs. On one occasion he was refused permission to go ashore to obtain medical treatment. As a result of the abuse, he suffered a nervous breakdown and was found to be in such a state that he was ordered away from work by one of the Respondent’s managers on 30 January 1995. He was then diagnosed as suffering from anxiety and stress and was certified as unfit for work. The Appellant complained about his treatment by the master and was told the matter would be investigated. However, on 24 February 1995 when the Appellant visited the office to submit a medical certificate, he was told there was no work for him and that his P.45 would be sent to him.

3. On 19 April 1995 the Appellant instituted a complaint against the Respondent alleging unlawful racial discrimination contrary to the Race Relations Act 1976 (the 1976 Act). The claim was contested. The Appellant was assisted by a representative of the Commission for Racial Equality (CRE). The IT.1 form set out in somewhat more detail the allegations to which I have referred in paragraph 2 and claimed that the Appellant had been victimised on the grounds of his race and/or suffered detriment, namely dismissal, as a result of racial discrimination. He claimed money compensation.

4. The case came on for hearing before the Employment Tribunal in October 1995 and was heard over two days. It was then adjourned part heard. The Appellant gave evidence. He was still off sick and not working. He claimed loss of earnings and provided sickness certificates for the period 30 January 1995 to the date of the hearing, the last one being dated 6 September 1995 for 13 weeks. The ground upon which the certificates were given was that he was suffering anxiety/depression.

5. In December 1995 negotiations took place to settle the claim. On 9 January 1996 the case was settled on payment of £4000. The Respondent did not admit liability. A formal agreement was entered into. Paragraph 4, which was introduced by the CRE as part of their standard form, was in these terms:

"The Applicant accepts the terms of this Agreement in full and final settlement of all claims which he has or may have against the Respondent arising out of his employment or the termination thereof being claims in respect of which an Industrial Tribunal has jurisdiction."

On 2 February 1996 the Employment Tribunal issued a formal decision dismissing the application on its withdrawal by the Appellant.

6. On 29 January 1998 the Appellant issued a summons in the Great Yarmouth County Court. The Particulars of Claim alleged that in the course of his employment by the Respondent on the ‘Anglian Salvor’ he had been subjected to ‘abusive and detrimental treatment’ by the master. The particulars of such abusive and detrimental treatment are almost word for word the same as the allegations giving rise to the claim for racial discrimination in the IT.1 form. It is then alleged that as a consequence of the abusive treatment, the Appellant suffered injury in that he was depressed, suffered anxiety, disturbance of sleep and insomnia. A medical report from Professor Weller was served with the pleading, which stated that the Appellant was suffering post-traumatic stress disorder due to the treatment he suffered at the hands of the master. It is then alleged that the injury and loss were caused by the negligence of the Respondent and the master (as their servant). The allegations against the master were the same as before. The allegations against the Respondent, their servants or agents other than the master, were that they had permitted the master to act as alleged.

7. On the Respondent’s application the action was struck out as an abuse of process by the Recorder. He did so on the basis that the claim was being brought in breach of clause 4 of the Agreement of 9 January 1996. The Recorder said this:

"Since therefore in this court the Plaintiff brings a case in identical terms to the case which he presented at the industrial tribunal, and since within the jurisdiction of the tribunal at the time the case was heard there was power to award damages for injury to feelings, which are a euphemism for mental suffering, mental injury, personal injuries of a psychiatric nature, and since he compromised that settlement in the terms of paragraph 4, to which I have already referred, then he has compromised his rights in regard to the damages that flow from his psychiatric condition caused, as he alleges, by the Defendant, and that is precisely the issue which is before the County Court. Since therefore that matter has been litigated before the industrial tribunal and compromised, it is, in my view, an abuse of process of the County Court that the matter should be brought here, and I therefore find that the proper course to follow is to strike it out as such an abuse."

8. Although in his skeleton argument Mr Buchan, who appeared on behalf of the Appellant in this court but not below, contended that paragraph 4 of the agreement was ambiguous, he rightly did not persist in it. In my judgment it is perfectly clear. The claim in the action is clearly one against the Respondent which arises out of his employment. The question is whether it is a claim in respect of which the Industrial Tribunal has jurisdiction.

9. We are concerned in this appeal with direct discrimination. A person discriminates against another if on racial grounds he treats that other less favourably than he treats or would treat other persons (1976 Act s.1(1)(a)). Part II of the Act is concerned with discrimination in the employment field. It is unlawful for a person, in the case of a person employed by him in Great Britain, to discriminate against him by dismissing him or subjecting him to other detriment (1976 Act s.4(2)(c)). It was not disputed that the treatment alleged by the Appellant amounted to a detriment. Part lll of the Act is concerned with discrimination in other fields, such as education, planning, the provision of goods and services and the disposal and management of premises.

10. Although the Act creates a statutory tort, it is one that can only be enforced in accordance with the provisions of the Act (1976 Act s.53 (1)). Thus complaints under Part ll in relation to employment must be presented to the Employment Tribunal (s.54(1)). It is an exclusive jurisdiction. Complaints under Part lll must be brought in designated county courts. This is provided by s.57 of the Act. It is an important section and must be set out. So far as is material it provides:

"(1) A claim by any person (“the claimant”) that another person (“the respondent”) -

(a) has committed an act of discrimination against the claimant which is unlawful by virtue of Part lll; or

(b) is by virtue of section 32 or 33 to be treated as having committed such an act of discrimination against the claimant,

may be made the subject of civil proceedings in like manner as any other claim in tort or (in Scotland) in reparation for breach of statutory duty.

(2) Proceedings under subsection (1) -

(a) shall, in England and Wales, be brought only in a designated county court; and

(b) (applies to Scotland only);

but all such remedies shall be obtainable in such proceedings as, apart from this subsection and section 53(1) would be obtainable in the High Court or the Court of Session, as the case may be.

(4) For the avoidance of doubt it is hereby declared that damages in respect of an unlawful act of discrimination may include compensation for injury to feelings whether or not they include compensation under any other head."

11. S.57(4) adds a head of injury for which compensation is payable since at common law a claimant cannot as a rule recover damages for injury to feelings, save in defamation and false imprisonment. The subsection does not, as Mr Buchan submitted, restrict the scope of compensation which can be awarded in discrimination cases to injury to feelings as opposed to physical or psychiatric injury. On the contrary, it adds a head not otherwise recoverable. I agree however with Mr Buchan that there is a well recognised difference between injury to health or personal injury, and injury to feelings. The Recorder was in my view in error in conflating the two as he appears to have done in the passage cited in paragraph 7.

12. S.56 is concerned with remedies available in the Employment Tribunal. S.56(1) so far as is material provides:

"Where an employment tribunal finds that a complaint presented to it under section 54 is well-founded, the tribunal shall make such of the following as it considers just and equitable -

(b) an order requiring the respondent to pay to the complainant compensation of an amount corresponding to any damages he could have been ordered by a county court or by a sheriff court to pay to the complainant if the complaint had fallen to be dealt with under section 57."

It is apparent therefore that the Employment Tribunal will award compensation on the same basis as the County Court, save only that it must consider that it is just and equitable to make the order.

13. A similar scheme is to be found under the Sex Discrimination Act 1975 (see sections 63 and 65, discrimination in employment which is dealt with in the Employment Tribunal; and section 66, discrimination in other fields which is dealt with in the County Court); and the Disability Discrimination Act 1995 (s.8 deals with discrimination in employment, s.25 deals with discrimination in other fields).

14. As originally enacted both the Sex and Race Discrimination Acts had a cap on the amount of damages that could be awarded. In 1976 this was £5,200; but the cap was removed by the Sex Discrimination and Equal Pay (Remedies) Regulations 1993 and the Race Relations (Remedies) Act 1994 respectively, and the amount of compensation has since then been unlimited.

15. Claims under Part ll of the 1976 Act must be brought in the Employment Tribunal within 3 months from the act complained of. Claims under Part lll must be brought within 6 months in the County Court. But there is power to extend the time if in all the circumstances of the case it is just and equitable to do so (s.68(1)(2)(6)).

16. Mr Buchan submitted that the Employment Tribunal and, for that matter the County Court under s.57 of the 1976 Act, had no jurisdiction to award compensation for personal injuries, that is to say either physical or psychiatric injury. His reasons were as follows:

(a) In 1976 when the Act was passed and a cap of £5,200 existed, Parliament cannot have intended personal injury claims to have been presented with such a low ceiling. I see no reason why this should be so. The phenomenon of post traumatic stress disorder seems to be a comparatively recent phenomenon, at least as such. Moreover, there is no reason why as a matter of policy when creating a new tort Parliament should not have intended to control the financial consequences within tight bounds.

(b) The limitation period of 3 and 6 months imposed by s.68 is unfair to claimants and unduly restrictive, since they may well not know within that time whether they are suffering psychiatric injury as opposed to injury to feelings. Parliament therefore, it is submitted, cannot have intended that claims for such injuries were justiciable in the Employment Tribunal. Again, in my view, this consideration cannot prevail over the language of the Act. In any event hearings in the Employment Tribunal are frequently split between liability and remedy, and there is no reason why the latter should not be delayed in an appropriate case.

(c) Mr Buchan placed reliance on certain provisions of the Industrial Tribunals Act 1996 (which replaced similar provisions going back to the Employment Protection Act 1975). S.2 of the Act confirms the existing jurisdiction of Employment Tribunals. S.3(1) empowers the Minister to extend the jurisdiction to claims to which the section applies. S.3(2) specifies the claims to which the section applies, which in general may be described as claims relating to contract. It is subject to s.3(3) which provides that the section does not apply to damages in respect to personal injuries. Since the duty of care owed to an employee can arise both in contract and in tort (see Johnstone v Bloomsbury Health Authority [1992] QB 333), Mr Buchan submits that it would be anomalous if claims for personal injury damages could be brought in the Employment Tribunal. But, with all respect to Mr Buchan, this misses the point. No one suggests that actions for damages for negligence, whether based on a duty owed in contract or in tort, can be brought in the Tribunal. The question is whether the Tribunal (or the County Court) can award compensation by way of damages for physical or psychiatric injury consequent upon or caused by the statutory tort of discrimination.

(d) Mr Buchan submitted that the expertise of the Employment Appeal Tribunal was in matters of employer/employee relations and they were not fitted to deal with complex medical questions. He relied on a dictum of Morrison J. in LFCD v Betty [1994] 1RLR 384, at paragraph 10 he said:

"It seems to us that Tribunals should not be concerned to ascertain whether the illness which is the reason for the dismissal was caused or contributed to by the employer. The question in issue is whether, in the light of the employee’s medical condition and the enquiries and procedures the employer made and used before deciding to dismiss, the dismissal was fair. To introduce questions of responsibility for illness or injury would take a Tribunal down a path that could lead to endless dispute on matters on which they would have no special expertise. We do not consider that the employer has disabled himself from fairly dismissing an employee whom he has injured. If the injury was caused by a breach of the employer’s duty to the employee, the employee will be entitled and able to recover appropriate compensation."

The issue in that case was not whether the Employment Tribunal had power to award compensation for personal injury; but I see the force of Morrison J’s observation. Nevertheless, the consideration cannot in my view override the statutory language.

17. In my judgment that language is clear. And the principle must be that the claimant is entitled to be compensated for the loss and damage actually sustained as a result of the statutory tort. (see Ministry of Defence v Wheeler [1998] 1 WLR 637 per Swinton Thomas LJ at p642, citing from Marshall v Southampton & South West Hants Health Authority (Teaching) No.2 (Case C-271/91) [1994] QB 126 at p165). In Alexander v Home Office [1988] 2 All ER 118, the court was concerned with the quantum of damages for injury to feelings. At p122e May LJ said:

"As with any other awards of damages, the objective of an award for unlawful racial discrimination is restitution. Where the discrimination has caused actual pecuniary loss, such as the refusal of a job, then the damages referable to this can be readily calculated."

He then went on to contrast injuries to feelings, to physical injuries to the body or mind, which were not in issue in that case. He added at p122g:

"Nevertheless damages for this relatively new tort of unlawful racial discrimination are at large, that is to say that they are not limited to the pecuniary loss that can be specifically proved."

18. The only authority which counsel have been able to find on the point is Parchment v Secretary of State for Defence (unreported transcript 23.2.98) a decision of Mr Griffith-Williams QC sitting as a deputy High Court Judge. The claimant was the son of a black Jamaican and white English mother. He joined the Royal Marine Commandos. He left the Army without leave in 1989, he was arrested in 1994 and subsequently discharged from the Army. In December 1995 he commenced proceedings in the Industrial Tribunal alleging racial discrimination, humiliation and bullying. But the application was withdrawn as it was out of time. In September 1996 he issued a writ against the Secretary of State for Defence. He alleged that he was suffering an Adjustment Disorder (a psychiatric injury) diagnosed in 1996 alleged due to the defendant’s negligence in failing to provide a safe system of work. The substance of the allegation of the conduct that had caused his injury was the same as that which had been alleged in the application to the Industrial Tribunal.

19. The defendant applied to strike out the action under RSC Order 18, Rule 19. Questions of limitation arose which are not relevant. But the defendant contended (a) that the Industrial Tribunal had exclusive jurisdiction to entertain claims in respect of racial discrimination in the employment field, which is clearly right; (b) that it had jurisdiction to award compensation for psychiatric injury; and (c) that since the claimant’s allegations amounted to allegations of racial discrimination, they could not be the subject of a claim for damages based upon the tort of negligence. The Deputy Judge accepted (b) and (c). We are not concerned with (c); we have heard no argument upon it and I would not wish to express any opinion upon the point, since it does not arise in this appeal. But (b) does. At p11 of the transcript, after rehearsing the provisions of the Act, the Deputy Judge said:

"It follows that damages in respect of an unlawful act of discrimination are not restricted to compensation for injuries to feelings and any compensation for past and future losses of earnings, but may include compensation for personal injury by reason of psychiatric illness."

Mr Buchan submits that this is wrong for the reasons he advanced.

20. Mr Pleming’s submission on behalf of the Respondent also accords with the views of the editors of Harvey on Industrial Relations and Employment Law. At paragraph L 534 (p.L/163) dealing with sex discrimination, which of course is the same for these purposes, it is said:

“the measures of damages is to be the same as that adopted by the ordinary courts (s65(1)(b)), and that means that the tribunal is entitled to make an award for injury to feelings (s66(4)). Also, of course, compensation will seek to provide reparation for any physical or psychological injuries caused by the discrimination. For this reason it will often be advisable for an applicant to obtain a medical report if she has been subjected to serious stress at work.”

21. In my judgment both the Employment Tribunal under s56 and the County Court under s57 have jurisdiction to award damages for the tort of racial discrimination including damages for personal injury caused by the tort. The question, which may be a difficult one, is one of causation. It follows that care needs to be taken in any complaint to an Employment Tribunal under this head where the claim includes, or might include, injury to health as well as injury to feelings. A complainant and his advisers may well wish in those circumstances to heed the advice of the editors of Harvey, just referred to, to obtain a medical report. This has particular relevance as the time within which to make a complaint is only 3 or 6 months and, unless an adjournment is obtained, an adjudication may follow quite shortly.

22. But is the present claim one to which paragraph 4 of the Agreement applies? Mr Buchan submits that it is not, because the cause of action is different. The claim in the action is based upon the tort of negligence. The Claimant will have to prove not only the conduct of the master, but that it was reasonably foreseeable to a reasonable employer that this might cause psychiatric injury. I merely comment in passing that this might in any event prove a difficult hurdle to surmount. One can reasonably appreciate that such harassment may cause injury to feelings; but psychiatric injury is a different matter. The advantage of the statutory tort, from the Claimant’s point of view, is that this requirement does not need to be established; all that needs to be established is the causal link. But in any event, in my judgment, the claim does fall within paragraph 4. It is a claim for compensation for injury sustained by the Appellant arising out of his employment with the Respondent (i.e. through the master’s conduct) and in respect of which the Industrial Tribunal has jurisdiction.

23. Mr Pleming also argues that the action should be struck out as an abuse of process on the basis of res judicata; he relies on the decision of the Employment Tribunal dismissing the application. I do not think this is a case of res judicata in the strict sense, because the cause of action is not the same in both proceedings. However, the principle applies to matters which could have been raised in previous proceedings, but were not. In Henderson v Henderson (1843) 3 Hare 100 Wigram V-C at p114-115 said:

“In trying this question, I believe I state the rule of the court correctly, when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.”

This principle was applied in the case of Talbot v Berkshire County Council [1994] QB 290. After citing it, I said at p296D:

“The rule is thus in two parts. The first relates to those points which were actually decided by the court; this is res judicata in the strict sense. Secondly, those which might have been brought forward at the time, but were not. The second is not a true case of res judicata but rather is founded on the principle of public policy in preventing multiplicity of actions, it being in the public interest that there should be an end to litigation; the court will stay or strike out the subsequent action as an abuse of process: per Lord Wilberforce in Brisbane City Council v Attorney-General for Queensland [1979] AC 411, 425G.”

And at p297F, I said:

“In my judgment there is no reason why the rule in Henderson’s case should not apply in personal injury actions. Indeed there is every reason why it should. It is a salutary rule. It avoids unnecessary proceedings involving expense to the parties and waste of court time which could be available to others, it prevents stale claims being brought long after the event, which is the bane of this type of litigation; it enables the defendant to know the extent of his potential liability in respect of any one event; this is important for insurance companies who have to make provision for claims and it may also affect their conduct of negotiations, their defence and any question of appeal.”

24. The principle applies in this case. The same issue of the conduct of the master of the Respondent’s vessel lies at the heart of both the proceedings in the Employment Tribunal and the County Court action, although in the latter the Appellant assumes the additional burden of proving negligence. For the reasons I have already given, the Appellant could have brought forward his whole claim for compensation in the Tribunal. He did not do so.

25. There is an exception to the rule in Henderson’s case where there are special circumstances. The special circumstances must afford an adequate explanation of why the claim now made was not made in the earlier proceedings. As I said in Talbot’s case at p299E, “The court has to consider why the claim was not brought in the earlier proceedings”.

26. Mr Buchan submitted that there were a number of special circumstances here. He listed the following:

(a) the different limitation period and in particular the very short period in the Employment Tribunal.

(b) different cost provisions; an applicant in the Employment Tribunal is not usually awarded costs. This may be a disadvantage to a claimant with a heavy claim.

(c) the procedure in the court is more suitable for trying a complex personal injury claim.

(d) there is no facility for interim payments or provisional damages in the Employment Tribunal.

(e) the expertise of the Employment Tribunal does not lie in the field of adjudication on perhaps difficult questions of psychiatric injury.

27. In my opinion these considerations cannot be regarded as special circumstances; they are inherent in the two different forms of jurisdiction. The principle of public policy is that claims that have been or could have been litigated in one tribunal, should not be allowed to be litigated in another.

28. What might be a special reason would be if the claimant’s condition had not come to light at the time the earlier proceedings were concluded. That is not the position here. Although the Appellant’s condition may not have been formally diagnosed as post traumatic stress disorder by October 1995, it is clear that he was complaining of anxiety and depression from February 1995 and continuing. This was not mere injury to feelings, but was the essence of his psychiatric injury.

29. For these reasons I would dismiss this appeal, both on the grounds that the claim in the County Court action is one that falls within paragraph 4 of the Agreement and on the principle in Henderson v Henderson.

MR JUSTICE SUMNER: I agree.

Order: Appeal dismissed with costs; assessment of costs

be postponed; application for permission to appeal

to the House of Lords refused.