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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> JENNIFER TROUP AGAINST WEST LOTHIAN COUNCIL [2020] ScotCS CSOH_29 (10 March 2020)
URL: http://www.bailii.org/scot/cases/ScotCS/2020/2020_CSOH_29.html
Cite as: 2020 GWD 10-142, [2020] CSOH 29, 2020 SLT 356, 2020 Rep LR 94, [2020] ScotCS CSOH_29
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A227/18
OUTER HOUSE, COURT OF SESSION
[2020] CSOH 29
OPINION OF LORD MULHOLLAND
In the cause
JENNIFER TROUP
against
WEST LOTHIAN COUNCIL
Pursuer: Napier QC and Stuart; Balfour and Manson, Edinburgh
Defenders: Rolfe; Clyde & Co (Scotland) LLP
Pursuer
Defenders
10 March 2020
Introduction
[1] In an ordinary action for damages the defenders seek dismissal on the basis that the
pursuer is by reason of the terms of a compromise agreement, entered into in respect of an
employment tribunal claim, personally barred from raising this action.
The facts
[2] The pursuer was employed by the defenders as a primary school teacher between
2004 and 12 May 2017. The defenders, a local authority, were her employer. She has raised
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an action for damages for personal injury (the present action). The action is based on the
averred fault at common law of the defenders and the averred breach of the implied term of
the pursuer’s contract of employment that the defenders would not without reasonable and
proper cause engage in conduct which destroyed or seriously damaged the confidence and
trust between employer and employee. She avers that she suffered a major depressive
disorder with anxiety as a result of the defenders’ breach of duty. The pursuer avers that the
defenders’ managers knew or ought to have known that the pursuer was at risk of
psychiatric injury by reason of work-related stress and that in the face of that knowledge or
imputed knowledge they failed to take reasonable care for her mental health. The defenders
dispute the claim.
[3] Prior to raising the action, the pursuer raised a claim at the employment tribunal
(4100245/2017). The defenders in the present case were the respondents in the claim. In the
claim which was brought under the Equality Act 2010 (the 2010 Act), she averred that she
had suffered discrimination by reason of her disability (sections 13 and 15 of the 2010 Act),
the defenders had failed to make reasonable adjustments in respect of her disability
(sections 20 and 21 of the 2010 Act) and she suffered harassment as a result of her disability
(section 26 of the 2010 Act). The claim form is 7/3 of the inventory of productions and the
claim is detailed at page 40 et seq (my page numbering). Paragraphs 121-125 of the claim set
out the legal basis of the claim under the 2010 Act.
[4] The claim was settled in a compromise agreement (7/2 of the inventory of
productions). The compromise agreement is also known as a COT3 agreement. I will refer
to it as the “compromise agreement”. This is an agreement to settle the claim which
involved input from the Advisory, Conciliation and Arbitration Service (ACAS). The
compromise agreement was signed by the claimant and the respondents (by a solicitor
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having the authority to sign on behalf of West Lothian Council) on 15 and 16 May 2017
respectively. The compromise agreement requires the respondents without admission of
liability to pay to the claimant a specified sum on money within 21 days. The agreement
states (paragraph 1(a)(ii)) that the sum of money was compensation, including loss of
employment, in full and final settlement of the employment tribunal claim (4100245/2017)
and all and any claims which the claimant has or may have in the future against the
respondents whether arising from her employment with the respondents or its termination
on 12 May 2017, including but not limited to, claims under contract law, the Equality Act
2010, the Equal Pay Act 1970, the Sex Discrimination Act 1975, the Disability Discrimination
Act 1995, the Employment Rights Act 1996, the Working Time Regulations 1998, the Part-
Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, the Information
and Consultation of Employees Regulations 2004, the Occupational and Personal Pension
Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 or
European Communities Law (paragraph 1(a)(ii)). As recognised by the compromise
agreement, the claimant’s employment with the respondents terminated on 12 May 2017.
The compromise agreement also contained an exclusion clause which caveated
paragraphs 1(a)(i) and (ii) by excluding:
“any claim related to accrued pension rights and any claim for damages for personal
injury which may be brought within the ordinary civil courts of Scotland arising
from circumstances occurring prior to 12 May 2017” (paragraph 1(a)(iii)).
The agreement requires the claimant to withdraw her claim from the employment tribunal
(first paragraph 4), the respondents to provide her with a reference (paragraph 7) and both
the claimant and the respondents to refrain from making false or misleading statements
about each other (second paragraph 4). There is also a confidentiality clause (paragraph 5)
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which contains limitations on disclosure. I was advised that both parties to the agreement
were legally represented when the agreement was drafted.
The defenders’ challenge
[5] The defenders seek dismissal of the present action on the basis that the pursuer is
personally barred by the compromise agreement (first plea in law for the defenders and
answer 56 in the pleadings). The defenders aver that the pursuer founds upon the same
factual events in both proceedings. She sought compensation in her claim before the
employment tribunal in respect of loss, injury and damage in respect of a psychiatric injury.
Both the claim and the present action relate to the same conduct of the same employees over
the same time frame. The fact that the present action includes more heads of loss is neither
here nor there. The defenders submit that the pursuer has settled her claim for damages in
respect of psychiatric injury and as a result she is personally barred from suing the
defenders in respect of the same injury arising from the same circumstances. The defenders
submit that the exclusion clause is ambiguous and as a result it should be narrowly
construed such that it should not be interpreted as preserving a right of action based on the
same events and resulting in the same harm. It should be construed contra proferentum
against excluding grounds of action from the compromise agreement. If the exclusion clause
does not operate in the way contended by the defenders, it is difficult to see what
substantive claim in respect of personal injury was settled by the compromise agreement.
The exclusion should only apply to claims not settled by the compromise agreement, namely
damages in respect of any injury sustained in her employment, apart from psychiatric
injury. This could include a fall from height, an assault by a co-worker and slips and trips.
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There is nothing within the compromise agreement which preserves the pursuer’s right to
maintain this action.
The pursuer’s response
[6] The pursuer submitted that employment tribunals have the power to award financial
compensation for breaches of the Equality Act 2010 which cause personal injury (physical or
psychiatric). This includes harassment related to disability, discrimination by reason of
disability and failure to make reasonable adjustments in respect of disability. The pursuer’s
employment tribunal claim was settled by means of the compromise agreement. ACAS was
involved. If the compromise agreement excludes the present action, the issue of personal
bar does not arise. The compromise agreement should be construed in accordance with the
ordinary principles of construction of a contract. It is not for the court to re-write the
compromise agreement that the parties have made. The wording of the exclusion clause is
clear and unambiguous. There is no scope for implied terms. The compromise agreement
excludes any claim for damages for personal injury which may be brought within the
ordinary civil courts of Scotland arising from the circumstances occurring prior to 12 May
2017. Had the defenders wished to achieve the result now sought, it should not have
accepted the exclusion clause in the terms agreed. The compromise agreement was not
intended to settle each and every aspect of the pursuer’s claim. If that was the case the
compromise agreement would have been in different terms. There is nothing in the
amended closed record to support such an averment. With regard to personal bar, the cases
cited in support of the defenders’ plea are distinguishable on the facts and the applicable
law in Scotland. There is nothing in the amended closed record to support the plea of
personal bar and there are no averments and no plea in law to support a submission of res
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judicata which in any event is not pled. There are no inconsistencies between the
compromise agreement and the present action. It is not inconsistent with agreeing to settle a
claim and then subsequently acting in a way that has been expressly identified as
permissible under the terms of the compromise agreement. There is no unfairness in the
present action. The question of whether the sum of money specified in the compromise
agreement should be deducted, in whole or in part, from the award of damages is a question
that will be addressed in due course, if and when the liability of the defenders is established.
At that stage it will be relevant to look at the background to the settlement agreement and
the factors taken into account in agreeing the payment. The compromise agreement had
value to both the parties to it. The payment of compensation in settlement of the
employment tribunal claim ended the claim of disability discrimination. This ended the risk
of the tribunal making a finding against the defenders that it had discriminated and
harassed the claimant and failed to make reasonable adjustments to accommodate her
disability. This would be a matter of importance for the defenders, a local authority,
avoiding any reputational damage and the risk of an award of compensation which is higher
than the sum agreed. The compromise agreement also ends the risk of a successful claim for
unfair dismissal following the termination of her employment. The agreement would also
be of benefit to the claimant in avoiding the uncertainty of a hearing and providing her with
compensation for the discrimination and harassment allegedly suffered by her. It also
brings closure of the claim which avoids any prolonged stress and anxiety that a hearing
would bring.
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Decision
[7] It is well established that settlement agreements entered into by parties to extra-
judicially settle litigation are binding contracts (Margaret Hamilton of Rockhall v Lord Lyon
Co Ltd 1982 SLT 83 per Lord Cameron at 88). The compromise agreement which settled the
employment tribunal claim is therefore a binding contract. This was accepted by both
counsel in their respective submissions. The rights and obligations of the pursuer and
respondents are therefore to be determined by the terms of the compromise agreement. In
interpreting the terms of the compromise agreement, the court's task is to ascertain the
objective meaning of the language which the parties have chosen to express their agreement.
The court must construe the provisions of the contractual agreement in context and in
accordance with the purposes that the contract is intended to achieve. This involves the
court identifying the intention of the parties by reference to what a reasonable person,
having all the background knowledge which would have been available to the parties,
would have understood the language in the compromise agreement to mean. The court will
look for the natural and ordinary meaning of the language used in the compromise
agreement, including the exclusion clause. With regard to background knowledge, it would
be known that the compromise agreement settled an employment tribunal claim brought
under the 2010 Act averring discrimination and harassment at work by reason of the
pursuer’s disability. The employment tribunal has jurisdiction to deal with such claims
(under part V of the 2010 Act) which is the appropriate place to make such claims (the
Sheriff court does not have jurisdiction to hear such claims per section 114 of the 2010 Act).
The tribunal has the power to order the respondents inter alia to pay compensation to the
claimant (section 124(2)(b) of the 2010 Act). The compromise agreement settled the claim
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without admission of liability which would be of benefit to the defenders in avoiding a
potential finding of discrimination and harassment of an employee with all the negative
connotations that could bring, including reputational damage. This is recognised by the
inclusion of a confidentiality provision. The agreement would also be of benefit to the
claimant in avoiding the uncertainty of a hearing and providing her with financial
recompense for the discrimination and harassment allegedly suffered by her. It also brings
closure of the claim which avoids any prolonged stress and anxiety that a hearing would
bring. There are therefore clear benefits in settling the claim.
[8] As noted above, both parties had legal input in the drafting of the compromise
agreement. The agreement was negotiated and the parties to it would not have agreed to it
unless they were content to sign it bringing it into force. The agreement will have been in
the interests of both parties to it or else it wouldn’t have been signed. So, is the present
action covered by the terms of the compromise agreement? The agreement specifies the
payment of compensation, including the claimant’s loss of employment, in full and final
settlement of the claim and all and any claims which the claimant has or may have in the
future against the respondents whether arising from her employment with the respondents
or its termination on 12 May 2017. Paragraph 1(a)(ii) then specifies that this includes, but is
not limited to, claims under contract law, European Communities law and a series of
statutes which are detailed in paragraph 4 above. If the exclusion clause (1(a)(iii)) did not
exist the compromise agreement would clearly cover the present action. However, the
agreement includes an exclusion clause. Does the exclusion clause prohibit the present
action? In determining this issue, the wording of the clause is of paramount importance.
The clause excludes “any claim for damages for personal injury which may be brought
within the ordinary civil courts of Scotland from circumstances occurring prior to 12 May
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2017.” The ordinary and natural meaning of this wording is that it does exclude a claim for
damages for personal injury brought within the civil courts from circumstances which
occurred prior to 12 May 2017. In my view this provision could not be clearer. It contains
no ambiguity and there is no room for doubt as to what it means. The present action is a
claim in a civil court in Scotland. It claims for damages for personal injury and arises from
circumstances which occurred prior to 12 May 2017 (the date of the termination of the
pursuer’s employment with the defenders). Applying the wording of the exclusion clause to
the present action, it is clearly excluded from the terms of the compromise agreement. The
defenders argue that it does not exclude the present case and the wording of the exclusion
clause would apply only to actions brought in respect of slips and trips, falls from height
and assaults by fellow workers. If it was meant to be so restrictive then it would surely have
been drafted accordingly. That is not what the exclusion clause says and applying the clear
and unambiguous wording of the exclusion clause, it covers the present action such that it is
not contractually prohibited by the compromise agreement.
[9] The defenders argue that to interpret the exclusion in the manner contended by the
pursuer would render the compromise agreement meaningless. I disagree. The
compromise agreement clearly has a purpose and is advantageous to both the pursuer and
defenders. I have summarised these advantages in paragraph 7 above. The defenders also
argue that the employment tribunal claim and the present action are both based on the same
set of circumstances within the same timeframe. It was submitted that these are the same
actions. However, this argument fails to recognise that the claim was based on allegations of
disability discrimination and harassment under the 2010 Act for which the employment
tribunal is the appropriate place to make such a claim. These are statutory wrongs. The
present action is not based on averments of disability discrimination and harassment and
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the pleadings for the present action contains heads of claim which were not contained
within the employment tribunal claim. The claim and the present action are rooted
differently. The present action avers negligence, fault and breach of contract the legal basis
of which is the common law. With regard to the payment of compensation, the 2010 Act
expressly gives the tribunal the power to award compensation. However, if compensation is
awarded by the tribunal it will be for a statutory breach of the 2010 Act for discrimination
and harassment. If the pursuer succeeds in her present action she will be entitled to
reparation for the fault, injury and damage through the fault and negligence of the
defenders. These actions are clearly different in nature. The different nature of the actions is
recognised in the jurisdictional provision in the 2010 Act. Section 114 of the Act gives the
employment tribunal jurisdiction to hear complaints of contraventions of Part V of the Act.
Part V is concerned with discrimination and harassment at work. In contrast, the Sheriff
court does not have jurisdiction to hear part V claims which is an implicit recognition by
Parliament that there may be separate actions and claims in these different forums arising
from the same facts and within the same time frame. In summary, applying the ordinary
and natural meaning of the wording of the exclusion clause, I have no doubt that it excludes
the present action from the compromise agreement. There is in my opinion no ambiguity in
the wording and as a result there is no scope for the application of the contra proferentum rule
(McBryde, The Law of Contract in Scotland, 3rd edition at paragraph 8-38 et seq).
[10] With regard to personal bar, the requirements are set out in Gloag and Henderson,
The Law of Scotland, 14th edition at paragraph 3.05 et seq, which was cited to me by counsel as
an authoritative definition. I note that personal bar is distinct from res judicata or lis alibi
pendens or bar due to the application of the rules preventing claims arising out of the one
obligation being pursued in separate actions (E Reid and J Blackie, Personal Bar (Scottish
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Universities Law Institute, 2006) at paragraph 19.10), none of which was pled before me and
there are no averments or pleas in law in the amended closed record to found such pleas. I
note from paragraph 3.05 of Gloag and Henderson that inconsistency on the part of the
person barred, and unfairness, are the fundamentals of the doctrine of personal bar. I agree
with the submission of the pursuer’s counsel that there is no inconsistency between the
terms of the compromise agreement and the present action. It is not inconsistent with
agreeing to settle the claim and then subsequently acting in a way that has been clearly and
unambiguously identified as permissible by the terms of the agreement. Nor is there
unfairness. It is not unfair to the defenders for the pursuer to behave in a way in which the
defenders contractually agreed. The defenders aver in their submissions (note of argument
at paragraph 12.3) that if the defenders’ view of the exclusion clause does not operate as the
defenders say it should, it is difficult to see what substantive claim in respect of personal
injury was settled by the compromise agreement. I reject this submission. As I have already
observed the compromise agreement settled the claim of discrimination and harassment
allegedly suffered by the pursuer, extinguished the possibility of a claim for unfair dismissal
and claims for breaches of the statutes listed in the compromise agreement at
paragraph 1(a)(ii) (detailed in paragraph 4 above). There are also derivative benefits which I
have listed in paragraph 7 above. The defenders submitted that unfairness results from the
payment of compensation for personal injury. However, this payment was compensation
for disability discrimination and harassment allegedly suffered by the pursuer. It is possible
that if, in the present action, liability is established and damages are being assessed, the
compensation paid in settlement of the employment tribunal claim will be taken into
account. However, that is not a matter for me to determine. I merely observe at this stage
that this is a possibility.
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[11] Two cases were cited to me by the defenders’ counsel in support of the plea of
personal bar. I did not find them helpful and both are distinguished on the facts. The first
of the settlement agreement in that case. The settlement agreement in that case is different
in terms than the compromise agreement which settled the employment tribunal claim
brought by the pursuer. The court held in Sheriff that the county court claim for damages for
personal injury was clearly covered by the compromise agreement which settled the
employment tribunal claim (paragraph 22 of the judgement of Stuart-Smith LJ). The case
Wigram V-C at pages 114-115. The rule, based on public policy, is that a defendant should
not be oppressed by successive suits when one would do. However, this rule is not part of
Scots law and does not form part of the doctrine of personal bar (E Reid and J Blackie,
Personal Bar (Scottish Universities Law Institute, 2006) at paragraph 19.10).
[12] The second case cited to me by the defenders’ counsel in support of the plea of
different on the facts. In this case Ms Sivanandan issued proceedings in the High Court
against the London Borough of Enfield (Enfield) for damages for breach of contract. The
contract was a contract of employment between Ms Sivanandan and Enfield under which
Enfield employed Ms Sivanandan as a racial equality officer. This claim had been
previously raised in the Stratford Employment Tribunal in proceedings brought by
Ms Sivanandan against Enfield in which she had claimed race discrimination and
victimisation under the Race Relations Act 1976, unfair dismissal, breach of contract, and sex
discrimination under the Sex Discrimination Act 1975. This claim was struck out by the
Employment Tribunal. Ms Sivanandan argued that her claim for breach of contract was
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withdrawn before the Employment Tribunal struck out her claim (the claim was struck out
on the ground that her conduct of the proceedings had been frivolous, vexatious and
scandalous). She submitted that her claim for breach of contract was therefore unaffected by
the dismissal of her Employment Tribunal proceedings. However, the Court of Appeal on a
detailed examination of the evidence held that the breach of contract claim had not been
withdrawn before proceedings were dismissed (paragraph 110 of the judgment of
Lord Justice Wall) and her county court action was dismissed as res judicata. These cases did
not assist me in determining the issues before me.
[13] For the foregoing reasons, I repel the plea of personal bar.
Disposal
[14] I repel the defenders’ first plea in law and order that the defenders’ averments in
support of personal bar are excluded from probation. The action should now be put on the
by order (adjustment) roll for discussion of further procedure. I shall reserve meantime the
question of expenses.