United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR GARY SELF (of Counsel) Instructed by: Messrs Biscoes Solicitors Kingston Place 62/68 Kingston Crescent North End Portsmouth Hampshire PO2 8AQ
For the Respondent	MR PAUL ROSE (One of Her Majesty's Counsel) Instructed by: Messrs Blake Lapthorne Linnell Solicitors 21 Brunswick Place Southampton Hampshire SO15 2AQ

SUMMARY

Sex Discrimination

Sex discrimination – compensation. Deductions because of pre-existing condition and chance of further illness in any event.


 


HIS HONOUR JUDGE ANSELL

1. This is an appeal from a remedies decision of a Southampton Employment Tribunal who in a reserved decision, promulgated on 23 December 2003, awarded the Appellant compensation in respect of sex discrimination.
2. The compensation had included a gross sum in respect of personal injuries in the sum of £10,000 together with various pecuniary losses including past and future loss of earnings and care expenses. The Tribunal had applied a reduction totalling 86.65% representing the evidence accepted from the medical expert Dr Wear, that the Appellant had a 33% chance of becoming ill anyway and that when she became ill she was 80% worse because of her underlying condition.
3. The appeal relates to those deductions and there is also a cross-appeal in which it is contended that the Tribunal ought to have calculated the pecuniary loss by reference to a specified time frame, namely 6 months, as well as certain errors alleged in connection with the calculation of past and future care costs.
4. During the hearing both parties agreed that if we were to find that there was error on the part of the Tribunal regarding their assessment of compensation then if possible we should correct those errors ourselves rather than incur the parties in further expense by remitting the matter back for a further hearing.
5. The Appellant was employed by the Respondent at an Advertising Executive in the field of sales, based at Chichester. Her employment began on 25 February 2002. At an earlier merits hearing in March 2003 a Tribunal had found that she had been the victim of sexual harassment by her manager, Mr Palmer, which had taken place during July 2002 and consisted of the sending of pornographic emails to her office computer, harassing behaviour by touching, leaning across her work space and moving her computer when it was unnecessary to do so, and inappropriate conduct in group discussions. She had also complained of sex discrimination against her employers in their failure to take appropriate action following lodging of a grievance. This behaviour had led the Appellant to be absent from work in August 2002 since which time she has been unwell and has not returned to employment.
6. The Tribunal noted in their remedies decision that the Appellant's marriage broke down soon after the harassment, although they found it extremely difficult to assess the significance of the harassment in the breakdown of that marriage. However in paragraph 13 they did make a finding that "the harassment is likely to have been a significant factor in the breakdown of that Applicant's marriage".
7. They also recorded that the Appellant had had a significant history of depressive episodes during her life recording periods of treatment from 1992 onwards. The medical evidence before the Tribunal came in the form of evidence from Dr Wear. He had prepared two reports: one dated 27 May 2003 and the second on 8 July 2003, together with additional letters, and also gave oral evidence to the Tribunal.
8. With the passage of time his view of the Appellant had changed and by the time of the hearing he tended to a view that she was suffering from a pre-existing depressive/anxiety disorder that had been insufficiently treated at the time of the harassment. He did, however, acknowledge that the sexual harassment did impact on someone who was vulnerable.
9. In response to an invitation to apportion in percentage terms the contribution made by the Appellant's condition since August 2002 until July 2003, by firstly her underlying condition and secondly the sexual harassment, Dr Wear put the proportions at 80% to the underlying condition and the sexual harassment and its subsequent management to a contribution of 20%. He added that she would continue to suffer from episodes of anxiety and depression even if she had not been the victim of discrimination; and bearing in mind that her marriage ended shortly after the sexual harassment he thought this would have been likely to have precipitated a further episode within 6 months of the sexual harassment, as he seemed to imply that the marital relationship was not particularly robust prior to the harassment taking place.
10. In the hearing he was asked as to the chances of a relapse in the subsequent 12 months had the marriage not broken down and had there been no harassment and he said those chances were quite small, between 10-20%. Given that the marriage did break down the chances of a relapse within a 12 month period were put by him at 50%. The Tribunal in the course of their decision did find that the Appellant was given to exaggeration on the one hand and minimisation on the other.
11. In dealing with compensation for personal injury the Tribunal set out the position thus:

"32. … Taking Dr Wear's assessment that the chances of a relapse in 12 months if the marriage had not broken down were 10 to 20% and with a marriage breakdown a proportion of the order of 50%, we find that the chances of a depressive episode occurring (taking into account the chances that there would or would not have been a marriage breakdown) are 33% - i.e. somewhere between the figure of 10% and 50%. This is based on assessment of all the evidence but also on our view that the marriage was perhaps somewhat more robust than Dr Wear gave it credit for.

33. In coming to a conclusion as to the gross figure for compensation for personal injury (prior to the application of the discount), we have taken account of the Guidelines provided by the Judicial Studies Board in regard to damages for psychiatric damage. We consider that the case falls between the Moderate and Moderately Severe categories of Section A of Chapter 3 of the Guidelines. The Applicant's ability to cope with life and work has been significantly affected and continues to be so. We expect, however, that it will improve in the future. Her relationships with her family and others have been substantially injured, though again, we expect improvement. We expect treatment to be successful. We expect the Applicant to return to employment similar to that she had before July 2002. We consider the appropriate figure for compensation for personal injury to be £10,000.

34. The award in respect of personal injuries is subject to a reduction of one-third to take account of the likelihood that the Applicant would fall ill anyway. A further deduction is appropriate to take account of the 80%/20% proportions referred to by Dr Wear in his letter of 24 November 2003. He then said "I would guess that the contribution from her underlying condition would be around 80% and that the sexual harassment and its subsequent management contributed 20%". What Dr Wear was in effect saying (subject to adjustment to one of the figures) was that the Applicant had a 33% chance of becoming ill anyway and that when she became ill, she was 80% worse because of her underlying condition. We accept his analysis. The application of the proportionate reductions is cumulative and the appropriate aggregate adjustment is 86.65%."

Thus, although they had awarded a gross sum of £10,000 the net amount came to only £1,365.

12. The Tribunal then went onto deal with the calculations for past and future pecuniary losses and applied to each of those amounts the aggregate adjustment of 86.65%. In dealing with future losses the Tribunal came to a conclusion that the Appellant, with the assistance of her parents, should be in a position to return to work within 6 months at the date of the hearing and awarded compensation for continuing losses for that period. Thus the total loss of earnings covered a period of just under 2 years.
13. Compensation for sex discrimination is awarded pursuant to section 65 (1) (b) of the Sex Discrimination Act 1975 which provides that:

"65. (1) Where an employment tribunal finds that a complaint presented to it under section 63 is well-founded the tribunal shall make such of the following as it considers just and equitable –

(a) …

(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 66."

14. In Essa v Laing [2002] ICR 346 the EAT made it clear that compensation was recoverable in respect of all harm caused directly by the act of discrimination, whether or not it was reasonably foreseeable.
15. In terms of causation and apportionment of damage, both Counsel directed us to the guidance provided by Hale LJ in Sutherland v Hatton [2002] IRLR 263 from paragraphs 35 to 42:

"35. Causation

Having shown a breach of duty, it is still necessary to show that the particular breach of duty found caused the harm. It is not enough to show that occupational stress caused the harm. Where there are several different possible causes, as will often be the case with stress related illness of any kind, the claimant may have difficulty proving that the employer's fault was one of them: see Wilsher v Essex Area Health Authority [1988] AC 1074. This will be a particular problem if, as in Garrett, the main cause was a vulnerable personality which the employer knew nothing about. However, the employee does not have to show that the breach of duty was the whole cause of his ill-health: it is enough to show that it made a material contribution: see Bonnington Castings v Wardlaw [1956] AC 613.

36. Apportionment and quantification

Many stress-related illnesses are likely to have a complex aetiology with several different causes. In principle a wrongdoer should pay only for that proportion of the harm suffered for which he by his wrongdoing is responsible: see e.g. Thompson v Smiths Ship Repairers (North Shields) Ltd [1984] QB 405; Holtby v Brigham & Cowan (Hull) Ltd [2000] PIQR Q293; Rahman v Arearose Ltd [2001] QB 351. Thompson and Holtby concerned respectively deafness and asbestosis developed over a long period of exposure; not only were different employers involved but in Thompson some of the exposure by the same employer was tortious and some was not. Apportionment was possible because the deterioration over particular periods of time could be measured, albeit in a somewhat rough and ready fashion.

37. It is different if the harm is truly indivisible: a tortfeasor who has made a material contribution is liable for the whole, although he may be able to seek contribution from other joint or concurrent tortfeasors who have also contributed to the injury. In Rahman, Laws LJ quoted the following illuminating discussion from Prosser & Keeton on Torts, 5th ed (1984) pp 345-346:

"If two defendants, struggling for a single gun, succeed in shooting the plaintiff, there is no reasonable basis for dividing the injury between them, and each will be liable for all of it. If they shoot the plaintiff independently, with separate guns, and the plaintiff dies from the effect of both wounds, there can still be no division, for death cannot be divided or apportioned except by an arbitrary rule … If they merely inflict separate wounds, and the plaintiff survives, a basis for division exists, because it is possible to regard the two wounds as separate injuries … There will be obvious difficulties of proof as to the apportionment of certain elements of damages, such as physical and mental suffering and medical expenses, but such difficulties are not insuperable, and it is better to attempt some rough division than to hold one defendant [liable] for the wound inflicted by the other. On the same basis, if two defendants each pollute a stream with oil, in some instances it may be possible to say that each has interfered to a separate extent with the plaintiff's rights in the water, and to make some division of the damages. It is not possible if the oil is ignited, and burns the plaintiff's barn."

38. In Bonnington Castings v Wardlaw [1956] AC 613, the employee was exposed to harmful dust, all of it at work, but some of it in breach of duty and some not: the employer was held liable for the whole of the damage caused by the combination of the 'guilty' and 'innocent' dust. The question of apportionment was not argued. The problem there, as in McGhee v National Coal Board [1973] 1 WLR 1, HL, was whether the claimant could prove causation at all, given the possible contribution of both 'guilty' and 'innocent' dust to his illness.

39. As Stuart Smith LJ commented in Holtby, at p Q300,

"[The claimant] will be entitled to succeed if he can prove that the defendants' tortious conduct made a material contribution to his disability. But strictly speaking the defendant is liable only to the extent of that contribution. However, if the point is never raised or argued by the defendant, the claimant will succeed in full, as in Bonnington and McGhee."

Clarke LJ went further and placed at least the evidential burden of establishing the case for apportionment upon the defendant, at p Q305:

"It seems to me that once the claimant has shown that the defendant's breach of duty has made a material contribution to his disease, justice requires that he should be entitled to recover in full from those defendants unless they show the extent to which some other factor, whether it be 'innocent' dust or 'tortious' dust caused by others, also contributed."

But he acknowledged that these cases should not be determined by the burden of proof: assessments of this kind are 'essentially jury questions which have to be determined on a broad basis'.

40. Hence the learned editors of Clerk & Lindsell on Torts, 18th edition (2000), at para 2-21, state that 'Where it is possible to identify the extent of the contribution that the defendant's wrong made to the claimant's damage, then the defendant is liable only to that extent, and no more'. This may raise some difficult factual questions. Calascione v Dixon (1993) 19 BMLR 97 is an example of apportionment between different causes, one the fault of the defendant, the other not: the claimant suffered post traumatic stress disorder as a result of seeing the aftermath of the accident in which her son was killed, but her normal grief reaction had become abnormal as a result of later events. In Vernon v Bosley (No 1) [1997] 1 All ER 577, the majority in this court held that the whole of the claimant's psychiatric injury was the result of the accident in which his two daughters died, although Stuart Smith LJ dissented on the ground that it had not been shown that it was caused by his witnessing the unsuccessful attempts to rescue them, that is by the breach of the defendant's duty towards him. These were both, of course, secondary victims. Rahman is an example of apportionment of the psychiatric injury suffered by a primary victim between different tortfeasors. Neither tort caused the whole injury, some was caused mainly by one, some mainly by the other, and some by their combined effect. Neither tortfeasor would have been held liable for the whole.

41. 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. The analogy with the polluted stream is closer than the analogy with the single fire. Nor is there anything in Bonnington Castings v Wardlaw [1956] AC 613 or McGhee v National Coal Board [1973] 1 WLR 1 requiring a different approach.

42. Where the tortfeasor's breach of duty has exacerbated a pre-existing disorder or accelerated the effect of pre-existing vulnerability, the award of general damages for pain, suffering and loss of amenity will reflect only the exacerbation or acceleration. Further, the quantification of damages for financial losses must take some account of contingencies. In this context, one of those contingencies may well be the chance that the claimant would have succumbed to a stress-related disorder in any event. As it happens, all of these principles are exemplified by the decision of Otton J at first instance in Page v Smith [1993] PIQR Q55 (and not appealed by the claimant: see Page v Smith (No 2) [1996] 1 WLR 855). He reduced the multiplier for future loss of earnings (as it happens as a teacher) from 10 to 6 to reflect the many factors making it probable that the claimant would not have had a full and unbroken period of employment in any event and the real possibility that his employers would have terminated his employment because of his absences from work."

16. Mr Self advanced a number of arguments in relation to the apportionment issue and what he contended was flawed methodology used by the Employment Tribunal in relation to both the 33% and 80% reductions:

(1) Firstly he contended that whilst he conceded that there had to be apportionment to reflect, firstly, the possibility that a depressive episode may have occurred even if the Appellant had not been the victim of discrimination and, secondly, that the Appellant was suffering from underlying anxiety related symptoms, it was not appropriate to apply both discounts at the same time which amounted to duplication and/or double counting.

(2) Bearing in mind that the Tribunal found that the harassment was likely to have been a significant factor in the breakdown of the Appellant's marriage, the 33% chance of becoming ill anyway was too high a figure and he submits that the Tribunal should have taken Dr Wear's lower calculation of 10 to 20%. We can deal with this submission immediately. We can find no fault with the Tribunal's approach as regards this percentage. Taking the decision overall, there was clearly some uncertainty as to the effect of the harassment on the marriage and in both paragraphs 24 and 25 the Tribunal were somewhat critical of the Appellant's evidence. The finding of 33% was in our view a permissible option for the Tribunal.

(3) Assuming the percentage of 33%, Mr Self submits that that is the appropriate discount to be applied to the loss of past and future earnings and other pecuniary losses, and not the additional 80%. He submits that the Tribunal's approach was to take the past and future losses over the two year period and to discount them by 33% to reflect the chances of a depressive episode occurring in any event irrespective of the harassment. He argues that it was inappropriate to further discount the loss of earnings by 80% since that discount was concerned with the severity of the symptoms and that severity was present whether the depressive episode was triggered by harassment (66%) or by another cause (33%).

(4) As far as general damage is concerned, he argues the reverse proposition, i.e. that the court is not concerned with the triggering mechanism, but whether the symptoms from which she suffered were caused by harassment or by her pre-existing condition, Mr Self argued it was wholly inappropriate to assess damages simply based on Dr Wear's arithmetical analysis that the contribution from her underlying condition was around 80% and from the sexual harassment and its subsequent management 20%. He argues that to simply assess damages on the 20% ignores the effect of the 20% on her quality of life. As he put it in the course of oral argument, it "tipped her over the balance". He submitted that she lost her work, her husband, her family life and her social life, and to apply a small percentage ignores the reality of what happened to the Appellant. He refers to the Tribunal's findings in respect of compensation for injury to feelings wherein paragraph 29 they set out the position thus:

"29. … The Applicant, whatever the situation in regard to her marriage might have been at the time, was happy in her work and looked forward to developing her career with the Respondents. That opportunity was, quite simply, taken away from her."

He submits that the proper approach should not have been to take a figure for general damages based on a full award and discount it, but rather seek from publications such as Kemp & Kemp and/or Butterworths cases which reflect the existence of a pre-existing condition and/or the inevitability of a further relapse occurring. He argues that if the court decided that a percentage deduction was appropriate then 80% was far too high leaving her with a sum of under £2,000 which cannot be said to be a proper award for the pain, suffering and loss of amenity she had suffered for the harassment alone.

(5) Whatever method is used to assess damages, he submits that it is not then appropriate to apply further discount of 33% to the general damages. As previously stated, the court in dealing with general damages is not concerned with the trigger for the depressive episode, but whether the symptoms that resulted can be attributed to a pre-existing condition or to the harassment.

17. By way of response and as part of his cross-appeal Mr Rose firstly argues that the Tribunal failed to make findings with regard to one of the possible alternative methods of calculation that he put to the Tribunal with regard to the assessment of compensation. Before the Tribunal he had argued that as a result of Dr Wear's evidence the Tribunal could make a finding that but for the discrimination the Appellant would have succumbed to the onset of psychiatric disorder of sufficient gravity to put her off work within 6 months of July 2002 and that her losses should be limited to that period. He conceded the Tribunal had adopted an alternative approach that he had suggested which was to fix a date by which they believed she would be able to return to work and then assess how much of her losses were attributable to the harassment.
18. By implication we are satisfied that the Tribunal rejected Mr Rose's primary contention and indeed if one looks at the notes of evidence from the Chairman, Dr Wear appeared to express some considerable uncertainty as to when the further depressive episode might have occurred, describing it as "speculation".
19. As regards the Tribunal's approach in applying two discounts to both general damages and pecuniary losses, he submits that this was a permissible approach resulting from the Tribunal following the guidance in Sutherland as to the necessity of apportioning liability. However, it seems to us that paragraph 42 of Hale LJ's judgment does provide an answer to the correct approach and indeed supports the Appellant's submissions.
20. In paragraph 42 Hale LJ commences by dealing with the situation where there has been exacerbation of a pre-existing disorder or acceleration of the effect of a pre-existing vulnerability, and she makes it clear that the award of general damages should reflect only the exacerbation or acceleration – in our case this is the 80%/20% split. However, she then goes onto deal with the quantification of damages for financial losses and states that that should take account of contingencies, one of which may be that the claimant would have succumbed to a stress-related disorder in any event, i.e. the 33% in our case.
21. We therefore agree with the Appellant's submissions that it was wrong for the Tribunal to apply both discounts to both heads of loss and that in respect of financial losses only a 33% discount should have been applied. To apply both discounts is to confuse cause with symptoms.
22. With regard to general damages Mr Rose submits that the 80% deduction was a permissible approach on the part of the Tribunal. He submits that the picture presented by Mr Self that the Appellant was a happy, relatively healthy and stress-free individual, who deteriorated dramatically as a result of the harassment, does not reflect the findings of the Tribunal.
23. As we have already indicated, they found that she had a significant history of depressive episodes during her life and "their gravity and length are matters that we have had to consider in coming to our decision". In paragraph 14 they had set out the various periods of anxiety disorder, some of which had resulted in her having to receive hospital treatment and as late as February 2002 she was undergoing counselling with a Ms Fiona Parkes.
24. Dr Wear's conclusion was that the Appellant was suffering from a pre-existing depressive/anxiety disorder that had been insufficiently treated at the time of the harassment and there was of course his evidence that 80% of her symptoms resulted from her underlying condition rather than the sexual harassment.
25. Mr Rose referred us to Holtby v Brigham (Hull) Ltd [2000] PIQR Q293. In that case the claimant had worked as a marine fitter for most of his working life and in the course of that work was exposed to asbestos. The defendants were his employers for about half the time. The claimant brought an action against the defendants when he developed asbestosis and the trial judge found that the defence were negligent in breach of statutory duty. In assessing damages he relied on medical evidence which stated that had the claimant's exposure been limited to that cause through his employment with the defendants his condition would not be so bad. Accordingly the trial judge reduced damage by 25% and the Court of Appeal approved that approach.
26. It seems to us that in the circumstances of this case where the Tribunal had received quite clear and precise percentage evidence from Dr Wear the approach they took to general damages by the 80% reduction was a permissible option. It is to be remembered that the Tribunal made an award of £10,000 by way of compensation for injury to feelings to take account of both the inappropriate conduct of Mr Palmer and the failure of the Respondent to take appropriate steps to remedy the situation. It follows from our conclusions in paragraph 21 that the 33% discount should not have been applied to general damages.
27. Finally, we deal with the discreet issues raised by Mr Rose in respect of the cross-appeal. Firstly, in respect of past care, the Tribunal allowed a claim for care and assistance based on the Appellant's parents providing 19 hours service per week including washing, ironing, gardening and the like. Mr Rose submits that this is manifestly excessive for a claim of moderate to moderately severe psychiatric injury and in his experience cases involving incomplete paraplegia attract lower awards for care. He submits therefore that the award was disproportionately high.
28. Whilst we note his comments the Tribunal in our view were entitled to accept the figures that were being put forward in the Appellant's evidence and we see no reason to interfere with their decision. It appears that the Tribunal may have made a mathematical error in that they have based their calculation on 17 months care rather than 16 months and therefore the correct figure before the 33% discount is applied is a sum of £5,927.76.
29. As regards future care the Tribunal reasoned at paragraph 49 that the Appellant would require continuing care for a period of 3 more months from 1 December 2003, although she would over that period develop the ability to perform such tasks as cutting her own grass and looking after children herself, and her reliance on her parents will reduce. However, they assessed the three months care at the same hourly rate that was used for past care and it appeared to equate to 25 hours per week which was more rather than fewer that the number of hours were allowed for past care. However, again the Tribunal heard the evidence and came to their conclusions and we are not prepared to interfere with their findings.
30. To the extent that we have indicated, specifically in relation to the percentage deductions, we are therefore prepared to allow this appeal. We trust that the parties, as a result, will be able to work out the overall effect on the total sum awarded.
31. Prior to the hearing we were presented with a schedule of damages as found by the Employment Tribunal pre-deduction. The only change on the schedule is that the figure for past care is reduced from £6,300 to £5,927.76. The deduction for the personal injury award will be 80% and the deduction for all the financial losses will be 33%.