United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0211/10/ZT

 

 

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

 

 

At the Tribunal

On 29 March & 1 April 2011

Judgment handed down on 29 July 2011

 

 

Before

THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)

MR T HAYWOOD

MR H SINGH

 

 

 

 

MR R AHSAN APPELLANT

 

 

 

 

 

 

THE LABOUR PARTY RESPONDENT

 

 

Transcript of Proceedings

 

JUDGMENT

 

 

 

 

 

 

 

 

 

APPEARANCES

 

 

 

 

 

For the Appellant	MS AKUA REINDORF (of Counsel) Instructed by: Raghib Ahsan Solicitors 66 Hinstock Road Handsworth Birmingham B20 2EU
For the Respondent	MR OLIVER SEGAL (One of Her Majesty’s Counsel) Instructed by: Thompsons Solicitors Congress House Great Russell Street London WC1B 3LW

 

 

SUMMARY

 

RACIAL DISCRIMINATION – Compensation

 

 

 

Claimant discriminatorily prevented by Labour Party from being selected as a candidate for election to Birmingham City Council in elections in 1998, 1999 and 2000 – Suspended from party membership in March 2002 and, partly in consequence, leaves the party in 2004

 

Awarded compensation at remedy hearing for loss of allowances that he would have received as a councillor, as follows:

 

(a) from May 1998 to May 2002,  in full;

 

(b) from May 2002 to May 2004, nothing, on the basis that he had been lawfully suspended;

 

(c) from June 2004 to May 2008, 25% of the amount of the allowances that he would have received, on an assessment of the chances that he would have been selected and elected in 2004;

 

(d) from May 2008, nothing, on the basis that no such loss had been proved and that in any event it would be too remote.

 

HELD:

 

(1) Allowing the appeal in part, that the Claimant was entitled to lost allowances for the entirety of the period to June 2004 (i.e. including period (b)) because if elected in 2000 he would have served to that date and his suspension as a member of the Labour Party would not have affected his entitlement to allowances as a councillor

 

(2) Allowing the cross-appeal in part, that the Claimant was not entitled to any compensation in respect of lost allowances from June 2004 since the reason that he had not been selected or elected on that occasion or thereafter was because he had left the party and not because of his unlawful non-selection in 1998-2000 - Essa v Laing Ltd [2004] ICR 746 applied; Beart v Prison Service (no. 2) [2005] ICR 1206 distinguished

THE HONOURABLE MR JUSTICE UNDERHILL

 

INTRODUCTION

 

1.               There are before us an appeal and a cross-appeal from the decision of an Employment Tribunal sitting at Shrewsbury, chaired by Employment Judge Thompson.  The Judgment and Reasons were promulgated on 22 January 2010 (though a corrected version was sent to the parties on 30 March).  The decision was concerned with the issue of remedy following the finding of a differently-constituted Tribunal, promulgated as long ago as 23 September 2003, that the Respondent had committed three distinct acts of racial discrimination against the Claimant.  The factual and procedural background is complicated, and before we can explain the Tribunal’s decision and the issues which arise from it, it is necessary to give a chronological account of how we got here.  

 

2.            The Claimant was elected as a Labour member of Birmingham City Council at a by-election in 1991, representing the Sparkhill ward.  In May 1994 he was re-elected for the standard four-year term. 

 

3.            The Claimant sought re-adoption by the Sparkhill ward as its candidate for the May 1998 election, and in the ordinary way as a sitting councillor he could have expected to be both selected and re-elected, Sparkhill being a safe Labour ward.  However, in 1995 the National Executive Committee of the Respondent decided to suspend a number of branches in Birmingham, including Sparkhill, as a result of allegations of malpractice of which we need not give details; and as a result the selection of candidates was carried out not by the branches but by a special panel appointed for the purpose.  On 19 December 1997 the panel decided not to select the Claimant.  On 26 February 1998 he brought proceedings in the Employment Tribunal against the Labour Party under section 12 of the Race Relations Act 1976, claiming that it was a “qualifying body” for the purpose of that section and that the decision not to select him was on the grounds of his Pakistani ethnic origin.  (In fact the claim was formally against the then General Secretary, and the subsequent claims and appeals to which we refer below have in the course of reporting undergone bewildering name-changes; but nothing turns on these.) We refer to this as the first claim. 

 

4.            As a result of his non-selection the Claimant ceased to be a councillor in May 1998.  In the usual way there was a further election in the Sparkhill Ward in May 1999 (one councillor out of the three in each ward coming up for re-election in three out of the four years); and the Claimant would have wished to stand.  But for that purpose he needed to be on the list of approved candidates for Birmingham; and in July 1998 he was taken off that list because he had brought proceedings against the party.  On 18 August 1998 he brought further proceedings – the second claim – alleging that that decision constituted victimisation. 

 

5.            The next occasion on which the Claimant could in principle have stood was in May 2000.  He had by then been restored to the list of approved candidates, but again the panel appointed by the National Executive Committee did not shortlist him.  On 26 May 2000 he brought a third claim, alleging that that decision constituted racial discrimination and/or victimisation.  (There was also a complaint about a separate alleged act of discrimination on 7 April 2000, but that does not feature in this appeal and we say no more about it.) 

 

6.            There was no election in Sparkhill in May 2001.  The Claimant did put himself forward for selection in another Birmingham ward, Kingsbury; but he was not selected.

 

7.            The next election in Sparkhill was in May 2002.  At a meeting of the Sparkhill branch (now unsuspended) in November 2001 the Claimant was shortlisted for selection.  Following that meeting there was a violent incident at which one of the Claimant’s supporters is said to have drawn a knife.  Allegations were also made by a rival candidate that the Claimant and others were guilty of intimidation of party members.  The West Midland Region of the party was concerned about that incident and there was a delay in proceeding to the selection of candidates from the shortlist.  It was eventually decided at national level that selection should again be completed by an independent panel.  Before any selection was made, however, on 25 March 2002 the Claimant was formally suspended from holding office, or representing the party, pending investigation of what was described, without particularisation, as “allegations concerning violence, intimidation and serious membership abuse amounting to fraud”.  In consequence the Claimant was not available for selection as a candidate for Sparkhill in 2002.  On 21 June 2002 he brought a further claim – the fourth claim – complaining that his suspension constituted racial discrimination and/or victimisation. 

 

8.            Over the following year and more the Claimant made vigorous attempts to have the suspension lifted and/or the allegations against him formally heard and determined, but without success.  He believed that the time taken by the Respondent in pursuing its investigation was wholly unreasonable (and indeed the Tribunal subsequently so found).  Towards the end of 2003 he decided not to renew his party membership.  For present purposes, it is enough to say that his reasons were a combination of dissatisfaction at his continuing suspension, and the apparent absence of any prospect of getting it lifted, and his opposition to the decision of the then Labour Government to participate in the invasion of Iraq.  He accordingly did not pay the annual subscription which became due at the beginning of January 2004; but since he did not explicitly resign his membership formally continued.

 

9.            In the June 2004 elections the Claimant stood as a candidate in the Springfield ward (a new ward created by re-organisation, which included all or most of the old Sparkhill ward) for the People’s Justice Party, an anti-war party closely associated with Respect.  When that came to the attention of the Respondent, he was formally expelled with effect from 18 May 2004.  He has not re-joined the party since then nor taken any active role in politics.  We will refer by way of shorthand to the Claimant as having “left the party” in 2004: even though in the event it was the Respondent which expelled him, his expulsion was inevitable once he stood for another party (and his membership would in any event have come to an end in due course for non-payment of his subscription). 

 

10.         We turn back to what was happening about the Claimant’s tribunal proceedings.  The Respondent took the point in the first case that it was not a qualifying body within the meaning of section 12 of the 1976 Act.  The Tribunal decided that point in the Claimant’s favour.  The Respondent appealed but the appeal was dismissed: see Sawyer v Ahsan [1999] IRLR 609.  Although permission to appeal was granted, the Respondent did not take the appeal to the Court of Appeal.  Accordingly, that claim, now consolidated with the second and third claims, came on for hearing in the Birmingham Tribunal in the summer and autumn of 2001.  But in February 2002, before its decision could be promulgated, the Court of Appeal, in a case called Triesman v Ali (also known as Ali v McDonagh) ([2002] ICR 1026), over-ruled Sawyer v Ahsan.  The Respondent thereupon sought leave to revive the section 12 point in the first three claims.  Matters hung fire while it was seen whether Triesman v Ali would go to the House of Lords, but in November 2002 leave was refused.  Eventually, after further submissions, the Tribunal decided that its original decision on the point remained binding, even though it had now been shown to be wrong, and it proceeded to promulgate its substantive decision: that was, as we have said, on 23 September 2003.  It found in the Claimant’s favour on all three claims: that is, it found that the Respondent’s original failure to select him for the May 1998 election was on the grounds of his race; that his non-inclusion on the list of approved candidates for the 1999 election constituted victimisation; and that his non-selection in March 2000 constituted both direct racial discrimination and victimisation. 

 

11.         That decision was appealed, eventually as far as the House of Lords (see [2008] ICR 82, sub nom Watt v Ahsan); and it was not until 21 November 2007 that the appeal was eventually dismissed, the House (a) confirming that the Respondent was not a qualifying body but (b) holding that the Tribunal’s decision to the contrary could not be re-opened in the three claims in question, since the Respondent had not pursued its right of appeal at the time.  It was only at that point that the three claims were remitted for a remedy hearing, and in the light of the passage of time that had to be before a differently constituted Tribunal. 

 

12.         As regards the fourth claim, this was not presented until after the decision of the Court of Appeal in Triesman v Ali, and it was not the subject of the original decision of the Tribunal by which the Respondent was ultimately held to be bound.  Accordingly, the Claimant recognised that the claim was bound to fail and it was in due course withdrawn.  The effect of the decision that the Respondent was not a qualifying body was not that he was deprived of any remedy but only that his claim could not be pursued in the Employment Tribunal: in principle he was entitled to bring proceedings in the County Court under Part III of the 1976 Act.  But he chose not to bring any such claim in relation to the suspension in 2002.  The County Court is, of course, a jurisdiction in which the parties are at risk as to costs, and we are told that it was this which principally deterred him from proceeding. 

 

THE ISSUES BEFORE THE TRIBUNAL

 

13.         The remedy issue was heard over two days in May 2009 and a further two days in September.  The Claimant was represented by Ms Akua Reindorf of counsel, who had been involved in the claim since the early days; the Respondent was represented by Mr Oliver Segal.  Both counsel also appeared before us. 

 

14.         The Claimant’s case as to remedy, as set out in the Schedule of Loss lodged at the hearing, can be summarised as follows.  He had a conventional claim for compensation for injury to feelings with which we are not concerned on this appeal; but he also had a claim for financial loss based on the loss of the allowances to which councillors are entitled under the various regulations made under section 18 of the Local Government and Housing Act 1989.  His case was that but for the Respondent’s unlawful conduct he would have been elected as a councillor in 1998 and would have remained a City councillor for Sparkhill (or any reorganised ward) until he retired in 2021.  He accordingly claimed loss of allowances in respect of the entirety of that period.  There was also a claim for pension loss.  The total claim for financial loss was for some £863,000.  That figure is methodologically flawed in various ways; but on any view an award for loss over a twenty-year period would be very substantial indeed. 

 

15.         As eventually articulated, the Respondent’s case can be summarised as follows (leaving aside, because it does not arise on this appeal, any question of mitigation): 

 

(1)        It accepted that the effect of its unlawful acts was (subject to one point – see (3) below) to prevent the Claimant from being a councillor, and thus from earning allowances, at any time between May 1998, when he was not re-selected for Sparkhill because of the first act complained of, and June 2004, being the expiry of the four-year term which he would have enjoyed if he had been selected in May 2000.  Thus it accepted that but for its various interventions the Claimant would in practice have been both selected and elected in 1998 and 1999 and 2000 (though the latter two would only come into the equation if he had not been elected on the previous occasion).  This was no doubt a realistic concession, given the facts that the Claimant had been a Sparkhill councillor for seven years, and presumably therefore had substantial support in the local party, and that Sparkhill was a safe Labour ward.

 

(2)        However, that was the limit of the Claimant’s loss.  The effect of the unlawful acts found by the Tribunal was exhausted at the end of the four-year terms which he was in each case prevented from enjoying.  They had no continuing effect on his ability to be elected a Labour councillor thereafter.

 

(3)        On that basis the Respondent accepted the Claimant would be entitled to compensation for lost allowances up to June 2004 but no further.  However, that concession was subject to one refinement.  It was contended that since the Claimant was in fact suspended in March 2002 he could not have earned any allowances as from that point.  (It has since been conceded that the premise of the point is simply wrong – see para. 20 below; but that was not appreciated at the time.) 

 

(4) If, contrary to the Respondent’s primary case, the Claimant was entitled in principle to claim in respect of any period after June 2004, he should nevertheless receive no award in fact, or any award should be heavily discounted, on account of two factors:

 

(i) He would, or there was in any event a substantial chance that he would, have left the party prior to the 2004 elections because of his opposition to the Iraq war and could not have stood as a Labour candidate. 

 

(ii) Even if his suspension had been in due course lifted it could not be assumed that the Claimant would have been selected as a candidate for Springfield (the successor ward to Sparkhill – see para. 9 above) or that, even if he had been, he would have been elected.  Springfield was not at the material times a safe Labour ward:  in June 2004 it elected two Liberal Democrats and only one Labour councillor, and in 2007 and 2008 the Liberal Democrat candidate defeated the Labour candidate. 

 

16. Although that was, as we say, how the Respondent’s case was eventually put, that may not have been clearly understood at the end of the hearing.  Certainly it appears that there remained some uncertainty about how both parties put their cases as to “causation”.  Further written submissions were asked for directed to this issue.  Ms Reindorf’s submissions for the Claimant were lodged first, on 30 June 2009.  Mr Segal’s in response were lodged on 14 July.  In bare outline:

 

(1) Ms Reindorf reiterated the Claimant’s basic case that the loss of the entirety of his career as a councillor was attributable to the three acts of discrimination complained of.  She understood the Respondent’s case to be that (a) the Claimant’s suspension in March 2002 and/or (b) his leaving the party in 2004 “broke the chain of causation”.  As to (a), she contended that the Respondent was not entitled to rely on the suspension because it was wrongful, being both (i) an act of discrimination/victimisation contrary to the 1976 Act (as had already been alleged in the now withdrawn fourth claim – see para. 12 above) and (ii) a breach of contract (sc. under the party’s rules) because both the imposition and the subsequent maintenance of the suspension had been arbitrary and unreasonable.  Ms Reindorf referred to the decision of the Court of Appeal in Beart v Prison Service (no. 2) [2005] ICR 1206 as authority for the proposition that “a tortfeasor may not rely upon his own wrongful act to break the chain of causation”.  As to (b), the Respondent was not entitled to rely on the Claimant having left the party in 2004 because he had done so in response to those wrongful acts.

 

(2) Mr Segal’s response was that since the Respondent’s primary case was that the effects of the acts complained of were exhausted by June 2004 – see para. 15 (2) above – this was not a case of his seeking to “break the chain of causation”: there was no chain to break.  The fact that the Claimant had not become a councillor at any time after 2001 was the result of other causes.  In particular, from early 2004 it was the result of his having left the party: even if, as the Claimant alleged, that was wholly or in part because of the wrongful suspension in and following March 2002, that was a separate wrong which was neither the subject of nor consequential on the acts with which the Tribunal was concerned. 

Further written submissions were also made following the decision of the Court of Appeal in Chagger v Abbey National plc [2010] ICR 397.

 

THE TRIBUNAL’S DECISION

 

17. Following receipt of the parties’ further submissions the Tribunal discussed the case in chambers over a further four days between September and December.  Its eventual decision was, as we have said, promulgated on 22 January 2010.  It awarded the Claimant £16,000 for injury to feelings, £7,500 by way of “aggravated damages”, and £2,500 for personal injury (in the form of psychiatric damage.)  We are not concerned with those awards on this appeal.  As regards the claim for financial loss, there was no issue as to the Respondent’s liability for the period up to May 2002.  As regards the claim for losses following that date, its reasoning appears at paras. 5.10-5.15 of the Reasons.  It is in places rather confusingly expressed (para. 5.13 is particularly problematic), but it can be summarised as follows:

 

(1) The Claimant’s suspension on 25 March 2002 meant that, irrespective of the effects of the discriminatory acts which were the subject of the three claims, he would not have been selected for, or therefore elected in, the May 2002 election.  The Tribunal tacitly accepted, contrary to the Respondent’s submission, that it was relevant for it to consider whether the suspension was lawful.  It held that it was, though the terms in which it did so refer only to the question of lawfulness under the rules, i.e. whether the Respondent had a reasonable basis for initiating the disciplinary process, and there is no explicit discussion of the Claimant’s argument that it constituted discrimination.  On the basis of that finding it held that the Claimant could not claim in respect of the lost opportunity to stand in May 2002.

 

(2) It was reasonable for the suspension to continue over the following year, with the result that the Claimant would not have been selected or elected in May 2003 either, and he had no claim in respect of that lost opportunity.

 

(3) However, the Respondent had acted wrongfully by dealing with the investigation so dilatorily.  Any reasonable investigation would have concluded in time for the Claimant, if absolved, to have been available for selection in May 2004.  There was a 50% chance of his being absolved; and, if that happened, there was a 50% chance of his being selected.  If he was selected he was certain to be elected.  He had accordingly lost a 25% chance of being a councillor for Springfield from 2004 to 2008.

 

(4) In reaching that conclusion the Tribunal took no account of the possibility that the Claimant would have left the party.  It found “on the balance of probabilities” that he in fact left the party when he did because the disciplinary investigation had been so badly handled and that he would not have done so otherwise.  It thus, albeit only tacitly, rejected the contention that he would have left the party because of the Iraq war.

 

(5) It held that the Claimant would not have held any position beyond that of an ordinary councillor – which affects the quantum of the loss suffered.

 

(6) As regards the period from May 2008 onwards, it found, at para. 5.14:

 

“Based on the evidence before us, if the claimant had been selected and elected in the 2004 elections, the Tribunal considers that there would have been a 100% chance of the claimant being selected in 2008, but there is no evidence to suggest that the claimant would have been elected in 2008 or any period thereafter.  Further, and in any event, the chain of causation would be broken in accordance with the principles set out in paragraph 2.2 of these reasons.”

 

There are evidently two distinct bases in that paragraph for denying the Claimant any compensation for the period from May 2008 onwards, but they are extremely shortly stated.  The first is based on what is said to be the absence of any supporting evidence: it is not entirely clear what point the Tribunal was making, but the reference may be to the fact that the Labour candidate was defeated by a Liberal Democrat in May 2008.  As to the second, the “principles set out in paragraph 2.2” consist of several extracts from an unidentified textbook dealing with questions of remoteness generally but supervening events in particular.  It includes a quotation from paras. 32-33 of the well-known judgment of Laws LJ in Rahman v Arearose Ltd [2001] QB 351 (at p. 367), which emphasise the unsatisfactory nature of mechanistic tests of causation and the need to recognise that the ultimate question is what loss the tortfeasor should as a matter of justice be held responsible for.

 

It will be observed that that reasoning does not accord with the case advanced by either of the parties.

 

18. The upshot of the Tribunal’s reasoning was that the Claimant was entitled to recover compensation for loss of allowances as follows:

 

(a) from May 1998 to May 2002,  in full;

 

(b) from May 2002 to June 2004, nothing;

 

(c) from June 2004 to May 2008, 25% of the amount of the allowances that he would have received;

 

(d) from May 2008, nothing. 

 

The parties were left to calculate the relevant figures. 

 

THE APPEAL AND CROSS-APPEAL

 

19. We take first the claim in relation to the years 2002-2004.  The Claimant takes the point under ground 2 of the Notice of Appeal that even if the Claimant had been suspended from his membership of the Labour Party in March 2002 he would not only have remained a councillor but would have remained entitled under the applicable regulations to receive allowances.  Mr Segal confirmed that he had had this checked and accepted that it was so.  It may seem surprising that neither party spotted the point at the time, but we can see how it may have been easy to lose sight of in the maze of alternative hypotheses which they were trying to thread.  Mr Segal accepted that this undermined the Respondent’s contention summarised at para. 15 (3) above, and that his concession as recorded at para. 15 (1) in principle applied to 2002-2004 as much as to the previous years.  He further accepted that if the Claimant were to be permitted now to take this point, it would follow that the appeal had to be allowed to that extent. We have no doubt that the Claimant should indeed be allowed to take the point.  This is not in truth a question of a party seeking to introduce new evidence on some disputed point of primary fact.  Rather, both parties overlooked a point – which is more in the nature of a point of law – which neither would have disputed had they understood the true position.  In our view it would be plainly unjust if the common mistake could not be corrected.

 

20. Accordingly the only live issue concerns the Claimant’s entitlement to compensation for loss of allowances in the period from June 2004.  As to that, the Notice of Appeal raises a number of challenges to the Tribunal’s detailed reasoning, both as to the 75% discount applied in the period 2004-2008 and as to the denial of any compensation for the period thereafter.  But the Respondent raises in its Answer and Cross-Appeal the same fundamental point which it advanced before the Tribunal (see paras. 15 (2) and 16 (2) above), namely that the effects of the unlawful acts complained of came to an end as at June 2004.  If that submission is correct the issues raised in the Notice of Appeal become irrelevant.  We accordingly take that question first.

 

21. We start by setting out Mr Segal’s submission rather more fully than in the summaries above.  The effect of the acts complained of – done in 1997, 1998 and 2000 – was to prevent the Claimant being elected in 1998, 1999 and 2000 respectively.  He had accordingly suffered a “loss of earnings” (strictly, allowances) for a period of four years running from each of those dates.  But that was the totality of their effect.  None of those acts prevented him from standing at any time thereafter.  At any time from June 2004 - and in fact from May 2001, but strictly speaking that is relevant only to mitigation - the Claimant was free to seek selection and election as a Labour candidate, in Sparkhill/Springfield or elsewhere (as indeed he had done in 2001 and 2002 - see paras. 6 and 7 above).  The fact that the Claimant was not selected or elected in 2004 or thereafter was the result not of what had happened in 1997-2000 but of subsequent unconnected events.  He was not relying on those events to break the chain of causation: the chain had come to an end in any event.  If either the Respondent was in breach of its rules by suspending the Claimant in March 2002 and/or by its dilatory and unreasonable handling of the investigation which followed the suspension or the suspension and/or the conduct of the investigation constituted unlawful discrimination and/or victimisation, those were quite distinct and causally unconnected wrongs which could not attract compensation by being piggy-backed onto the acts done in 1998-2000 which were the only subject-matter of the present proceedings.  Indeed the Tribunal did not even have jurisdiction over such claims, one of which was a contractual claim and the other of which had now been held to fall outside Part II of the 1976 Act: both could only be brought in the County Court.

 

22. Ms Reindorf, both in the Answer to the Cross-Appeal and in her skeleton argument, disputed the premise of Mr Segal’s argument.  She contended that it was appropriate to apply a “but for” test and that on that basis the fact that the Claimant was not selected as a candidate, or therefore elected as a councillor, in any year after 2001 – most pertinently, from June 2004 – did indeed flow from the original acts of discrimination, which had kept him out of office in previous years.  She drew an analogy with the case of an employee on a fixed term contract who is unfairly (or indeed discriminatorily) dismissed, arguing that in such a case the claimant would be entitled to compensation for earnings not only in the term during which he was dismissed but in subsequent terms if and to the extent that there was a chance that the contract would be renewed.  She also repeated the argument based on Beart (see para. 16 (1) above): the suspension was a wrongful act and could not be relied on by the Respondent to limit its loss.  She accepted that the Tribunal had not fully accepted her case on that point, both because it had found that the Respondent had reasonable grounds for the original suspension and because it had failed to consider the discrimination claim; but she said that its reasoning was flawed and/or inadequate and the case had to be remitted.

 

23. We accept Mr Segal’s submissions.  Our reasoning is as follows.

 

24. The starting-point is that we do not accept that the issue of causation can be decided on a simple “but for” basis.  It is debatable whether, if the Claimant had not been unlawfully prevented from standing in 1998-2000, the suspension in March 2002 would have occurred: he would in fact have been seeking re-selection in that year, so there would presumably have had to be a short-listing meeting of the kind at which the alleged incident occurred, but it is of course impossible to say whether equivalent events would have occurred in an alternative universe of that kind.  But the real point is that it is well-established that a “but for” connection – so-called “cause in fact” - is not necessarily enough to found liability for the consequences of a wrongful act: we will not set out here the wealth of recent case-law on the topic (though Rahman – see para. 18 (6) above – is central).  Liability extends only to those consequences which “directly and naturally” flow from the act complained of: see, most authoritatively in this field, Essa v Laing Ltd [2004] ICR 746.  (The reasoning of the Court in that case leaves open the possibility that in factual situations different from that before it a test of reasonable foreseeability is also appropriate; but that point was not argued before us.)

 

25. On the face of it the “direct and natural” consequences of the original acts complained of are indeed limited to the loss suffered in the actual years in which the Claimant was, by reason of his non-selection, prevented from serving as a councillor.  There is obvious force in Mr Segal’s argument that as a matter of principle non-selection in year 1 does not cause or contribute to non-selection in year 5: each selection/election is a fresh exercise, where the outcome depends on the circumstances prevailing in the year in question.  That is vividly illustrated, though the point is a general one, by the facts of the present case: the Claimant did not even seek selection as a Labour candidate for June 2004, since he had left the party and was indeed standing for another party.  (Even if he left the party, as the Claimant contends, in response to wrongful/discriminatory conduct by it, we agree with Mr Segal that the Claimant cannot obtain compensation for that wrong in the present proceedings, a fortiori in circumstances where the Tribunal did not even have jurisdiction to entertain a claim in relation to it.) 

 

26. However, it is not quite as simple as that.  It seemed to us, and we put it to the parties at the hearing, that a candidate who is de-selected and as a result spends a period of time out of office will in practice be in a less good position when he seeks selection in a subsequent year.  He will not be able to present himself as the sitting candidate, and indeed it may be that he will be standing for selection against a sitting candidate, perhaps the person who replaced him. Mr Singh helpfully suggested that damage of this kind could be described as “loss of political capital”.  (In practice, the lost capital that counted would almost certainly be the Claimant’s capital with the party: except perhaps in the case of a very close contest, his prospects with the electorate would depend on his being the Labour candidate rather than on his personal history.)  In our view it was arguable that a candidate who failed to achieve selection in, say, year 5 as a result of a wrongful de-selection in year 1 could claim that that failure, and any financial consequences, were direct and natural consequences of the original wrong (though there might be formidable difficulties of proof and/or quantification).  The question then arose whether such an argument was available to the Claimant on the facts of the present case.  Ms Reindorf submitted that it was.  The point does not clearly emerge from her skeleton argument (though it might perhaps be said to be implicit in her analogy with the case of an employee on a fixed-term contract); but she developed it orally before us.  She accepted that it was not the way in which the Tribunal approached the issue of compensation for 2004-2008 and that the relevant findings had not been made; but she submitted that the case needed to be remitted for the point to be properly considered. 

 

27. Mr Segal’s answer was essentially threefold (though there is some overlap between the three).  First, he said that the point had not been put that way before the Tribunal, or indeed in the Answer to the Cross-Appeal, and should not be permitted to be advanced now.  Secondly, he said that there was in any event no evidence before the Tribunal that the Claimant had in fact suffered any such loss of political capital.  Thirdly, and in any event, he submitted that any loss of political capital that may have occurred did not in fact form any part of the reason why he was not elected in 2004.  We take those points in turn.

 

28. It seems to us fairly clear that the Claimant did not before the Tribunal advance an argument that the reason, or part of the reason, why he was not selected as a Labour candidate after 2000, and more particularly in 2004 or following, was loss of political capital.  Ms Reindorf showed us a passage in his witness statement in which he said that as a result of the “campaign” waged against him by the party at national level, culminating in his non-selection in 1998, “I was no longer able to present myself as a credible contender for the position of prospective parliamentary candidate or local councillor”; but that allegation, which in any event raises a rather different point, is directed to the issue of injury to feelings, and the “credibility problem” to which he refers appears to be with the national and regional party rather than with his local party.  In any event, the best guide to how the case was put is in the written submissions referred to at para. 16 (1) above. These do not run a “loss of political capital” case.  This is not a criticism of Ms Reindorf: as appears below, we do not believe that such a case was in truth available on the facts.

 

29. As to Mr Segal’s second point, we accept that an argument that a de-selected councillor has suffered loss of political capital cannot rest simply on assertion but requires to be proved.  No doubt in many cases it will be fairly obvious, but it depends on the circumstances.  Sometimes past de-selection as a result of intervention at national or regional level will positively increase a candidate’s popularity with his local party.  Mr Segal pointed out that when the Claimant put himself forward for selection in Sparkhill in May 2002 he reached the shortlist – though of course the party’s intervention means that we cannot know whether he would eventually have been selected.  We were referred to no evidence which would in our judgment have justified the Tribunal, had the point been raised, in concluding that the Claimant’s political capital, in the relevant sense, had as at June 2004 been materially diminished by his non-selection in 1998, 1999 and 2000. 

 

30. Whether we are right or wrong on the previous two points, we regard Mr Segal’s third point as decisive.  The reason why the Claimant was not elected as a Labour councillor in June 2004 was not because any loss of political capital had led to his local party not electing him but because he had left the party.  He cannot claim compensation for the consequences of damage which might have caused loss in different circumstances but did not do so in the events which actually happened. 

 

31. Ms Reindorf sought to counter that last point by reference to Beart (above).  In that case the Prison Service had unlawfully discriminated against Mrs Beart by failing to make reasonable adjustments for a depressive illness from which she was suffering (caused or contributed to by its own conduct); and had subsequently unfairly dismissed her.  Its discriminatory treatment had made her illness worse and had rendered her unable, for the foreseeable future, to work and so to earn.  The Prison Service sought to limit Mrs Beart’s claim to compensation for loss of earnings as a result of the discrimination by praying in aid the fact that she had been dismissed: that, it was said, was a supervening act which broke the chain of causation.  (She would of course recover compensation for the dismissal, but the importance of the point was that any such award would be subject to the statutory cap, unlike any award for the consequences of the discrimination.)  The Court of Appeal rejected that contention: its reasoning appears in the leading judgment of Rix LJ at paras. 26-40 (pp. 1216-1221).  Among other things, Rix LJ referred to the principle enunciated by Waller LJ in Normans Bay Ltd v Coudert Brothers [2004] EWCA Civ 215 (see para. 46) that a defendant may not rely on a wrong which he himself has committed in order to reduce the damages which would otherwise flow from his tort.  Ms Reindorf argued that, like the Prison Service, the Respondent was seeking to rely on its own wrong, namely the discriminatory conduct which had led to the Claimant leaving the party; and he was entitled to have the case remitted to the Tribunal for that issue to be decided.

 

32. One difficulty about drawing an analogy between Beart and the present case is that the alleged supervening act in the former, namely Mrs Beart’s dismissal, had been explicitly held by the tribunal to be unfair (and thus in the relevant sense wrongful), whereas here not only has no finding been made that the suspension and/or investigation constituted unlawful discrimination but the Tribunal had no jurisdiction to make such a finding, at least as the basis of an award. It could, however, be said that the Tribunal would be entitled to make a collateral finding to that effect if it was necessary to do so in order to resolve an issue of compensation which was properly before it.  But even if that is so we do not think that the two cases are on all fours.  There was no question that Mrs Beart had suffered a loss of earnings from the prior acts of discrimination: she had been rendered too ill to work.  It is, with respect, entirely understandable that the Court of Appeal was not prepared to regard that loss as notionally trumped by her subsequent dismissal.  But the Claimant’s potential claim for the consequences of the loss of political capital, i.e. damage to his chances of being selected by his party as a candidate, is for a loss which never in fact eventuated. 

 

33. Once that point is reached, the cross-appeal must succeed.  The post-June 2004 claim thus falls away in its entirety.  In those circumstances we need not consider the Claimant’s challenges to the Tribunal’s reasoning in relation to that claim.

 

CONCLUSION

 

34. The cross-appeal is allowed, with the result that the Tribunal’s award in relation to the period June 2004 to June 2008 is quashed.  The appeal is dismissed, save in respect of the period from May 2002 to June 2004, in respect of which the Claimant is entitled to be awarded compensation for the full amount of his lost allowances.  The case is remitted to the same Tribunal (unless that is no longer practicable) for calculation of the latter amount in the event, which we imagine is unlikely, that the parties are unable to agree.

 

35. We are grateful to both counsel for their thoughtful and fair submissions.