Sheriff v Klyne Tugs (Lowestoft) Ltd

An employment tribunal may award compensation for physical or psychiatric injury caused by the statutory tort of racial discrimination. Compensation is not confined to pecuniary loss or injury to feelings. Injury to feelings and personal injury remain distinct heads of damage, and causation must be proved.

A claimant who could have sought full compensation in earlier tribunal proceedings may be prevented from pursuing substantially the same subject matter in a later negligence action. A different cause of action does not avoid the abuse-of-process principle. Special circumstances must adequately explain why the later claim was omitted from the earlier proceedings.

The claimant alleged that racial harassment during his employment caused anxiety, depression and post-traumatic stress disorder. He commenced proceedings under the Race Relations Act 1976, but compromised them for £4,000 under an agreement settling all employment-related claims within the tribunal's jurisdiction.

He later brought a County Court negligence action based on substantially the same conduct and psychiatric injury. The recorder struck out that action as an abuse of process. The appeal concerned whether an employment tribunal could compensate personal injury caused by racial discrimination, whether the negligence claim fell within the settlement, and whether the later action was independently barred by the rule against relitigating matters which could have been advanced earlier.

1. Appeal dismissed unanimously. Lord Justice Stuart-Smith, with whom Mr Justice Sumner agreed, held that both an employment tribunal under section 56 and a county court under section 57 of the Race Relations Act 1976 have jurisdiction to award damages for physical or psychiatric injury caused by the statutory tort of racial discrimination.

2. The statutory language required compensation for the loss and damage actually sustained as a result of the discrimination. Section 57(4) added compensation for injury to feelings, which was not ordinarily recoverable at common law. It did not restrict recovery under other heads. Injury to feelings and injury to physical or psychiatric health were distinct. The recorder had erred by conflating them.

3. The former statutory cap, the short limitation periods and the tribunal's lack of specialist medical expertise could not override the statutory language. The exclusion of personal-injury damages from the extended contractual jurisdiction under the Industrial Tribunals Act 1996 was immaterial. The present question concerned injury caused by the separate statutory tort of discrimination. A claimant seeking such compensation had to establish causation and might require medical evidence.

4. The later negligence action fell within the settlement agreement. It sought compensation for injury arising from the employment and caused by conduct over which the employment tribunal had jurisdiction. The fact that negligence was a different cause of action, requiring reasonable foreseeability of psychiatric injury as well as causation, did not take the claim outside the agreement.

5. The action was also an abuse of process under Henderson v Henderson (1843) 3 Hare 100. Although strict cause-of-action estoppel did not apply, substantially the same alleged conduct lay at the heart of both proceedings. The claimant could have advanced his entire compensation claim before the tribunal and was required to bring forward his whole case.

6. Special circumstances must adequately explain why the omitted claim was not made earlier. Differences in limitation, costs, procedure, remedies and institutional expertise were inherent in the two jurisdictions and were insufficient. A later-emerging medical condition might provide an explanation, but this claimant's continuing anxiety and depression were already apparent before the tribunal proceedings were settled.

1. Court of Appeal: Dismissed the claimant's appeal and upheld the striking out of the County Court action as an abuse of process. Permission to appeal to the House of Lords was refused.
2. Norwich County Court: Mr Recorder Crome struck out the personal-injury action because it breached the earlier settlement and constituted an abuse of process.
3. Employment Tribunal: Dismissed the racial-discrimination application on its withdrawal after a settlement under which the respondent paid £4,000 without admitting liability.