Laing Ltd. v Essa

Compensation for unlawful race discrimination under the Race Relations Act 1976 does not require the claimant to prove that psychiatric injury was reasonably foreseeable. A claimant may recover loss which flows directly and naturally from the discriminatory wrong, provided causation is proved and subject to intervening cause and mitigation.

Recognisable psychiatric illness is compensable in addition to injury to feelings under section 57(4). The heads are distinct but may overlap. In any event, if foreseeability were required, the relevant inquiry would be the kind of damage rather than the extent of the claimant’s reaction.

The respondent, a construction worker, was subjected by the appellant’s foreman to a grossly offensive racist remark. An Employment Tribunal found unlawful race discrimination and awarded compensation for financial loss and injury to feelings. It limited loss of earnings because it considered that the extent of the respondent’s reaction and subsequent inability to seek work had not been reasonably foreseeable.

The Employment Appeal Tribunal allowed the respondent’s appeal and remitted compensation for reconsideration, including the causal connection between the racial abuse and any psychiatric illness, intervening cause and mitigation. The appellant appealed. The central issue was whether compensation for psychiatric injury under the Race Relations Act 1976 required reasonable foreseeability of that type of loss.

1. Appeal dismissed by a majority. Pill LJ, with whom Clarke LJ agreed, upheld the Employment Appeal Tribunal’s remittal. The Employment Tribunal had misdirected itself by treating the unforeseeable extent of the respondent’s reaction as decisive.

2. Under sections 56 and 57 of the Race Relations Act 1976, the statutory tort did not require a separate threshold of reasonable foreseeability of psychiatric injury. In the context of deliberate racial abuse directed at the victim, the proper limit was whether the loss arose directly and naturally from the wrong. Causation remained essential, and the Tribunal had to consider any intervening act and mitigation.

3. The need for an effective remedy reinforced that construction. The majority followed the approach in Sheriff v Klyne Tugs Lowestoft Ltd [1999] ICR 1170. The Court distinguished the foreseeability rules applicable to negligence and nuisance, whose purposes and duties differed from this statutory wrong.

4. A claimant may recover for a recognisable psychiatric illness. Section 57(4) also permits compensation for injury to feelings. Those heads are distinct, but may overlap in practice, as recognised in Vento v The Chief Constable of West Yorkshire Police [2003] ICR 318.

5. If foreseeability had been required, it would have been enough that injury to feelings was foreseeable. The relevant question would concern the kind of damage, not the severity of the eventual reaction.

6. Rix LJ dissented on the legal test. He would have required reasonable foreseeability as a rule of remoteness, while agreeing that the remittal should stand because an extreme reaction did not itself defeat a claim.

• Court of Appeal (Civil Division) Dismissed the employer’s appeal and upheld the remittal of compensation issues in [2004] EWCA Civ 2.
• Employment Appeal Tribunal On 17 February 2003, allowed the employee’s appeal on compensation and remitted the matter to the Employment Tribunal to determine causation, any intervening cause and mitigation.
• Employment Tribunal, Cardiff Found race discrimination established and, in a decision sent on 30 March 2001, awarded compensation for financial loss and injury to feelings.