Saiger v North Cumbria Acute Hospitals NHS Trust

Future loss in discrimination and unfair dismissal cases is a predictive assessment. The tribunal must make the best overall estimate it can of the claimant’s chances, including the prospect and timing of alternative employment or promotion. It is not confined to an all-or-nothing balance-of-probabilities approach. A broad-brush assessment is permissible if the essential reasoning and principal factors are clear.

Tribunals may use their industrial knowledge and experience, including knowledge of the labour market. Exemplary damages are punitive, not compensatory, and are exceptional. A tribunal must address whether compensatory damages are inadequate to punish the respondent. Costs remain discretionary, even where unreasonable or vexatious conduct may arguably have occurred.

The claimant had succeeded before an Employment Tribunal in claims of race discrimination, victimisation and unfair dismissal. At the remedies hearing, the tribunal awarded compensation for past and future earnings, injury to feelings and aggravated damages, but refused exemplary damages and a costs order.

She appealed on three grounds: that the future-loss assessment was too low and insufficiently reasoned; that exemplary damages should have been awarded; and that the tribunal had wrongly refused costs. The Employment Appeal Tribunal considered the principles governing predictive compensation assessments, exemplary damages and costs discretion.

1. Future loss. The appeal on future loss was dismissed. Future earnings and promotion losses are inherently uncertain and must be assessed by estimating the relevant chances, rather than choosing between complete success and complete failure by applying the balance of probabilities. The tribunal was entitled to make a broad-brush assessment, provided its essential reasoning and principal factors were clear.
2. The relevant factors included the claimant’s employment record after dismissal, qualifications, experience, motivation, prospects of promotion, family-location constraints, the size of the National Health Service and the likely availability of suitable posts. The tribunal was entitled to use its industrial knowledge and experience of the local labour market. Its reasons were sufficient, and the challenged matters were not irrelevant. The allegation of blacklisting did not require separate determination, particularly in light of the guidance in [2009] EWCA Civ 1202.
3. Exemplary damages. The appeal was allowed on this ground. Exemplary damages are intended to punish, mark disapproval and deter, not to compensate. The tribunal’s reasons appeared to treat the adequacy of compensation as determinative and did not explain why exemplary damages were inappropriate. Given the tribunal’s serious findings, the Employment Appeal Tribunal could not conclude that such an award was necessarily unavailable. The issue therefore required reconsideration.
4. Costs. The costs appeal was dismissed. Under rule 40, the tribunal had to consider whether the relevant conduct occurred but retained a discretion whether a costs order was appropriate. The tribunal had applied the correct legal principles, had considered the parties’ conduct and was best placed to evaluate it. No error of law was established.
5. The appeal was dismissed on grounds (1) and (3), allowed on ground (2), and the pension issue remained to be heard.

• Employment Tribunal: Liability findings concluded on 20 March 2009. At a remedies hearing on 1 March 2010, corrected on 10 May 2010, the tribunal awarded compensation but refused exemplary damages and costs.
• Employment Appeal Tribunal: Appeal allowed in relation to exemplary damages; appeals concerning future loss and costs dismissed.