Malcolm v Dundee City Council

Where unlawful discrimination has made a material contribution to psychiatric illness with divisible causes, compensation may be apportioned so that the respondent is liable only for the loss attributable to its unlawful conduct. A vulnerable personality does not itself justify a reduction, but actual pre-existing or other contributing causes may do so.

A tribunal must give cogent reasons when refusing wage loss during study. Attendance at university does not alone establish that a claimant suffered no loss where accepted medical evidence shows fitness to study but unfitness for paid work. Failure to address a material submission which could alter the award is an error of law. Future loss may be limited where supported by medical and other evidence, notwithstanding the necessarily predictive nature of the assessment.

The claimant had established that she was sexually harassed by employees for whose acts the respondent was responsible in 2001. Following proceedings in the Court of Session, the Employment Tribunal assessed compensation. It awarded compensation for injury to feelings, psychiatric injury and limited past earnings loss. It apportioned the psychiatric condition equally between the harassment and other causes, declined earnings loss during the claimant’s university studies, and made no future earnings award after 2013. It left pension loss for agreement.

The claimant appealed the apportionment, the treatment of earnings loss and pension loss. The respondent cross-appealed on the basis that there was insufficient evidence of the employment and earnings the claimant would otherwise have had. The central issues were whether the illness and loss could be apportioned, and whether the Tribunal had lawfully assessed wage and pension loss.

1. Appeal allowed in part. The Employment Tribunal’s 50% apportionment of the psychiatric illness and consequential loss was upheld. Applying Thaine and the approach stated by Hale LJ in Hatton, a respondent whose unlawful conduct materially contributes to harm with several divisible causes is liable only for the contribution attributable to that conduct. The evidence entitled the Tribunal to find that the claimant had serious psychiatric illness before the harassment and that other events actually contributed to her inability to work.

2. The eggshell-skull principle did not preclude apportionment. The case was not one in which the claimant’s vulnerability alone made the respondent liable for the full consequences. The Tribunal had found actual independent causes of illness. The foreseeability authority referred to as The Wagon Mound did not assist because psychiatric injury from the abuse was foreseeable and foreseeability was not in issue.

3. The Tribunal erred in refusing wage loss for the period before and during university study without cogent reasons. The issue was factual. On the accepted, unusual medical evidence, the claimant was unfit for paid work but fit to study. University attendance therefore did not, without more, show that she had sustained no loss. The Tribunal also failed to address material submissions concerning reduced-hours work at Asda and the evidence of alternative employment. A tribunal need not mention every evidential detail, but it errs in law if it gives no reasons for a submission which, if accepted, could alter the outcome.

4. The Tribunal was entitled to calculate future wage loss only to 2013. Its prediction was supported by medical evidence and the claimant’s evidence that the end of the litigation would assist recovery. Loss to state pension age was not established.

5. The case was remitted to the same Employment Tribunal to determine wage and pension loss. It must find what work the claimant would have undertaken after her 2002 resignation had she been fit, the likely earnings and pensionability of that work, and the resulting loss. The determinations on apportionment and the 2013 end-date were preserved.

• Employment Appeal Tribunal: appeal and cross-appeal from the Employment Tribunal’s compensation decision, reasons sent on 31 May 2013. The appeal was allowed in part and the assessment of wage and pension loss was remitted.
• Court of Session: held that the sexual-harassment claim was not time-barred and remitted compensation to the Employment Tribunal.
• Employment Tribunal: the earlier Tribunal had dismissed the claim as time-barred in written reasons dated 5 December 2006.