Lindsay Anne McNicholas v Care And Learning Alliance & Anor

An intervening act breaks the chain of causation only where it is the sole effective cause of the claimant’s loss. A wrongdoer’s conduct need not be the only factual cause, but it remains legally effective where the third party’s act is a natural and reasonable consequence of that wrongdoing.

A regulatory body’s decision to investigate a referral will not ordinarily be an independent supervening cause where the referral was made without proper cause and for an improper retaliatory purpose. The competence of the regulator’s decision, and uncertainty about the eventual outcome of its proceedings, do not by themselves displace the wrongdoer’s liability for consequential loss.

The appellant, a teacher employed by the respondents, brought whistleblowing detriment claims after making protected disclosures about nursery practices. The Employment Tribunal found that both respondents had subjected her to detriments, including a referral to the General Teaching Council for Scotland concerning her fitness to teach.

The Tribunal found that the referral was retaliatory, was not made in good faith, probably lacked genuine substance, and was intended to discredit the appellant and appease Highland Council. At the remedies stage, however, it treated the GTCS decision in February 2019 to investigate as a novus actus interveniens. It limited compensation accordingly and refused certain further heads of loss and expenses.

The appellant appealed on the basis that the GTCS decision did not break causation. The respondents conceded that issues concerning an ACAS uplift and tax grossing-up required remission.

1. Appeal allowed. The Employment Tribunal erred in law in holding that the GTCS decision to investigate the respondents’ referral was a novus actus interveniens. On the facts found, that conclusion was not open to it.

2. The rationale of an intervening-act rule is fairness: a wrongdoer should not be liable for loss caused by an independent supervening event for which it is not responsible. But an intervening act must be the sole effective cause of loss. The original wrongdoing may remain an effective legal cause even if it is not the sole factual cause.

3. The GTCS decision to investigate was not an independent supervening cause. It was a natural and reasonable consequence of the respondents’ referral. The referral therefore remained an effective cause of the appellant’s loss.

4. The remedies decision was also inconsistent with the liability findings. The respondents had jointly made the referral without good faith, on allegations probably lacking genuine substance, in retaliation for protected disclosures, and to discredit the appellant while appeasing Highland Council. Those findings meant that the referral was malicious in law, having been made without proper cause and for improper purposes.

5. The Tribunal had been distracted by uncertainty about the ultimate GTCS outcome and by the competence of its decision to investigate. Neither matter supplied a relevant or sufficient basis to conclude that causation ended in February 2019.

6. Paragraph (Three) of the remedies judgment of 29 November 2021 was set aside. The case was remitted to the same Tribunal to reassess future loss, injury to feelings and psychiatric injury; reconsider pension loss, GTCS legal costs and liability-hearing expenses; and determine ACAS uplift and tax grossing-up.

• Employment Appeal Tribunal: Allowed the appeal and remitted the remedy issues to the same Employment Tribunal: [2023] EAT 127.

• Employment Tribunal: Its liability judgment found protected disclosures and retaliatory detriments. Its remedies judgment of 29 November 2021 treated the GTCS investigation decision as a novus actus interveniens and limited compensation.