Factual and Procedural Background
The Appellant, a solicitor, was employed by Company A, which subsequently merged to form Company B. The Appellant worked under the management of the Second Respondent, an individual who was a partner in Company B at the relevant time. After the termination of her employment, the Appellant brought claims of unfair dismissal and sex discrimination against Company A, which were settled.
In March 2008, a prospective employer, Company C, offered the Appellant a job subject to satisfactory references. The Appellant provided references including one from the Second Respondent. The reference given was qualified and included negative remarks about the Appellant's relationships at Company A and referenced her prior employment tribunal proceedings against Company A. This reference was found by the Employment Tribunal to be damaging and motivated by victimisation contrary to section 20A of the Sex Discrimination Act 1975.
Company C, after receiving the reference and related information, altered the terms of the job offer to include a six-month probationary period. Due to miscommunications and unwillingness by both parties to accept the revised terms, the job offer was effectively withdrawn. The Tribunal found that the withdrawal was influenced by the Appellant's prior protected act of bringing sex discrimination proceedings, constituting unlawful victimisation under section 6(1) of the 1975 Act.
The Appellant requested and received a copy of the reference from Company B and subsequently raised a grievance, during which inappropriate conduct by both parties was noted. The Appellant settled with Company C for a sum believed to include compensation for loss of earnings. The Employment Tribunal awarded the Appellant £7,500 plus interest for injury to feelings but made no award for loss of earnings. The Appellant appealed the amount and the exclusion of loss of earnings compensation.
Legal Issues Presented
- Whether the Employment Tribunal erred in declining to award compensation for loss of earnings resulting from the withdrawal of the job offer by Company C.
- Whether the amount awarded for injury to feelings was appropriate and properly assessed.
Arguments of the Parties
Appellant's Arguments
- The Tribunal should have awarded compensation for loss of earnings caused by the withdrawal of the job offer, as the withdrawal was a direct consequence of the unlawful reference and victimisation.
- The compensation for injury to feelings was insufficient and did not properly account for inflation since the relevant guidelines were established.
- The Tribunal erred in suggesting that the award should be reduced to reflect the Appellant's conduct during the grievance meeting, which the Appellant disavowed relying on for compensation purposes.
Respondents' Arguments
- The withdrawal of the job offer by Company C constituted a novus actus interveniens (a new intervening act) which broke the chain of causation, relieving the Respondents of liability for loss of earnings.
- The award for injury to feelings was appropriate and within the relevant guideline band.
- The Tribunal's approach to apportionment of loss between concurrent tortfeasors was proper and agreed upon by the parties.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Jameson v Central Electricity Generating Board [2000] 1 AC 455 |
Whether settlement with one party precludes recovery from others. |
Rejected as a bar to recovery from remaining Respondents due to consecutive torts concept. |
| Essa v Laing Ltd [2004] ICR 746 |
Discrimination compensation governed by common law tort principles. |
Applied to confirm approach to awarding damages for discrimination. |
| Kuwait Airways Corporation v Iraq Airways Company [2002] 2 AC 883 |
Modern approach to remoteness and causation in damages claims. |
Used to explain the difference between factual causation and legal remoteness. |
| Rahman v Arearose Ltd [2001] QB 351 |
Novus actus interveniens and remoteness in tort law. |
Referenced for principles on causation and remoteness. |
| McManus v Beckham [2002] 1 WLR 2982 |
Remoteness of damage in defamation cases and novus actus interveniens. |
Supported the evolving approach to remoteness and causation. |
| Home Office v Dorset Yacht Co Ltd [1970] AC 1004 |
Liability for acts of third parties, including criminal acts. |
Illustrated that subsequent wrongful acts do not necessarily break causation chain. |
| Vicars v Wilcocks (1806) 8 East 1 |
Historical doctrine on remoteness and subsequent wrongful acts. |
Discredited doctrine; the Court declined to rely on it. |
| Everett v Griffiths [1920] 3 KB 163 |
Commentary on remoteness and causation in tort. |
Supported modern views on remoteness and liability. |
| Vento v Chief Constable of West Yorkshire Police [2003] ICR 318 |
Guidance on compensation for injury to feelings in discrimination cases. |
Referred to for assessment of injury to feelings damages. |
| Da'Bell v National Society for Prevention of Cruelty to Children [2010] IRLR 19 |
Adjustment of Vento bands for inflation. |
Noted as a reminder for tribunals to consider inflation in awards. |
| Barker v Corus UK Ltd [2006] 2 AC 572 |
Apportionment of liability between concurrent tortfeasors. |
Referenced for discussion on apportionment in concurrent torts. |
| Way v Crouch [2005] ICR 1362 |
Apportionment of damages in tort claims. |
Considered for guidance on apportionment but found not directly applicable. |
| Chubb Fire Ltd v. Vicar of Spalding [2010] EWCA Civ 981 |
Relevant to application of section 20A of the Sex Discrimination Act 1975. |
Referenced in notes regarding legal framework for victimisation claims. |
| Spencer v Wincanton Holdings Ltd [2009] EWCA Civ 1404 |
Modern authority on remoteness and causation principles. |
Cited for the key passage on remoteness of damage. |
| HM Prison Service v Salmon [2001] IRLR 425 |
Doubts on apportionment principles in tort claims. |
Referenced for cautionary note on apportionment of damages. |
| Nagarajan v London Regional Transport [1999] ICR 877 |
Definition of motivation in discrimination law. |
Clarified terminology on respondent's mental processes. |
Court's Reasoning and Analysis
The Court analysed the issue of loss of earnings compensation by applying principles of causation and remoteness in tort law. It recognised that the Appellant suffered loss due to two consecutive torts: the Respondents' unlawful victimising reference and Company C's withdrawal of the job offer. The Tribunal had treated Company C's withdrawal as a novus actus interveniens that broke the causal chain, absolving the Respondents of liability for loss of earnings.
The Court rejected this reasoning, emphasizing that the withdrawal by Company C was a foreseeable and natural consequence of the damaging reference. The purpose of a job reference is to inform prospective employers, and a negative reference is likely to influence their hiring decisions. The Court held that the Respondents should remain liable for the loss of earnings caused by the use of the reference, as the subsequent act by Company C did not break the chain of causation.
The Court further explained that the fact that Company C acted wrongfully and illegally in withdrawing the offer does not absolve the original wrongdoers. The Court drew on established case law to clarify that liability should extend to the foreseeable consequences of the original wrongful act, including the impact on employment opportunities.
Regarding injury to feelings, the Court found no error in the Tribunal's assessment or quantum awarded. It acknowledged the Tribunal's reference to the Vento guidelines and its consideration of the Appellant's conduct during the grievance meeting as a relevant factor.
The Court also addressed procedural aspects, concluding that the matter of loss of earnings should be remitted to the original Employment Tribunal for reconsideration, given its familiarity with the case. The Court noted the parties' agreement on the approach to apportionment of liability between concurrent tortfeasors but expressed some reservations about its correctness in principle.
Holding and Implications
The Court ALLOWED IN PART the Appellant's appeal.
Holding: The Court held that the Employment Tribunal erred in law by concluding that the Respondents were not liable for loss of earnings due to the withdrawal of the job offer by Company C. The case was remitted to the Employment Tribunal for reconsideration of the loss of earnings claim. The appeal against the quantum of the award for injury to feelings was dismissed.
Implications: This decision clarifies that in discrimination victimisation claims involving damaging references, the original wrongdoer can be held liable for consequential loss of earnings caused by a prospective employer's withdrawal of a job offer, even if that withdrawal is itself unlawful and constitutes a separate tort. The ruling reinforces the foreseeability and remoteness principles in tort law applied to discrimination cases and underscores the importance of assessing damages in light of the entire causal chain. No new precedent was established beyond the application of existing principles, but the ruling ensures that claimants are not unfairly denied compensation for loss of earnings due to successive tortious acts by different parties.