Apportionment of damages in stress claim

The Defendant appealed against a first instance decision finding it liable for 50 percent of damages to the Claimant for psychiatric injury caused by stress in the course of her employment. The Claimant began work for the Defendant in 1991, initially as a secretary. She was gradually promoted and by 2000 had become a management accountant.

In August 2000 she was promoted to the position of Finance and Regulatory Manager, a position she found very demanding. In August 2001 she moved to a similar job closer to home. At that time she was undergoing counselling related to irritable bowel syndrome and the Defendant was aware of this. She alleged that before she suffered a breakdown there had been warning signs that she was not coping with some aspects of her job and that she was "at the end of her tether". In April 2002 she expressly warned her employers about this and asked to take six months off but no action was taken. She carried on and by June 2002 her health had broken down. The Defendant argued that there had been no warning signs of an impending breakdown in health and no express warning from the Claimant. The guidance given in the leading Court of Appeal case on stress, Hatton v Sutherland [2002] was considered.

Held

The Claimant had passed the key threshold test that the Defendant could have reasonably foreseen the problem. The Defendant had failed to take the steps in April 2002 which were reasonable in the circumstances, which would have been to refer the Claimant to Occupational Health and send her home. It was clear that this breach of duty had made a material contribution to the severe illness which began in June 2002. Failing to take earlier action had tipped the Claimant over from suffering from stress into complete breakdown. The Court of Appeal was not asked to consider the issue of apportionment but commented on an obiter basis that it is inappropriate simply to apportion damages across the board in cases of psychiatric injury where there are multiple causes of the breakdown. The comments supporting this approach in Hatton were obiter only and the House of Lords in Barber v Somerset County Council [2004] declined to endorse this approach. However, ultimately the result of a different approach might well not have been very different.

Comment

This case follows the clear guidance set out by the Court of Appeal in Hatton v Sutherland which set out the core principles on which a claim for compensation for a stress-related injury can be brought by an employee, and the basis on which it can be defended. The key "threshold test" in stress claims has to be whether the employer could have reasonably foreseen the problem. In Dickins, given that the Defendant was aware that the Claimant was undergoing counselling and that she made her concerns clear, it is perhaps not surprising that a finding of liability was made. However, the case may indicate that the Hatton v Sutherland hurdles are easier for a claimant to cross than some may have thought. Also, offering a confidential counselling service is not on its own necessarily going to provide a defence.

The comments made in relation to apportionment are of interest. Whilst it did not form part of their formal judgment, the Court of Appeal made it clear that they did not consider it appropriate to apportion damages at 50 percent as the Judge had done at first instance. The Court considered that stress was indivisible between tortious and non tortious causes. However, the Court did indicate that reductions to damages could be made in other ways - for example the Defendant could have argued that the Claimant might in any event have suffered a breakdown at some time in the future and would then have suffered some loss of earnings, or that other factors had prolonged her illness so the Defendant was only liable for a reduced period of absence from work. Once these reductions were made a similar result might be achieved. Defendants and their insurers should bear this in mind when approaching current and future claims, and prepare their cases accordingly.