The Court of Appeal in the recent decision of BAE Systems (Operations) Ltd v Konczak, provided important guidance on how to assess compensation in workplace stress claims where a claimant’s injury has multiple causes.
The facts of the case were that the claimant worked as a secretary for BAE from 1998 until her dismissal in 2007. During this time she experienced a series of stressful events including bullying and sexual harassment whilst working as part of the liaison team working for the Royal Saudi Air Force (RSAF) who were working with the defendant employer in this case. In January 2005 she was removed from this role and moved to the defendant’s commercial team. The claimant was unhappy in this role as she felt it did not constitute a ‘proper job’. In March 2006 she applied for a job back with the RSAF but for a different team. This then prompted a proposal from her line manager that she should return to the same team that had allegedly subjected her to the instances of bullying and sexual harassment. It was at this point that her manager stated that women take things more emotionally than men, while men tend to forget things and move on. This was known throughout the proceedings as the ‘Dent Comment’ and was one of the alleged instances of sexual discrimination.
Subsequent to this comment, the claimant did not return to work the following day and was certified by her GP as unfit to work on account of work-related stress. She was eventually dismissed on 23 July 2007. The reason for the dismissal was said to be ‘it not being appropriate for the claimant to return to her old job in the commercial department and …there being no other positions for her’.
At first instance, the Employment Tribunal held that the ‘Dent Comment’ was an act of sex discrimination and agreed that the claimant’s dismissal was discriminatory and that as a result BAE were responsible for the claimant’s injury and all the losses incurred as a result. The claimant was awarded an amount of £360,000.
BAE argued that it should not be held liable in full for the injury caused to the claimant because of the other instances of harassment/bullying which were brought to light and which BAE were not legally liable for e.g. the sexual harassment suffered whilst working for the RSAF. It was argued by the defendant that these instances all contributed to the claimant’s injury and as such there should be an objective apportionment of causative responsibility.
In this argument they relied on the decision of Keith J in the Employment Appeal Tribunal in Thaine v London School of Economics  UKEAT 0144/10 in which it was held:
‘Where an employee’s psychiatric ill-health has been caused by a combination of factors, some of which amount to unlawful discrimination for which the employer is liable, but others which were not the legal responsibility of the employer, it is open to an Employment Tribunal to discount the employee’s compensation by such percentage as reflects its apportionment of that responsibility’.
The Tribunal rejected this argument and found that:
‘The Tribunal takes the view that the claimant’s condition was “normal” prior to the end of July 2004. We have not received any evidence of any events outside of the claimant’s working life that in our judgment might have led to any change in her psychiatric health from July 2004 until the comment made by Mr Dent on 24 April 2006 and so we find that it was only matters arising in the workplace that caused any deterioration in the claimant’s mental health. On the basis that these matters occurred in the workplace, they are the vicarious responsibility of the respondent and so in this particular case we do not find that there were any causes which were not the legal responsibility of the employer that led to any change in the claimant’s mental state from July 2004 to April 2006’.
The Tribunal went on to say:
‘In our judgment, set out above when answering question 1, we have concluded that the claimant’s life events outside the workplace did not cause or contribute to her current condition and so we reject the respondent’s contention that the claimant’s unfitness for work has been caused by an underlying medical recurrent condition and/or the claimant’s part history of depression’.
The defendant then appealed to the Employment Appeal Tribunal which remitted it back to the ET to reconsider. On reconsideration they concluded:
‘On the basis of the evidence heard, the facts found, the views of the psychiatrists and the submissions made to us, we conclude that the psychiatric illness suffered by the claimant from 26 April 2006 is not capable of being divided between the sex discrimination found by the Cook Tribunal to have occurred on that day and the 15 other alleged incidents because the claimant’s injury was triggered by the final straw of the Dent comment…We believe that we are supported in this finding by the view of Dr Jarman that it would not be possible scientifically to give a measurement in percentage terms and the lack of evidence from Dr Craig as to causation, given his comment as to perpetuation rather than causation’.
The defendant appealed to the Court of Appeal on the grounds that the Tribunal had failed to adopt the correct approach to causation i.e. that it had failed to adopt the correct test as outlined in Rahman i.e. is there a rational basis for an objective apportionment of causative responsibility for the injury.
Giving judgment, Lord Justice Underhill usefully provided an overview of the law in this area. He began by outlining the statement of law in Rahman v Arearose Ltd  EWCA Civ 190, in which two essential propositions were made:
- At common law wrongdoers who together cause ‘a single indivisible injury’ are each liable to compensate the claimant for the whole of the injury suffered.
- An injury is to be regarded as single and indivisible ‘where there is simply no rational basis for an objective apportionment of causative responsibility for it’.
Then, considering these principles specifically in relation to claims for psychiatric injury, the court turned their attention to the authority of Sutherland v Hatton  EWCA Civ 76 in which Hale LJ put forward some practical propositions numbered 15 and 16. Proposition 15 states:
‘Where the harm suffered has more than one cause, the employer should only pay for that proportion of the harm suffered which is attributable to his wrongdoing, unless the harm is truly indivisible. It is for the defendant to raise the question of apportionment…’.
Proposition 16 states:
‘The assessment of damages will take account of any pre-existing disorder or vulnerability and of the chance that the claimant would have succumbed to a stress related disorder in any event’.
Underhill LJ was quick to point out the distinction to be made between these two points, he stated at para 62;
‘The distinction between propositions 15 and 16 needs to be appreciated. Proposition 15 is applicable to cases where the injury in question is regarded as having multiple causes, one or more of which are, or are attributable to, the wrongful acts of the employer but one or more of which are not. Proposition 16 applies where the claimant has a pre-existing vulnerability which is not treated as a cause in itself but which might have led to a similar injury (for which the employer would not have been responsible) even if the wrong had not been committed. At the level of deep theory the distinction between pre-existing vulnerability and concurrent cause may be debatable, and even if it is legitimate it may be difficult to apply in particular cases. There may also be cases where both propositions are in play. It may in many or most cases not be necessary for a court or tribunal to worry too much about where exactly to draw the line. Both propositions are tools which enable a tribunal to avoid overcompensation in these difficult cases. Nevertheless they are clearly treated as conceptually distinct’.
The comments in relation to apportionment and quantification in Hatton were never applied by the Court in that case, and on appeal to the House of Lords, whilst they described this part of the judgment as ‘a valuable contribution to the development of the law’, they had heard no argument on this section and so expressed no view on it.
The approach in Hatton was subsequently criticised by Smith LJ in Dickens v O2 Plc  EWCA Civ 1144 where it was said:
‘I respectfully wish (obiter) to express my doubts as to the correctness of Hale LJ's approach to apportionment. My provisional view (given without the benefit of argument) is that, in a case which has had to be decided on the basis that the tort has made a material contribution but it is not scientifically possible to say how much that contribution is (apart from the assessment that it was more than de minimis) and where the injury to which that has led is indivisible, it will be inappropriate simply to apportion the damages across the board. It may well be appropriate to bear in mind that the Claimant was psychiatrically vulnerable and might have suffered a breakdown at some time in the future even without the tort. There may then be a reduction in some heads of damage for future risks of non-tortious loss. But my provisional view is that there should not be any rule that the judge should apportion the damages across the board merely because one non-tortious cause has been in play’.
This was supported by Sedley LJ in Dickens who stated at para 53:
‘Like [Smith LJ], I am troubled by the shared assumption about the appropriateness of apportionment on which the case has proceeded. While the law does not expect tortfeasors to pay for damage that they have not caused, it regards them as having caused damage to which they have materially contributed. Such damage may be limited in its arithmetical purchase where one can quantify the possibility that it would have occurred sooner or later in any event; but that is quite different from apportioning the damage itself between tortious and non-tortious causes. The latter may become admissible where the aetiology of the injury makes it truly divisible, but that is not this case’.
Smith LJ added to these comments when giving the Munkman lecture in Leeds in 2008 (subsequently published as an article in the Journal of Personal Injury Law 2009), where she said:
‘I do not think that one can apportion damages for psychiatric injury. It seems to me that it is par excellence an indivisible injury. As a rule, the claimant will have cracked up quite suddenly; tipped over from being under stress into being ill. The claimant will almost always have a vulnerable personality. But a defendant must take the claimant as he finds him, eggshell skull or vulnerable personality included. So having a vulnerable personality should not result in any reduction in damages’.
As we outlined above, the comments in Hatton are not binding in this area, however, the approach adopted by Hale LJ in that case was still preferred by Underhill LJ in the present claim. He addressed the comments of Smith LJ and Sedley LJ at para 70 in which he stated:
‘I too believe that, to the extent that there is a difference between the views expressed by Smith and Sedley LJ in Dickins (and by Smith LJ in her article) and the propositions enunciated in Hatton, we should follow the latter; and I would therefore endorse what Keith J said in Thaine. Strictly, as Smith LJ pointed out, Hatton is not binding so far as concerns these issues. Nevertheless, it represents the considered, and fully reasoned, opinion of the Court in what was intended to be a decision giving guidance for the future in cases of psychiatric injury caused by the wrongdoing of an employer. Although the Court was concerned with common law causes of action rather than the statutory tort of discrimination, that difference has no bearing on the question of principle. I would therefore accept the propositions relevant to this appeal unless I were satisfied that they were wrong. That is not the case. On the contrary, they seem to me consistent with principle and to follow the approach of the Court in Rahman, which is binding on us’.
He went on at para 71:
‘What is therefore required in any case of this character is that the tribunal should try to identify a rational basis on which the harm suffered can be apportioned between a part caused by the employer’s wrong and a part which is not so caused. I would emphasis, because the distinction is easily overlooked, that the exercise is concerned not with the divisibility of the causative contribution but with the divisibility of the harm. In other words, the question is whether the tribunal can identify, however, broadly, a particular part of the suffering which is due to the wrong; not whether it can assess the degree to which the wrong caused the harm’.
Underhill LJ said that based on Rahman and Hatton, even where the claimant ‘cracked up’ quite suddenly, the tribunal should seek to find a rational basis for distinguishing between a part of the illness which is due to the employer’s wrong and a part which is due to other causes. Whether this is possible will depend on the facts and the evidence of the case. If there is no such rational basis then the injury will be ‘truly indivisible’ and the defendant will be responsible to compensate for the entire injury.
Underhill LJ clarified that if the claimant has a vulnerable personality, a discount may be required in accordance with principle 16 in Hatton.
Turning to the decision of the EAT, the Court of Appeal concluded that whilst its reasoning on the divisibility issue was compressed and particular passages were not clear, following the acceptance that it was the Dent comment that ‘pushed the claimant over the edge’ and she had not been suffering from an illness up to that point, they were entitled to reject a basis for apportionment based on aggravation of a pre-existing injury. As such, the Court of Appeal rejected the defendant’s appeal and they were ordered to pay the entirety of the compensation owed to the claimant for the whole of the injury.
The full judgment can be accessed here.