Veitch Penny LLP - Exeter | Crediton, Devon

Case

Laing Limited v Essa
Court of Appeal - (21 February 2004)

Issues

(1) Race discrimination
(2) Assessment of compensation; Race Relations Act 1976
(3) Reasonable foreseeability test

Facts

In June 1999 Yashin Essa had been employed as a labourer on a sub-contracted basis. He was a Welshman of Somali ethnicity. He lived in Cardiff all his life and had represented Wales on a number of occasions as an amateur boxer. He was subjected to racial abuse at work. Whilst he complained about his treatment to his superiors he felt that his concerns were not taken seriously. He left the site and commenced proceedings for race discrimination.

The Tribunal found in favour of Mr Essa and awarded him £5,000.00 compensation for injury to feelings because the Tribunal found that Laing was only liable for the loss that was “reasonably foreseeable” as a result of the discrimination. Whilst the firm could have foreseen that Mr Essa would have been distressed for his experiences, it could not have foreseen the extent of his reaction.

When the Employment Appeal Tribunal considered the matter it found that there was no need for the employee in a race discrimination case to show that the loss was reasonably foreseeable.

The matter was then referred to the Court of Appeal.

Decision

The Appeal was dismissed.

The Court of Appeal found that although most civil claims for damages rely on the test of “reasonable foreseeability” other claims do not. It had considered European sex equality legislation (as similar principles applied to race equality legislation), which pointed away from the need for the test.

The Court of Appeal heard that the test to use was that the damages assessed should be in line with the extent of the Applicant’s loss, which arises directly and naturally from the act of discrimination. It need not be limited to what was reasonably foreseeable by the employer although the Court conceded that difference considerations might apply in cases where the discrimination was different. The Court of Appeal noted that injury caused as a result of negligence could be committed by accident, but this could not be the case in respect of a breach of the Race Relations Act 1976. This was the crucial difference. The racial abuse was deliberate conduct akin to an assault although the act was verbal and not physical.

The Court stressed that the requirement for a causal link between the act of discrimination and the harm. For example, compensation was not payable where there was a break in the chain of causation or the Applicant failed to mitigate their loss to a reasonable level.

Comments

This case highlights the potential for individuals to obtain high compensatory awards from Tribunals as a result of the discriminatory conduct of their employers. Although Mr Essa’s claim was based upon race discrimination, the principles outlined in this case also apply in relation to Discriminatory Acts under the other discrimination legislation such as sex, disability, religion, sexual orientation, etc. Where a discriminatory act causes psychiatric injury, any compensation consequently payable would not be subject to any statutory cap.