Recoverability of damages for psychiatric illness from race discrimination

The Court of Appeal's decision in Laing Limited v. Essa (21st January) takes a very broad view of the injuries for which damages can be awarded in discrimination cases. By a two to one majority, the Court ruled that only a causal link between the discriminatory act and the damage needed to be established. In so ruling, the Court decided it was irrelevant whether the damage in question was reasonably foreseeable.

Mr Essa, the Claimant, was a black Welshman. He earned his living as a construction worker and represented Wales many times as an amateur boxer. He was subject to a single racially abusive remark while working on the construction of the Millennium Stadium in Cardiff. He was so upset by this that he was unable to continue working on the site. The incident also affected his boxing. He allegedly suffered clinical depression and felt unable to look for new work.

The original Tribunal decided this was a gross over reaction to a "one-off " incident and was only prepared to award him 3 weeks loss of pay. The Tribunal considered the further loss he claimed to have suffered as a result of the alleged clinical depression was not reasonably foreseeable and so not recoverable from his employer.

The case went to the Employment Appeal Tribunal and then on to the Court of Appeal.

The majority in the Court of Appeal decided the correct test was whether the damage flowed naturally and directly from the discriminatory act rather than whether it was foreseeable. All that needed to be established was a causal link between the racial abuse and the psychiatric illness.

Employers therefore need to take particular note that discrimination claims may well be much more expensive than was previously thought. If there are unexpected and extreme reactions to even a single discriminatory act an employer could be liable for substantial damages.

If you require further advice or information on discrimination issues please contact Simon Jeffreys by email at: [email protected] or on +44(0)20 7367 3421 or Anthony Fincham at [email protected] or on +44(0)20 7367 2783.