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The cost of discriminating in employment increases

Discrimination awards in employment (and related) circumstances will rise following a landmark decision of the Court of Appeal.

Discrimination awards in employment (and related) circumstances will rise following a landmark decision of the Court of Appeal. In its long awaited Judgment in the case of De Souza v Vinci Construction (UK) Ltd the Court has confirmed that discrimination awards for injury to feelings and personal injury made in the Employment Tribunal should be increased by 10%.

The facts

Following relatively recent Government reforms to the civil justice system, successful claimants in the civil courts have no longer been able to recover a particular element of their legal costs. To protect claimants against any losses arising from this, the Court of Appeal decided in Simmons v Castle (a non-employment personal injury claim decided in 2012) that awards for damages made in the civil courts for certain types of claims should be increased by 10%.

However, the case did not state whether this principle applied to injury to feelings and personal injury awards made in discrimination claims in the Employment Tribunal. A line of argument suggested it should not, as the increase was intended to compensate claimants for lost costs and the costs rules in the Employment Tribunal are very different to the Courts. The position has been unclear for some time.

This uncertainty has now been resolved. In De Souza v Vinci Construction (UK) Ltd the Court of Appeal held that the uplift should apply to all personal injury and injury to feelings discrimination awards made in the Employment Tribunal. It held that inconsistency between the approach in the civil courts and the Employment Tribunal should be avoided.

What does this mean for me?

Hopefully this won’t mean anything to you. However if you are in the unfortunate position of losing a discrimination claim, the De Souza Judgment means that it will cost you more.

The Judgment confirms the principle, but doesn’t go as far as to spell out the amounts which will be awarded for injury to feelings in discrimination cases. The awards were historically set out in the 2003 case of Vento v Chief Constable of West Yorkshire Police which prescribed three broad categories. In 2009, the case of Da’Bell v NSPCC adjusted these bands to take account of inflation. It is now likely that there is a further 10% increase in these awards following De Souza and as there has been no adjustment for inflation since 2009, another inflationary increase may also be due. The Court of Appeal suggests in its decision that these issues should be rolled together in revised guidance from the President of the Employment Tribunals. We don’t yet know how long it will take for any such guidance to be produced, but this decision also suggests that Employment Tribunals can start to apply increases immediately and stresses that any adjustments to the bands in the interim “need not be mathematically precise”.

So it looks like the Vento bands for injury to feelings in discrimination could be the following (albeit we will have to wait for the guidance to know for certain and the figures could be higher to allow for inflation):

  • Lower band for one off or relatively minor/isolated discrimination: £660 to £6,600
  • Middle band for more serious acts of discrimination: £6,600 to £19,800
  • Higher band for the most serious discrimination cases (which are relatively rare and usually involve long-term or very serious discrimination): £19,800 to £33,000

Comment

It would be sensible to factor these uplifted figures straight away into any reserve you make against successful discrimination claims, or when advising on the risks involved in potential discrimination. Do remember that the largest part of most discrimination awards is the loss of earnings (which is not capped, unlike unfair dismissal awards) and is in addition to these injury to feelings figures. In practice, the usual rule of thumb figure for injury to feelings in discrimination is likely to remain an award for mid-band Vento, it is just that citing this as £10,000 may now be an under-estimate.

We have also had another Court of Appeal Judgment which also points to an increase in discrimination and whistleblowing compensation. In Small v Shrewsbury and Telford Hospitals NHS Trust the Court held that Mr Small could have recovered an additional award for stigma damages. In this case it was effectively an award for lost earnings accruing after he would have left that organisation’s employment (as he was engaged for a fixed term), because his future prospects of securing new employment outside that organisation had been damaged by his dismissal for whistleblowing. Even though the claimant did not expressly ask for these additional damages, the Court has said the Tribunal was required to consider such an award, where it had acknowledged that the consequences of the dismissal were career-ending.

If these cases have any implications for your organisation, or you would like assistance in handling discrimination allegations/claims or assessing what might be awarded, please speak to you usual contact in the Weightmans employment, pensions and immigration team. Alternatively you can speak to Phil Allen (phil.allen@weightmans.com) a partner based in Manchester.