Legal analysis - harassment claims

harassment

Paula Jefferson takes a look at what role employment tribunals may play in future harassment claims and the consequences for insurers.

For conventional employers' liability insurers, Lord Justice Kay's recent comments in Veakins v Kier Islington (2009) — that most claims for high-handed or discriminatory misconduct by or on behalf of an employer would more fittingly be addressed in the employment tribunal — ought to provide some relief and a reduction in claims. The reality is somewhat different.

Since Walker v Northumberland, the courts have grappled with what the correct approach is, where an employee alleges that, as a consequence of their employment, they have suffered psychiatric injury. Even 16 years on, the issue continues to challenge.

Mr Walker claimed he suffered from stress caused by excessive and traumatising work. The case established that an employer was entitled to assume its employee could cope with the demands of their job unless the employee indicated to the contrary. Only where there had been notice that they could not cope was any illness foreseeable and, thus, compensatable.

Fast forward to 2002 and we had the judgment in Hatton v Sutherland. This set out 16 practical propositions to consider when determining liability in stress cases. For a short period those guidelines seemed capable of limiting further litigation.

Meanwhile the Protection from Harassment Act 1997 had become law. Following the decision in Majrowski v Guys & St Thomas's NHS Trust (2006), which established there could be vicarious liability for a breach of that Act, claims for psychiatric injury linked to an employee's work usually now include a claim for damages caused by harassment. Broadly, if a claim of harassment is found, then the two event proposition becomes less relevant because, with any harassment, it is foreseeable that psychiatric injury can ensue.

Absence of definition

The purpose of the 1997 Act was not to enable claims arising from alleged workplace harassment, but to provide criminal and civil remedies in the event of stalking. It contains no definition of harassment, other than that the behaviour complained about must have occurred on two or more occasions and harassment can be merely verbal.

In reality, the subjective nature of the facts relating to allegations of harassment — and the very personal and emotional aspects of such claims — make it very difficult to determine guidelines on what is, and is not, harassment. The closest the courts have now come to a definition is to say that the behaviour, when taken cumulatively, must have moved from being unattractive and unreasonable to oppressive and unacceptable.

Bearing in mind all the circumstances, there will have been harassment where the behaviour has been of an order to sustain criminal liability, had there been a prosecution brought under the Act. This may seem surprising when considering the examples of harassment that have justified a finding of liability. These have included excluding a claimant from conversations; laughing when the claimant walked by; making crude comments; ignoring or staring silently at the claimant (the behaviour successfully complained of in Green v Deutsche Bank); or, as in Veakins, the claimant being persistently 'picked on' by her supervisor.

Invidious position

Allegations of harassment in the workplace often combine with other problems at work, so it is understandable why Lord Justice Kay considered such disputes should mostly be heard by the employment tribunal. While undoubtedly correct, EL insurers do not avoid involvement in such matters.

Indeed, rather than benefiting insurers, the inclusion of claims for personal injury in allegations of harassment in employment proceedings places them in an invidious position. They will often be notified of circumstances that could give rise to a claim midway through the employment proceedings, when the issue of injury has just been raised — or the possibility of seeking a contribution from insurers thought about.

At that stage the allegations will usually have been investigated and the evidence possibly finalised. But that evidence will often have concentrated on different concerns from those pertinent to a civil claim. Crucially, the issue of foreseeability (still relevant for non-harassment stress claims) is not relevant to the employment tribunal and often full independent medical evidence will not have been obtained.

Employers will usually seek to compromise the tribunal claim, which is to their own and insurers' advantage in preventing future claims for injury if a comprehensive settlement of all existing and future claims can be agreed. If such a comprehensive settlement is to be reached, employers will inevitably desire a contribution from their EL insurers for preventing a subsequent civil claim.

Faced with such a request, insurers must balance several competing factors. Insurers must accept that their assessment of a likely separate claim succeeding must be made without all the relevant information. While they can take a view on liability, difficulties can arise where there is no independent medical evidence and thus no determination of the cause of the alleged illness or the likely prognosis.

Avoiding inevitably expensive future litigation will save costs but careful consideration is needed on whether the claimant could actually pursue a separate civil claim or whether such claim would be res judicata (a matter already settled in court). If there is a tribunal hearing, the findings of fact are likely to impact on any subsequent civil claim, thus making the latter more difficult to defend.

Employers may have commercial and reputational reasons that will justify their desire to settle but are irrelevant to an insurer. Equally the insurer's relationship with their insured will be significant. Finally, insurers should consider their policy wording and whether the definition of illness or injury is so wide that they risk a request to contribute to any award made for injury to feelings (up to £30 000) and aggravated damages, in addition to the traditional damages for pain, suffering and loss of amenity as well as special damages.

Having considered these factors, a contribution may be appropriate but it must be on the basis that the compromise agreement precludes future personal injury claims. Otherwise, there is no benefit gained from making the early offer. Thus stress and harassment claims will remain an issue for insurers for the foreseeable future. While this overlap exists between employment and civil proceedings, any further clarity in this area of law is unlikely to be obtained.

Paul Jefferson is a partner and head of the diseases group at law firm Beachcroft

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