Julie Bower v Cheapside (SSL) Ltd (formerly Schroder Securities Ltd) ET (unreported)
In this widely publicised case, Thompsons acted for Julie Bower, funded by the EOC, in her claim for sex discrimination, equal pay and unfair dismissal against her former employer - a large city institution. It was one of the first cases to expose city employment practices to the light of an Employment Tribunal and resulted in the largest award for sex discrimination compensation of close to one and a half million pounds.
The case is also significant for all discrimination claims for its review of all aspects of case law on compensation and extrapolation of the present position. The Respondent withdrew their appeal to the EAT shortly before the scheduled hearing and so the principles set out in this decision remain unchallenged.
We speculated in an earlier LELR (April 2002, Issue 69) that the House of Lords judgment in Kuddus v Chief Constable of Leicestershire could open the door to exemplary damages in discrimination claims. The Bower decision confirms this. It is now clear that tribunals can award compensation to an Applicant in order to punish the Respondent in two situations.
Firstly where there have been oppressive, arbitrary or unconstitutional actions by servants of the government (including eg. local authorities and the police).
Secondly where the Respondent's conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to the Applicant (in order to teach the Respondent that wrongdoing does not pay).
The significance of such an approach is that an award is in addition to the compensation designed to compensate the Applicant for his or her losses. Until the Kuddus case, Tribunals were bound by earlier cases, that had ruled that exemplary damages could not be awarded for torts (such as sex, race and disability discrimination which are statutory torts) for which exemplary damages had not been awarded prior to 1964. As none of the anti-discrimination legislation was in force in 1964, exemplary damages could not be awarded against discriminators, the argument ran.
Bower sets out in clear and detailed reasoning, that exemplary damages are now available and considers the definition of the second category when they might be awarded. It extends to circumstances where the Respondent commits a tort (legal wrong) deliberately in contumelious disregard of another's rights in order to obtain an advantage which would outweigh any compensatory damages likely to be obtained by the victim. It would apply where a defendant calculates with cynical disregard that the money to be made out of his wrongdoing will probably exceed the damages to be awarded. It is not intended to be limited to precise mathematical calculations - the necessary element of the second category is that the defendant did direct his mind to the material advantage to be gained by committing the tort and came to the conclusion that it was worth the risk of having to compensate the plaintiff if he or she should bring an action. Profit includes a material advantage in a broad sense.
Although in the Bower case the Tribunal ultimately decide that the bank's conduct did not quite fall into the second category as they were not calculating to make a profit by their conduct, there will be many other cases where exemplary damages are now likely to be awarded.