In personal injury claims - which are essentially negligence claims and therefore decided at common law - the courts can only award compensation for loss or damage if it was 'reasonably foreseeable'.
In the case of Essa v Laing Ltd (2004, IRLR 313), the Court of Appeal has decided that in a case involving race discrimination, applicants only have to show a causal link between the act of discrimination and the loss. They do not need to show that the harm was reasonably foreseeable.
What happened to Mr Essa?
Mr Essa, who is black, started work as a labourer at the Millennium Stadium site in Cardiff. From the start, he was subjected to petty acts of humiliation. On 28 July, a foreman for Laing, Mr Pritchard, made a particularly offensive remark about him in front of a gang of other men.
Mr Essa was very distressed by it and complained to Laing. The company apologised to Mr Essa and disciplined Mr Pritchard. He was given a final written warning on 6 August, by this time Mr Essa had already left the site. Mr Essa was not satisfied with the company's response, and brought a claim of race discrimination.
He was subsequently treated for depression and stopped looking for other work because he had been so affected by the abuse. He also gave up representing Wales as an amateur boxer because the incident had such an effect on him.
What did the tribunal decide?
The employment tribunal heard from two psychiatrists that Mr Essa had undergone a personality change as a result of his experience. It upheld his claim against Laing, and awarded compensation of £5,000 for injury to feelings and just over £500 for financial loss.
The tribunal restricted the amount of financial loss on the basis that the employers 'are...only liable for such reasonably foreseeable loss as was directly caused by the discriminating act'.
Although it was reasonable to expect Laing to have foreseen that Mr Essa would experience some distress because of the abuse from Mr Pritchard 'they could not have reasonably foreseen the extent of Mr Essa's reaction to it'.
What happened on appeal?
Mr Essa appealed against the compensation award, arguing that he should only have to prove a causal link between the act of discrimination and the loss, not that it was reasonably foreseeable.
The employment appeal tribunal (EAT) allowed the appeal, saying that compensation is not limited to cases of reasonably foreseeable harm.
A majority of the Court of Appeal agreed. It held that:
- the employment tribunal was wrong to decide that the applicant was not entitled to compensation under the Race Relations Act because the loss was not reasonably foreseeable
- a claimant who is the victim of direct discrimination in the form of racial abuse is entitled to be compensated for the loss which arises naturally and directly from the wrong
- it is not necessary for the claimant to show the loss was reasonably foreseeable in order to be entitled to compensation for unlawful racial discrimination
- the claimant only has to show that the particular type of injury alleged was caused by the act of discrimination.
Although the Court of Appeal dismissed the employer's arguments, it has not come up with a cast iron statement of general principle. That is, that victims of discrimination can always claim compensation for their loss without having to show that it was reasonably foreseeable.
The Court has also restricted its findings to cases of race discrimination, saying that 'It is possible that, where the discrimination takes other forms, different considerations will apply'.