Aggravated Damages: New EAT Decision

The EAT has held that employees can recover aggravated damages in discrimination claims arising from the unreasonable conduct of the employer after dismissal - in this case, the unreasonable conduct of the employer in the way it conducted its defence in the ET claim.

The case is Zaiwalla & Co v Hodson (EAT, Maurice Kay J., 24/7/02)

Facts
Ms Hodson was a mature law graduate. She obtained a training contract with Zaiwalla & Co. After several months of ongoing sex discrimination, she was dismissed. The tribunal found the reason for her dismissal was the sex discrimination, and awarded her £43,149 compensation (including £7,500 aggravated damages)

The Issue(s)
A number of issues were raised as to the liability decision, all of which were rejected in fairly robust terms.

The important issue on quantum was whether a tribunal was entitled to make an award of aggravated damages in respect of the way that Zaiwalla & Co (who represented themselves) conducted their defence in the employment tribunal claim. Although this issue had been raised previously in Chief Constable of West Yorkshire Police v Vento, the EAT had not found it necessary to determine the point.

The Result
The EAT held that it was proper to award aggravated damages by reference to conduct in the defence of proceedings. Indeed, it was desirable to do so on policy grounds, because otherwise it might result in satellite litigation for victimisation (although query whether this analysis is correct, given the House of Lord's decision in Khan, which was not considered by the EAT).

The EAT rejected the argument that there are better ways of dealing with the problem of unreasonable litigants - for example, by an order for costs to reflect unreasonableness.

However, the EAT made it clear that this was an almost unique case on the facts. It held:

"28. We are sensitive to the possibility that overenthusiastic litigants and litigants in employment tribunals may be tempted to read our conclusions in a way which would give the green light to claims for aggravated damages in respect of alleged misconduct in the defence of proceedings almost as a matter of routine. They would be wrong to do so. The findings of fact in the present case...were exceptional in their assessment of the litigation misconduct. We expect that cases attracting awards of aggravated damages for such behaviour will be few and far between. It saddens us that this exceptional case concerned the behaviour of a firm of solicitors."