Breach of Contract: Can you recover the excess of £25k in the High Court?

At last, after twelve years of uncertainty, we have an answer. The Court of Appeal has, today, handed down judgment in Fraser v Hlmad Ltd, holding that the excess over £25k in a tribunal breach of contract claim cannot be recovered in the civil courts.

Mr Fraser brought a breach of contract claim in the employment tribunal and the High Court. His Claim Form in the ET expressly reserved the right to pursue the excess over the £25k limit in the High Court.

He succeeded in his employment tribunal claim and recovered £25,000, a shortfall of £55,000 on the full value of his contract claim.

Following a strike-out appliation by the Defendant in the High Court claim, the Court of Appeal held:

• Mr Fraser's wrongful dismissal claim merged into the judment of the employment tribunal on his wrongful dismissal claim
• his cause of action for wrongful dismissal ceased to exist independently of the judgment
• he no longer had any cause of action to pursue in the High Court, even for the excess over £25k
• it is not open to a Claimant to avoid the operation of a cause of action estoppel simply by purporting to reserve a right to make a second claim in the future.

As a postscript, the Court of Appeal recommended that the ETS review their literature to make it clear that wrongful dismissal claims cannot be brought in the High Court to recover the excess over £25k.

Mummery LJ also suggested that Claimants and their legal advisers do not bring wrongful dismissal claims in the employment tribunal unless they are certain they want to limit compensation to £25k. If the Claimant wishes to recover more, the claim should only be brought in the High Court. Finally, he suggested that the DTI reconsider the limits on the jurisdiction of the employment tribunal in respect of claims for wrongful dismissal.

Fraser v Hlmad Ltd