A record number of high awards of compensation in discrimination cases were made in 2009. There were 14 awards for over £100,000, more than twice as many as the previous year. The amount paid out has more than doubled in two years, going from just under £4m in 2007 to almost £8m in 2009, reveals the annual survey of compensation awards in Equal Opportunities Review.
The average award across all jurisdictions increased to £20,910 in 2009 – the highest recorded. This reflects the record number of awards over £100,000. These include: a disability discrimination award for over £3/4m (Driscoll v News Group Newspapers Ltd); an award for sex discrimination of almost £0.5m (Scanlon v Redcar and Cleveland Borough Council); almost £400,000 in a race discrimination case (Wardle v Calyon); and an award of £120,000 for age discrimination (Koh v Sainsburys Supermarkets Ltd)
The average gives employers an indication of the amount that they could potentially have to pay out for unlawful discrimination. However, the median gives a better indication to claimants of how much they could expect to receive in compensation. Interestingly, the median in 2009 was some £2000 lower than in 2008, at £7,806. So, although the increase in high awards provides a warning of the possible costs of discrimination, these are exceptional.
Tribunals will make an award in discrimination cases where it considers it ‘just and equitable’ to do so. The aim is to put the claimant, as far as possible, in the position they would have been in but for the discriminatory act. The award comprises two elements: financial loss (loss of earnings, future loss of earning, pension loss and expenses) and non-financial loss (injury to feelings, aggravated damages and personal injury). There is no maximum limit to compensation in discrimination cases (unlike other jurisdictions, such as unfair dismissal). The rapid increase in the number of six-figure sums awarded suggests that employment tribunals are becoming more confident in using their powers to award unlimited damages.
Future loss of earnings and pensions
The high awards are largely due to the amounts given for future loss of earnings and pension loss. For example, in the sex discrimination case Newton v Dupont Teijin Films Ltd, the tribunal believed that due to her age and medical difficulties, the claimant would find it difficult to return to full time work. It awarded future loss of earnings of £95,550, plus £63,967 for pension loss as it believed that the claimant would have remained in the employer’s final salary pension scheme until retiring at the age of 62. Similarly, in Cuerden v Yorkshire Housing Ltd, a disability case, the tribunal concluded that the claimant would be highly unlikely to find future employment with a final salary scheme, and accordingly awarded £59,264 for loss of pension.
Injury to feelings
An important aspect of discrimination compensation is an award for injury to feelings – which is not available in other employment claims, such as unfair dismissal. The Court of Appeal, in Vento v Chief Constable of West Yorkshire Police (No 2) [203] IRLR 102, set three bands for injury to feelings, depending on the seriousness of the discrimination. Although the limits within in each band were increased by the EAT in 2009 in line with inflation, (in Da’Bell v National Society for the Prevention of Cruelty to Children [2010] IRLR 19), the level of award has not yet seen a similar increase. There were some particularly high awards; for example £40,000 for sex discrimination and £35,000 for disability, but the figures for 2009 reveal a drop in the amounts being awarded for the distress caused by discrimination, with two thirds of such awards falling into the lowest Vento band of £6,000 or less. The amount most often awarded was £5,000, with around 10% of claimants receiving this amount, and the median was £4,500.
There were some notable exceptions to this decline in injury to feelings awards. In two jurisdictions, both the average and median awards increased – substantially in the case of age discrimination. Although there were only 33 cases where compensation was awarded for age discrimination (a similar number to the previous year), the average and median almost doubled on the previous year, to £5,078 and £3,750 respectively. Disability discrimination continues to attract the highest levels of award, with an average of £7,904 and median of £6,000. Disability discrimination cases have the highest proportion of awards in the top Vento band (7%), and the lowest proportion in the bottom, with only just over half (52%) falling within that band.
Aggravated damages
Injury to feelings awards generally include a sum for aggravated damages where the tribunal considers it appropriate, but in some cases it will make a separate award and this can bump up the total. Aggravated damages may be awarded where the respondent has behaved in a ‘high-handed, malicious, insulting or oppressive’ manner. For example, in Scanlon v Redcar & Cleveland Borough Council, - a sex discrimination case – the tribunal awarded £20,000 in aggravated damages, taking account of: flagrant breach of the law in the disciplinary process; unfounded allegations of dishonesty and deceit against the claimant; no offer of an apology; and lack of action against the perpetrator (the council’s chief executive), indeed there was public approval of his actions and public congratulations for his services.
Future trends
The level of compensation in discrimination cases is unlikely to go down. Economic circumstances will be reflected in the periods for which future loss of earnings are awarded. For cases that arise in the public sector, tribunals are likely to consider that public spending cuts and a consequent freeze on jobs will make it more difficult for employees who lose their jobs to get future employment.
It is also likely that the increase in the limits on the Vento bands will start to bite. Although some tribunals had already been taking it upon themselves to increase the level, there was no consistency in their approach. Now that there is legal authority from the Employment Appeal Tribunal for the increased levels, we should see them being applied regularly.