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Aggravated damages - To award or not to award, that is the question

Unlike unfair dismissal compensation, which is limited purely to financial loss (such as wages), awards for successful discrimination claims can include compensation for non-financial losses such as "injury to feelings" and "aggravated" damages. The latter are awarded in the most serious cases where the behaviour of an employer has (as the name suggests) aggravated a Claimant's injury to feelings. Importantly, both injury to feelings awards and aggravated damages are designed to compensate a Claimant for injury and not to punish an employer.

A recent Employment Appeal Tribunal ("EAT") case of HM Land Registry v McGlue has reinforced previous guidance on how Tribunals should approach compensation for the above types of awards in discrimination cases.

As a bit of background, it has long been argued by Claimants that injury to feelings and aggravated damages are two separate matters and can therefore be awarded in conjunction with each other (potentially increasing the monies received). Employers, however, have understandably raised objections to dealing with these awards in this way as it is often seen as a "double recovery" by Claimants. Indeed, previous case law has led to large awards for injury to feelings (which on their own can reach up to £30,000) that have been supplemented by additional monies purely for aggravated damages.

Whilst the rationale of a separate award for aggravated damages has been questioned before in the EAT, most notably in Commissioner of Police of the Metropolis v Shaw, separate awards have continued…that is until now. It is also becoming apparent that Tribunals are taking a stricter stance on the facts which would justify such an award.

In the McGlue case, the Claimant was awarded £71,000 as a compensatory award (to cover loss of earnings), together with £12,000 for injury to feelings and a further £5,000 for aggravated damages after she succeeded in her claim for indirect sex discrimination. The Land Registry appealed this decision and argued, amongst other points, that the overall injury to feelings award was too high. In response the EAT quite correctly stated that an award given for injury to feelings was not to be interfered with unless they were "manifestly excessive" or "wrong in principle".

The EAT did, however, look at the award provided for aggravated damages. It reaffirmed that such an award can only be justified where the behaviour of one party is aggressive, malicious or oppressive. In this instance it could not find evidence that this requirement had been satisfied. In coming to its decision the EAT also looked at what the total non-financial award amounted to, namely £17,000, which it believed was too high bearing in mind the initial reasons provided by the Tribunal. This meant that the EAT was in effect taking the approach of viewing injury to feelings and aggravated damages together (and as part of the same family of awards), rather than in isolation.

As a result, the EAT allowed part of the Land Registry’s appeal by rejecting the £5,000 aggravated damages (i.e. the Claimant was now to receive nothing for this type of damages) and simply upholding the £12,000 award for injury to feelings.

This case is a reminder of what needs to be shown in order for the risk of aggravated damages to arise and therefore, at the same time, what employers should avoid doing! In addition, Claimants’ ability to potentially double recover for injury to feelings and aggravated damages (and so receive higher awards) has been curtailed (for now at least).

 

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.

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