CASE COMMENT: BAE SYSTEMS (OPERATIONS) LTD v M KONCZAK (2017)

BAE SYSTEMS (OPERATIONS) LTD v M KONCZAK (2017)

 [2017] EWCA Civ 1188

1) This case revisits the vexed question of divisibility of psychiatric (and other) injury.

2) It is an employment case of wide importance and application.

3) The employee made allegations of sexual harassment. She was moved to a new role, on a different site.  She became unhappy.  Her line manager suggested that she move back, a proposal rejected by the employee as it would mean returning to the team she had left.  The manager made a sexist comment.  Thereafter the employee was diagnosed with work-related stress.  She was dismissed.  The tribunal found the dismissal to be unfair.  The employee had a history of stress and problems at work pre-dating the line manager’s comment. The initial decision on liability found that the sexist comment amounted to sex discrimination, but dismissed the other conduct complained of under this heading.

4) After a protracted history, the claim eventually came before the ET for a remedies hearing. The judge considered whether the Claimant’s damages should be apportioned, and considered the statement in Thaine v London School of Economics [2010] UKEAT 0144/10, [2010] ICR 1422 that compensation may be discounted where psychiatric ill health is caused by a combination of unlawful discrimination and unrelated causes. However, the judge declined to make such an apportionment, finding instead that the factors which had had a detrimental impact on the Claimant’s mental health were exclusively work-related.

5) The EAT gave short shrift to this line of analysis, given that not all of the Respondent employer’s conduct had been found to be unlawful. This left the question of whether, and how, compensation should be apportioned. The key question – familiar to personal injury practitioners –was whether the injury was divisible (in which case the Thaine approach was appropriate), or not. The EAT had determined that the injury was indivisible, and so no apportionment was made. The Employer appealed this decision.

6) Underhill LJ gave the lead judgment: he considered the lead case of Rahman v Arearose [2001] QB 351, and the relevant law on apportionment of psychiatric injury since then.

7) Mr Rahman was assaulted by two black youths in a Kings Cross fast-food restaurant in which he worked. He suffered a serious facial injury. His employers had negligently failed to provide adequate protection. Mr Rahman’s hospital treatment was negligent, he lost the sight of one eye. He further developed a serious psychiatric illness.  Underhill LJ extracted two core propositions from Rahman:

a. At common law wrongdoers who together cause “a single indivisible injury” are each liable to compensate the claimant for the whole of the injury suffered – see para. 17 (p. 361E).

b. An injury is to be regarded as single and indivisible “where there is simply no rational basis for an objective apportionment of causative responsibility for [it]” – see para. 19 (p. 363 A-B).

8) In Rahman neither defendant could fairly be regarded as having caused the totality of the claimant’s overall condition and Laws LJ held that in those circumstances the injury should be regarded as divisible, even if only on a rough-and- ready basis. With an apportionment of 75% to the hospital and 25% to the employers.

9) Objective apportionment has long been a feature of industrial injury claims where there has been long exposure for only part of which a particular defendant was responsible at law: for example noise-induced hearing loss (Thompson v Smiths Shiprepairers (North Shields) Ltd [1984] QB 405), asbestosis (Holtby v Brigham & Cowan (Hull) Ltd. [2000] 3 All ER 421) or VWF (Allen v British Rail Engineering Ltd [2001] EWCA Civ 242, [2001] ICR 942).

10) The Rahman approach was considered in Sutherland v Hatton [2002] EWCA Civ 76, [2002] ICR 613 at paragraphs 36-42 of the judgment of Hale LJ (pp. 629-631). That judgment went on to formulate the well-known numbered “practical propositions” at paragraph 43, later describing them as “principles”.

11) Proposition 15 (p. 632 E-F) is:

“Where the harm suffered has more than one cause, the employer should only pay for that proportion of the harm suffered which is attributable to his wrongdoing, unless the harm is truly indivisible. It is for the defendant to raise the question of apportionment … .”

12) Proposition 16 (p. 632F) is:

“The assessment of damages will take account of any pre-existing disorder or vulnerability and of the chance that the claimant would have succumbed to a stress related disorder in any event.”

13) Underhill LJ characterised proposition 15 as being applicable to cases where the injury in question is regarded as having multiple causes, one or more of which are, or are attributable to, the wrongful acts of the employer but one or more of which are not. Whereas Proposition 16 applies where the claimant has a pre-existing vulnerability which is not treated as a cause in itself but which might have led to a similar injury (for which the employer would not have been responsible) even if the wrong had not been committed. He deftly dealt with the potential conflict between pre-existing vulnerability and concurrent cause: “it may in many or most cases not be necessary for a court or tribunal to worry too much about where exactly to draw the line. Both propositions are tools which enable a tribunal to avoid over- compensation in these difficult cases. Nevertheless they are clearly treated as conceptually distinct. “

14) The Hatton Court of Appeal judgment apportionment and quantification principles were obiter.

15) The next obiter airing of the issues took place in in Dickins v O2 Plc [2008] EWCA Civ 1144. No issue about apportionment arose in the appeal. However Smith LJ at paragraphs 45-47 of her judgment  (a) doubted whether Rahman v Arearose  could be used to justify a general rule apportionment should be carried out in cases of divisible psychiatric injury where excessive stress was a contributory cause (b) noted that Hale LJ’s comments on the issue were obiter (c) expressed the view that in a case which has had to be decided on the basis that the tort has made a material contribution but it is not scientifically possible to say how much that contribution is (apart from the assessment that it was more than de minimis) and where the injury to which that has led is indivisible, it will be inappropriate simply to apportion the damages across the board but (d) did concede that  it may well be appropriate to bear in mind that the Claimant was psychiatrically vulnerable and might have suffered a breakdown at some time in the future even without the tort thence reducing some heads of damage for future risks of non-tortious loss. But there should not be any rule that the judge should apportion the damages across the board merely because one non-tortious cause has been in play.

16) Thus as Underhill LJ noted, Smith LJ was questioning whether proposition 15 could ever apply in practice, because psychiatric injury is always indivisible: she was suggesting that justice can be sufficiently achieved by the application of proposition 16 (as was Sedley LJ in Dickins).

17) Smith LJ provided a further insight into her views in a lecture she subsequently delivered: “I do not think that one can apportion damages for psychiatric injury. It seems to me that it is par excellence an indivisible injury. As a rule, the claimant will have cracked up quite suddenly; tipped over from being under stress into being ill. The claimant will almost always have a vulnerable personality. But a defendant must take the claimant as he finds him, eggshell skull or vulnerable personality included. So having a vulnerable personality should not result in any reduction in damages … The defendant should not be entitled to a reduction in damages for the chance that the other factor might have caused a breakdown … In general, the doctors are not able to quantify the contributions which different factors have made. Psychiatry does not lend itself to the kind of statistical analysis which orthopaedic surgeons and oncologists can provide. So the judge is likely to be left with evidence that the claimant had a vulnerable personality and that there was more than one factor in play when he had the breakdown. If that is the state of the evidence, it seems to me that the claimant should succeed in full provided that the negligent factor was of more than minimal effect. It also seems to me illogical if, in one breath the judge says that he can say only that the negligence has made a material contribution to the injury, in the next breath he embarks on an apportionment which has to reflect the contributions which the judge has just admitted he cannot assess.”

18) In BAE v Konczak Underhill LJ was gently critical of Smith LJ’s approach to propositions 15 and 16:

“As regards cases where all that is being said is that the claimant had a pre-existing vulnerability to psychiatric injury, I understand the guidance in Hatton to be that any reduction, or discount, should indeed be made by the application of proposition 16, as Smith LJ herself suggests, rather than by apportionment in accordance with proposition 15. And even in cases where there are “multiple extrinsic causes”, the Court in Hatton says only that a “sensible attempt” should be made to apportion the harm between what is and is not attributable to the defendant’s wrong. It recognises that there may still be cases where the harm is “truly indivisible” and that in such cases apportionment would be wrong. There is thus no difference as to the applicable principle, which indeed is authoritatively stated in Rahman. The difference is that Smith LJ believes that in the case of psychiatric injury the harm will always be indivisible, whereas the encouragement in Hatton to find a basis for apportionment where possible means that the Court believed that the harm would be divisible at least sometimes. (That is to put it at its lowest: in fact I think it can be inferred that the Court in Hatton believed that apportionment would be possible in the generality of such cases, but that is not explicitly stated, and it cannot be tested since it did not have to consider any individual cases.)”

19) The template for the appropriate approach had been provided in Thaine v London School of Economics [2010] I.C.R. 1422, Keith J, which had itself considered the line of cases set out above. In short, the EAT had preferred the approach of Hatton (being more faithful to the Court of Appeal’s judgment in Rahman) to Smith LJ’s decision in Dickens.

20) In Thaine, the claimant had suffered psychiatric ill-health partly as a result of unlawful harassment but partly also as a result of what the tribunal described as “concurrent causes” (perhaps in reality pre-existing vulnerability) leading to a 60% discount in compensation. The EAT held at paragraph 23

‘If we know – and we do know, for by the end of the case it was no longer seriously in dispute that a substantial part of the impairment took place before the defendants were in breach, why, in fairness, should they have been made to pay for it? The fact that precise quantification is impossible should not alter the position. The whole exercise of assessing damages is shot through with imprecision … I see no reason why the present impossibility of making a precise apportionment of impairment and disability in terms of time, should in justice lead to the result that the defendants are adjudged liable to pay in full, when it is known that only part of the damage was their fault. What justice does demand, to my mind, is that the court should make the best estimate which it can, in the light of the evidence, making the fullest allowances in favour of the plaintiffs for the uncertainties known to be involved in any apportionment.’

We similarly ask: why should the LSE have to compensate Miss Thaine for her psychiatric ill-health and its consequences in its entirety when the unlawful discrimination for which it was responsible, though materially contributing to her psychiatric ill-health, was just one of the many causes of it?”

21) Underhill LJ approved the judgment in Thaine then observed that where the views in Dickins departed from Hattons principles the Hatton principles were to be preferred. The tribunal should try to identify a rational basis on which the harm suffered can be apportioned between a part caused by the employer’s wrong and a part which is not so caused: the exercise is concerned not with the divisibility of the causative contribution but with the divisibility of the harm. In other words, the question is whether the tribunal can identify, however broadly, a particular part of the suffering which is due to the identify, however broadly, a particular part of the suffering which is due to the wrong; not whether it can assess the degree to which the wrong caused the harm (paragraph 71).

22) At paragraph 72 he noted the emphasis of Hatton: that harm may well be divisible. It might be possible to conclude that a pre-existing illness, for which the employer is not responsible, had been materially aggravated by the wrong (in terms of severity of symptoms and/or duration), and to award compensation reflecting the extent of the aggravation. He agreed with Smith LJ that the most difficult cases are where “the claimant will have cracked up quite suddenly, tipped over from being under stress into being ill”. Even there the tribunal should seek to find a rational basis for distinguishing between a part of the illness which is due to the employer’s wrong and a part which is due to other causes; but whether that is possible will depend on the facts and the evidence. If there is no such basis, then the injury will indeed be, in Hale LJ’s words, “truly indivisible”, and principle requires that the claimant is compensated for the whole of the injury. However if the claimant has a vulnerable personality, a discount may be required in accordance with proposition 16. ]

23) The tone of Underhill LJ’s judgment is that it will be difficult to convince a Court that apportionment is not going to be possible.

24) As it was, the medical evidence before the ET and the EAT was not such that a rational apportionment could be made in this case – the Employer’s appeal against the finding that the psychiatric injury was indivisible ultimately failed.

25) Nevertheless, useful practical guidance is to be found throughout the decision and in particular in the judgment of Irwin LJ, concurring with the analysis and conclusions of Underhill LJ:

93. In my view, the problem exposed here, properly analysed, is not so much a problem of law as a problem of medicine or science. The territory between the non- pathological but sensitised and vulnerable individual and the person with a defined pathology constitutes highly debatable land. It should be closely and carefully mapped by the relevant experts, and it is imperative that they should bring to bear as much clinical and diagnostic precision as possible, paying close attention to one or both of the internationally recognised psychiatric diagnostic systems. In particular, it is necessary to consider whether a less serious but nevertheless established and defined disorder may not have been achieved before progression to the diagnostic end-state. In addition, it should be routine for the experts to assess the level of risk of crossing the borderland between non-pathology and pathology through some other stimulus than the tortious act or omission. It will be recognised that exercise is often difficult and uncertain, but it will often be possible to give such advice within reasonable parameters of time and to the level of probability. Such an exercise is necessary in order to address proposition 16 in Hatton.

26) It has been a good year for Rahman v Arearose – it was also cited with approval in Darnley v Croydon Health Services NHS Trust [2017] EWCA Civ 15

27) That may however come at a price: the Rahman approach of identifying out separate damage has difficult ramifications for the approach in cases such as Wright v Cambridge Medical Group where the elasticity of the chain of causation was stretched to the limits, and where a more Rahman inspired approach could be problematic for claimants.

28) In summary BAE v Konczak has (a) provided Court of Appeal approval of Hatton principles over Dickins v O2 indivisibility (and endorsed the EAT’s decision in Thaine v LSE in the process) (b) emphasised the need for the courts to try their best to achieve an apportionment (or a discount where there is vulnerability) (c) and emphasised the need for the medical experts to address the issues to the best of their capability.

 

Henry F. Charles

David Green

12 King’s Bench Walk,

Temple,

London EC4Y 7EL

13th October 2017