Record high payouts in discrimination cases
A survey by the Equal Opportunities Review (“EOR”), based on cases at the Bury St Edmunds Employment Tribunal and cases sent to the EOR by individual lawyers, has found that the total compensation paid out in discrimination cases in 2011 was £8,774,403. This represents an increase of around £3.5 million from 2010 figures.
The scale of this increase is attributable mainly to two NHS cases. In Michalak v. The Mid Yorkshire Hospitals NHS Trust, the employment tribunal awarded £4.5 million (the highest award to date in a discrimination case) after the Claimant was subjected to a prolonged period of sex and race discrimination. An award of £933,155 was also made to the Claimant in Browne v. Central Manchester University NHS Foundation Trust for race discrimination and unfair dismissal.
Excluding these two large payouts, the average compensation award for discrimination claims in 2011 stood at £15,130, an increase from the 2010 average of £13,624.
Interestingly, the median award for 2011 of £7,518 is less than the median of £8,000 in 2010. The median is likely to be less distorted by the highest and lowest awards than the average and thus is a more realistic indication of what Claimants may expect to receive. Albeit the award in an individual case is influenced by the level of the employee’s earnings and the extent to which the Claimant was affected by the discrimination.
Ultimately, the awards received by Ms Michalak and Mr Browne reinforce that tribunals are not averse to exercising their unlimited financial power when making discrimination awards where the circumstances of the case justify doing so. Such cases serve as a reminder for employers of the purpose of carrying out staff training on discrimination issues to try and minimise exposure to such costly claims.
The variation in discrimination awards can make it difficult to value discrimination claims and leave businesses’ facing uncertain costs if they run a case to a hearing and lose.
Does there need to be clearer guidance on what types of discrimination fall in which band when it comes to injury to feelings awards?
And now personal injury damages are becoming more common, do we need more guidance on the likely levels of this award to be able to value claims and (if applicable) inform settlement discussions?