Compensation for discrimination victims whether loss ‘reasonably foreseeable’ or not

The case, Yassin Essa v Laing Ltd, concerned Mr Essa, a black Welshman who represented his country in amateur boxing championships. He was working on site at the Millennium Stadium in Cardiff in 1999 when he was racially abused in such a way as to be described by the Employment Tribunal as “grotesquely offensive”. As a result of the incident, he left his job and developed depression, which meant that he was unable to look for other work and lost his interest in amateur boxing.

The Employment Tribunal found that Mr Essa had been subjected to race discrimination but that Laing were only liable for the losses caused by the discrimination which were “reasonably foreseeable”. The Tribunal found Mr Essa’s reaction to be “so extreme to have been irrational” and decided that Laing were only liable to pay compensation for injury to feelings and three weeks’ loss of earnings, the length of his contract for work at the Millennium stadium.

Giving the judgment, Lord Justice Pill said that he saw “no need to superimpose the requirement or pre-requisite of reasonable foreseeability”. “It is sufficient if the damage flows directly and naturally from the wrong,” he said. “While there is force in the submission that, to prevent multiplicity of claims and frivolous claims, a control mechanism beyond that of causation is needed, reliance upon the good sense of employment tribunals in finding the facts and reaching conclusions on them is a sufficient control mechanism, in my view.” As a mechanism for protecting a defendant against damages “which, on policy grounds, may appear too remote,” he said that a further control by way of a reasonable foreseeability test was “neither appropriate nor necessary”.

The case was followed closely by the Commission for Racial Equality (who backed the action from the employment tribunal onwards) as well as the Equal Opportunities Commission and the Disability Rights Commission. They were concerned by the Employment Tribunal’s original remedies decision which suggested that Mr Essa was not entitled to compensation for psychiatric illness. When Laing appealed to the Court of Appeal, the three Commissions took the unprecedented step of making a joint application to the Court of Appeal to allow them to present their views.

Trevor Phillips, chair of the CRE, was “delighted” that the Court of Appeal had “chosen not to impose any additional hurdles on those who seek full and proper compensation for discrimination”. “This judgment sends out a clear message: those who trivialise the effect of harassment and abuse do so at their peril – 99 times out of 100, people who abuse others on the grounds of race, sex or disability pretend that it’s only ’banter’,” he said. “This decision highlights the real inner pain and damage that discrimination can cause and ensures that victims are compensated in full for the damage that they suffer as a result.”