The number of massive compensation payouts awarded for stress by the county
courts could be slashed following a Court of Appeal ruling.
The appeal court ruled in the case of Eastwood v Magnox that a claim for
damages to compensate for stress arising from unfair dismissal should be
decided at an employment tribunal rather than county court.
This would mean employers would face a ceiling of up to £52,700 awarded by
tribunals for unfair dismissal rather than unlimited awards for stress, often
running into hundreds of thousands of pounds, awarded by the county court.
Jonathan Chamberlain, partner at law firm Wragge & Co, believes the
ruling, which is being considered by the House of Lords, will significantly
reduce the number of unlimited stress payouts awarded if upheld.
"If your stress claim arises from the manner of dismissal, you will
have to bring that claim for unfair dismissal at an employment tribunal, rather
than for personal injury through the county courts," he said.
Chamberlain said the ruling will apply to the majority of stress claims
because most are made by people who have already left an organisation because
of alleged stress at work.
Major stress payouts
– Teacher Janice Howell won a stress
claim of £254,400 from her employer Newport County Borough Council (formerly
Gwent County Council) in 2001 after suffering two nervous breakdowns
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– Gipsy-site manager Randy Ingram won £203,400 in damages from
Worcestershire County Council (formerly Hereford and Worcester County Council)
in 2000
– A female line manager’s bullying of Test Valley Borough
Council housing benefits officer Roderick Mcleod led to an estimated £200,000
out-of-court settlement
