Tighten policies or face huge claims, firms told

A ruling in the Court of Appeal that put up awards for personal injury will
mean more employers paying out in high-profile stress cases unless they tighten
their policies, lawyers have warned.

Revised levels of damages, agreed by the court on 23 March, will see the
highest pay-outs for pain and suffering caused by work-related injuries going
up by a third.

This will take the top award for mental damage caused by stress from £50,000
to more than £66,000.

Loss of earnings will continue to be paid on top, pushing pay-outs, which
reached a record of £203,000 in January, up further.

Don Cuthbert, head of the employee relations practice at consultancy Towers
Perrin, said it is up to HR professionals to make sure the right policies are
in place to stop employees suffering from stress and injuries such as RSI.

"The levels of compensation that are now achievable are going to
motivate the legal profession to take on more no-win, no-fee cases.

"If employers don’t review their policies in light of this judgement to
ensure their procedures don’t create liabilities, it will result in more
litigation," he said.

Elaine Aarons, head of employment law at Eversheds, London, said the impact
on employment practices will depend on how much insurance premiums go up.

But she said the threat of a damaged reputation should galvanise employers
into action.

"If a fund manager in a City company wins a stress case, investors are
not going to trust their money to that company," she said.

Awards of £10,000 and below will not go up. Increases in awards between the
top rates and £10,000 will taper downwards.

The increases were lower than those recommended by the Law Commission’s
report of April 1999 which prompted the review.


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