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PREVIOUS SPEAKERS:
Andrew Hogarth

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Title: Hatton v Sutherland – a stress free guide to stress at work claims?

1. The decision of Colman J in Walker v Northumberland County Council caused a degree of hysteria in some sections of the press. They regarded it as giving the green light to numerous stress at work claims. It is certainly true that following the decision in Walker the number of stress at work claims grew considerably. This is not surprising as a successful claim invariably gives rise to a number of claims which appear to the claimants or to their solicitors to be similar. The success of Mr Barber in his claim against Somerset County Council for psychiatric injury resulting from the stress of his work led to claims being made by 7 of the 34 other teachers at the same school.
2. The same sections of the press reported gave extraordinary prominence to the decision in Hatton v Sutherland and suggested that its effect was to severely restrict the chances of success in all stress at work claims.
3. What was surprising was that the section of the press responsible for these views was not the tabloid press but the broadsheets. Some of these papers were inevitably going to take the conservative line in reporting these cases. What was more surprising was the fact that all the broadsheets took the same view and that all of them gave the same prominence to the decision. As is so often the case, the alleged effect of both these cases was not as extreme as was suggested. There was almost no press reporting of the equally important decisions of the House of Lords in Johnson v Unisys or of the Court of Appeal’s decision in Eastwood v Magnox Electric, which between them decided that all stress at work claims which arise out of the fact of or the manner of the termination of an employee’s employment cannot give rise to a claim in tort, but must be brought in an Employment Tribunal. The manner in which the Hatton appeals were treated in the press suggests that there is, or was, considerable unease about the growth in claims for psychiatric injury not only amongst editors of newspapers but amongst their readers.
4. The House of Lords have now given leave to appeal to one of the four employees whose case was heard by the Court of Appeal. Mr Barber, a teacher employed by Somerset County Council, has been given leave to appeal and his appeal will probably be heard in early 2003. In his petition to the House of Lords he has taken most, probably all, of the points which could conceivably be taken on behalf of an employee suffering psychiatric injury as a result of stress at work.
5. In this short talk I am going to attempt to describe the current legal position regarding this class of case according to the Court of Appeal , to discuss some of the reasons behind the decision in Hatton and deal with some of the new points to be argued on the appeal to the House of Lords.
6. A new and modern law of tort.

There has been a change in the judges hearing cases and that change is reflected in their attitude to the law of tort. They are cleverer, younger, more normal and more modern; the result is that their social and political attitudes are different from those of their predecessors. When I appeared in the Court of Appeal in 1990 as counsel for the employees in the case of James W Cook (Wivenhoe) Ltd v Tipper one of the judges was Sir Roger Ormrod. The case concerned the treatment of employees by an employer who was closing his business. Sir Roger had been born in 1911, was 78 years old when the hearing took place, had been called to the bar in 1936 and had been a judge since 1961. ( Ten years before there was a right to complain of unfair dismissal.) His social attitudes reflected his era. I remember him asking, " Are you suggesting that when an employer closes his business he has to take into account the interests of his employees?" When I replied that that was one of the purposes behind the employment legislation of the last twenty years, he commented "I find that a quite extraordinary proposition." Lord Justice Sedley, Lord Hoffman, Lady Justice Hale and their colleagues all have a rather different outlook on life.

7. Part of that different outlook on life is the willingness to ask themselves whether the answer which a previous legal authority or rule produces is necessarily the right answer. Part of that different outlook on life is a desire to achieve the right answer. In a recent case about removing fixtures from a house before the contract for sale had been signed, Sedley LJ, when describing his reasons for making a significant change in the law, said, " It seems to me to answer the present case and cases like it simply and clearly and ethically. If so, it is satisfactory that it answers it legally as well."
8. In tort cases in order to achieve the right answer the judges have gone back to basics . In tort the basics are pretty simple. There is only one question that is answered by the whole of the law of tort, "In these circumstances should A pay compensation to B for the injury which they have suffered?" Everything else is just a series of devices designed to ensure that the claimants who are perceived to be meritorious should be compensated and that those whose claims are perceived as unmeritorious should not be compensated. All the tests for duty, breach of duty, causation and damages are just a series of filters designed to allow only the claims perceived as meritorious to succeed.
9. Until recently no judge was prepared to admit that this was the purpose behind the tests used in order to determine liability in tort. Things change and recently judges have decided that this is what the various rules of tort are for, that they are going to admit it and that whenever it is necessary to do so they will alter the rules in order to achieve the correct result.
10. In Rahman v Arearose, Laws LJ said of causation " The problem at the heart of this case rests in the law’s attempts to contain the kaleidoscopic nature of the concept of causation within a decent and rational system for the compensation of innocent persons who suffer injury by reason of other people’s wrongdoings." Later he said "Novus actus interveniens, the eggshell skull, and (in the case of multiple torts) the concept of concurrent tortfeasors are all no more and no less than tools or mechanisms which the law has developed to articulate in practice the extent of any liable defendant’s responsibility for the loss and damage which the claimant has suffered."
11. In Fairchild v Glenhaven, the House of Lords were invited to change the law on causation. The late Mr Fairchild had died of mesothelioma, a form of cancer caused by exposure to asbestos dust. He had been exposed to asbestos in two different employments. The exposure to asbestos in each of those employments was approximately equal. The result was that his widow could not establish whether he had been killed as a result of the acts of defendant A or Defendant B. If the House of Lords had chosen to apply the conventional balance of probabilities test for causation she would fall short of the standard of proof required, it being equally likely that Mr Fairchild had been killed by defendant A as defendant B. The House of Lords were urged by her counsel to depart from the normal rule for proof the of causation and in a number of passages considered the purpose behind having rules for causation.
12. Lord Bingham freely admitted that the rules used in the law of tort were only present in order to allow meritorious claimants succeeding and to prevent those whose claims were perceived as less meritorious from succeeding. In his speech he said, when providing his justification for departing from the normal test for causation,

"The overall object of tort law is to define cases in which the law may justly hold one party liable to compensate another."

 

 

13. Lord Hoffman said at paragraph 56

"The same is true of causation. The concepts of fairness, justice and reason underlie the rules which state the causal requirements of liability for a particular form of conduct (or non-causal limits on that liability) just as much as they underlie the rules which determine that conduct to be tortious. And the two are inextricably linked together; the purpose of the causal requirement rules is to produce a just result by delimiting the scope of liability in a way which relates to the reasons why liability for the conduct in question exists in the first place."

14. Lord Nicholls was looking for a result which "justice requires and fairness demands" and was prepared to depart from the normal rules for causation in order to achieve it.
15. Now that the judges have shown a willingness to achieve the correct result and now that they have decided to regard the long established rules of tort as being capable of modification if they think it appropriate, there will be a much greater degree of flexibility in the approach of the courts to new classes of claim.
16. The review of stress at work claims carried out by the Court of Appeal.

Against this background of a willingness to change the law to produce the right result, the Court of Appeal heard four stress at work appeals. Not all of the claims which had been started after the decision in Walker v Northumberland County Council were equally meritorious and the result had been a growth in the number of appeals, almost all of them from dissatisfied defendants. For this reason the Court of Appeal decided to list four appeals together for hearing in order to give themselves the opportunity to review this class of action and to ensure that the County Courts were dealing with them correctly. The cases seem to have been selected on the basis that they were all cases in which it appeared that the defendants had at least one strong ground of appeal as a result of a mistake made by the trial judge.

17. The judges had read some of the papers in advance of the hearing and were obviously uneasy about the judgments that had been produced by the County Court judges and had formed the impression that there was something wrong with them. Before the appeal started they were uncertain what it was that was wrong with the judgments and why they had that feeling of unease about them.
18. Almost as soon as the appeals started it became apparent that there were two problems. The first was that County Court judges, many of whom had never practiced in this area of law, were having great difficulties in applying the correct legal tests to the relatively complex cases in front of them. Some were confused about the existence of a duty of care, some were confused about the standard of care, almost all were confused about the tests for causation and many of them were having great difficulty in assessing damages correctly. Some managed to get every part of the legal analysis wrong! For this reason one major part of the judgment is an attempt by the judges the Court of Appeal to lay down a series of propositions which they intended would provide a definitive guide to County Court judges hearing this class of case. As a result most of the 16 propositions set out in the summary given in the judgment make no new statement of law; what they do is to state the law clearly. The second problem with this class of claim arose from the evidence in the individual cases. It quickly became apparent that employers often knew very little about their employees state of mind or their psychiatric state of health. They often knew that the employee was having some form of difficulty, but the true nature and extent of that difficulty was almost always kept from the employers by the employees and their doctors. In this respect these claims differed from ordinary physical injury claims where the consequences of a particular state of affairs is usually much more obvious. The Court of Appeal had to consider whether they should change the conventional approach adopted in other types of personal injury actions in order to achieve what they felt was the right result. This is what they did in the second major part of their judgment and this is where they changed the law as it had previously been understood.
19. In addition the Court of Appeal decided to make a complete change in the manner in which a defendant’s responsibility for damages was assessed.
20. The special treatment of claimants in psychiatric injury claims.

In addition to the willingness of modern judges to alter the previously accepted rules, there is one additional background factor which is reflected in the outcome of the Hatton appeals. It is a factor present in many stress at work claims and always favours the claimant. Courts have been very reluctant to conclude that a claimant in such an action has been guilty of contributory negligence, even when he deliberately conceals his true state of health from his employer, even when he returns to work against his doctor’s express advice. This view is a consequence of the general perception that a person with a psychiatric condition is incapable of acting normally or carefully, and therefore that he cannot be in breach of a duty to take reasonable care for his own safety. In the case of a severe episode of psychiatric illness this may be a reasonable view to take. Whether it is reasonable in the case of a man who is capable of writing long and detailed letters to his doctor in which he describes that he is ill as a result of the stresses of work, as was the case with Mr Barber, is much more doubtful.

21. However charitable this approach to contributory negligence in stress at work cases may be, it creates an artificial situation in which the courts have deprived themselves of the normal device by which responsibility is allocated between a claimant and a defendant. If this normal method of allocating responsibility is not available, then a court inevitably finds itself looking for other methods for apportioning responsibility.
22. In the Hatton appeals the Court of Appeal felt that they were dealing with a new class of claim, not because it was the first time the Court of Appeal had considered a stress at work claim, the first was Petch v Commissioners for Customs and Excise, but because this was the first time they had conducted a substantial review of this growth area in the law of tort.
23. The duty of care.

Some suggest that there should never be a duty to prevent psychiatric injury or that it should be limited to cases in which the injury is caused by a reaction to an injury to another person. This contentious issue was never raised at the hearing of the appeal. In the Court of Appeal this argument was not available to the employers as the Court of Appeal’s decision in Petch, that there was such a duty, was binding on the court.

24. The decisions under appeal did demonstrate some confusion amongst judges at first instance about the distinction in Page v Smith between primary and secondary victims and the effect of the decision of the House of Lords in Frost v Chief Constable of South Yorkshire.
25. In Frost a number of police officers at the Hillsborough disaster had brought claims for psychiatric injury suffered as a result of what they had seen. Members of the public who had suffered psychiatric injury in similar circumstances had been unable to recover as they were not within the zone of danger necessary for them to be considered as primary victims, nor were they sufficiently close in time, place or relationship to the victims to be owed a duty as secondary victims. It was said that the police officers were entitled to succeed as they were owed a duty because they were employees. The House of Lords declined to permit them to succeed as they felt that it was inappropriate for an employee to be owed such a duty when a member of the public was not. In his speech Lord Hoffman had said of Mr Walker of Walker v Northumberland County Council that he was in "no sense a secondary victim. " County Court judges were obviously somewhat confused about what all of this meant. They were not alone.
26. In Hatton, Hale LJ adopted the explanation given by Lord Hoffman in Frost. In his speech he pointed out that the control mechanisms set out in Page v Smith and Frost only applied where "the injury has been caused in consequence of death or injury suffered ( or apprehended to be suffered or likely to be suffered) by someone else". She went on to say that an employee would be a secondary victim, and therefore subject to the control mechanisms applicable to a secondary victim, "where the harm is suffered as a result of harm to others, in the same way as secondary victims in tort, but there is also a contractual relationship with the defendant". Otherwise he is a primary victim.
27. This test will exclude some who suffer psychiatric injury as a result of seeing someone else mistreated at work, or may do.
28. The standard of care.

It is the passages in which the Court of Appeal decide that they should adjust the standard of care in stress at work claims which mark the greatest change brought about by the decision in Hatton.

29. In Walker v Northumberland the judge had concluded that an employer was not, without more, liable for the normal risks of the job he has employed someone to do. On the assumption that the risk was a foreseeable one, one might ask , "why not?" Nowhere in the judgment is an answer given to this. The reason for the lack of an answer is that at the hearing in the Court of Appeal all counsel appearing for the Claimants were asked if they accepted that this was a correct statement of the law and as they all agreed that it was, the contrary was never argued.
30. If one takes as an example the managing director on a large salary trying to save a failing company and working long hours in his attempt to do so. It could easily be suggested that the risk of the managing director suffering psychiatric injury is not so "far fetched or fantastic as to be a mere possibility that would never occur to the mind of a reasonable man", and thus it would be possible to satisfy the first part of the test of foreseeability. It would not perhaps be a danger against which the employer ought to have protected him, and thus arguably not satisfy the second part of the test for foreseeability. Although this was not a point argued it is probably right that an employer is not liable for the consequences of normal work. It is rather more difficult to pinpoint exactly why the employer ought not to have protected his employee against these risks. There are a number of points which together might lead to this conclusion, probably the most obvious of which are that the employee has agreed to do a particular type of work, the universality of stress and the fact that the employer cannot easily tell if an employee is able to cope with the normal pressures of work to the extent that they are going to suffer a psychiatric illness.
31. The Court of Appeal when describing the new standard of care concluded "In view of the many difficulties of knowing when and why a particular person will go over the edge from pressure to stress and from stress to injury to health, the indications must be plain enough for any reasonable employer to realise that he should do something about it." [ The court’s italics.]
32. In reaching this conclusion the Court of Appeal accepted three points made on behalf of the defendants.

[a] That unlike the normal factory accident type of case, from which almost all employers’ liability principles are derived, in this class of case many of the causative factors – the pressures an employee is facing - are outside an employer’s control and often arise from life outside work.

[b] That an employee often conceals the true nature and extent of his difficulties from his employer.

[c] That most of the employees who are affected by stress are professional or white collar employees whose manner of working is often largely outside the employer’s control, but is within their own control.

33. These points led the court to conclude that they should exercise the power they had to change the rules and to impose new ones in their place. It is interesting to see how they justified to themselves their right to do so. In paragraph 13 Hale LJ said " When imposing standards, the law tries to strike a balance which is reasonable to both sides." In paragraph 14 she said "… if the standard of care expected of employers is set too high, or the threshold of liability too low, there may also be unforeseen and unwelcome effects on the employment market." In paragraph 15 she said " Some things are nobody’s fault." This sort of statement would drive some lawyers to apoplexy.
34. Whether the court set the standard at the correct level may be debateable, but if you start from a position in which you have decided that contributory negligence is an inappropriate tool for adjusting responsibility between the parties then you have to use a different tool to achieve the correct balance.
35. Causation.

There is no new principle for causation in the judgment. There are some clear guidelines which should prevent lawyers and judges from making mistakes. A number of the judges had become hopelessly confused when dealing with causation, and the Court of Appeal point out that the claimant has to prove on the balance of probabilities that the breach of duty of the defendant caused, or, in an appropriate case, materially contributed to, the psychiatric illness. It is not enough to conclude that the stress of work caused the injury. All pretty obvious stuff.

36. Damages.

Psychiatric illness often has multiple causes. Some of those will come from the claimant’s own personality, background and personal events, love, illness, death and divorce. Some will relate to the work which a claimant does, but will be causes in respect of which a defendant will not have been in breach of duty. In the context of a teacher such as Mr Barber some will come from the stresses of dealing with unruly and uncooperative children who may show no interest in being taught a particular subject. Some of those causes will be those for which a defendant has been held to be in breach of duty.

37. How in those circumstances should a court approach the assessment of damages?
38. The starting point is said to be that a defendant should only pay for the damage which he has caused. In principle such an approach leads to the correct result, the fair result as it equates breach of duty with the damage for which a defendant is made responsible. The approach works without difficulty where there is truly only one cause for a particular damage. It becomes more difficult when there are a number of causes which are operative and in this type of case there is almost always more than one causative factor.
39. Using an analogy: if a jug of water is three quarters full and a defendant fills it so that it overflows, should he be liable for making it overflow or should he liable according to the amount of water he has put into the jug, a quarter? Does it make a difference if the water in the jug is three quarters full as a result of the act of another tortfeasor, or if it is three quarters full as a result of a variety of non tortious reasons? Is the damage the overflow of the water or the whole of the water in the jug?
40. Rahman v Arearose is a difficult case to understand, but it appears to conclude that psychiatric injury can be divided up between its component causes using a common sense or rough and ready sort of approach. It also makes it clear that when all causative factors are a result of the tortious acts of two persons, then each is liable to the claimant but only to the extent that they that they were responsible for the various causative factors.
41. Lady Justice Hale seems to go one step further in Hatton and suggests that where "extrinsic causes" and tortious causes combine together the defendant is only liable for that proportion of the damage which can fairly be attributed to the cause for which they are responsible.
42. This is the weakest part of the judgment and it is difficult to see exactly what conclusion the court did reach. However, it may reasonably be said that the Court of Appeal did conclude that the person filling the jug of water is only responsible to the extent that they filled it. The egg-shell skull principle would suggest the contrary, but earlier in the judgment the Court of Appeal had expressly approved a passage from Rahman ,a case in which Laws LJ described the egg-shell skull principle as a device used by the courts. Normally contributory negligence would go some way towards remedying the injustice to a defendant by depriving a claimant of a proportion of their damages, but the court had set its face against such a course. That left open the question of how a claimant could be made responsible for his own personality and his own life. One of the key themes of the judgment is personal responsibility, and it appears to me that the court felt that he should take some responsibility for his own fate and for his own life and concluded that the best way in which that could be done is to apportion the damage as if he had himself been a tortfeasor. Certainly the earlier parts of the judgment contain strong passages making it clear that a person must bear responsibility for his own health and his own safety and this was a good way to do it.
43. The reasoning is not that clear, but the result that a defendant is only responsible to the extent of his contribution is reasonably clear.
44. New issues in the House of Lords.

In his petition for leave to appeal Mr Barber, who is now represented by different counsel, has decided to take some points which were not argued in the Court of Appeal. The most substantial of these is the argument that the claimant should be able to succeed on the basis of an allegation of breach of statutory duty under the Management of Health and Safety at Work Regulations 1992, which imposes a responsibility on an employer to carry out a risk assessment.

45. The regulations state that they do not give rise to a civil cause of action, and it follows that the employee needs to rely upon the Direct Effect of the Directive which gave rise to the United Kingdom Regulations. It may be the case that the House of Lords will hold that the directive will satisfy the relevant test and be held to be enforceable against an emanation of the state such as the County Council, although the argument appears to me to be rather tenuous.
46. However, opinions differ as to whether this argument has any merit. It is extensively referred to in some of the textbooks , most of which suggest that it has some merit. The argument does have problems when it comes to considering where it will lead. There is only a point in establishing a right to make a claim for breach of statutory duty if it leads to a different conclusion than that which would be reached at common law. Unless the "risks" in "evaluate the risks to the safety and health of workers" means something apart from "foreseeable risks" it becomes very difficult to see what a statutory duty will add to a common law duty. In addition, when a claimant reaches the stage of establishing causation he may have some difficulty in answering the question " If you told the employer there was nothing wrong with you and that you fit for work, why should we assume that your answer would have been different if you had been told that your employer was carrying out a risk assessment?"
47. Conclusion.

ANDREW HOGARTH

12, King’s Bench Walk,
The Temple. London EC4Y 7EL.

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