Capping compensation for discrimination claims

by Laurie Anstis on June 18, 2011

PLC Employment pointed out on 16 June 2011 the introduction of a private member’s bill, the Tribunals (Maximum Compensation Awards) Bill by Christopher Chope MP seeking to limit tribunal awards for unfair dismissal, wrongful dismissal or discrimination claims to £50,000.

The bill was considered in Parliament on 17 June 2011. The text of the debate can be found here. During the course of the debate, Damian Green, the minister for immigration, confirmed that:

the Government will be launching a public consultation on this specific matter later in the year


This confirms the government’s previous announcement on 11 May 2011 that compensation for discrimination claims will the subject of a review. The government was not proposing any review of unfair dismissal or wrongful dismissal awards, which were also dealt with in this bill, and it does not seem that this intervention by the minister was supposed to expand the scope of the proposed review.

At the time, Mrs Markleham pointed out the legal objections to any cap. These were mentioned in the commons debate, but without any solution being proposed. The draft bill sought to get around this by excluding the operation of the European Communities Act 1972, a radical step which raises many constitutional issues.

While private members bills rarely, if ever, make it to the statute book, it will be interesting to see what room the government feels that it has for making changes, in an area of law where European Union legislation is highly significant.


I really don’t know where to start…

His evidence that awards are too high seems to revolve around 2 cases reported in the Daily Mail. I think that more or less sets the tone. He neatly dodges (or ignores) two opposition MPs pointing out that median awards are quite low (£7,000), meaning that half of all awards are less than that. His answer is that “employers worry that high awards may encourage people to take weak, speculative or vexatious cases in the hope of a large payout”, quoting from a government press release. Frankly I think that particular “worry” on the part of employers is both over-blown and self-serving.

He then makes such an egregiously misleading statement that I can hardly believe it was allowed to stand without challenge. He said:

“if somebody were to lose one leg below the knee, under the criminal injuries compensation scheme they would be entitled to £33,000. If they were to lose one arm and one leg, they would be entitled to far less compensation than is paid to people who bring successful claims for discrimination before an employment tribunal. We value the damage of hurt feelings from discrimination cases far more than the criminal injuries compensation scheme values the actual loss of a leg or an arm and that is absolutely ridiculous”.

The only thing that’s “absolutely ridiculous” is his argument. The maximum award for hurt feelings, i.e. the very top of the top band, is £30,000. The top band, £18,000-£30,000, is used for the most horrendous cases of lengthy and sustained harassment or discrimination, often with long term effects on the person involved. The overwhelming majority of awards are in fact in the lower band, £600-£6,000. He’s ignored that point in the same way that he ignored the point about most discrimination awards – but more importantly, his argument is not even correct on his own figures. If a leg is worth £33,000, then this is more than the highest type of injury to feelings award. His argument that a leg, let alone an arm AND a leg, are worth “far less” than injury to feelings, is therefore nothing short of a lie.

In fairness, Mr Chope does make one sensible point, with which I agree. He argues that the government, in saying that they will consult over discrimination awards, have so far failed to deal with whether this is even allowed under EU law (see my blog post, which you cited above).

“I really wanted to find out from my hon. Friend whether the Government recognised that this was a problem and, if so, how they would overcome it. There is no point in going out for consultation on something where the Government’s ability to manoeuvre is restricted by European Union law, unless the Government are saying that they will override that law. “

There is indeed no point to the exercise, other than as a cosmetic exercise to keep the business lobby happy. Which is precisely what I have argued is going on here.

The constitutional issues raised by Mr Chope’s clause 2, which seeks to disapply the European Communities Act in order to get round Marshall, would certainly need a lot of thought. Luckily, a Parliamentary Committee on European Scrutiny has already got up to speed on these issues, when it was considering clause 18 of the EU Bill, the “parliamentary sovereignty” clause. I haven’t quite got to the end to see what their conclusions were, but the observations from paragraph 43 onwards are very interesting.

by Mrs Markleham on 20 June 2011 at 12:05 pm. #

As an aside it surely cannot be appropriate to compare compensation claimed from a Government fund to that recoverable from a conventional Defendant. I’m no PI lawyer but I understand that, outside the CICA, general damages for the loss of a leg are likely to be at least £80,000 – quite a bit more than than £30,000 maximum under Vento. If we are considering Government backed funds which will only come into play where the claimant has no realistic chance of recovering damages from the party at fault perhaps a better comparator would be the RPO. In which case the victim of discrimination would receive nothing. Whichever way you look at it the PI victim is always going to recieve significantly more – either £33,000 more from the Government or at least £47,000 more from the Defendant/Respondent.

by Richard Simpkins on 20 June 2011 at 3:50 pm. #