Laing Ltd. v Essa [2004] EWCA Civ 2

Case No A1/2003/0523Neutral Citation No. [2004] EWCA Civ 2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIS HONOUR JUDGE SEROTA QC
AT THE EMPLOYMENT APPEAL TRIBUNAL
Venue Royal Courts of JusticeDate Wednesday 21 January 2004
Strand,
London, WC2A 2LL
Before
LORD JUSTICE PILLLORD JUSTICE CLARKELORD JUSTICE RIX
Between
Laing LimitedAppellantsYassin EssaRespondent
(Transcript of the Handed Down Judgment ofSmith Bernal Wordwave Limited, 190 Fleet StreetLondon EC4A 2AGTel No: 020 7421 4040, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
MR D BEAN QC & MR M. SETHI (instructed by Hawkins,Russell,Jones, AL8 6RD) for AppellantsMISS S MOOR (instructed Race Equality First) for RespondentMISS K MONAGHAN (instructed by Equal Opportunities Commision, Commission for Racial Equality, and Disability Rights Commission SW1H 0BH) for the Interveners
Judgment

Lord Justice Pill:

This

[1]is an appeal by Laing Limited (“the appellants”) against a decision of the Employment Appeal Tribunal (“EAT”), His Honour Judge Serota QC presiding, dated 17 February 2003. The EAT allowed an appeal by Mr Yassin Essa (“the respondent”) from a decision of an Employment Tribunal held at Cardiff on 12 March 2001 to consider the compensation payable to Mr Essa following the finding of a tribunal in March 2000 that a complaint of race discrimination against the appellants was established. In a decision sent to the parties on 30 March 2001, the tribunal ordered the respondents to pay the appellant £5,519.76 compensation for race discrimination consisting of £591.76 for financial loss and £5,000 for injury to feelings. The EAT remitted the matter to the Employment Tribunal: “To reconsider questions of compensation having regard to such findings as they might make and to what extent Mr Essa’s psychological injury was a direct cause of the racial abuse he suffered on the 28th day of July 1999, whether there was any intervening cause such as an unreasonable refusal or failure to seek and follow medical advice. It is necessary to consider questions that might be relevant in this regard to mitigation of damages”.[2]The award for injury to feelings is not now challenged by either side. Nor is the dismissal of claims made by the respondent against the appellants, and his employer, of constructive dismissal and the complaint of race discrimination against his employer. The relevant findings of the Employment Tribunal were that the conduct of Mr Pritchard, an employee of the appellants, on 28 July 1999 constituted “less favourable treatment” within the meaning of section 1 of the Race Relations Act 1976 (“the 1976 Act”), that the respondent was subjected to a “detriment” within the meaning of section 7 of the Act and that, by virtue of section 32 (1) and (3), Mr Pritchard’s act on 28 July was “treated as done by” the appellants. The facts[3]Within the narrow factual context in which the issue of law arises, the relevant facts can be stated briefly. The respondent is a Welshman who has lived all his life in Cardiff. He is black. He has earned his living as a labourer and construction worker and has represented Wales many times as an amateur boxer. In the spring and summer of 1999, he was employed by a Mr Rogers on the construction of the Millennium Stadium at Cardiff Arms Park. The respondent was a member of a gang of about fifteen subject to the instructions and supervision of Mr Pritchard, who was employed by the appellants, the main contractors, as a foreman. They were working under pressure because of the need to complete the stadium in time for the Rugby World Cup and, as the tribunal found, Mr Pritchard’s quite abrasive style of foremanship achieved highly effective results. It was in that context that the tribunal made the following findings:
“On 28 July Mr Pritchard was giving instructions on the allocation of work to a Mr Grayson Williams who was employed by Mr Rogers [the respondent’s employer] but supervised Mr Pritchard’s gang. The evidence was that there were about 15 men present on this occasion. According to Mr Essa, Mr Pritchard said to Mr Williams “get the boys organised”
. He then turned and, pointing at Mr Essa who was sitting down reading his payslip, he said “and make sure that black cunt doesn’t wander off”. Mr Essa was extremely hurt and in tears. He said that Mr Williams said “I can’t believe he said it. He shouldn’t have said it.” Mr Essa expressed his hurt in highly emotional terms and at great length to the tribunal and there could be no possible doubt that he was extremely distressed. He wept and said “he called twenty men ‘boys’ and he called me a black cunt”. He said “he looked at me like an animal. It took my humanity from me”. He stressed over and over to the tribunal that he was born in Cardiff only around the corner from the stadium.” The tribunal found the remark “grotesquely offensive”.[4]Mr Pritchard told the tribunal he deeply regretted making the remark. It was “merely a throw-away comment made without malice “. On 6 August, Mr Pritchard was subjected to a disciplinary hearing and received a final written warning. By that time, the respondent to whom an apology was made, had left the site.[5]The tribunal considered the consequences; “Mr Essa gave evidence as to the effect Mr Pritchard’s remark had on him. He said that he came from a decent family where obscenities were never used. He had heard bad language on sites but had never been spoken to in the way Mr Pritchard had spoken to him. He said the incident of 28 July so affected his health that he had been treated by his doctor for depression. He has stopped looking for work because he will always be wondering if his boss is thinking of him in the terms expressed by Mr Pritchard. It also affected his boxing. He was picked to carry the Welsh flag before boxing for Wales against Scotland but became upset whilst carrying it, asking himself what right he had to be representing Wales. He was overcome with similar feeling during the fight. He says why cannot people see him for what he is and not for the colour of his skin. He says it was “the way he spoke to me, it was the way he treated me, I’ll take it to my grave…. The only thing I’d done was to be black and to go to work… I am Welsh and no one can take that away from me”. His sense of rejection as a Welshman has so distressed him that he intends to leave Wales and to take up professional boxing in England.” The statute[6]The respondent’s relevant proceedings were brought pursuant to section 54 of the 1976 Act. Section 56 provides, insofar as is material:
“(1) Where an [Employment Tribunal] finds that a complaint presented to it under section 54 is well-founded, the Tribunal shall make such of the following as it considers just and equitable - … (b) an order requiring the Respondent to pay to the complainant compensation of an amount corresponding to any damages he could have been ordered by a county court or [in Scotland] by a sheriff court to pay to the complainant if the complainant had fallen to be dealt with under section 57.” (b) an order requiring the Respondent to pay to the complainant compensation of an amount corresponding to any damages he could have been ordered by a county court or [in Scotland] by a sheriff court to pay to the complainant if the complainant had fallen to be dealt with under section 57.”
[7]Section 57 provides, insofar as is material: “(1) A claim by any person (“the claimant”) that another person (“the respondent”) –(a) has committed an act of discrimination against the claimant…(b) … may be made the subject of civil proceedings in like manner as any other claim in tort or (in Scotland) in reparation for breach of statutory duty… (4) For the avoidance of doubt it is hereby declared that damage in respect of an unlawful act of discrimination may include compensation for injury to feelings whether or not they include compensation under any other head.” (a) has committed an act of discrimination against the claimant… (b) … may be made the subject of civil proceedings in like manner as any other claim in tort or (in Scotland) in reparation for breach of statutory duty… The decision and the issue[8]In their decision following the remedies hearing, the Employment Tribunal said, in relation to special damages:
“In calculating special damages we bear in mind that the respondents [the present appellants] are only liable for such reasonably foreseeable loss as was directly caused by the discriminating act. We find that the direct cause of Mr Essa’s departure on 5 August 1999 was the incident of 28 July, in that his distress was such that it rendered him so over-sensitive to the reasonable reprimand given him by Mr Rogers, his employer, that he was unable to continue working on the site. Had he not left prematurely he would have been there for a further three weeks until the end of August, when all Mr Rogers’ workers finished on site. The respondents might well have reasonably foreseen that the incident would lead to distress and premature departure but they could not have reasonably foreseen the extent of Mr Essa’s reaction to it and his subsequent failure to look for other work. We therefore confine compensation for loss of earning to three weeks at £189.92 per week that is £569.76 less £75 benefit received at £50 per fortnight, totalling £519.76 [sic].”
[9]While the award for injury to feeling is not under challenge, it is relevant to note the tribunal’s approach to damages under that head. Having referred to the evidence of a dramatic personality change and dramatic change in lifestyle, the tribunal stated:
“We have no doubt that Mr Essa has suffered hurt and humiliation as would any reasonable person in a similar situation. We bear in mind that the award for injury to feelings depends not so much on the seriousness of the discrimination as on the nature of Mr Essa’s reaction to that discrimination. Mr Essa’s reaction however, was extreme. It was so extreme as to have been irrational. In our view Mr Essa has not helped himself. His trainer, Mr Kitchen, gave him excellent advice when he told him to try to put the incident behind him. He did not do so. He stayed indoors and dwelt on the incident and allowed it to poison his mind to such an extent that he was unable to look for work or to take any other positive steps to get his future back on track. To make matters worse he took himself off medication prescribed by the doctor after only two weeks, and did not seriously seek counselling as suggested by the doctor until six months had gone by, thus allowing more time for the wound to fester.”
The tribunal also stated that they kept in mind that it was a “one-off” incident and not a prolonged or continuing act of racism.[10]The issue is whether the tribunal took the correct approach to the assessment of damages under Section 57 of the 1976 Act. The EAT held that it did not stating, at paragraph 30:
“In our opinion the case should be remitted to the Employment Tribunal to re-consider questions of compensation having regard to such findings as they might make and to what extent Mr Essa’s psychological injury was a direct cause of the racial abuse he suffered on 28 July 1999”
. The EAT went on to acknowledge that the tribunal would have to consider whether there was any intervening cause of damage and questions that might be relevant to mitigation in damages.[11]The Employment Tribunal had a difficult task in assessing the quantum of damage. The appellants were alleged to be responsible for a serious psychiatric illness which had followed, to put it neutrally, a single racial remark. They had before them two long and complex reports from consultant psychiatrists, that from Dr John Lewis dated 18 April 2000 and that from Dr Anne Heavey, dated 10 August 2000. The situation was probably unusual, as well as difficult, but in my view the tribunal should, particularly on the approach to damages adopted, have analysed and made findings upon the medical evidence and its effect. That would include, amongst other things, a consideration of the impact of the incident on 28 July, as distinct from other incidents out of which no liability arose. Only upon such findings, along of course with findings as to the other evidence, can conclusions such as those stated by the tribunal be reached. There is very little reference to the medical evidence in the reasoning of the tribunal. It is not for this Court, in determining the legal issue with which it is confronted, to conduct its own analysis of the medical evidence . Nor is it necessary at this stage to do so though I do express the view that there is material in the medical reports from which it could properly be concluded, if the tribunal thought fit, that the respondent developed a psychiatric illness. Submissions, authorities and comment[12]For the appellants, Mr Bean QC accepts the EAT’s proposition that “psychological injury was a type of harm [the Act] was intended to protect against”. He submits that, while it is possible for a respondent to be liable for such injury in a discrimination case, it must be established that injury of that kind was reasonably foreseeable in the particular case. Mr Bean also acknowledges that a claimant does not have to establish that an act was malicious or intentional to establish liability for direct discrimination but it does not follow that a respondent is liable for all the consequences of a discriminatory act.[13]Mr Bean seeks to uphold the findings of the Employment Tribunal. They found as a fact that the claim involved a “one-off” incident. On that finding, they were entitled to hold that no compensation was recoverable for psychiatric injury because such injury was not reasonably foreseeable. Nor could there be recovery for loss of earnings consequential upon that injury.[14]It is accepted by the appellants that section 57 of the Act does create a cause of action in tort which does not depend on the presence of sub-section (4). The analogy, it is submitted, is with torts such as negligence, nuisance, and Rylands v Fletcher, where foreseeability is an ingredient of the cause of action rather than with torts such as defamation and deceit where it is not.[15]Foreseeability of harm of the relevant type is a pre-requisite for damages in nuisance and in Rylands v Fletcher for reasons explained by Lord Goff of Chieveley in Cambridge Water v Eastern Counties Leather PLC [1994] 2 AC 264 at 300 and following). In “common justice”, if a claimant is only able to claim damages for personal injuries when he can prove foreseeability, he should not be in a stronger position to claim damages for interference with the enjoyment of his land.[16]In employment cases such as the present, there is an analogy between the duty of care owed to employees in negligence, and the duties imposed by the Act, it is submitted. Moreover, there are policy reasons for including a foreseeability test. Without it, there could be a multiplicity of claims. It provides a simple test. Moreover the law takes a limited view of the circumstances in which psychiatric injury can be the subject of a claim. (Page v Smith [1996] AC 155)[17]A control mechanism is required, it is submitted, and that is provided by the test of reasonable foreseeability. The inclusion of such a test does not prevent there being the “effective, proportionate and dissuasive sanctions” contemplated in paragraph 26 of the preamble to the Equal Treatment Directive (2000/43/EC of 29 June 2000). Mr Bean accepts that there is no rule of law that a “one-off” incident cannot cause a psychiatric illness, though he naturally submits that the facts will rarely permit such a conclusion. The distinction between psychiatric illness and grief and distress must be kept in mind (recently considered by Lord Hoffman in Wainwright v Home Office [2003] UKHL 53) and that between injury to health and personal injury on the one hand and injury to feelings under section 57 (4) (recognised by Stuart-Smith LJ in Sheriff (cited below)) on the other, though there may be an overlap.[18]While accepting that there is no direct authority on the present issue, Mr Bean relies on the statement of Lawton LJ, obiter, in Skyrail Oceanic Ltd v Coleman [1981] ICR 864 at 871 that “compensation is to be awarded for foreseeable damage arising directly from an unlawful act of discrimination”.[19]I say at this stage that, even if the appellants were to be correct in their submission that a reasonable foreseeability test is a necessary ingredient of a claim under Section 56, the Employment Tribunal in my judgment misdirected themselves in the way they applied it. A defendant’s liability in negligence depends on the reasonable foreseeability of the consequent damage (Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co.Ltd (The Wagon Mound) [1961] AC 388 at 425). In Hughes v Lord Advocate [1963] AC 837, Lord Reid stated, at page 845, that “a defender is liable, although the damage be a good deal greater in extent than was foreseeable. He can only escape liability if the damage can be regarded as differing in kind from what was foreseeable.” Lord Pearce stated, at page 857 that “the defenders are therefore liable for all the foreseeable consequences of their neglect. When an accident is of a different type and kind from anything that a defender could have foreseen he is not liable for it (see the Wagon Mound)”. In Page v Smith, 155, Lord Lloyd of Berwick, of the majority, stated at page 197G: “…. The approach in all cases should be the same, namely, whether the defendant can reasonably foresee that his conduct will expose the plaintiff to the risk of personal injury, whether physical or psychiatric. If the answer is yes, then the duty of care is established, even though physical injury does not, in fact, occur. There is no justification for regarding physical and psychiatric injury as different “kinds of damage” ”.[20]Thus, the tribunal were wrong to find in favour of the appellants on the basis that “they could not have reasonably foreseen the extent of Mr Essa’s reaction to [the incident]” [my emphasis]. The test is the kind of damage and not its extent. The tribunal do go on, rightly, to consider the possible application of the eggshell skull principle, questions of causation, intervening act and mitigation but the foreseeability test has not been applied correctly.[21]For the respondent, Miss Moor takes as her starting point the analysis of the issue of the identification of loss in cases of tort by Lord Nicholls of Birkenhead in Kuwait Airways Corporation v Iraqi Airways Co. [2002] 2 WLR 1353, with which the other members of the House, except Lord Scott of Foscott who dissented, agreed. The context was the assessment of damages in conversion in relation to aircraft evacuated from Iraq to Iran during hostilities in 1990 and 1991.

Lord Nicholls stated:

“69 How, then, does one identify a plaintiff’s “true loss” in cases of tort? This question has generated a vast amount of legal literature. I take as my starting point the commonly accepted approach that the extent of a defendant’s liability for the plaintiff’s loss calls for a twofold inquiry: whether the wrongful conduct causally contributed to the loss and, if it did, what is the extent of the loss for which the defendant ought to be held liable. The first of these inquiries, widely undertaken as a simple “but for” test, is predominantly a factual inquiry. The application of this test in cases of conversion is the matter now under consideration. I shall return to this in a moment. 70 The second inquiry, although this is not always openly acknowledged by the courts, involves a value judgment (“ought to be held liable”). Written large, the second inquiry concerns the extent of the loss for which the defendant ought fairly or reasonably or justly to be held liable (the epithets are interchangeable). To adapt the language of Jane Stapleton in her article “Unpacking ‘Causation’” in Relating to Responsiblitiy, ed Cane and Gardner (2001), p 168, the inquiry is whether the plaintiff’s harm or loss should be within the scope of the defendant’s liability, given the reasons why the law has recognised the cause of action in question. The law has to set a limit to the causally connected losses for which a defendant is to be held responsible. In the ordinary language of lawyers, losses outside the limit may bear one of several labels. They may be described as too remote because the wrongful conduct was not a substantial or proximate cause, or because the loss was the product of an intervening cause. The defendant’s responsibility may be excluded because the plaintiff failed to mitigate his loss. Familiar principles, such as foreseeability, assist in promoting some consistency of general approach. These are guidelines, some more helpful than others, but they are never more than this. 71 In most cases, how far the responsibility of the defendant ought fairly to extend evokes an immediate intuitive response. This is informed common sense by another name. Usually, there is no difficulty in selecting, from the sequence of events leading to the plaintiff’s loss, the happening which should be regarded as the cause of the loss for the purpose of allocating responsibility. In other cases, when the outcome of the second inquiry is not obvious, it is of crucial importance to identify the purpose of the relevant cause of action and the nature and scope of the defendant’s obligation in the particular circumstances. What was the ambit of the defendant’s duty ? In respect of what risks or damage does the law seek to afford protection by means of the particular tort? …..”
[23]Lord Nicholls went on to consider the purpose sought to be achieved by the tort of conversion and concluded that the loss flowing from the unforeseen circumstances in that case should be borne by the wrongdoer, not the innocent owner of the goods. Having heard extensive submissions on whether the test for liability for consequential loss in cases of conversion is reasonable foreseeability as distinct from whether the loss arises naturally and directly from the wrong, Lord Nicholls stated a view, with the proviso that his findings had made it strictly unnecessary to do so. Lord Nicholls concluded that foreseeability, as the more restrictive test, was appropriate for those who act in good faith but that the remoteness test of “directly and naturally”, applied in cases of deceit, also applied in cases of conversion where the defendant acted dishonestly (paragraphs 103 and 104).[24]Miss Moor relies on the decision of the European Court of Justice in Marshall v Southampton and South West Hampshire Health Authority (Teaching) (No.2) [1993] ICR 893. The case was decided in the context of sex discrimination but Miss Moor relies on the principle that it is legitimate to consider the Sex Discrimination Act and the Race Relations Act together (Anyanwu v South Bank Student Union [2001] ICR 391 per Lord Bingham of Cornhill, at paragraph 2, and Lord Hope of Craighead in Rhys-Harper v Delvian Group plc [2003] ICR 867, at paragraphs 74 and 81). The court in Marshall held, at paragraph 18: “It is therefore necessary to identify the objects of the Directive and in particular to see whether, in the event of a breach of the prohibition of discrimination, its provisions leave Member States a degree of discretion as regards to form and content of the sanctions to be applied”.[25]The Court concluded:
“24. However, the objective is to arrive at real equality of opportunity and cannot therefore be attained in the absence of measures appropriate to restore such equality when it has not been observed. As the court state in the Von Colson case, at p.1908, para.23, those measures must be such as to guarantee real and effective judicial protection and have a real deterrent effect on the employer. 25. Such requirements necessarily entail that the particular circumstances of each breach of the principle of equal treatment should be taken into account. In the event of discriminatory dismissal contrary to article 5 (1) of the Directive, a situation of equality could not be restored without either reinstating the victim of discrimination or, in the alternative, granting financial compensation for the loss and damage sustained. 26. Where financial compensation is the measure adopted in order to achieve the objective indicated above, it must be adequate, in that it must enable the loss and damage actually sustained as a result of the discriminatory dismissal to be made good in full in accordance with the applicable national rules. ”
Miss Moor relies upon the expression “actually sustained as a result of” the dismissal and submits that the applicant should, as far as possible, be placed in the same position as he would have been but for the unlawful act. The purpose of the statute is to protect against acts of racial discrimination and that can only be done effectively if the principle of full recovery is applied. The causation test provides a control mechanism sufficient to provide fairness between the parties especially when taken with the protection conferred on parties in the appellants’ position by section 32 (3) of the 1976 Act.[26]Reference is made to Draehmpaehl v Urania Immobilienservice o.h.G. [1998] ICR 164, a sex discrimination case. The ECJ held (paragraph 24) that article 6 [requirement for remedies under national law] of Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment etc. obliges States to adopt measures which are sufficiently effective to achieve the aim of the Directive. Moreover, the Directive requires that, “if a member state chooses to penalise breach of the prohibition of discrimination by the award of compensation, that compensation must be such as to guarantee real and effective judicial protection, have a real deterrent effect on the employer and must in any event be adequate in relation to the damage sustained. Purely nominal compensation would not satisfy the requirements of an effective transposition of the Directive: von Colson,[1984] ECR 1891p.1908, paras 23 and 24, (paragraph 25).”[27]For the interveners, Miss Monaghan makes similar submissions. Miss Monaghan submits that the statutory tort comes within the category of intentional torts in which remedies are assessed by reference to causation rather than to reasonable foreseeablity, or at least is closely analogous to them. Unlike negligence, the tort cannot be committed accidentally. In the case of direct discrimination, the intention is quite simply an intention to perform the relevant act of less favourable treatment, a view to which Lord Goff of Chieveley inclined in James v Eastleigh PC [1992] AC 751 at 774. The necessary intention is to perform an act (which by virtue of S78 of the 1976 Act may include a deliberate omission) which in the event proves to be unlawful. Unlike negligence, it is not necessary to establish that the act was unreasonable. That the relevant act in the present case, the abusive language, amounted to less favourable treatment is established.[28]Miss Moor and Miss Monaghan rely on the obiter remarks of Stuart-Smith LJ in Sheriff v Klyne Tugs Lowestoft Ltd [1999] ICR 170 a case involving the alleged racial harassment, abuse, intimidation and bullying of a seaman by the master of the vessel. The case involved an attempt to bring a claim in the county court when there had been proceedings in an employment tribunal and the issue was procedural. When comparing allegedly different causes of action, Stuart-Smith LJ stated, at paragraph 17:
“In my judgment that language [the language of Section 57 of the Act] is clear. And the principle must be that the claimant is entitled to be compensated for the loss and damage actually sustained as a result of the statutory tort”
. Marshall (No.2) was cited as authority.[29]Stuart-Smith LJ stated, at paragraph 21:
“In my judgment both the employment tribunal under section 56 of the Act of 1976 and the county court under section 57 have jurisdiction to award damages for the tort of racial discrimination including damages for personal injury caused by the tort. The question, which may be a difficult one, is one of causation. It follows that care needs to be taken in any complaint to an employment tribunal under this head where the claim includes, or might include, injury to health as well as injury to feelings.”
Reference was made to the appropriateness of obtaining a medical report. Stuart-Smith LJ continued, at paragraph 22:
“But is the present claim one to which paragraph 4 of the agreement applies? Mr Buchan submits that it is not, because the cause of action is different. The claim in the action is based upon the tort of negligence. The claimant will have to prove not only the conduct of the master, but that it was reasonably foreseeable to a reasonable employer that this might cause psychiatric injury; I merely comment in passing that this might in any event prove a difficult hurdle to surmount. One can reasonably appreciate that such harassment may cause injury to feelings; but psychiatric injury is a different matter. The advantage of the statutory tort, from the claimant’s point of view, is that this requirement does not need to be established; all that needs to be established is the causal link.”
[30]Before leaving Sheriff, I cite paragraph 11 of the judgment of Stuart-Smith LJ with its analysis of possible heads of damage under Section 57:
“Section 57(4) adds a head of injury for which compensation is payable since at common law a claimant cannot as a rule recover damages for injury to feelings, save in defamation and false imprisonment. The subsection does not, as Mr Buchan submitted, restrict the scope of compensation which can be awarded in discrimination cases to injury to feelings as opposed to physical or psychiatric injury. On the contrary, it adds a head not otherwise recoverable. I agree however with Mr Buchan that there is a well recognised difference between injury to health or personal injury, and injury to feelings.”
[31]Miss Moor seeks to rely on the provisions of the Protection from Harassment Act 1997 which provides, in section 3, that a victim of harassment may recover damages for any anxiety caused by the harassment and any financial loss resulting from it. The mischief from which protection is required is similar, it is submitted, to that in the present case and the civil claim does not require proof of foreseeability of the relevant damage. The statute does demonstrate that it is possible to create a statutory tort which does not incorporate the reasonable foreseeability test but I am not much influenced by that in construing the 1976 Act. As appears from section 1, the ingredients of the tort created by the 1997 Act are distinctly different from those under the 1976 Act, which was in any event enacted over twenty years earlier.[32]Miss Monaghan has drawn attention to provisions of the Disability Discrimination Act 1995 and the consequences which might follow from the presence of a test of reasonable foreseeability in that context. I do not consider it appropriate, on the hearing of this appeal, to conduct an investigation into the operation of that more recent Act. Conclusions[33]I do not accept the submission that the foreseeability test is to be incorporated as providing a simple answer to the problems which inevitably arise in situations such as the present. Its establishment, as a pre-requisite, does not eliminate the complex questions of causation which may arise, and do in fact arise in the present case. It would add a dimension to the resolution of the dispute between the parties. I would not decide the point on the basis of which of the tests is easier to apply.[34]Lord Nicholls’ analysis in Kuwait demonstrates the importance, in deciding the extent of the loss for which the defendant ought to be held liable, of analysing the nature and scope of the defendant’s obligation in the particular circumstances (paragraph 71). Different considerations may apply even within the confines of a single tort. The circumstances of the present case were what the employment tribunal rightly found to be a grotesquely offensive racialist remark directed towards the respondent in an employment context. Domestic law requires that an effective remedy must be provided and is reinforced in that respect by community law concepts such as those expressed in Marshall and in Draehmpaehl.[35]The need to provide an effective remedy is not necessarily decisive of the question whether the foreseeablity test applies. A remedy which includes that requirement or pre-requisite, may still be capable of complying with the requirement for adequate financial compensation for wrongdoing. Marshall, at paragraph 26, does leave with the domestic court a discretion as to how to “make good in full” the “loss and damage actually sustained”. The use of such broad expressions does, however, point away from the inclusion of the additional ingredient of foreseeability. For reasons given later, the requirement is unlikely in any event to provide an impediment to complaints in circumstances such as the present.[36]The issue turns on the application to the facts of the expression “in like manner in tort” in Section 57 (1) of the 1976 Act. The present are not circumstances in which the consequences of an act of discrimination causing a detriment need to turn upon an analysis of the intention or motives of the wrongdoer. A sanction against such conduct is required without the need for an analysis of why the act was committed. The obligation is to refrain from making remarks such as the one complained of in this case.[37]A consideration of, for example, whether there is a duty-situation and whether the conduct was reasonable, appropriate in negligence, does not arise in present circumstances and the test by way of direct result appears to me to meet the statutory intention. I see no need to superimpose the requirement or pre-requisite of reasonable foreseeability upon the statutory tort in order to achieve the balance of interests which the law of tort requires. It is sufficient if the damage flows directly and naturally from the wrong. 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, a further control by way of a reasonable foreseeability test is neither appropriate nor necessary in present circumstances.[38]In torts such as negligence and nuisance, the need to establish foreseeability of the relevant kind of harm is a “pre-requisite” of the recovery of damages (Lord Goff in Cambridge Water, pages 300 and 301). In order to do justice between the parties in circumstances which may be complex, that requirement has been held to be appropriate and the facts of such cases as the Wagon Mound and Cambridge Water demonstrate the need for it. In the Wagon Mound, the defendants neither knew nor could reasonably have known that furnace oil was capable of being set on fire when spread on water.[39]In present circumstances of direct discrimination by racial abuse in the face of the victim, the same considerations do not apply. The present facts are akin to the torts of assault and battery in that there was deliberate conduct towards and in the presence of the victim, though the abuse was verbal and not physical. The statutory tort in my view affords protection against that conduct and, applying Lord Nicholls’ test, to the extent that the victim is to be compensated for the loss which arises naturally and directly from the wrong. It is possible that, where the discrimination takes other forms, different considerations will apply.[40]That is my conclusion. However, I add that, once it is accepted that foreseeability need only be of the kind of damage (Hughes) and that distinctions should not be drawn between different kinds of personal injury (Page), the significance of a foreseeability test in circumstances such as the present may be very limited in potentially providing safeguards for a wrongdoer. The wrongdoer in the present case, Mr Pritchard, should plainly have foreseen injury to feelings as a consequence of his conduct. In cases such as the present, I do respectfully question whether a reasonable foreseeability test will have the broad consequence apparently contemplated by Stuart-Smith LJ in paragraph 22 of his judgment in Sheriff. I agree with the conclusion of Stuart-Smith LJ, however, that all that needs to be established in the present case is the causal link between the racial abuse and the psychiatric illness. That is not in any way to minimise the difficulties of establishing that link in cases such as the present or to diminish the care with which an employment tribunal needs to approach the issue.[41]Psychiatric illness is regarded as a species of personal injury (Page). A claimant can, in present circumstances, recover in respect of a recognisable psychiatric illness. The claimant can also, by virtue of section 57 (4), claim in tort for “injury to feelings”. I do not find the presence of sub-section 4 in Section 57 decisive upon the present issue. It was inserted at a time when there may well have been doubt as to whether “injury to feelings” was a proper head of damage in personal injury cases. For the avoidance of doubt, it was declared that damages for the present tort may include damages for such injury. Injury to feelings will most frequently occur, of course, without there being a psychiatric illness but both may result from the conduct complained of. They are different, as stated by Stuart-Smith LJ in Sheriff, but they are not, in my judgment, different kinds of damage in the sense contemplated in cases such as Hughes.[42]I agree with the analysis of Section 57 (4) by Stuart-Smith LJ in Sheriff, with the proviso that while there is a difference between “injury to health or personal injury” and “injury to feelings”, the two are not inconsistent, may overlap and injury to feelings may contribute to injury to health. In Vento v The Chief Constable of West Yorkshire Police [2003] ICR 318 an award including sums for both psychiatric damage (clinical depression and adjustment disorder) and injury to feelings was upheld in this court, though that for injury to feelings substantially reduced. Giving the judgment of the court, Mummery LJ commented, at paragraph 63, that during the period of psychiatric disorder there must have been a substantial degree of overlap with the injury to the applicant’s feelings. This approach does not support a conclusion that the damages are of a different kind.[43]In present circumstances a requirement that psychiatric illness must reasonably have been foreseen by the wrongdoer does not in my view arise. If I am wrong about that, I would hold that on the facts of this case, foreseeability of significant injury to feelings is obvious and, for the reasons given, the foreseeability test is thereby satisfied with respect to psychiatric illness. Causation needs to be established and issues including intervening act and mitigation considered. I would dismiss this appeal. I agree with the conclusion of the EAT that the case should be remitted to the Employment Tribunal. Any proposed drafting amendments to the order of the EAT should be submitted in writing and can be considered when the judgments are handed down.

Lord Justice Clarke:

[44]I agree with Pill LJ that in order to be entitled to compensation for unlawful racial discrimination under section 56 of the 1976 Act it is not necessary for the claimant who has been discriminated against to show that the particular type of loss was reasonably foreseeable. I have reached that conclusion for essentially the same reasons as Pill LJ. I gratefully adopt his account of the facts and use the same abbreviations as he has done.[45]It is common ground that there is no common law rule that in order to recover a particular type of damage it is always necessary to show reasonable foreseeability. That can clearly be seen from the approach to the tort of conversion in the passage which Pill LJ has quoted from paragraphs 69 to 71 of the speech of Lord Nicholls in Kuwait Airways Corporation v Iraqi Airways Co [2002] 2 WLR 1353. Thus, although there are of course many torts in which reasonable foreseeability of the type of damage alleged must be shown, notably negligence, nuisance and Rylands v Fletcher, it does not follow that it must be shown in the case of every statutory tort.[46]It is to my mind essentially a question of construction of the 1976 Act whether, on the facts of a case of this kind, the court should require the claimant to show that it was reasonably foreseeable to the person who made the racist remark (or perhaps to the person who is treated as having done so by section 32 of the 1976 Act) that psychiatric injury would or might result.[47]The relevant questions are encapsulated by Lord Nicholls, namely first whether the wrongful conduct causally contributed to the injury and loss and, secondly, if it did, what is the extent of the injury or loss for which the defendant ought to be held liable. That formulation emphasises the fact that the relevant causal link must be established in every case, so that the requirement of reasonable foreseeability does not avoid any difficulties which may attend proof of causation in a particular case, unless the tribunal of fact can say that reasonable foreseeability cannot be established and so be able to say that it is not necessary to determine any issues of causation.[48]The question whether, in Lord Nicholls’ phrase, the defendant ‘ought to be held liable’ only if he ought reasonably have foreseen that the type of injury alleged was reasonably foreseeable seems to me to depend upon a consideration of the 1976 Act and the policy behind it. The court should I think have in mind the purposive approach to the construction of the Act adopted by Waite LJ in Jones v Tower Boot Co Ltd [1997] ICR 254 at 261-3 and by Templeman LJ in Savjani v Inland Revenue Commissioners [1981] QB 458 at 466-7. Although those cases were concerned with a different problem, they do not support a suggestion that a restricted approach should be adopted to compensation for unlawful racial discrimination.[49]As Templeman LJ put it in a well-known phrase, the Act was brought in to remedy a very great evil. In these circumstances, it seems to me that it should be sufficient if the claimant shows that the particular type of injury alleged was caused by the act of discrimination. Both Miss Moor and Miss Monaghan rely upon the fact that the wrong created by the statute is an intentional wrong in the sense that it cannot be committed accidentally. As Pill LJ has observed, the act or omission must be deliberate and in that sense intentional.[50]In these circumstances I entirely agree with the approach of Stuart-Smith LJ in Sheriff v Klyne Tugs Ltd [1999] ICR 1170, to which Pill LJ has already extensively referred. I will not repeat all his citations and refer to only three. In paragraph 17 Stuart-Smith LJ said of the statutory language:
“In my judgment that language is clear. And the principle must be that the claimant is entitled to be compensated for the loss and damage actually sustained as a result of the statutory tort.”
He then expressly referred to paragraph 26 of the judgment of the ECJ in Marshall (No 2), which is in these terms:
“Where financial compensation is the measure adopted in order to achieve the object indicated above, it must be adequate, in that it must enable the loss and damage actually sustained as a result of the discriminatory dismissal to be made good in full in accordance with applicable national rules.”
[51]Although I recognise that the ECJ was there accepting that it was for member states to formulate national rules, I agree with Stuart-Smith LJ that the ECJ’s approach points the way because it stresses that those rules must enable the loss and damage actually sustained to be made good in full. It seems to me to be likely that it was with that in mind that, after the reference to Marshall (No 2),Stuart-Smith LJ added (also in paragraph 17):
“In Alexander v Home Office [1988] ICR 685 the court was concerned with the quantum of damages for injury to feelings. May LJ said at p 692C: “As with any other awards of damages, the objective of an award for unlawful racial discrimination is restitution. Where the discrimination has caused actual pecuniary loss, such as the refusal of a job, then the damages referable to this can be readily calculated.”” “As with any other awards of damages, the objective of an award for unlawful racial discrimination is restitution. Where the discrimination has caused actual pecuniary loss, such as the refusal of a job, then the damages referable to this can be readily calculated.””
[52]Stuart-Smith LJ’s reasoning (with which Sumner J agreed) was detailed and carefully thought out and seems to me to lead convincingly to the conclusion in paragraph 22 (quoted by Pill LJ) that the advantage of the statutory tort from the claimant’s point of view is that all that needs to be established is the causal link between the discrimination and the injury to feelings or the psychiatric injury as the case might be. I respectfully agree with Stuart-Smith LJ’s reasoning and conclusion and prefer them to the contrary view shortly expressed by Lawton LJ in Skyrail Oceanic Ltd v Coleman [1981] ICR 864 at 871.[53]In all the circumstances I agree with Pill LJ that there is no need to add a further requirement of reasonable foreseeability and that the robust good sense of employment tribunals can be relied upon to ensure that compensation is awarded only where there really is a causal link between the act of discrimination and the injury alleged. No such compensation will of course be payable where there has been a break in the chain of causation or where the claimant has failed to take reasonable steps to mitigate his loss.[54]Like Pill LJ, I am unpersuaded that this decision will open the floodgates to unmeritorious claims. Indeed I have considerable doubts whether it will make any real difference at all. That is because of the decision of the House of Lords in Page v Smith [1996] AC 155, to which Pill LJ has referred. That case is authority (albeit by a majority) for the proposition that, where physical injury (in the sense of non-psychiatric injury) is a reasonably foreseeable consequence of a negligent act or omission, loss and damage as a result of psychiatric injury caused by the same act or omission will be recoverable even if psychiatric injury was not reasonably foreseeable.[55]It seems to me that, if it were necessary to show that any injury or loss was reasonably foreseeable, it would be sufficient to show that injury to feelings was reasonably foreseeable. The reasoning in Page v Smith would lead to the conclusion that it would not then be necessary to show that psychiatric injury was also reasonably foreseeable in order to recover compensation in respect of it. If psychiatric injury and physical injury are treated as the same type of damage, I do not see why injury to feelings and psychiatric injury should not also be so treated.[56]That view is I think supported by two related factors. The first is that, although (as Stuart-Smith LJ pointed out in paragraph 11 of his judgment in Sheriff v Klyne Tugs) there is a well recognised difference between injury to health or personal injury and injury to feelings, that difference was simply that (viewed in 1999) damages for injury to feelings were not recoverable at common law. It may well be that the position was less clear in 1976, which was the reason that section 57(4) of the 1976 Act declared that ‘for the avoidance of doubt’ damage in respect of an unlawful act of discrimination could include injury to feelings. I see no reason why, in the light of that declaration in section 57(4), injury to feelings should not be treated as the same type of damage as psychiatric injury (or vice versa) for the purposes of the principle in Page v Smith. The second related factor is that there is a good deal of material in this case which suggests that in practice there is a considerable overlap between injury to feelings and psychiatric injury.[57]In the instant case it has not, so far as I am aware, been suggested that it was not reasonably foreseeable that the respondent would suffer injury to his feelings. It seems to me to follow from the above discussion that if (contrary to my view) there were any requirement for a claimant to show reasonable foreseeability, the claimant would have satisfied that requirement and would be able to recover compensation in respect of any psychiatric injury which was caused by the unlawful discrimination.[58]In these circumstances it seems to me that there are likely to be very few cases in which reasonable foreseeability will be a crucial factor. However, even if my approach to Page v Smith were wrong, I would hold that the statute requires only causation to be established. Finally, I also agree with Pill LJ that the appeal should be dismissed and the matter remitted to the employment tribunal.[59]Since writing the above I have seen a draft of the judgment of Rix LJ expressing a different view. I have considered whether I should alter the opinion I had formed in that light of his interesting analysis but I am not persuaded that I should do so. I add a few further observations on some of the issues.[60]First, as to sections 56(1)(b) and 57(1) of the 1976 Act, I agree with Rix LJ that there is nothing in either section to require a sole test of causation. On the other hand, I do not think that there is anything in either section to suggest that loss is only recoverable if it is of a type which is reasonably foreseeable. The provision that a claim may be made the subject of civil proceedings “in like manner as any other claim in tort” does not seem to me to point to such a conclusion. It is an entirely procedural provision, which is to my mind neutral on the question at issue here.[61]Secondly, I agree with Rix LJ that the inquiry as to the extent of the loss for which the defendant ought to be held liable involves a value judgment. In short, it involves answering the second question identified by Lord Nicholls, namely what is the extent of the injury and loss for which the defendant ought to be liable. The answer depends upon a consideration of the particular tort with which the court is concerned.[62]The tort of racial discrimination is a unique tort. It cannot be committed by accident. The act or omission must be deliberate but I agree with Pill LJ that there is no need for an analysis of why the act or omission is committed. I also agree with him that in these circumstances there is no need to super-impose the requirement or pre-requisite of reasonable foreseeability in order to achieve the balance of interests which the law of tort requires.[63]If the question is tested by reference to the facts of this case, it seems to me that that balance is best achieved by affording compensation for injury caused by the act of discrimination. Such an approach affords justice to the claimant who has been unlawfully discriminated against and is not unjust to the perpetrator because he deliberately made the racist remark. Like Rix LJ, I am intrigued by the just and equitable phraseology found in section 56 of the 1976 Act. Although no-one placed reliance upon it in the course of the argument, it seems to me that for the reasons already given, in the particular circumstances of this statutory tort, justice and equity are best served by holding that a simple test of causation is sufficient. The position might be different if there were a real risk that, without a further requirement of reasonable foreseeability, the floodgates of unmeritorious claims might be opened. I adhere to my view that there is no such real risk.[64]Finally, I add a word on Page v Smith referred to above. I recognise of course that there are differences between injury to feelings and psychiatric injury, just as there are differences between psychiatric injury and physical injury which is not psychiatric injury. However, as cases such as Vento v the Chief Constable of West Yorkshire Police [2003] ICR 318show, there may be a considerable overlap between psychiatric damage and injury to feelings. In these circumstances, I agree with Pill LJ that the approach in such cases does not support a conclusion that damages for psychiatric injury and damages for injury to feelings are damages of a different kind.[65]That is to my mind especially so given the declaration in section 57(4) of the 1976 Act that “for the avoidance of doubt … damage … may include injury to feelings”. It seems to me that there is a far closer relationship between psychiatric injury and injury to feelings than there is between psychiatric injury and the kind of non-psychiatric physical injury being considered in Page v Smith. If reasonable foreseeability of the non-psychiatric physical injuries in Page v Smith made it unnecessary for the claimant to show that psychiatric injury was reasonably foreseeable, it would in my opinion be very odd if reasonable foreseeability of injury to feelings was not sufficient to avoid any necessity to show that psychiatric injury as reasonably foreseeable. I have not therefore changed the view I expressed above.[66]In any event those considerations seem to me to support the conclusion that it is not necessary to impose a requirement of reasonable foreseeability as well as causation.

Lord Justice Rix:

[67]I gratefully adopt Lord Justice Pill’s account of the background facts and submissions of the parties.[68]The principal issue before the court is whether the damages recoverable from a defendant who has been found liable in the statutory tort of racial discrimination under section 54 of the Race Relations Act 1976 (the “1976 Act”) is quantifiable solely by reference to proof of a causal link between the discriminatory act and the loss claimed or also by reference to the concept of reasonable foreseeability. I consider this to be a question of the quantification of damages rather than of the conditions or pre-requisites for the finding of liability. Thus although the appellant, Laing Limited, submits that the Employment Appeal Tribunal (the “EAT”) was wrong to remit the case to the Employment Tribunal for it to find “to what extent Mr Essa’s psychological injury was a direct cause [sc consequence] of the racial abuse he suffered” without reference to whether such injury was foreseeable and subject only to questions of intervening cause and mitigation, no objection has been made to the award of £5,000 in respect of injury to feelings, or of £569.76 for loss of earnings. Similarly, Ms Moor’s skeleton argument on behalf of the respondent, Mr Essa, speaks of the point as one on the “scope of damages”: she submits that whilst the foreseeability test makes sense in common law actions of negligence and nuisance by harmonising the test for causation with the test for liability, such considerations do not apply in a race discrimination claim. So also Ms Monaghan, on behalf of the interveners, put her principal proposition in these terms – “that the proper test for assessing compensation for the statutory tort of unlawful discrimination is a simple causation test: a claimant is entitled to all losses flowing from the unlawful act (subject only to any new intervening cause, eg a failure to mitigate).”

The Race Relations Act 1976

[69]The Act does not approach the subject of racial discrimination by providing a personal cause of action in all circumstances, but rather legislates for particular fields of conduct. Part I defines the “discrimination to which the Act applies”, Part II deals with “discrimination in the employment field” (and is the Part which applies directly to the present case), Part III deals with “discrimination in other fields” which are defined, viz education, planning, public authorities, “goods, facilities, services and premises”, and barristers, and Part IV provides for “other unlawful acts”. Part VII sets up a Commission for Racial Equality, whose functions are there defined. Part VIII is concerned with “Enforcement” and section 53 there makes it clear that the Act is the sole source of any proceedings, civil or criminal, which can be brought by reason of any act made unlawful under it. Only discrimination within Parts II and III gives rise to a personal cause of action.[70]Claims within Part II (ie within the field of employment) are called “complaints” and are to be brought before an employment tribunal (section 54(1)). Section 56 describes the “remedies” which are available on complaint under section 54. It provides as follows:
“56 (1) Where an employment tribunal finds that a complaint presented to it under section 54 is well-founded, the tribunal shall make such of the following as it considers just and equitable – i) an order declaring the rights of the complainant and the respondent in relation to the act to which the complaint relates; ii) an order requiring the respondent to pay to the complainant compensation of an amount corresponding to any damages he could have been ordered by a county court or by a sheriff court to pay to the complainant ifthe complaint had fallen to be dealt with under section 57; [emphasis added] iii) a recommendation that the respondent take within a specified period action appearing to the tribunal to be practicable for the purpose of obviating or reducing the adverse effect on the complainant of any act of discrimination to which the complaint relates. (4) If without reasonable justification the respondent to a complaint fails to comply with a recommendation made by an employment tribunal under subsection (1)(c), then, if it thinks it just and equitable to do so – i) the tribunal…may increase the amount of compensation required to be paid to the complainant in respect of the complaint by an order made under subsection (1)(b); or ii) if an order under subsection (1)(b) could have been made but was not, the tribunal may make such an order.” i) an order declaring the rights of the complainant and the respondent in relation to the act to which the complaint relates; ii) an order requiring the respondent to pay to the complainant compensation of an amount corresponding to any damages he could have been ordered by a county court or by a sheriff court to pay to the complainant ifthe complaint had fallen to be dealt with under section 57; [emphasis added] iii) a recommendation that the respondent take within a specified period action appearing to the tribunal to be practicable for the purpose of obviating or reducing the adverse effect on the complainant of any act of discrimination to which the complaint relates. i) the tribunal…may increase the amount of compensation required to be paid to the complainant in respect of the complaint by an order made under subsection (1)(b); or ii) if an order under subsection (1)(b) could have been made but was not, the tribunal may make such an order.”
[71]The words emphasised within section 56(1)(b) are entirely neutral as to the quantification of such damages. It will be observed that the choice of available remedies are for the tribunal’s consideration of what is “just and equitable” and that in a case under sub-section (4) the tribunal may increase or add an award of damages if it thinks it just and equitable to do so.[72]Section 57, to which section 56(1)(b) makes reference, is concerned with the enforcement of claims under Part III. Such claims are not referred to as complaints but claims. Section 57 provides:
“57 (1) A claim by any person (“the claimant”) that another person (“the respondent”) – i) has committed an act of discrimination against the claimant which is unlawful by virtue of Part III; or ii) is by virtue of section 32 or 33 to be treated as having committed such an act of discrimination against the claimant, may be made the subject of civilproceedings in like manner as any other claim in tort or (in Scotland) in reparation for breach of statutory duty. (2) Proceedings under subsection (1) – i) shall, in England and Wales, be brought only in a designated county court; and… but all such remedies shall be obtainable in such proceedings as, apart from this subsection and section 53(1) would be obtainable in the High Court or the Court of Session, as the case may be. (3) As respects an unlawful act of discrimination falling within section 1(1)(b), no award of damages shall be made if the respondent proves that the requirement or condition in question was not applied with the intention of treating the claimant unfavourably on racial grounds. (4) For the avoidance of doubt it is hereby declared that damages in respect of an unlawful act of discrimination may include compensation for injury to feelings whether or not they include compensation under any other head.”
[emphasis added] i) has committed an act of discrimination against the claimant which is unlawful by virtue of Part III; or ii) is by virtue of section 32 or 33 to be treated as having committed such an act of discrimination against the claimant, i) shall, in England and Wales, be brought only in a designated county court; and…[73]It may be observed that in claims under Part III proceedings may be brought in like manner as any other claim in tort and that all remedies obtainable in any other civil proceedings in the High Court are available. There is no suggestion in this language, one way or another, of any particular rule of quantification. Subsection (3) gives a special defence against a claim in damages for indirect discrimination in the absence of the requisite intention. Subsection (4) gives a claim for damages for injury for feelings as well as “under any other head”.[74]It is recognised that the 1976 Act and the Sex Discrimination Act 1975 can be interpreted together: Rhys-Harper v. Relaxion Group plc [2003] UKHL 33, [2003] ICR 867 at paras 74 and 81.

European jurisprudence

[75]It was submitted on behalf of Mr Essa and the interveners that European jurisprudence in the field of sex discrimination requires a pure test of causation and is inconsistent with a test of foreseeability, and that the same approach should be applied in the field of race discrimination.[76]Council Directive 76/207/EEC of 9 February 1976 requires victims of sex discrimination to be provided with recourse to judicial process. Article 6 provides:
“6. Member states shall introduce into their national legal systems such measures as are necessary to enable all persons who consider themselves wronged by failure to apply to them the principle of equal treatment within the meaning of articles 3, 4 and 5 to pursue their claims by judicial process after possible recourse to other competent authorities.”
[77]Section 65(2) of the Sex Discrimination Act 1975 (as amended) at one time provided for a statutory cap on the amount of damages recoverable) by enacting that – “The amount of compensation awarded to a person under subsection (1)(b) shall not exceed the limit for the time being imposed by section 75 of the Employment Protection (Consolidation) Act 1978.”[78]In Marshall v. Southampton and South West Hampshire Health Authority (Teaching) (No 2) [1994] QB 126 the European Court of Justice had to consider whether such a statutory cap was legitimate under European law. Mrs Marshall had been required to retire at the age of 62 while the retirement age for men was 65. Her claim for unlawful discrimination was referred to the industrial tribunal for the assessment of compensation. Her employer, the health authority, tendered the statutory maximum which at the time was £6,250: but the tribunal found that her actual loss was £19,405 inclusive of £7,710 interest (her retirement had occurred back in 1980). The ECJ reasoned, in the passage cited by Pill LJ at para 25 above, that the objective of the directive was to arrive at “real equality of opportunity”, that a situation of equality could not be restored in the event of breach without either reinstating the victim or providing financial compensation, and that in the latter case – “26. Where financial compensation is the measure adopted in order to achieve the objective indicated above, it must be adequate, in that it must enable the damage actually sustained as a result of the discriminatory dismissal to be made good in full in accordance with the applicable national rules.”[79]It therefore followed that an arbitrary cap was not permissible and that interest should be allowed to compensate for the effluxion of time. The Court said:
“30. It also follows from that interpretation that the fixing of an upper limit of the kind at issue in the main proceedings cannot, by definition, constitute proper implementation of article 6 of the Directive, since it limits the amount of compensation a priori to a level which is not necessarily consistent with the requirement of ensuring real opportunity through adequate reparation for the loss and damage sustained as a result of discriminatory dismissal. “31. With regard to the second question relating to the award of interest, suffice it to say that full compensation for the loss and damage sustained as a result of discriminatory dismissal cannot leave out of account factors, such as the effluxion of time, which may in fact reduce its value. The award of interest, in accordance with the applicable national rules, must therefore be regarded as an essential component of compensation for the purposes of restoring real equality of treatment.”
[80]In Draehmpaehl v. Urania Immobilienservice ohG [1998] ICR 164 the German statute imposed a ceiling of three months’ salary on the provision of compensation for sex discrimination in the appointment of an applicant for employment. The employer submitted that the claimant would not have been appointed in any event because the applicant who was appointed had better qualifications. The ECJ distinguished between a claimant who would not have been appointed even in the absence of any discrimination and a claimant who would have obtained employment in the absence of discrimination in the selection process. In the former case, a ceiling of three months’ salary was acceptable as a statutory presumption as to the limit of loss, for the claimant would not have suffered any loss over and above the act of discrimination; but in the latter case the limit was inconsistent with the directive’s requirements, which the Court expressed as follows:
“25…compensation must be such as to guarantee real and effective judicial protection, have a real deterrent effect on the employer and must in any event be adequate in relation to the damage sustained. Purely nominal compensation would not satisfy the requirements of an effective transposition of the Directive: von Colson [Case 14/83 [1984] ECR 1891], p. 1908, paras. 23 and 24.”
[81]Reliance was also placed before us on the equal pay directive 75/117/EEC whose article 6 provides:
“Member states shall, in accordance with their national circumstances and legal systems, take the measures necessary to ensure that the principle of equal pay is applied. They shall see that effective means are available to take care that this principle is observed.”
[82]In Levez v. T H Jennings (Harlow Pools) Ltd [1999] ICR 521 the ECJ had to consider section 2(5) of the Equal Pay Act 1970 which contained a limitation of arrears in respect of more than two years before the commencement of proceedings. On the facts, Mrs Levez’s delay in bringing her claim was due to a deliberate misrepresentation by her employer as to the remuneration received by men performing the like work. The ECJ held that the statutory cap was in principle “not in itself open to criticism” as a reasonable limitation period (at para 19), but that its application in that case was not acceptable in the absence of a discretion to extend the period to take account of the employer’s deliberate misrepresentation. The Court referred to its well-known jurisprudence regarding the impact of the principles of equivalence and effectiveness on national procedural rules (at para 18).[83]In the more recent Race Directive 2000/43/EC 29 June 2000 (implementing the principle of equal treatment between persons irrespective of racial or ethnic origin) preamble (26) provides that – “Member States should provide for effective, proportionate and dissuasive sanctions in case of breaches of the obligations under this Directive.”[84]Ms Moor and Ms Monaghan submitted that this jurisprudence was incompatible with the application of the concept of reasonable foreseeability as a limiting factor on the awarding of damages for loss actually suffered as a consequence of a breach of the requirements of the relevant directives. They emphasised the ECJ’s insistence that compensation be provided for a victim’s actual loss, and its acceptance that only in this way can the underlying principle of equality be vindicated.[85]I would accept the relevance of this jurisprudence, but in my judgment these decisions take the matter no further. In the circumstances of the national statutory limitations there discussed it is inevitable that reference was made to the claimants’ actual loss as distinct from the artificial ceilings in issue. It was in this context that it was said (in Marshall) that loss was to be made good “in full in accordance with applicable national rules”. No question of foreseeability was directly in play in any of these decisions. If, therefore, England’s national rules require a concept of foreseeability for the fair adjudication of a claim in racial discrimination, I do not see why such a rule for quantifying damages is prima facie inconsistent with the principles and objectives of the outlawing of racial (or other forms of) discrimination. As applied in our general law, it is not obvious to me that such a rule undermines the application of effective, proportionate and dissuasive sanctions for breach of the relevant obligations. If it does so, or if in its absence a rule of pure causation better vindicates the purposes of the 1976 Act, then that is something which the philosophy and the role of these concepts in the general law, as seen against the construction of the 1976 Act, should be able to demonstrate.[86]I therefore turn to examine that question, and begin by asking whether there is anything in the 1976 Act itself which should, either as a matter of construction of its language, or as a matter of its purposes, mandate a particular answer or at least predispose the enquiry to lead to a particular conclusion.

Does the 1976 Act require or suggest quantification by reference to pure causation?

[87]It seems to me that the initial question is whether the 1976 Act requires or suggests that quantification of loss should be by reference to pure causation. I have already considered the structure and language of the Act above. In my judgment, there is nothing in the language of the Act to require or suggest a test of pure causation. On the contrary, section 57(1) states that a claim under Part III may be made the subject of civil proceedings “in like manner as any other claim in tort” and section 57(2) states that the general remedies “obtainable in the High Court” shall be obtainable in such a claim. The same provisions are referable to a complaint under Part II, by reason of section 56(1)(b). The only possibly relevant difference under Part II is that the remedies obtainable thereunder are specifically said to depend on what an employment tribunal considers just and equitable: see the opening words of section 56(1) and (4). None of the submissions before us, however, were directed to these words and so I do not place any particular reliance on them. However, they appear to focus on the overall merits of any particular complaint. What is just and equitable would seem to me to emphasise the need for balance and fairness: presumably the context of employment brings its own difficulties.[88]If therefore the purpose of the statute is to be said to suggest a particular or special rule for the quantification of damages – in the absence of express language it can hardly be argued that any particular rule is required – then the governing considerations will presumably be illuminated by matters of general principle. That is the next question to which I turn. Do general considerations of the principles of quantification of damage point to a pure causation rule or to a foreseeability rule?[89]Lord Nicholls’ restatement in Kuwait Airways Corporation v. Iraqi Airways Co (Nos 4 and 5) [2002] UKHL 19, [2002] 2 AC 883 of the problem of quantification of loss in tort has rapidly become a leading text. Lord Justice Pill LJ has set out the essence of that part of Lord Nicholls’ speech at para 22 above. I would respectfully make the following observations.[90]The passage begins by asking “How, then, does one identify a plaintiff’s “true loss” in cases of tort?” The terms of that question demonstrate, by reference to what follows in answer to it, that a rule of pure causation has no greater claim than any other rule to constitute by itself the proof of a claimant’s actual or true loss. Of course, unless the claimant’s loss has been caused by the defendant’s wrong, then a claim does not get to first base. In that sense the rule of causation is fundamental. But, as Lord Nicholls rapidly proceeds to explain, the test of causation is only the first part of a “twofold inquiry”, the second part of which is to ask “what is the extent of the loss for which the defendant ought to be held liable”. That second inquiry involves a value judgment:
“70…The law has to set a limit to the causally connected losses for which a defendant is to be held responsible. In the ordinary language of lawyers, losses outside the limit may bear one of several labels. They may be described as too remote because the wrongful conduct was not a substantial or proximate cause, or because the loss was the product of an intervening cause. The defendant’s responsibility may be excluded because the plaintiff failed to mitigate his loss. Familiar principles, such as foreseeability, assist in promoting some consistency of general approach. These are guidelines, some more helpful than others, but they are never more than this.”
[91]It is to my mind interesting and instructive that Lord Nicholls treats these various guidelines as all being part of “the second inquiry”. Some of them are closely related to concepts of cause, such as substantial, proximate or intervening cause. Mitigation is also closely linked to causation, but is still often treated as something different from it. It is a way of drawing attention to an argument that some loss, although a consequence of the wrongful act, is rather to be ascribed to the responsibility of the claimant. Foreseeability is less obviously linked to concepts of causation, but is still not entirely divorced from them: unforeseeable consequences are treated as it were as caused, legally speaking, by something other than the wrongful actor, they are at the risk of the claimant rather than of the defendant. To know how to operate such guidelines in any case, especially – “when the outcome of the second inquiry is not obvious, it is of crucial importance to identify the purpose of the relevant cause of action and the nature and scope of the defendant’s obligation in the particular circumstances. What was the ambit of the defendant’s duty? In respect of what risks or damage does the law seek to afford protection by means of the particular tort?” (at para 71).[92]The distinction between the two lines of enquiry has been recognised in terminology which varies. Sometimes the distinction drawn is between causation and remoteness; a more modern terminology is between cause in fact and cause in law: see McGregor on Damages, 17th ed, 2003, at para 6-005. At para 6-004 McGregor states:
“In relation to tort, remoteness in its causation aspect has generally been taken as the primary concern: the question is whether in law the defendant’s tort caused the claimant’s damage, whether in law the claimant’s damage resulted from the defendant’s tort. In the past less attention has been paid, although unjustifiably, to remoteness in so far as it concerns the scope of protection given by the particular tort; it is beginning to get more attention.”
[93]Whereas it is helpful to distinguish the two lines of enquiry, I have already underlined Lord Nicholls’ own implicit observation that the concept of causation does not simply lie, easily identifiable, on only one side of the division. The actual decision in Kuwait Airways makes the point in a graphic way. The issue was whether a person committing a second successive conversion had a defence to the payment of more than nominal damages on the ground that the claimant had already lost his property as a result of the first conversion by another party. It was argued on behalf of the defendant that the basic test of causation in fact, the so-called “but for” test, demonstrated that, since the claimant had already lost his goods to the first converter, “but for” the second conversion the loss would have occurred in any event: therefore the claim failed the “but for” test and the damages were nil. The House of Lords disagreed: the nature, scope and purpose of the tort of conversion made it necessary to ask not whether the second conversion had added to the loss of the first, but whether the second conversion had caused any loss on the assumption that the claimant would otherwise have retained his goods: see Lord Nicholls at para 83.[94]At a later stage of his speech Lord Nicholls also had to consider whether the concept of foreseeability applied to the quantification of the claimant’s losses. Kuwait Airways’ civil aircraft were converted by Iraq Airways and some of them were flown out to Iran. Iran detained them and would only permit their recovery on payment of a fee of $20 million for sheltering and maintaining them. Moreover the loss of Kuwait Airways’ fleet caused financial losses in the operation of their business. It was argued on behalf of Iraq Airways that some or all of these losses were unforeseeable and therefore irrecoverable. Two important distinctions were made by Lord Nicholls. The first was between the direct losses of recovering the aircraft in Iran and the consequential losses to their business. The second was between an innocent and a dishonest conversion. As for the direct losses, a converter could not pray in aid unforeseen consequences beyond his control, because “A person who misappropriates another’s goods does so at his own risk” (at para 92). As for consequential losses, however, the foreseeability test should be applied to protect an “innocent” converter who acted in ignorance and good faith, but a defendant who knowingly converts another’s goods should be liable on the same “remoteness test” as applies in deceit (at paras 103/104). Of particular interest for the submissions in the present case is the following passage (at paras 100/101):
“100. Expressed in terms of the traditional guideline principles, the choice is between confining liability for consequential loss to damage which is “foreseeable”, as distinct from damage flowing “directly and naturally” from the wrongful conduct. In practice, these two tests usually yield the same result. Where they do not, the foreseeability test is likely to be the more restrictive. The prevalent view is that the more restrictive test of foreseeability is applicable to the torts of negligence, nuisance and Rylands v Fletcheri: see the two Wagon Mound cases [1961] AC 388 and [1967] 1 AC 617 and Cambridge Water Co v Eastern Counties Leather plc [1994] 2 AC 264… “101. In contrast, the less restrictive test is applicable in deceit. The more culpable the defendant the wider the area of loss for which he can fairly be held responsible: see the discussion by my noble and learned friend Lord Steyn in Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254, 279-285.”
[95]Two passages from the cases cited in that extract are worth mentioning at this point, for they most clearly express the philosophy which led to the rules of remoteness applicable to the respective torts. In Wagon Mound (No 1) [1961] AC 388 Viscount Simonds famously said (at 423):
“For, if some limitation must be imposed upon the consequences for which the negligent actor is to be held responsible – and all are agreed that some limitation there must be – why should that test (reasonable foreseeability) be rejected which, since he is judged by what the reasonable man ought to foresee, corresponds with the common conscience of mankind, and a test (the “direct” consequence) be substituted which leads nowhere but the never-ending and insoluble problems of causation. “The lawyer” said Sir Frederick Pollock, “cannot afford to adventure himself with philosophers in the logical and metaphysical controversies that beset the idea of cause.”
Yet this is just what he has most unfortunately done and must continue to do if the rule in Polemis is to prevail. A conspicuous example occurs when the actor seeks to escape liability on the ground that the “chain of causation” is broken by a “nova causa” or “novus actus interveniens”.”[96]In the case of deceit, however, Lord Steyn said this in Smith New Court [1997] AC 254 at 279/280 under the heading of “The justification for distinguishing between deceit and negligence”:
“As Hart and Honoré, Causation in the Law, 2nd ed. (1985), p. 304 observed, an innocent plaintiff may, not without reason, call on a morally reprehensible defendant to pay the whole of the loss he caused. The exclusion of heads of loss in the law of negligence, which reflects considerations of legal policy, does not necessarily avail the intentional wrongdoer. Such a policy of imposing more stringent remedies on an intentional wrongdoer serves two purposes. First it serves a deterrent purpose in discouraging fraud. Counsel for Citibank argued that the sole purpose of the law of tort generally, and the tort of deceit in particular, should be to compensate the victims of civil wrongs. That is far too narrow a view. Professor Glanville Williams identified four possible purposes of an action for damages in tort: appeasement, justice, deterrence and compensation: see “The Aims of the Law of Tort” (1951) 4 C.L.P. 137. He concluded, at p. 172: “Where possible the law seems to like to ride two or three horses at once: but occasionally a situation occurs where one must be selected. The tendency is then to choose the deterrent purpose for tort of intention, the compensatory purpose for other torts.”
And in the battle against fraud civil remedies can play a useful and beneficial role. Secondly, as between the fraudster and the innocent party, moral considerations militate in favour of requiring the fraudster to bear the risk of misfortunes directly caused by his fraud. I make no apology for referring to moral considerations. The law and morality are inextricably interwoven. To a large extent the law is simply formulated and declared morality. And, as Oliver Wendell Holmes, The Common Law (ed. M. De W. Howe), p. 106, observed, the very notion of deceit with its overtones of wickedness is drawn from the moral world.” “Where possible the law seems to like to ride two or three horses at once: but occasionally a situation occurs where one must be selected. The tendency is then to choose the deterrent purpose for tort of intention, the compensatory purpose for other torts.”[97]Where in this spectrum does the new statutory tort of racial discrimination lie? The rule in deceit appears to be regarded as an exceptional one (see McGregor at para 41-006: “with deceit, in contradistinction to tort generally, the damages need not have been reasonably foreseeable”), and it is clear from Lord Nicholls speech in Kuwait Airways that the rationale of the rule and its extension into knowing conversion depends on dishonesty. It was submitted on behalf of Mr Essa and the interveners that the public interest in discouraging racial (and other forms of) discrimination should likewise prompt the adoption of the deceit rule, and that in any event discrimination is an intentional act, distinct from mere negligence.[98]In my judgment, however, this submission is not a cogent one. I grant that the 1976 Act is designed as a whole to improve public conduct in the field of racial discrimination inter alia by deterrence, and that the public interest in decency and equality in this and other like fields is considerable. It is hard to say, however, that the interest is greater than in the discouragement of negligence. Moreover, I find the concept of intention in this context, as distinct from deceit, elusive. An act of discrimination may be deliberate, without there being any intent to discriminate. It is well recognised in any event that discrimination may occur without any deliberate intent, or unconsciously, or, in the case of indirect discrimination, may arise because the defendant fails objectively to justify some detrimental requirement or condition and, where damages are claimed, fails to bring himself within section 57(3). An employer is liable for the unlawful act of discrimination committed by his employee in the course of his employment whether or not the act was done with the employer’s knowledge or approval, and he may fail to make good the objective test that he had taken such steps as were reasonably practicable to prevent the employee doing such an act (section 32). On the other hand, in an appropriate case exemplary damages are available (see McGregor at para 11-014). In truth, cases of discrimination may vary enormously. Just how much so is well illustrated by James v. Eastleigh Borough Council [1990] 2 AC 751 where a case of unlawful direct sex discrimination was upheld because the council permitted women of pensionable age free attendance at a leisure centre at an age at which men, not having reached pensionable age, could not obtain the like benefit. It was irrelevant that the council’s motive was benign, and the council was held to have acted intentionally for “that intention is simply an intention to perform the relevant act of less favourable treatment”. In such circumstances there seems to me to be no reason in principle why every case should be treated as though it partook of the dishonest (or malicious).[99]Thus in Alexander v. Home Office [1988] ICR 685 May LJ discussed the range of options open to a tribunal to match damages appropriately to the nature of the discrimination (at 692/3):
“As with any other awards of damages, the objective of an award for unlawful racial discrimination is restitution. Where the discrimination has caused actual pecuniary loss, such as the refusal of a job, then the damages referable to this can be readily calculated. For the injury to feelings, however, for the humiliation, for the insult, it is impossible to say what is restitution and the answer must depend on the experience and good sense of the judge and his assessors. Awards should not be minimal, because this would tend to trivialise or diminish respect for the public policy to which the Act gives effect. On the other hand, just because it is impossible to assess the monetary value of injured feelings, awards should be restrained. To award sums which are generally felt to be excessive does almost as much harm to the policy and the results which it seeks to achieve as do nominal awards. Further, injury to feelings which is likely to be of short duration, is less serious than physical injury to the body or the mind which may persist for months, in many cases for life. “Nevertheless damages for this relatively new tort of unlawful racial discrimination are at large, that is to say they are not limited to the pecuniary loss that can be specifically proved. Further, even where exemplary or punitive damages are not sought, nevertheless compensatory damages may and in some instances should include an element of aggravated damages where, for example, the defendant may have behaved in a highhanded, malicious, insulting or oppressive manner in committing the act of discrimination: see per Lord Devlin in Rookes v. Barnard [1964] A.C. 1129, 1121; per Lord Reid in Broome v. Cassell & Co. Ltd. [1972] A.C. 1027, 1085 and per Lords Diplock in Broome’s case, at p. 1124… “Although damages for racial discrimination will in many cases be analogous to those for defamation, they are not necessarily the same. In the latter, the principal injury to be compensated is that to the plaintiff’s reputation: I doubt whether this will play a large part in the former. On the other hand, if the plaintiff knows of the racial discrimination and that he has thereby been held up to “hatred, ridicule or contempt”, then the injury to his feelings will be an important element in the damages…”
[100]It was submitted before us that the nature of the tort of racial discrimination was closer to that of defamation than to that of negligence. The above citation from Alexander indicates that that may be the case where injury to feelings are concerned; but there it seems to me that the analogy stops.[101]There is no prior authority within the sphere of discrimination which binds this court, only two conflicting dicta. In Skyrail Oceanic Ltd v. Coleman [1981] ICR 864 there was a claim under the Sex Discrimination Act 1975 by Mrs Coleman. That Act contained in its sections 65(1)(b) and 66(4) identical provisions to sections 56(1)(b) and 57(4) of the 1976 Act. She had been wrongly dismissed by her employer. The industrial tribunal awarded her £1,666 compensation, which included £1,000 for injury to feelings. The court of appeal reduced the £1,000 award for injury to feelings to £100 on two grounds: the first was that the tribunal had taken into account injury to her feelings arising out of damage to her reputation caused by the dismissal, but that injury was not properly attributable to the unlawful act of sex discrimination; the second was that the award was out of all proportion to the injury proved. In introducing his reasons for reducing the compensation awarded, Lawton LJ briefly said (at 871F) – “Compensation is to be awarded for foreseeable damage arising directly from an unlawful act of discrimination.” No reason was given for the requirement of foreseeability.[102]In Sheriff v. Klyne Tugs (Lowestoft) Ltd [1999] ICR 1170, however, the claimant seaman had previously compromised his complaint of racial discrimination under the 1976 Act arising out of an allegation of bullying and harassment by the master of his vessel. Subsequently he brought a further claim against his employers alleging negligence in permitting such treatment on the part of the master causing personal injury in the form of post-traumatic stress disorder. His claim was struck out as an abuse of process on the ground that it was identical to the claim that had been compromised. It was submitted on behalf of the claimant that the employment tribunal had had no power under the 1976 Act to award compensation for personal injuries. That submission was rejected, on the ground that all forms of loss and damage could be compensated - pecuniary loss, injury to feelings, and physical injury whether to body or mind: see para 17, where Alexander was cited and Stuart-Smith LJ also said, referring inter alia to Marshall (No 2) – “And the principle must be that the claimant is entitled to be compensated for the loss and damage actually sustained as a result of the statutory tort.”[103]A second submission was that the claim in negligence fell outside the compromise “because the cause of action is different”. In rejecting that submission on the ground that whatever the tort the claim was a claim for compensation for injury in respect of which the employment tribunal had jurisdiction, Stuart-Smith LJ observed (at para 22) that:
“The claim in the action is based on the tort of negligence. The claimant will have to prove not only the conduct of the master, but that it was reasonably foreseeable to a reasonable employer that this might cause psychiatric injury…The advantage of the statutory tort, from the claimant’s point of view, is that this requirement does not need to be established; all that needs to be established is the causal link.”
[104]As in the case of Lawton LJ’s contrary remark in Skyrail, no reason was advanced for this observation, nor was Skyrail cited. It may be that Stuart-Smith LJ had in mind his comment at para 17 citing Marshall (No 2) (see above) to the effect that the claimant is entitled to be compensated for loss and damage actually sustained: but if that was intended to be decisive of the applicable rule of remoteness (and I would comment that the context of the submission at that point of the judgment was the different one of whether personal injury was a possible head of damage), then I would repeat my view that Marshall (No 2) was concerned with the quite different question whether a claimant’s loss, instead of being assessed in the ordinary way and in accordance with whatever might be the applicable rules of remoteness, could be arbitrarily curtailed by a statutory cap which bore no relationship to the damage sustained.[105]Thus far, I can find nothing in the statute itself, nor in either European or domestic jurisprudence, which requires a conclusion that the relevant rule of remoteness is one of pure causation. Normally, liability for personal injury in tort is limited by the concept of foreseeability. In Cambridge Water Co v. Eastern Counties Leather plc [1994] AC 264 at 300G Lord Goff of Chieveley reasoned that if that was a requirement of the law of negligence in relation to personal injury, it should similarly be a requirement of the law of nuisance in relation to interference with the enjoyment of land.A similar concept (the “contemplation of the parties”) applies in contract: Czarnikow v. Koufos (The Heron II) [1969] 1 AC 350.Whatever rule applies has to operate not only in the sphere of personal injury caused by racial (or sex) discrimination, but also in the sphere of pecuniary loss so caused. If the suggestion is that the only relevant rule is one of cause in fact, then almost uniquely the second enquiry of cause in law will have been omitted from consideration. However, I understand the submission of the respondent and of the interveners to allow other elements of cause in law to have their play, such as mitigation and intervening cause, but only to exclude the rule or guideline of foreseeability. The rule reflects an inherent notion of rationality and proportionality, or what Viscount Simonds in Wagon Mound (No 1) referred to as the “common conscience of mankind”. It is submitted that an analogy is to be made with deceit and dishonest conversion, but I do not think that the analogy holds good. The law of discrimination covers a vast range of human conduct. It is always undesirable and sometimes wicked in the extreme, but in my view it is too disparate to be put together with deliberate dishonesty. In any event, for the reasons given by May LJ in Alexander, it seems to me that the law has several and sufficient instruments at its disposal to ensure that more serious examples of discrimination are adequately discouraged and compensated.[106]It may be that even so there are cases of deliberate and malicious discrimination which can only be compensated adequately on a remoteness test akin to that found in deceit, just as in Kuwait Airways Lord Nicholls said that the deceit rule might well apply to certain, but not all, forms of conversion. I would on the whole be reluctant to promote the added complication of a test which varied with the nature of the discrimination. If therefore I had to choose between the two rules debated before us, I would prefer to say that the remoteness test of foreseeability prevailed, for all the reasons stated above and also because I am reasonably confident that foreseeability is unlikely to provide a defendant in a bad case with any realistic defence. I am also intrigued by the just and equitable phraseology found in section 56 (but not in section 57).[107]It is submitted nevertheless that psychiatric injury is always foreseeable, because it is merely an extension of injury to feelings. It seems to me that this submission raises a separate question, as is demonstrated by the consideration that pecuniary loss is an obvious form of loss to be anticipated in the case of discrimination in employment or the provision of goods, facilities, services and premises and also raises the question of the relevance of the test of foreseeability. It is to that separate question that I now turn.

Is psychiatric injury always foreseeable?

[108]The submission is that because the statute expressly contemplates injury to feelings, and because such injury is always foreseeable as a consequence of racial discrimination, therefore psychiatric injury is also always foreseeable. It is merely a more serious and long lasting form of injury to feelings. It is after all standard law that, if a type of loss is foreseeable, then it does not matter that it occurs to an unforeseeably extreme degree or in an unforeseeable manner, or that the victim is peculiarly susceptible to it (the “egg-shell skull” rule): see Smith v. Leech Brain [1962] 2 QB 405, Hughes Lord Advocate [1963] AC 837 and Page v. Smith [1996] AC 155.[109]In support of this submission it is pointed out, for instance by reference to HM Prison Servicev. Salmon [2001] IRLR 425 at para 29, that – “in practice the two types of injury are not easily separable. In a given case it may be impossible to say with any certainty or precision when the distress or humiliation that may be inflicted on the victim of discrimination becomes a recognised psychiatric injury such as a depression. At the lower end are comparatively minor instances of upset or distress, typically caused by one-off acts or episodes of discrimination: this appears to be the type May LJ [in Alexander] had in mind. But at the upper end the victim is likely to be suffering from serious and prolonged feelings of humiliation, low self-esteem and depression; and in these cases it may be fairly arbitrary whether the symptoms are put before the tribunal as a psychiatric illness, supported by a formal diagnosis and/or expert evidence.”[110]As a variation of this argument, Ms Monaghan submitted that it would be bad policy, and contrary to practicalities, to impose on a jurisdiction where there is often no representation or funding for the complainant in the employment tribunal an additional layer of legal complexity in the need to find reasonable foreseeability.[111]In my judgment, however, this submission does not support the remoteness rule contended for. First, even if the submission were correct that injury to feelings and psychiatric injury were all one head of damage, one type of injury, so that foreseeability of injury to feelings would always encompass psychiatric injury, that would not support a remoteness rule of pure causation: ex hypothesi a rule of foreseeability was in place but always met. Secondly, the submission would tell one nothing about a remoteness rule outside the sphere of injury to feelings and psychiatric injury.[112]Thirdly, however, I would not agree that injury to feelings is the same type of injury as psychiatric injury. That appears to be recognised in HM Prison Service v. Salmon itself, for the passage I have already cited begins – “29…No doubt in principle ‘injury to feelings’ and psychiatric injury are distinct. In Alexander [1988] IRLR 190 (above) May LJ clearly distinguished them when he said (at p.193):
‘…Injury to feelings, which is likely to be of a relatively short duration, is less serious than physical injury to the body or the mind which may persist for months, in many cases for life [our emphasis].’
Likewise in Prison Service v Johnson [1997] IRLR 162 (above) Smith J (at p.166) accepted counsel’s submission that if the applicant had suffered ‘injury to health’ that would have been the subject of a separate head of compensation.” ‘…Injury to feelings, which is likely to be of a relatively short duration, is less serious than physical injury to the body or the mind which may persist for months, in many cases for life [our emphasis].’[113]To that I would add Sheriff, where Stuart-Smith LJ referred to section 57(4) and said that “there is a well-recognised difference between injury to health or personal injury, and injury to feelings” (at para 11); and also referred with approval to May LJ’s similar contrast in Alexander (at 1178E, para 17)) and went on himself to say (at 1179H, para 22) that – “One can reasonably appreciate that such harassment may cause injury to feelings; but psychiatric injury is a different matter.”[114]Moreover, the distinction between personal injury (physical or psychiatric) and injury to feelings has been further emphasised in the decisions in this court of Wong v. Parkside Health NHS Trust [2001] EWCA 1721, [2003] 3 All ER 932 and Vento v. Chief Constable of West Yorkshire Police [2002] EWCA 1871, [2003] ICR 318 and in the House of Lords of Wainright v. Home Office [2003] UKHL 53, [2003] 4 All ER 969.[115]In the circumstances, I would respectfully feel unable to agree with Clarke LJ (at para 56 above) to the extent that he regards injury to feelings as the same type of damage as psychiatric injury for the purposes of the principle of Page v. Smith. As Lord Lloyd of Berwick there said in his conclusions (at 197H):
“A defendant who is under a duty of care to the plaintiff, whether as primary or secondary victim, is not liable for damages for nervous shock unless the shock results in some recognised psychiatric illness.”
[116]Lord Lloyd clearly had in mind the distinction between psychiatric injury and injury to feelings about which he had spoken at 189G/190B. Even though foreseeability of physical injury is enough to render a defendant liable in negligence for psychiatric injury, for physical and psychiatric injury is treated as injury of the same type, the distinction between such personal injury and injury to the feelings or emotions falling short of recognised illness is still preserved. As Lord Jauncey of Tullichettle (to whose albeit dissenting speech Lord Lloyd referred at 189H) said (at 171B):
“The ordinary emotions of anxiety, fear, grief or transient shock are not conditions for which the law gives compensation.”
[117]That is true of the law of negligence, but not, for entirely understandable reasons, of the statutory torts of discrimination. Thus section 57(4) makes it clear that there is a claim for damages for injury to feelings as well as “under any other head”. That is itself a confirmation that injury to feelings is to be treated as a distinct head of damages. This is said to be for the “avoidance of doubt”. I would respectfully agree with Pill LJ that that provision was inserted because there may well have been doubt as to whether injury to feelings was a proper head of damages, but I would not regard that issue as related specifically to personal injury or as otherwise throwing any particular light on the issues raised on this appeal. On the contrary, it probably reflects the fact that the general rule of the common law, then as well as now, as Devlin J stated in Behrens v. Bertram Mills Circus [1957] 2 QB 1 at 28, is that “mental suffering caused by grief, fear, anguish and the like is not assessable”. It is only in certain torts, such as defamation or false imprisonment, that damages for injury to feelings may form an element in damages. Thus, in the specific context of employment, the House of Lords rejected a claim for injury to feelings as a separate head of damages for breach of the contract of employment: Addis v. Gramophone Co [1909] AC 488, and that has essentially remained the law to this day – Mahmud v. Bank of Credit and Commerce International SA [1998] AC 20. However, in the context of discrimination it is of course natural to think of injury to feelings not only as being a likely and foreseeable consequence of the statutory wrong but also as being precisely what the statute was aiming to prevent and compensate. Hence, in my view, the statutory language “for the avoidance of doubt”. However, in the absence of grosser forms of discrimination, personal injury is not as obviously likely and foreseeable as injury to feelings. It is on the whole more likely that a victim of discrimination will suffer pecuniary loss, especially in the context of discrimination in such matters as “goods, facilities, services and premises” and of course employment. Someone suffering psychiatric illness may well suffer from injured feelings; but injury to feelings is a common-day experience and is something distinct from illness.

The decision in this case

[118]I agree nevertheless that, irrespective of the issue concerning the relevance of the test of reasonable foreseeability, the conclusion of the EAT that the case should be remitted to the employment tribunal for them to consider issues of intervening cause and mitigation must be upheld. On any view the fact that Mr Essa’s reaction was extreme, even to an unforeseeable extent, does not in itself mean that it cannot be the object of compensation, for that is to ignore the egg-shell skull principle. For myself, for the reasons contained in this judgment, I would also have wished the tribunal to consider separately whether they accepted the evidence of a depressive illness advanced before them in evidence on behalf of Mr Essa, and if so whether such psychiatric injury was reasonably foreseeable in the light of their overall findings. In this latter respect, however, I recognise of course that Pill LJ and Clarke LJ see the matter differently.

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