The Claimant was a teacher who began working for the Second Respondent under an agreement for casual work. She then obtained further employment working at a nursery operated by the First Respondent which provided nursery places for Highland Council. The Second Respondent is a wholly owned subsidiary of the First Respondent and the Second Respondent’s principal client is Highland Council. As a result of protected disclosures by the Claimant about practices within the nursery, she was subjected to detriments by both Respondents. These included inter alia a complaint by both Respondents to the General Teaching Council for Scotland (GTCS) about the Claimant’s fitness to teach. The ET found that the complaint to the GTCS was not made by the Respondents in good faith. The Respondents knew that it was retaliation against the Claimant for her disclosures. The Respondents’ true motive for the GTCS referral was to appease the First Respondent’s client, Highland Council. The ET concluded, however, that a decision by the GTCS further to investigate the complaint was a novus actus interveniens that broke the chain of causation between the detriment of the complaint and the Claimant’s losses. It accordingly limited its awards for future loss, injury to feelings and psychiatric injury to losses which arose prior to the date of the GTCS decision. It also refused to make any awards for pension loss or legal costs incurred in defending the GTCS proceedings and refused an application for the expenses of the liability hearing before the ET. The Claimant appealed, submitting that the ET had erred in law in its conclusion about novus actus.

The EAT allowed the appeal. The decision by the third party – the GTCS – further to investigate the allegations was not an independent, supervening cause of loss. Rather, it was a natural and reasonable consequence of the Respondents’ wrongful act. The wrongful act remained the effective cause of the Claimant’s loss. The ET’s conclusion on novus actus was also irreconcilable with its earlier findings in the liability judgment that the joint GTCS referral by the Respondents: (i) was not made in good faith; (ii) was based on allegations that probably had no real or genuine substance; (iii) was – as the Respondents knew at the time of the referral – retaliation against the Claimant for having made the protected disclosures about practices within the nursery; and (iv) was motivated by a desire to discredit the Claimant and to appease Highland Council. On those factual findings the referral was, in law, malicious in that it was made by the Respondents without proper cause and for improper purposes.