The employee had been made redundant from her position as a school administrative assistant to be effective on 31 August 2008. However on 9 July the governors agreed she should be denied access to the premises and the following day (10th July) she was escorted from the school. A claim in the ET was settled as was a separate claim for defamation, following which the employee brought a claim for damages arising from psychiatric illness. In a letter, before the Particulars were filed,  the school admitted a breach of duty in the manner of the dismissal but not quantum or causation: it was common ground that she suffered from depression but not certain whether it was the redundancy or the manner of the dismissal that caused it.

In this judgment, John Leighton Williams QC first considers the withdrawal of the admissions, and allows them to be rescinded primarily as they were "made innocently, not to gain an advantage, and were made because of an error as to what the law was, an error which both sides appear to have made." He then considers the strike out, reviewing the case of Johnson v Unisys, among others, and the submission that under common law there is no claim for damages for psychiatric injuries caused by the manner of dismissal. He finds that he is bound by Johnson and the decisions in Eastwood and Edwards discerning two relevant principles:

"1. Whether a dismissal is wrongful or unfair, damages cannot be recovered at common law for the consequences of the fact of or manner of dismissal.

1. An employee retains the right to sue at common law for damages for breach of any tortious or contractual right which exists independently of his rights not to be wrongfully or unfairly dismissed.  The 1971 and 1996 Acts do not prevent a dismissed employee from suing in tort for damages resulting from tortious conduct which exists independently of the dismissal."

However in this case the employee had not established any causes of action independent from what happened on 10th July, so therefore the claim was struck out.
_________________

Neutral Citation No: 2012 EWHC 3819 (QB)

Claim No: HQ11X02534

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Date: 25th September 2012

BEFORE:

JOHN LEIGHTON WILLIAMS QC,

B E T W E E N

SUZANNE MONK (Claimant)

and

(1) CANN HALL PRIMARY SCHOOL; (2) ESSEX COUNTY COUNCIL (Defendants)

Judgment

As Approved by the Court

Crown copyright ©

1. In October 1997 the Claimant entered the Second Defendants' employment as an administrative assistant at Cann Hall Primary School, Clacton-on-Sea. By letter dated 6th June 2008 the Second Defendants notified her that her employment would be terminated on 31st August 2008 on the grounds of redundancy and confirmed that she would be entitled to her full normal pay during the period of notice. On 9th July 2008 the school governors agreed that the Claimant should be denied access to the premises. On 10th July 2008 she was instructed to clear her desk and was escorted from the premises by the Chairman of the School Governors, Mr Parsons.

1. She brought an action in the Employment Tribunal for unfair dismissal, contrary to section 94 of the Employment Rights Act 1996. Initially the Defendants resisted the claim but on the morning of a resumed hearing they served Amended Grounds of Resistance making some admissions. Subsequently the claim was settled. The terms of settlement preserved the Claimant's right to sue for personal injuries.

1. She also brought an action for defamation against some of the First Defendants' school governors and the Second Defendants. That too was ultimately settled.

1. In this present action she claims damages for psychiatric illness allegedly caused by the Defendants' negligence. Proceedings were issued on 8th July 2011. By letter dated 21st October 2011 and prior to service of the Particulars of Claim the Defendants admitted breach of duty but not causation and quantum. That admission was relied upon in the Particulars of Claim. The Defence contained an admission which was narrower in scope and stated :

"1. As indicated in the open letter dated 21st October 2011 the Defendants admit that they, their servants or agents, failed to exercise reasonable care in the manner in which they brought the Claimant's employment to an end on 10th July 2008."

Pursuant to directions given on 29th December 2011 the action is listed for trial on 8th October 2012, with a time estimate of two days, the only issues to be determined being causation and quantum.

1. There is no dispute that the Claimant has suffered from a recognised psychiatric condition. Professor Gournay for the Claimant considers the Claimant has suffered from a depressive disorder and in his second report dated 5th April 2012 states "the causation of her current psychiatric disorder can only be attributed to the events of 10 July 2008". Professor Maden for the Defendants considers the issue of causation is complicated, that redundancy itself would have had a serious effect on the Claimant, that she would probably have developed an adjustment order in any event as a result of losing a long lasting "battle of wills" with her headmistress and that whilst the events of 10th July had an aggravating effect they were not the sole or main cause of her symptoms. The Claimant has received cognitive behavioural therapy ("CBT") for her condition, funded by interim payments made by the Defendants but has ceased this treatment allegedly because the Defendants are no longer willing to fund it.

1. On 17th July 2012 the Defendants issued the present application seeking orders permitting them to withdraw their admissions of breach of duty and striking out the Claimant's claim as disclosing no reasonable cause of action. In support the Defendants rely on the decision in Johnson v Unisys [2003] 1 AC 518, [2001] UKHL 13, where the House of Lords upheld the decisions of the first instance judge and the Court of Appeal striking out a claim for wrongful dismissal based on the manner in which the claimant had been dismissed. The Defendants submit the present claim is based on the manner in which the Claimant was dismissed, therefore she has no cause of action and that their admissions were made in error.

1. The Claimant resists both applications.

1. Both admissions were made after proceedings had been commenced and are therefore governed by CPR 14.1. CPR 14.1(1) provides that a party may admit the truth of the whole or any part of another party's case and CPR 14.1 (5) that the permission of the court is required to amend or withdraw such an admission.

1. CPD 14.7.1 states that an admission made under Part 14 may be withdrawn with the court's permission. CPD 14.7.2 sets out matters the court should take into account in deciding whether or not to give permission to withdraw an admission. It states:

"7.2 In deciding whether to give permission for an admission to be withdrawn, the court will have regard to all the circumstances of the case, including –

(a) the grounds upon which the applicant seeks to withdraw the admission including whether or not new evidence has come to light which was not available at the time the admission was made;

(b) the conduct of the parties, including any conduct which led the party making the admission to do so;

(c) the prejudice that may be caused to any person if the admission is withdrawn;

(d) the prejudice that may be caused to any person if the application is refused;

(e) the stage in the proceedings at which the application to withdraw is made, in particular in relation to the date or period fixed for trial;(f) the prospects

of success (if the admission is withdrawn) of the claim or part of the claim in relation to which the offer was made; and

(g) the interests of the administration of justice."

1. In Woodland v The Swimming Teachers Association and others [2011] EWCA Civ 266 the Court of Appeal, upholding a decision of Langstaff J allowing defendants to withdraw an admission of breach of a duty of care, held that CPR 14.1A(3), which deals with admissions made before the commencement of proceedings, conferred a wide discretion on the court to allow the withdrawal of a pre-action admission and that the factors listed in CPD 14.7(2) were not listed in any hierarchical sense nor did any one factor have any greater weight than another. There appears to be no reason why a wide discretion should not also exist in CPR 14.1 cases.

1. Mr Rivalland for the Defendants relies on this case in support of his proposition that a defendant may be allowed to withdraw an admission in the light of reappraisal of evidence. I have no difficulty with that proposition but each case will of course depend on its facts. In the present case the application is not made in the light of reappraisal of evidence but reappraisal of the law. In fact what was in issue in Woodland was whether or not a school authority owed a pupil a non-delegable duty of care which embraced care which allegedly ought to have been provided by an independent lifeguard.

1. CPR 3.4 provides :

"3.4(1) In this rule and rule 3.5, reference to a statement of case includes reference to part of a statement of case.

(2) The court may strike out a statement of case if it appears to the court –

(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;

(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings; or

(c) that there has been a failure to comply with a rule, practice direction or court order.

(3) When the court strikes out a statement of case it may make any consequential order it considers appropriate.

(4)..........

(5) Paragraph (2) does not limit any other power of the court to strike out a statement of case.

(6) If the court strikes out a claimant's statement of case and it considers that the claim is totally without merit –

(a) the court's order must record that fact; and

(b) the court must at the same time consider whether it is appropriate to make a civil restraint order.

................"

1. It is well established that courts must be especially careful not to strike out claims made where facts upon which application of a principle of law depend are not yet clear, where the law is uncertain or is in a state of development. In Barrett v Enfield Borough Council [1999] UKHL 25 ; [2001] 2 AC 550 at 557 Lord Browne-Wilkinson said :

"In my speech in the X v Bedfordshire Case [1995] 2 AC 633, at pp. 740-741 with which the other members of the House agreed, I pointed out that unless it was possible to give a certain answer to the question whether the plaintiff's claim would succeed, the case was inappropriate for striking out. I further said that in an area of the law which was uncertain and developing (such as the circumstances in which a person can be held liable in negligence for the exercise of a statutory duty or power) it is not normally appropriate to strike out. In my judgment it is of great importance that such development should be on the basis of actual facts found at trial not on hypothetical facts assumed (possibly wrongly) to be true for the purpose of the strike out."

1. Mr Rivalland also draws my attention to Summers v Fairclough Homes Limited [2012] UKSC 26, where the Supreme Court overruled previous authority and held that a case could be struck out even after the trial had taken place, in support of his proposition that, broadly speaking, it can never be too late to strike out a claim. He accepts that the case was dealing with CPR Part 3.4(2)(b) (abuse of process) rather than 3.4(2)(a) (no reasonable grounds for bringing or defending the claim), but observes that the width of the Supreme Court's reasoning appears to cover all of CPR Part 3.4(2).

1. I would observe only that where CPR 3.4(2)(a) is concerned lateness is a relevant factor but much will also turn on arguments supporting lack of reasonable grounds and whether or not the facts are such that a party should be estopped from resiling from an admission. In the present case the application was made less than 3 months before trial and is being heard less than a month before trial. Lateness may have less relevance where CPR 3.4(2) (b) is concerned.

1. Mr Rivalland submits that the admission need not be withdrawn as a precursor to striking out the claim because at common law there is no claim for damages for psychiatric injuries caused by the fact or manner of dismissal from employment, relying on Johnson. He says it does not matter whether negligence has been admitted, the claim is bad in law, whether or not the Defendants were negligent. But if the Court is against this submission, he applies for permission to withdraw the admissions made in the letter and the Defence.

1. Mr Morton QC for the Claimant says that logically Withdrawal should be dealt with first.

1. If I decide to strike out there is logically no need to consider Withdrawal. On the other hand if I do not strike out there is need to consider it. I have to decide on the pleadings as they stand and it seems to me appropriate that I should first decide the issue of Withdrawal.

1. The application is for permission to withdraw both the admission of breach of duty in the letter of 21st October 2011 and the admission of failure to exercise reasonable care in the manner of dismissal on 10th July 2008 in Paragraph 1 of the Defence.

1. Underlying the application is the argument that no duty of care existed in law and there could be no negligence based upon the manner of dismissal. It is said that the Defendants got the law wrong.

1. The evidence in support of the application is provided by Ms Tracy Davies, a solicitor and employee of the Second Defendants. She says that the Second Defendants' solicitors department received the Claimant's pre-action protocol letter claiming damages for personal injury on 8th August 2011 followed by the claim form which was served on 27th October 2011. She states that upon reviewing the letter of claim and the previous proceedings (ie the unfair dismissal and defamation claims), "it was clear that the incident had occurred as the Claimant described" and that as part of the employment compromise the Defendants had issued a statement admitting its actions were wrong and apologising for the distress caused. I assume the statement she is referring to is the Amended Grounds of Resistance served in the unfair dismissal proceedings in paragraph 37 of which the Defendants admitted that "the actions and words spoken by the Chair of Governors on the 10th July amounted to a dismissal of the Claimant on the 10th July 2009" although I can see no reference to apology in that document.

1. She then says :

"In responding to the letter of claim and subsequently in preparing the Defence both counsel who was instructed at the time and I erroneously relied upon this statement. The House of Lords decision in Johnson v Unisys 2003 1 AC 518 was unfortunately overlooked and breach of duty to the Claimant was admitted. I apologise to the Court and the Claimant for the oversight."

She submits there would be no evidential prejudice to the Claimant should the application to withdraw be allowed.

1. Although the letter of 21st October 2011 admitted breach of duty without reference to any specific incident I conclude that what was being admitted in the letter was breach of duty in relation to the incident of 10th July when the Claimant was escorted from the school premises. The Defence refers expressly to 10th July. In this connection it is relevant to note the following :

(i) The letter of claim refers to "injuries sustained following the events of 10 July 2008", states that the Claimant was "unexpectedly and peremptorily dismissed" that day then refers to a second grievance brought by the Claimant "for the method of her dismissal on 10th July 2008".

(ii) Whilst this letter also refers to a failure to take steps to mitigate the effects of what happened on 9th July 2008 (which the Claimant did not know of at the time) and 10th July, as "having exposed the Claimant to reasonably foreseeable risk of psychiatric harm", central to the complaint was what happened on 10th July.

(iii) The claim form claims damages for personal injury and other losses "arising out of the negligent action taken by...the Defendants, on 10th July 2008 and during the course of her employment with the Defendants...".

(iv) The Particulars of Claim after dealing with what happened on 9th July refers to the events of 10th July 2008 when the Claimant was "unexpectedly and peremptorily dismissed", treated "in an aggressive, humiliating and degrading manner" and suffered anxiety that day as a result.

(iv) The Unfair Dismissal claim form had alleged dismissal occurred on 10th July 2008.

1. The incident of 10th July 2008 is central to the claim in negligence. The Particulars of Negligence in paragraph 28 of the Particulars of Claim also refer to other conduct by Mr Parsons, namely his action at the governors' meeting on 9th July, his later reporting events to staff in a manner detrimental to the Claimant's reputation and his failure to admit his errors. The Particulars of Negligence also refer to conduct/inactivity by the First Defendants, school staff and the Second Defendants' Human Resources department : it is alleged the School's governors on 9th July "recklessly" allowed Mr Parsons to take action against the Claimant and that all three thereafter failed adequately to investigate what had occurred, take steps to mitigate harm caused to the Claimant and chose to contest her unfair dismissal complaint.

1. During submissions Mr Morton QC accepted the events of 9th July were not causative and although I drew counsels' attention to the allegations of negligence seemingly post dating the 10th July 2008, Mr Morton QC did not address me on that aspect. Mr Rivalland said they were all effectively part of the incident of 10th July and in any event, were covered by the principle in Johnson.

1. Given the bases upon which this and the preceding claims have progressed I conclude that the intention behind the admission in the letter like the admission in the Defence was made in relation to Mr Parsons' conduct on 10th July.

1. I accept Ms Davies' explanation of how the admissions came to be made. Further it appears to me for the reasons Mr Rivalland advanced, namely that the claim was being advanced on the basis that the manner of dismissal was negligent, that both sides had overlooked the fact that there was no duty of care with regard to manner of dismissal. Mr Morton QC did not submit to the contrary. It remains Mr Morton QC's case that a duty of care did exist and was breached by Mr Parson's conduct on 10th July, a point I shall have to deal with in due course.

1. When dealing with CPD 14.7(2) (see paragraph 9 above) Mr Rivalland described the effect of grounds (a) (grounds for seeking withdrawal) and (b) (conduct of the parties) as neutral. He rejected the Claimant's submissions that she was prejudiced ((c)) but said the Defendants would be prejudiced because they would not be able to fight the case on merits and possibly could lose just because of the admission ((d)). He accepted that his application was being brought at a late stage ((e)). As to (f) (prospects of success) he submitted the Claimant's prospects in the action were poor because of the need to prove foreseeability of psychiatric injury and the Claimant had no earlier history of psychiatric problems; she did not fall into the category of vulnerable claimants. Finally, he submitted that the interests of justice required that true not artificial issues should be decided.

1. Mr Morton QC has not challenged Miss Davies' explanation but says that if the Defendants' admissions were made because they got the law wrong then their remedy is to sue their lawyers. He points out that no new evidence has emerged since the admissions were made. As to the conduct of the parties he points out that the compromise agreement preserved the right to bring a claim for damages for personal injuries and had been agreed against a background where the Defendants were expecting a claim for personal injuries to be made. He suggests that had it been known that such a claim would have been contested then the unfair dismissal claim would not have been compromised on the terms it was. I find this latter point difficult to follow. Both sides may have anticipated a claim being made. Both sides may have thought at the time that a duty of care existed in relation to the manner of the dismissal. But I cannot conclude from the terms of the compromise that the Defendants were undertaking not to defend any such claim. Further, if the Claimant has no valid claim then it is difficult to see that there could have been valid grounds for seeking an increased settlement given a settlement figure of £25,000, unless it be on the basis of a common misunderstanding as to the law. He rightly says that no criticism can be made of the Claimant's conduct.

1. He underlines the prejudice to the Claimant should I allow the application. She will lose a valuable admission and have to face the risk of an argument that she has no valid cause of action. If the application is granted he suggests the trial will have to be adjourned. He also claims that the Claimant has had to cease her CBT treatment because the Defendants are no longer willing to fund it, stating that continued treatment would have enabled the experts better to determine prognosis and likelihood of return to work. On this latter point Mr Rivalland points out that the Claimant has already had 16 sessions of CBT treatment at £80 per session and that the interim payments made should easily be able to cover any further treatment required. Mr Morton QC says there is no prejudice to the Defendants in refusing permission since the error is theirs. He underlines the fact that the application is made very late in the day and submits the claim has excellent prospects of success. He also submits it would not be in the interests of the administration of justice to accede to the application : wasted costs will have been occurred and the two days of court time at present allocated for the trial are likely to be wasted.

1. He further submitted it would be unconscionable for the Defendants to be allowed to withdraw admissions which had led the Claimant to believe she had a good claim and where the parties had hitherto acted on the basis that this was so. He relied on observations by Lord Goff in Johnson v Gore Wood [2002] 2AC 1 in particular at 40D where he said :

"I accept that in certain circumstances an estoppel may have the effect of enabling a party to enforce a cause of action which, without the estoppel, would not exist. Examples are given in my judgment in Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank [1982] QB 84, 105-107."

He then referred me to the Amalgamated Investment case and the examples given by Lord Goff. I note that although estoppels have been upheld where representations have been made as to the legal effect of an agreement, not one of those examples is of a party being estopped where he has innocently made a mistake on what the law is. All those examples are ultimately based on representations of fact.

1. In all the circumstances and taking into account the submissions I have received I consider that my discretion should be exercised to permit the admissions to be withdrawn. They were made innocently, not to gain an advantage, and were made because of an error as to what the law was, an error which both sides appear to have made. Further, I consider it would be wrong to allow an action to proceed on the basis of principle of law which is unsound which, as will appear, is what I consider to be the case here. Further issues of law may well fall to be decided whose outcome may depend on underlying principle and the trial judge might, if permission is not granted, have to make rulings on an artificial basis. It is in the interests of justice that cases are decided on real not artificial bases. Allowing the withdrawal will enable the point to be fully argued and a decision made, and if necessary appealed, on the merits.

1. I am conscious of the fact that the application is made late in the day and that granting permission may result in the trial date being lost. But that appears on the cards in any event, given the Claimant's argument raised in her skeleton and advanced before me that the Claimant was not in fact dismissed until 31st August in accordance with the terms of her redundancy letter. To date the Claimant has resisted calls for an amendment if this is to be pursued, Mr Morton QC taking the view that it is for the Defendant to amend first before he takes that step. He accepts that with such an amendment the trial date will necessarily be lost.

1. I am conscious too that the Claimant thus far has not had to concern herself with breach of duty and now, subject to strike out, she will have to. That is not a consequence solely of the Defendants' misunderstanding of the law but also of those who have advised her, or if her advisers were aware of the Defendants' mistake, in failing to alert her to it, the possibility that the mistake may be discovered and the impact on her claim. As it is the point remains available for her advisors to argue.

1. In his skeleton argument Mr Rivalland asserts that there is no claim at common law for damages for psychiatric injuries caused by the fact or manner of dismissal citing Johnson and relying on paragraphs 33-34, 48 and 54-59 of Lord Hoffmann's speech in support. The relevant part of the headnote in Johnson reads:

"...under Part X of the Employment Rights Act 1996 Parliament had provided the employee with a limited remedy for the conduct of which he complained; that although it was possible to conceive of an implied term which the common law could develop to allow an employee to recover damages for loss arising from the manner of his dismissal, it would be an improper exercise of the judicial function of this House to take such a step in the light of the evident intention of Parliament that such claims should be heard by specialist tribunals and the remedy restricted in application and extent…"

He submits that the Claimant's psychiatric loss is alleged to have arisen from her dismissal on 10th July 2008 and, in particular, on the manner in which she was dismissed. He says the claim falls fairly and squarely within what has become known as "the Johnson exclusion zone", cannot stand in law, and therefore should be struck out.

1. The paragraphs referred to by Mr Rivalland read as follows :

"33 Mr Johnson says that in consequence of the manner and the fact of his dismissal he suffered a mental breakdown. He became depressed, attempted suicide and started to drink heavily. In 1994 he spent five months in a mental hospital and since then has occasionally had to be re-admitted. His family life has suffered and despite over 100 applications, he has been unable to find work. He is 52 and considers it unlikely that he will find remunerated work again. He says that severe damage of this kind was reasonably foreseeable by Unisys because during the period before his redundancy in 1987 it was known to persons whose knowledge should be attributed to the company that he was under stress and at risk of suffering psychological injury. The alternative claim in tort is based upon the allegation that Unisys owed him a duty of care because it ought reasonably to have foreseen that such injury was likely to result from dismissing him in the way it did.

34 Unisys applied to Judge Ansell in the Milton Keynes County Court to strike out the particulars of claim on the ground that the alleged facts disclosed no cause of action at common law. The judge did so. Mr Johnson appealed to the Court of Appeal (Lord Woolf MR, Hutchison and Tuckey LJJ) which affirmed the judge's decision [1999] ICR 809 . Mr Johnson now appeals to your Lordships' House."

"48 Some of the potential problems can be illustrated by the facts of this case, in which Mr Johnson claims some £400,000 damages for the financial consequences of psychiatric damage. This form of damage notoriously gives rise at the best of times to extremely difficult questions of causation. But the difficulties are made greater when the expert witnesses are required to perform the task of distinguishing between the psychiatric consequences of the fact of dismissal (for which no damages are recoverable) and the unfair circumstances in which the dismissal took place, which constituted a breach of the implied term. The agreed statement of facts records that for the purposes of this appeal against a strike-out it is accepted that Mr Johnson's psychiatric illness was caused by "the circumstances and the fact" of his dismissal. At a trial, however, it would be necessary to decide what was caused by what."

"54 My Lords, this statutory system for dealing with unfair dismissals was set up by Parliament to deal with the recognised deficiencies of the law as it stood at the time of Malloch v Aberdeen Corpn [1971] 1 WLR 1581 . The remedy adopted by Parliament was not to build upon the common law by creating a statutory implied term that the power of dismissal should be exercised fairly or in good faith, leaving the courts to give a remedy on general principles of contractual damages. Instead, it set up an entirely new system outside the ordinary courts, with tribunals staffed by a majority of lay members, applying new statutory concepts and offering statutory remedies. Many of the new rules, such as the exclusion of certain classes of employees and the limit on the amount of the compensatory award, were not based upon any principle which it would have been open to the courts to apply. They were based upon policy and represented an attempt to balance fairness to employees against the general economic interests of the community. And I should imagine that Parliament also had in mind the practical difficulties I have mentioned about causation and proportionality which would arise if the remedy was unlimited. So Parliament adopted the practical solution of giving the tribunals a very broad jurisdiction to award what they considered just and equitable but subject to a limit on the amount.

55 In my opinion, all the matters of which Mr Johnson complains in these proceedings were within the jurisdiction of the industrial tribunal. His most substantial complaint is of financial loss flowing from his psychiatric injury which he says was a consequence of the unfair manner of his dismissal. Such loss is a consequence of the dismissal which may form the subject matter of a compensatory award. The only doubtful question is whether it would have been open to the tribunal to include a sum by way of compensation for his distress, damage to family life and similar matters. As the award, even reduced by 25%, exceeded the statutory maximum and had to be reduced to £11,000, the point would have been academic. But perhaps I may be allowed a comment all the same. I know that in the early days of the National Industrial Relations Court it was laid down that only financial loss could be compensated: see Norton Tool Co Ltd v Tewson [1973] 1 WLR 45 ; Wellman Alloys Ltd v Russell [1973] ICR 616 . It was said that the word "loss" can only mean financial loss. But I think that is too narrow a construction. The emphasis is upon the tribunal awarding such compensation as it thinks just and equitable. So I see no reason why in an appropriate case it should not include compensation for distress, humiliation, damage to reputation in the community or to family life.

56 Part X of the Employment Rights Act 1996 therefore gives a remedy for exactly the conduct of which Mr Johnson complains. But Parliament had restricted that remedy to a maximum of £11,000, whereas Mr Johnson wants to claim a good deal more. The question is whether the courts should develop the common law to give a parallel remedy which is not subject to any such limit.

57 My Lords, I do not think that it is a proper exercise of the judicial function of the House to take such a step. Judge Ansell, to whose unreserved judgment I would pay respectful tribute, went in my opinion to the heart of the matter when he said:

"there is not one hint in the authorities that the ... tens of thousands of people that appear before the tribunals can have, as it were, a possible second bite in common law and I ask myself, if this is the situation, why on earth do we have this special statutory framework? What is the point of it if it can be circumvented in this way? ... it would mean that effectively the statutory limit on compensation for unfair dismissal would disappear."

58 I can see no answer to these questions. For the judiciary to construct a general common law remedy for unfair circumstances attending dismissal would be to go contrary to the evident intention of Parliament that there should be such a remedy but that it should be limited in application and extent.

59 The same reason is in my opinion fatal to the claim based upon a duty of care. It is of course true that a duty of care can exist independently of the contractual relationship. But the grounds upon which I think it would be wrong to impose an implied contractual duty would make it equally wrong to achieve the same result by the imposition of a duty of care."

Mr Rivalland accepts that paragraphs 55 and 56 have since been said to be obiter : Part X of the 1996 Act did not give a remedy "for exactly the conduct of which Mr Johnson complains" since an employment tribunal has no jurisdiction to award damages for personal injuries (see further below). But the parts that I have emphasised in bold, in my judgment remain good law.

1. For the Claimant Mr Morton QC asserts that the Defendants' assertion that the claim discloses no reasonable cause of action is wrong but that even if it is correct the court should exercise its discretion in the Claimant's favour.

1. He says that Mr Rivalland's approach to Johnson is wrong because it is too simplistic and fails to take into account subsequent decisions. He has taken me in detail through Johnson, and whilst accepting that Lords Bingham, Nicholls and Millett agreed with Lord Hoffman, he has relied on reservations expressed by Lord Steyn about whether or not an employee could recover damages for psychiatric injury resulting from the manner of his dismissal expressed at paragraph 11 in these words :

"Fifthly, it is important to note that the claim is solely for the recovery of special damages for financial loss. The separate question whether an employee may recover compensation for anxiety and mental stress arising from the manner of his dismissal was not raised before the Judge or before the Court of Appeal. It is not an issue before the House and it would be wrong to express any view on it".

1. He says that unfair dismissal, a separate creature from the common law action of wrongful dismissal which remains, is concerned with the procedural fairness of the dismissal process. He submits that the reference "to the manner of dismissal" should therefore be read as referring to whether or not correct procedures were followed. He submits that it would be anomalous if the effect of the Industrial Relations Act 1971 and the Employment Rights Act 1996 has been to restrict an employee's rights by preventing him suing for psychiatric loss where negligence accompanies dismissal. He points out that the [Employment Tribunals] Extension of Jurisdiction (England and Wales) Order 1994 whilst enabling employees to claim damages in employment tribunals does not permit claims for damages for personal injuries, that there is a financial limit on awards that can be made and says therefore that, given that the 1994 Order limited awards to £25,000, since extended to £72,300, considerable injustice will arise if a claimant cannot sue in circumstances like the present where psychiatric injuries and financial losses in excess of the tribunal's limit are claimed.

1. As to the decision in Johnson, he says it was not a tortious claim for general damages and the case did not proceed as a typical stress case but one where the claim was argued in the House of Lords essentially on the basis of breach of the implied term of trust and confidence and failure to observe proper procedures, without emphasis on liability in tort. However, I note that leading counsel for the employee, whilst accepting that in most cases it would be difficult for an employee to establish foreseeable breach of duty arising from the circumstances of dismissal alone, did submit that there was an arguable case that the employers had been in breach of duty to the employee (see 522D), and that the speeches acknowledged that a claim was also being made in tort.

1. He also observes that Lord Nicholls in his speech at paragraph 2 (526B-D) whilst stating that he was persuaded "that a common law right embracing the manner in which an employee is dismissed cannot satisfactorily co-exist with the statutory right not to be unfairly dismissed" also said :

"a newly developed common law right of this nature, covering the same ground as the statutory right, would fly in the face of the limits Parliament has already prescribed on matters such as the classes of employees who have the benefit of the statutory right, the amount of compensation payable and the short term limits for making claims. It would also defeat the intention of Parliament that claims of this nature should be decided by specialist tribunals, not the ordinary courts of law".

He submits that the present claim does not cover the same ground as the statutory ground, and that as an employment tribunal has no jurisdiction to hear the present claim Lord Nicholls' reasoning ought not to apply to the present case.

1. In his speech in Johnson Lord Steyn expressed the reservation recorded in paragraph 37 above. He did so after referring to Addis v Gramophone Company Co Ltd [1909] where, he said, the headnote purported to state that where a servant was wrongfully dismissed from his employment the damages for dismissal could not include compensation for the manner of his dismissal, for his injured feelings, nor for the loss he may sustain from the fact that the dismissal of itself makes it more difficult for him to obtain fresh employment. He stated that the headnote was arguably wrong "insofar as it states that a wrongfully dismissed employee could never sue for special damages for loss of employment prospects arising from the harsh and humiliating manner of the dismissal", citing Macgregor on Damages (526G) and pointed out the reliance on Addis placed by the trial judge and the Court of Appeal (528E – 529B).

1. Following his above quoted reservation he observed that the claim was framed in contract and tort adding :

"As I have explained the claim is framed in contract and tort. Having regard to the particular circumstances of this case, if the claim in contract is held to be unsustainable the fate of the claim in tort must inevitably be the same. I propose therefore to concentrate on the potential sustainability of the claim in contract."

He went on to express the opinion that if the headnote in Addis correctly stated its ratio he would be willing to depart from it. It is to be noted, however, that Lord Steyn did not go as far as to state that in such circumstances damages should be recoverable for personal injuries merely that it would be wrong to express any view on it.

1. Lords Bingham and Millett agreed with Lord Hoffmann.

1. Mr Morton QC submits that subsequent decisions have looked more closely at this point, indicate that some of Lord Hoffmann's observations were obiter, *and should be treated with care. He relies in particular on the decisions of the House of Lords/Supreme Court in Dunnachie v Kingston Upon Hill City Council [2004] UKHL 36; [2005] 1 AC 226, Eastwood v Magnox Electric plc; McCabe v Cornwall County Council [2004] UKHL 35, [2005] 1 AC 503 and [Edwards v Chesterfield Royal NHS Foundation Trust; Botham v Ministry of Defence]()* [2011] UKSC 58, [2012] ICR 201, extracts of which he has quoted at length in his skeleton, some of which I repeat below.

1. In Dunnachie an employment tribunal awarded the applicant/appellant damages which included £10,000 for distress suffered from the manner of his dismissal. The Employment Appeal Tribunal reversed the Employment Tribunal's decision. The Court of Appeal reversed the Employment Appeal Tribunal's decision. The House of Lords reversed the Court of Appeal holding that in Section 123 of the 1996 Act "loss" did not include non-pecuniary loss and that the employment tribunal had no jurisdiction to award compensation for loss arising from the manner of the dismissal including humiliation, injury to feelings and distress.

1. Lord Steyn gave the leading speech, with which the other Law Lords including Lord Hoffmann agreed. At paragraph 5 Lord Steyn said:

"While there may arguably be differences of opinion about the exact ratio decidendi of Johnson v Unisys Ltd I am content to accept that the central legal decision of the majority (Lord Bingham of Cornhill, Lord Nicholls of Birkenhead, Lord Hoffmann and Lord Millett) was as summarised in the headnote of the Appeal Cases report..."

At paragraph 13 Lord Steyn, with whom Lords Nicholls, Rodger and Brown and, most significantly Lord Hoffmann, agreed, stated that paragraphs 55 and 56 of Lord Hoffmann's speech in Johnson had been obiter.

1. On the same day the same constitution of the House of Lords gave judgment in the cases of Eastwood and another v Magnox Electric plc; McCabe v Cornwall County Council [2004] UKHL 35, [2005] 1 AC 503. In Eastwood the claimant employees sought damages for stress-related illness and inability to work allegedly caused by a campaign on the part of the defendant employer to demoralise them before dismissing them, in breach of an implied term of their contracts of employment not to so conduct itself as to destroy or seriously damage their mutual trust and confidence and/or in breach of a duty of care. The judge, on a preliminary issue, gave judgment for the defendant on the ground that the claimants had no real prospect of succeeding on their claim. The Court of Appeal dismissed the appeal.

1. In McCabe the claimant, having obtained the statutory maximum compensation for unfair dismissal, sought damages for psychiatric injury resulting from his suspension from work by his defendant employers and their failure during the next five months to inform him of allegations made against him or to carry out a proper investigation of those allegations, in breach of the relationship of trust and confidence and breach of duty to provide a safe system of work. The judge struck out the claim on the ground that the principle of entitlement to recover at common law for injury caused by the manner of disciplinary proceedings had no application where dismissal in fact followed and that the claimant's industrial tribunal proceedings had covered the substance of the claim. The Court of Appeal allowed the claimant's appeal.

1. The House of Lords allowed the claimants' appeals in Eastwood and dismissed the defendant's appeal in McCabe. The headnote reads :

"..that although it would be desirable if the implied obligation on an employer at common law to act fairly towards his employee applied to a decision to dismiss him, such a development could not co-exist satisfactorily with the statutory code regarding unfair dismissal; that, however, where an employee had, prior to his unfair dismissal, whether actual or constructive, acquired a common law cause of action against his employer in respect of the employer's failure to act fairly towards him, and financial loss had flowed directly from that failure, he could, subject to the rule against double recovery, bring an action at law in respect of that loss and such action was not barred by the availability of a claim in the employment tribunal under the unfair dismissal legislation; and that in the claimants' cases the assumed facts constituted causes of action that had accrued before their dismissals and those causes of action should be permitted to proceed to trial."

1. In Eastwood Lord Nicholls said of the decision in Johnson:

"8.… He [Johnson] sought to rely on breach of the trust and confidence implied term, not as a foundation for a statutory claim for unfair dismissal or as a foundation for a claim for damages related to dismissal, but as a foundation for a claim at common law for unfair dismissal."

1. Mr Johnson's grievance concerned the way he had been summarily dismissed: the way the dismissal decision had been reached…

10.… Mr Johnson's claim was founded on the fact that he had been dismissed, and the trust and confidence implied term cannot be applied to dismissal itself. Further the grounds on which it would be wrong to impose an implied contractual duty regarding exercise of the power of dismissal make it equally wrong to achieve the same result by imposing duty of care. All the matters of which Mr Johnson complained in his court proceedings were within the statutory jurisdiction of an employment tribunal."

1. He also said :

"14. I recognise that, by establishing a statutory code for unfair dismissal, Parliament did not evince an intention to circumscribe an employee's rights in respect of wrongful dismissal. But Parliament has occupied the field relating to unfair dismissal. It is not for the courts now to expand a common law principle into the same field and produce an inconsistent outcome. To do so would, incidentally, have the ironic consequence that an implied term fashioned by the courts to enable employees to obtain redress under the statutory code would end up supplanting part of that code.

1. As was to be expected, the decision in Johnson v Unisys Ltd [2003] 1 AC 518 has given rise to demarcation and other problems. These were bound to arise. Dismissal is normally the culmination of a process. Events leading up to a dismissal decision take place during the subsistence of an employment relationship. If an implied term to act fairly, or a term to that effect, applies to events leading up to dismissal but not to dismissal itself unsatisfactory results become inevitable."

1. Lord Nicholls noted how in the Eastwood case both claims for unfair dismissal were compromised on terms whereby both men received financial payments and that the compromise agreement reserved their rights to pursue at common law any claims they might have in respect of personal injuries arising out of their employment, as is the case here.

1. He dealt specifically with the Johnson exclusion area as follows. The highlighting is mine.

"The boundary line

1. Identifying the boundary of the "Johnson exclusion area", as it has been called, is comparatively straightforward. The statutory code provides remedies for infringement of the statutory right not to be dismissed unfairly. An employee's remedy for unfair dismissal, whether actual or constructive, is the remedy provided by statute. If before his dismissal, whether actual or constructive, an employee has acquired a cause of action at law, for breach of contract or otherwise, that cause of action remains unimpaired by his subsequent unfair dismissal and the statutory rights flowing therefrom. By definition, in law such a cause of action exists independently of the dismissal.

1. In the ordinary course, suspension apart, an employer's failure to act fairly in the steps leading to dismissal does not of itself cause the employee financial loss. The loss arises when the employee is dismissed and it arises by reason of his dismissal. Then the resultant claim for loss falls squarely within the Johnson exclusion area.

1. Exceptionally this is not so. Exceptionally, financial loss may flow directly from the employer's failure to act fairly when taking steps leading to dismissal. Financial loss flowing from suspension is an instance. Another instance is cases such as those now before the House, when an employee suffers financial loss from psychiatric or other illness caused by his pre-dismissal unfair treatment. In such cases the employee has a common law cause of action which precedes, and is independent of, his subsequent dismissal. In respect of his subsequent dismissal he may of course present a claim to an employment tribunal. If he brings proceedings both in court and before a tribunal he cannot recover any overlapping heads of loss twice over.

1. If identifying the boundary between the common law rights and remedies and the statutory rights and remedies is comparatively straightforward, the same cannot be said of the practical consequences of this unusual boundary. Particularly in cases concerning financial loss flowing from psychiatric illnesses, some of the practical consequences are far from straightforward or desirable. The first and most obvious drawback is that in such cases the division of remedial jurisdiction between the court and an employment tribunal will lead to duplication of proceedings. In practice there will be cases where the employment tribunal and the court each traverse much of the same ground in deciding the factual issues before them, with attendant waste of resources and costs.

1. Second, the existence of this boundary line means that in some cases a continuing course of conduct, typically a disciplinary process followed by dismissal, may have to be chopped artificially into separate pieces. In cases of constructive dismissal a distinction will have to be drawn between loss flowing from antecedent breaches of the trust and confidence term and loss flowing from the employee's acceptance of these breaches as a repudiation of the contract. The loss flowing from the impugned conduct taking place before actual or constructive dismissal lies outside the Johnson exclusion area, the loss flowing from the dismissal itself is within that area. In some cases this legalistic distinction may give rise to difficult questions of causation in cases such as those now before the House, where financial loss is claimed as the consequence of psychiatric illness said to have been brought on by the employer's conduct before the employee was dismissed. Judges and tribunals, faced perhaps with conflicting medical evidence, may have to decide whether the fact of dismissal was really the last straw which proved too much for the employee, or whether the onset of the illness occurred even before he was dismissed.

1. The existence of this boundary line produces other strange results. An employer may be better off dismissing an employee than suspending him. A statutory claim for unfair dismissal would be subject to the statutory cap, a common law claim for unfair suspension would not.... Likewise, the decision in Johnson v Unisys Ltd [2003] 1 AC 518 means that an employee who is psychologically vulnerable is owed no duty of care in respect of his dismissal although, depending on the circumstances, he may be owed a duty of care in respect of his suspension.

1. It goes without saying that an interrelation between the common law and statute having these awkward and unfortunate consequences is not satisfactory. The difficulties arise principally because of the cap on the amount of compensatory awards for unfair dismissal. Although the cap was raised substantially in 1998, at times tribunals are still precluded from awarding full compensation for a dismissed employee's financial loss. So, understandably, employees and their legal advisers are seeking to side-step the statutory limit by identifying elements in the events preceding dismissal, but leading up to dismissal, which can be used as pegs on which to hang a common law claim for breach of an employer's implied contractual obligation to act fairly. This situation merits urgent attention by the Government and the legislature.

The present cases

1. It follows from what is set out above that I would dismiss the appeal in Mr McCabe's case and allow the appeals of Mr Eastwood and Mr Williams. In the case of all three men the assumed facts constitute causes of action which accrued before the dismissals. They disclose reasonable causes of action which should proceed to trial."

1. Lord Steyn considered "it may be necessary to reconsider the decision in Johnson in a future case". At paragraph 36 he said:

"36. Having disagreed with the main thrust of the majority decision in Johnson, I make this suggestion with considerable diffidence. Moreover, although the printed cases lodged on behalf of the employees invited the House to depart from Johnson if necessary, the House did not in the event hear oral argument from counsel for the employees calling in question the correctness of Johnson. My observations must, therefore, be read subject to this caveat. On the other hand, the subject is of enormous importance: the personal contract of employment affects almost all individuals and families at some time. And, as I shall attempt to show, there are grounds for thinking that Johnson has left employment law in an unsatisfactory state. I will only be able to touch on a few aspects. But my remarks may provide some focus for a future re-examination of the position."

1. After repeating the summary he had given of Johnson in his speech in Dunnachie, referring to the headnote of Johnson (see paragraph 46 above) he stated:

"In other words, the majority held that the statutory regime of unfair dismissal precludes a common law development in respect of wrongful dismissal despite the different meanings of those concepts."

1. He further commented in Eastwood:

"41. A fourth troublesome feature of the reasoning of the majority in Johnson [2003] 1 AC 518 is that it was assumed that an employer's conduct causing psychiatric illness to an employee resulting in financial loss may be compensated under section 123(1). But for this assumption Lord Nicholls of Birkenhead could not, at p 526, paragraph 2, have described the common law remedy in question as "covering the same ground as the statutory right". Lord Hoffmann observed, at p 544, paragraph 55:

'In my opinion, all the matters of which Mr Johnson complains in these proceedings were within the jurisdiction of the industrial tribunal. His most substantial complaint is of financial loss flowing from his psychiatric injury which he says was a consequence of the unfair manner of his dismissal. Such loss is a consequence of the dismissal which may form the subject matter of a compensatory award.'

These observations were critical to the decision in Johnson.

1. Was the assumption that in an unfair dismissal case an employment tribunal may award compensation for financial loss flowing from psychiatric injury correct? The jurisdiction of an employment tribunal does not extend to the awarding of compensation "in respect of personal injuries": see Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 (SI 1994/1623), article 3, as amended by the Employment Rights (Dispute Resolution) Act 1998, section 1(2)(a); and section 3(3) of the Employment Tribunals Act 1996. A claim in contract or tort for damages for psychiatric injury is a claim in respect of personal injuries: Page v Smith [1996] AC 155, 188E-F, 190C-E, per Lord Lloyd of Berwick; compare Limitation Act 1980, section 38(1), sv "personal injuries". There is no reason to give to the words "in respect of personal injuries" in the statutory regime governing employment tribunals any different meaning. On the plain meaning of those words claims for financial loss caused by psychiatric injury are excluded from the jurisdiction of employment tribunals. Subject to a novel judicial interpretation to bring such claims under the statutory regime, there are cogent grounds for thinking that in Johnson the majority proceeded on a fundamentally wrong assumption. The unfair dismissal scheme is less comprehensive than it was thought to be. The symmetry between the statutory regime and the proposed common law development visualised by the majority probably did not exist. If this is the case, the core reasoning of the majority in Johnson is flawed."

1. Finally, Mr Morton QC refers to Edwards v Chesterfield Royal NHS Foundation Trust; Botham v Ministry of Defence [2011] UKSC 58, [2012] ICR 201. In each case an employee claimed that his dismissal resulted from breach of contract. The Supreme Court by a majority (Lords Dyson, Phillips, Mance and Walker), applying Johnson and Eastwood, held that the claims were within the Johnson exclusion area and therefore damages were not recoverable for breach of contract in relation to the manner of dismissal even though the breach was of an express term of the contract of employment regulating the disciplinary procedure leading to the dismissal.

1. Lord Dyson dealt with the history of the introduction of the right to claim for unfair dismissal starting with the 1971 Act which resulted from the Donovan report. He noted at paragraph 19 (208F) that the Donovan Report stated at paragraph 522 :

"An employee has protection at common law against 'wrongful' dismissal, but this protection is strictly limited; it means that if an employee is dismissed without due notice he can claim the payment of wages he would have earned for the period of notice … Beyond this, the employee has no legal claim at common law, whatever hardship he suffers as a result of his dismissal. Even if the way in which he is dismissed constitutes an imputation on his honesty and his ability to get another job is correspondingly reduced he cannot—except through an action for defamation—obtain any redress (see the decision of the House of Lords in [Addis v Gramophone Co Ltd [1909] AC 488] )."

1. He adopted Lord Nicholls' statement in Eastwood that by the time of the Donovan Report it was "settled law" that an employee was not entitled to recover damages in respect of the manner of his dismissal, that Parliament, giving effect to the Donovan recommendations, passed the 1971 Act the relevant parts of which are now in Part X of the 1996 Act, and in doing so placed significant limitations on an applicant's right to recovery in respect of unfair dismissal, which involved balancing the interests of employers and employees and the social and economic interests of the country as a whole.

1. When dealing with the question facing the court namely whether, if provisions about disciplinary procedure were incorporated into a contract of employment, they were intended to be actionable at common law giving rise to claims for damages in the ordinary courts, agreeing with Lord Phillips he concluded that that to permit a claim for damages for failure to comply with a disciplinary code leading to dismissal would undermine the decisions in Johnson and Eastwood.

1. At paragraphs 42-43 he dealt with arguments that have been repeated by Mr Morton QC before me. He said :

"42 I need to deal with the suggestion that was made during the argument (accepted by Baroness Hale of Richmond and Lords Kerr of Tonaghmore and Wilson JJSC) that claims such as those made by Mr Edwards and Mr Botham would have been available as common law claims for breach of contract before the enactment of the 1971 Act and that neither that statute nor its successors should be interpreted as having taken away existing rights enjoyed by employees.

43 The answer to this argument is that the right to claim damages in respect of the manner of a dismissal did not exist before the 1971 Act: see paragraphs 20 and 21 above. I accept that there has been debate as to what Addis v Gramophone Co Ltd [1909] AC 488 decided. It is not necessary to enter into this debate. It is, however, clear that the Donovan Report which inspired the 1971 Act stated that the law was as summarised in the headnote to the law report to Addis and Lord Nicholls expressed the same view in Eastwood's case [2005] 1 AC 503, paragraph 2. In any event, at the very least it was not clear whether an employee could claim damages for the unfair manner in which he was dismissed. No example was cited to us of any case decided before the 1971 Act in which an employee was awarded damages for breach of contract for the unfair manner in which he had been dismissed. In these circumstances, I cannot accept that an application of the reasoning in Johnson [2003] 1 AC 518 should be rejected because it involves saying that the 1971 Act took away an employee's existing rights and that this could not have been intended by Parliament."

1. After referring to "The Demarcation Boundary" of the Johnson exclusion area and quoting the "valuable guidance" given by Lord Nicholls at paragraphs 27–33 inclusive of his speech in Eastwood (see above) he added (my highlighting) :

"51. The question in each case is, therefore, whether or not the loss founding the cause of action flows directly from the employer's 'failure to act fairly when taking steps leading to dismissal' and 'precedes and is independent of' the dismissal process (Lord Nicholls, at paragraph 29). In other words, the court must decide whether 'earlier events do or do not form part of the dismissal process' (Lord Steyn, at paragraph 39). This is a fact specific question.

52 As Lord Nicholls observed, at paragraphs 15 and 30–33, drawing the boundary line in this way leads to unsatisfactory and anomalous results. One of these is that an employer may be better off dismissing an employee than suspending him. But this is the inevitable consequence of the interrelation between the common law and statute. The unfair dismissal legislation occupies the unfair dismissal territory to the exclusion of the common law, but it does not impinge on any cause of action which is independent of a dismissal (such as a common law claim for damages for suspension in breach of contract)."

1. Lord Phillips approached the issue from a different angle. He considered the claim was for "stigma" damages and that the issue was whether such were recoverable. Agreeing with Lord Dyson, he held they were not, stating at paragraph 86 :

"If the courts in developing the common law principles of measure of damage can exclude a claim for stigma damages for breach of contract that consists of wrongful dismissal, it is equally open to them to exclude such a head of claim for breach of contract that consists of a failure to comply with a disciplinary code. The question in this case is whether this court should do so."

He considered that, following Johnson and Eastwood the courts should exclude such a claim.

1. Lord Mance agreed with Lord Dyson's reasoning and conclusions. He summarised his opinion at paragraph 94 (my highlighting) :

"94 Employers and employees when contracting, in particular when introducing prescribed disciplinary procedures, must be taken to have in mind the statutory scheme relating to unfair dismissal, and to contemplate that scheme as providing the relevant remedies in the event of unfair dismissal. It does not seem to me artificial to ascribe such an intention to them, any more than it did to Lord Hoffmann in Johnson [2003] 1 AC 518 , paragraphs 63 and 66. They cannot have intended that procedures put in place to avoid the need to invoke the statutory scheme should in fact circumvent and make irrelevant the careful limitations of that scheme. Parties could by express agreement attach a different significance to the prescribed disciplinary procedures. But, in the absence of express contrary agreement, the Johnson exclusion area must be taken to cover both loss arising from dismissal and financial loss arising from failures in the steps leading to such dismissal, unless the loss claimed can be regarded as occurring quite independently of the dismissal, as the psychiatric loss claimed by the claimants in the Eastwood cases could be.

1. Mr Morton QC, acknowledging that the authorities prevent him recovering damages solely for the manner of dismissal submits that the Claimant's dismissal was also negligent in that it was carried out in such a way that it was a foreseeable cause of psychiatric injuries. He asserts that this negligence was independent of the dismissal itself and therefore is actionable at common law.

1. Further, as part of his argument that the Claimant's cause of action does not arise from the dismissal itself Mr Morton QC has submitted before me that the Claimant was not in fact dismissed until 31st August. He suggests that until now the date of dismissal was not relevant, given the admission, and points out that by Section 97(1) of the Employment Act 1996 Act "the effective date of termination" is defined as :

"(a) in relation to an employee whose contact of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires,

(b) in relation to an employee whose contract of employment is terminated without notice, means the date on which termination takes effect…"

*He submits that in the present case the effective date of termination was 31st August 2008 as stated in the Second Defendants' letter to the Claimant dated 6th June 2008. He points out that the Claimant continued to be paid after 10th July, and draws my attention to correspondence between the parties in which the Second Defendants' Human Resources department were denying that dismissal had occurred on 10th July but were asserting it occurred on 31st August as well as drawing my attention to the fact that this at first was the Second Defendants' case in the unfair dismissal proceedings. He accepts that at the employment tribunal hearing the parties acted on the basis that dismissal occurred on 10th July 2008 but says they were in error and that the effective date of termination was a matter of law, not a matter of fact which the parties could agree. Relying on the words of Lord Nicholls in Eastwood* he submits that the negligence occurred before the date of termination and therefore is actionable at common law.

1. He repeats his submission that the Claimant's action is brought in tort not contract, based on negligence not dismissal, and submits it would be inappropriate to strike out the action at this stage, not least, relying upon the above observations of Lord Steyn and the observations of Lord Browne-Wilkinson in Barrett v Enfield Borough Council (see paragraph 13 above).

1. In response, Mr Rivalland, whilst accepting that Lord Hoffman resiled from his suggestion in Johnson that an employment tribunal could award compensation for non pecuniary loss, submits that the underlying ratio of Johnson remains good law. He accepts that Lord Steyn stated that Johnson might need to be reconsidered but says such reconsideration took place in Edwards v Chesterfield Royal NHS Foundation Trust; Botham v Ministry of Defence [2011] UKSC 58, where six out of seven Law Lords applied Johnson. He submits the Claimant's submission that a tortious cause of action for damages arising from the manner of dismissal has survived Johnson is unsustainable and that the decision in Johnson remains "mainstream law".

1. He rejects as wrong the Claimant's submission that the effective date of termination was 31st August 2008 relying on Stapp v The Shaftesbury Society [1982] IRLR 326 which held that where lawful notice is given to determine a contract, the effective date of termination may be brought forward by the employee's resignation or summary dismissal. He adds that the concept of "effective date of determination" is a term of art within the Employment Tribunal but is unknown to common law and would not dictate a decision at common law.

1. He points out as facts that the Claimant herself said in form ET1 that her employment ended on 10th July 2008, that it is pleaded to be 10th July 2008 and submits that asserting the 31st August as the dismissal date is a serious departure from the pleaded case, may well be an abuse of the process of the court, pointing out that compensation has already been received in the two earlier proceedings in which it was alleged she was summarily dismissed on 10th July 2008 and in addition to arguing that it is unsustainable on the facts he submits that were any amendment sought it should not be allowed.

1. At a more general level Mr Rivalland submits the case is unlikely to succeed given the Claimant had demonstrated no signs or symptoms of psychiatric disorder prior to 10th July 2008 and the requirement for liability to be established in stress cases for psychiatric injury, not merely distress, anxiety and upset, to be foreseeable. He submits that the authorities indicate that the Claimant's injuries would likely be regarded as too remote.

1. The ordinary courts may award damages for wrongful dismissal but have no jurisdiction to award damages for unfair dismissal. On the other hand the Employment Tribunal has jurisdiction to award damages for both unfair dismissal and wrongful dismissal subject to the rule about double recovery and subject to restrictions such as those limiting sums which may be awarded.

1. The present action is being brought at common law and therefore, subject to statute, common law principles apply. Those principles have been explored in the cases referred to above. Whilst Addis has come in for criticism, Lord Hoffmann's observations in paragraphs 55 and 56 of Johnson can no longer be regarded as good law and the interrelation of employees' rights under the 1996 Act and at common law has been regarded as unsatisfactory, I remain bound by the now accepted ratio of Johnson and the decisions in Eastwood and Edwards from which I derive the following principles of law relevant to the present case :

1. Whether a dismissal is wrongful or unfair, damages cannot be recovered at common law for the consequences of the fact of or manner of dismissal.

1. An employee retains the right to sue at common law for damages for breach of any tortious or contractual right which exists independently of his rights not to be wrongfully or unfairly dismissed. The 1971 and 1996 Acts do not prevent a dismissed employee from suing in tort for damages resulting from tortious conduct which exists independently of the dismissal.

1. I am afraid I cannot accept Mr Morton QC's submissions. The unfair dismissal proceedings were brought and settlement concluded on the basis that the dismissal was on 10th July. The present proceedings are brought on the basis that dismissal occurred on 10th July and are defended on that basis. Medical evidence has been obtained and medical opinions given on that basis. Not only would I regard it as, ordinarily, far too late for the Claimant now to assert a different date but the Claimant has not sought to amend to change her case. Mr Morton QC says it is for the Defendants to amend first since at present he has the advantage of an admission of breach of duty. That ignores the fact that the admitted breach clearly relates to what happened on 10th July. Nor in my judgment ought it to prevent the Claimant seeking to amend if that is the case she intends to advance. I would add that on the basis of the evidence put before me I would regard the chances of success in establishing 31st August as the date of dismissal as minimal. But I have to decide the issues before me on the basis of the pleaded cases and the Claimant's pleaded case is that she was dismissed on 10th July.

1. Nor can I accept the submission that she has a valid claim in negligence arising out of the events of 10th July. The substance of her claim is that the manner in which her dismissal was carried out on 10th July 2008 was negligent. Such a claim is not justiciable on present authorities.

1. Mr Morton QC is not relying on the events of 9th July as affording the Claimant an independent cause of action. Nor has he addressed me on the basis that events subsequent to 10th July 2008, namely those pleaded in paragraphs 28.1.3 – 28.1.4 and paragraphs 28.2.2-28.2.4 afford him causes of action independently of what happened on 10th July.

1. The reported cases have been concerned with events preceding dismissal and observations about causes of action independent of the dismissal have related to preceding acts : see eg Lord Nicholls at paragraphs 27 and 28 of Eastwood. That is no doubt because dismissal rarely comes out of the blue but is the last incident in what often has been a developing state of affairs. However, in Johnson Lord Hoffman at paragraph 58 referred in passing to unfair circumstances "attending dismissal" and in Edwards Lord Mance referred to the loss claimed being regarded "as occurring quite independently of the dismissal". Even assuming that the allegations in paragraphs 28.1.3 – 28.1.4 and paragraphs 28.2.2-28.2.4, if proved, could be the subject of a duty of care, upon which I have not heard argument (save that Mr Rivalland says that with dismissal the employer's duty of care qua employer ceases) they are in my judgment so intrinsically connected with the manner of dismissal that they would fail for the same reasons as allegations based on the manner of dismissal fail. They cannot sensibly be regarded as being independent of that dismissal nor as giving rise to loss independently of the manner of dismissal.

1. I would therefore strike out the claim.

1. Mr Rivalland has stated that the Defendants will not require the Claimant to refund the interim payments made.

1. I would be grateful if counsel would kindly draw up the appropriate order but will hear argument in the event of any issues remaining.

JOHN LEIGHTON WILLIAMS QC

25th September 2012.