UK Banks Facing Rising Lawsuits over Stress? Really?

Banks are facing a rising tide of stress at work claims, according to Reuters yesterday. The report refers to anecdotal evidence by GQ Employment Lawyers to the effect that the number of “stress related lawsuits” is on the increase, but doesn’t say what type of lawsuits, nor give any statistics to back up the assertion.

 Never mind, the Health & Safety Executive’s own statistics for 2010/11 state the following;

“The number of new cases of stress, depression or anxiety has fallen from an estimated 254,000 in 2001/02 to 211,000 [in 2010/11]” *

Whether that downward trend will continue in 2011/12 or be broken as the report suggests we will have to wait and see. In my view it is unlikely that we will see a tidal wave of stress claims in the courts or Tribunals for various reasons – see below – but because when the next recession, which looks inevitable now, strikes it will be accompanied by job losses.  The CIPD produced a report yesterday predicting a “slow, painful contraction” in the jobs market in Quarter Four this year as many employers impose a hiring freeze. It isn’t actually predicting a rise in redundancies merely that once you’re out of a job you may find it hard to get another one.

I’ve acted for many employees over the years with occupational illnesses or injuries (including stress cases) and the one factor that usually concerns most, if not all of them, is the reaction of their employer if they bring a personal injury claim or assert their legal rights in some way.  Bankers are prey to this concern just as much as any other workers, arguably more so if they think it might jeopardise their annual bonus. The other concern, which should be ameliorated by the banning of pre-job offer health enquiries by employers under the Equality Act but probably isn’t, is that having a lengthy spell off work with stress will render a job-seeker “damaged goods”.

If I‘m wrong and a flood of stress at work claims does arise there’s another important consideration to bear in mind.  It’s relatively easy to commence a claim, start a protocol or issue proceedings, but quite another to win and recover compensation. Most employers faced with a stress at work claim aren’t likely to simply roll over and pay up.

There are several possible claims; in negligence for personal injury, for harassment under the Protection from

Harassment Act 1997 (PHA), or for injury to feelings at an Employment Tribunal if the stress is caused by harassment on the grounds of sex, race, disability, age, religious belief or sexual orientation (known as “Protected Characteristics”) . All it says is that claims from financial services staff are increasing, in the face of challenging economic conditions, long working hours, the threat of redundancy as well as being the occupation that currently everyone loves to hate (well, it gives estate agents and solicitors a break I suppose).

To sue for personal injury in the tort of negligence (which is the type of claim you would make if you suffered a whiplash injury in a car crash or a back injury from lifting something heavy at work) a Claimant has to have suffered a medically recognised illness or injury.  “Mere” stress won’t be enough, it has to go beyond that and will need to be verified by a medical practitioner, preferably a Consultant Psychiatrist.  That will be expensive.

The first legal issue is whether the illness/injury was reasonably foreseeable to the employer, in other words would the reasonable employer have realised, or should they have realised, that an employee subjected to those particular working conditions would suffer a psychological injury or illness.  That can be a difficult hurdle to overcome because mental illness tends to be “invisible” and most people don’t admit they have a problem until they become very unwell.  An employer is entitled to view his/her staff as being ordinarily robust and able to deal with the ups and downs of the workplace unless they have particular knowledge to the contrary.  It is in those cases where an employee has suffered mental illness, notified the employer of it, been off work as a result and then returned only to have another breakdown later on that have tended to be successful with claim for personal injury.

The second main problem tends to be in proving that the illness/injury was caused by or contributed to by the actions of the employer.  That usually means a forensic examination of the Claimant’[s medical records to see if they have any other stressors in their life – such as a prior history of mental illness, or have been going through a divorce, in trouble with the police etc.

Finally, these type of claims tend to be very expensive to put together, usually vigorously contested by the employer’s EL insurer and, because the claim is taken through the Court (High or County), there is a risk of losing and having to pay the other side’s costs – at least until the Jackson litigation reforms are introduced and we have “Qualified One-Way Costs Shifting”.

Claims under the PHA are, perhaps, slightly easier if the Claimant can show a near criminal standard of harassment from, e.g. their line manager, but that sort of claim doesn’t help an employee who is grossly overworked and trying to do the work of three people.  The ET claims for harassment and victimisation also require a “Protected Characteristic” to be the motivating factor in the employer’s behaviour.

Personal injury law is very unhelpful to people suffering from mental illness caused by the workplace. There won’t be a great increase in the number of claims going through the courts because the substantive law hasn’t changed.

• HSE Annual Statistics 2010/11 p.5