Wardle v Crėdit Agricole Corporate and Investment Bank

Assessing Compensation

We have had discrimination law in the UK for over 35 years so you would think tribunals would know how to assess loss by now. The Court of Appeal’s decision in Wardle v Crėdit Agricole Corporate and Investment Bank [2011] EWCA Civ. 545 demonstrates that both Tribunal and the Employment Appeal Tribunal (EAT) are still capable of getting it wrong.

The Claimant was Head of Exotic Interest Rate Derivatives Risk Management at French Bank. Risk management is just the sort of job to get you into difficulties at any investment bank and in this case the tribunal found that the bank had discriminated against the Claimant by preferring a French national to him when possible promotion came round and it had then victimized him by dismissing him unfairly.

Unsurprisingly the Tribunal took a dim view of this behaviour and awarded hefty compensation in the sum of £375,000. One of the errors in doing this concerned the uplift rules under the 2002 Employment Act, which, as they are now no longer in force, will be ignored for the purposes of this note. It was the way the tribunal went about assessing future loss that is the principle interest of the case.

The Tribunal began with the usual exercise of considering how long the claimant took to get his new job (with the FSA) and the difference between his salary there and the rate for the job to which he should have been promoted.

Not satisfied with this they then got out their crystal ball and assessed when he would leave his new job to return to banking. They also computed when he might have been expected to leave the French bank (had he not been dismissed) and did this based on his previous history of moving jobs.

They then projected all of these probabilities forward to the year 2024 and attempted, by applying percentage chances to the various elements, to calculate the loss flowing from the discrimination by reference to the whole of the claimant’s career.

Unsurprisingly the Bank appealed to the EAT which made a number of adjustments to the calculations but held that all the looking forward was not too speculative and that the Tribunal had enough evidence to make sensible predictions about the claimant’s future.

Off to the Court Appeal everyone traipsed where Lord Justice Elias applied some sense to all of this futurology. What he said was that it was not impossible that there could be cases where the loss suffered could last for the whole of the future career of a claimant but that such cases would be rare. The courts were well used to making such calculations if they had to, for example in career shattering personal injuries. However what had happened in this case was that the tribunal had attempted to award damages up to the point that they could be sure that the claimant would obtain an equivalent job.

That was the wrong approach. What they had to do was assess loss up to the point when it was likely he would obtain a job on equivalent terms and calculate loss to that date. In this case the tribunal had decided that there was a 70% chance this would happen by the end of 2011 and any calculation of loss should have ended then. In fact as soon as they formed the view that there was a greater than 50% chance this would happen was the moment to draw the line on future loss. Whilst this was far from scientific the tribunal’s best estimate ought in principle to provide appropriate compensation.

First published in The Grapevine Magazine

June 2011

Further Information contact Sejal Raja, sejal.raja@rlb-law.com


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.