Deadman v Bristol City Council

This is an appeal by the defendant, Bristol City Council, against the order of His Honour Judge Bursell Q.C. giving judgment for the claimant, Michael John Deadman, on his claim for damages for personal injury suffered in the course of his employment.

Mr. Deadman was employed by Bristol City Council for over 30 years in various capacities, most recently as manager of its Mechanical and Electrical Services Team. On 5^th February 1998 a female employee from another department, Mrs. Benneworth, came to his office to collect some carpet samples. Exactly what occurred between them has never been determined: Mrs. Benneworth alleged that Mr. Deadman had spoken and acted towards her in a manner that amounted to sexual harassment; Mr. Deadman denied that anything untoward had occurred and rejected the allegations in forthright terms. The upshot was that Mrs. Benneworth made a complaint which led in due course to a formal investigation being carried out under the Council’s procedures for dealing with allegations of harassment.

Unfortunately, the Council failed to follow its own procedures correctly. In particular, the panel convened to consider Mrs. Benneworth’s complaint comprised only two, rather than three, members, one of whom was Mr. Deadman’s immediate line manager, Mr. Knight. The panel found against Mr. Deadman, but he challenged its decision before a Staff Joint Consultative Committee in accordance with the Council’s Grievance Procedure and was successful in having that decision set aside. The question of a fresh investigation then arose. The Committee decided that since the complaint was still unresolved a new panel should be convened to deal with it. That decision was communicated to Mr. Deadman by a letter dated 6^th May 1998 which was left on his desk for him to find when he next came in to work.

It is clear that Mr. Deadman found the whole investigation very stressful. It will be necessary in due course to refer in greater detail to some of the judge’s findings about the way it affected him, but it is sufficient at this stage to say that he consulted his doctor on two occasions complaining of stress and was prescribed medication. According to the judge, it is likely (though it was not entirely clear) that he was off work for most, of not all, of the period between 6^th and 13^th May when he ceased work permanently as a result of depression. The judge found that, although the Council had not acted in breach of the duty of care it owed to Mr. Deadman at common law, the manner in which it had conducted the investigation and the manner in which it had informed him of the renewal of the investigation had involved breaches of his contract of employment and that those breaches were the cause of his illness. He made an award of damages accordingly. The parties agreed that the judge should not make any finding about what had occurred between Mr. Deadman and Mrs. Benneworth on 5^th February 1998 and he did not seek to do so.

The Council has appealed against the judge’s decision on the grounds that neither of the terms on which he based his decision formed part of Mr. Deadman’s contract of employment, or, if they did, that it had not acted in breach of them. Mr. Deadman has sought to uphold the judge’s decision both for the reasons he gave and, if necessary, on the grounds that the Council was in breach of its duty of care to him at common law. It is convenient, therefore, to begin by considering the terms of Mr. Deadman’s contract of employment and the duties which the Council as his employer owed to him at common law which together governed the relationship between them.

The only record we have of the terms of Mr. Deadman’s contract of employment is contained in a Statement of Terms and Conditions issued in compliance with the Employment Rights Act 1996. There is nothing unusual about that apart from the fact that the statement was not issued until 15^th June 1998, that is, after the events with which this case is concerned. However, both parties asked us to accept it as accurately reflecting, for all practical purposes, the position as it existed in February 1998 and subject to one matter which I shall mention in a moment, I am content to do so.

Paragraph 11 of the Statement of Terms and Conditions is headed “Terms and Conditions of Employment”. It refers to various collective agreements applicable to Mr. Deadman’s employment and continues:

Paragraph 13, which is headed “Other Terms and Conditions of Employment” refers to other collective agreements and then continues:

In February 1997 the Council published a document entitled ‘Integrated Equalities Policy’ which stated that it had been drawn up following widespread consultation with its partners in the community and set out its aims of challenging discrimination and promoting equality of opportunity. Most of the document is couched in terms of policies and aspirations, but is no less valuable for that. It contained a paragraph recognising that harassment of employees and service users is unacceptable and a statement of its policy for stopping harassment in the workplace which included the following passage:

In December 1997 the Council adopted a ‘Procedure for Stopping Harassment in the Workplace’. This was a detailed document which included the following paragraph:

I have set out parts of these documents in some detail because there was much debate in the course of argument as to whether all or any of them became part of Mr. Deadman’s contract of employment or gave rise to terms which substantially reflected their provisions. Before turning to that question, however, I think it is helpful to consider the legal relationship between employer and employee at common law which forms part of the background to these documents and the context in which they must be construed.

It has been recognised for some time that a contract of employment carries with it certain rights and obligations which reflect the fact that the parties’ relationship has personal and social as well as economic dimensions. Two sources of such rights and obligations are of particular importance in the present case: an implied term of mutual trust and confidence which forms part of the contract of employment itself and a general duty imposed on the employer by the common law to take reasonable care to avoid causing physical or mental harm to his employees. As to the former, it is now well-established that a contract of employment contains an implied term that neither party will, without reasonable and proper cause, conduct himself in a manner likely to destroy or seriously damage the relationship of trust and confidence that must exist between employer and employee: see Malik v Bank of Credit and Commerce International S.A.[1998] A.C. 20. The practical consequences of what Lord Nicholls described in that case as a “portmanteau” obligation are many and various, but I have little doubt that they include dealing with personal disputes and difficulties between employees in a way that is conducive to their individual well-being and the well-being of the employer’s own enterprise, so far as that is reasonably possible. The contract of employment is also subject to an implied term that the employer will take reasonable care for the health and safety of the employee. This term covers broadly the same ground as the employer’s duty of care under the general common law, so that in practice it is usually a matter of indifference whether the employee who has suffered injury at work sues in contract or tort: see the comments of Clarke L.J. in Martin v Lancashire County Council [2001] I.C.R. 197.

The existence of the rights and obligations deriving from these common law sources provides part of the context in which the effect of the various documents to which I referred earlier falls to be considered. The judge held in paragraph 75 of his judgment that the Council’s harassment policy was part of the Integrated Equalities Policy and that the Procedure for Stopping Harassment in the Workplace was incorporated into Mr. Deadman’s contract of employment. The Guide to which the latter document refers had not been published at the time of the investigation, but he regarded it as a good indication the kind of steps that a reasonable and prudent employer should take to support employees directly involved in an investigation of that kind. Although the judge did not express himself in quite these terms, he held that it was a term of Mr. Deadman’s contract of employment arising from paragraph 4 of the ‘Procedure for Stopping Harassment in the Workplace’ quoted earlier that the Council would handle all aspects of any investigation sensitively. He went on to hold that it had not done so and was in breach of contract because, in his view, it was most insensitive to inform Mr. Deadman of the renewal of the investigation by leaving a letter for him on his desk. However, he also held that that did not amount to a breach of the Council’s common law duty of care. In addition the judge held that the procedure for investigating complaints of harassment was incorporated into Mr. Deadman’s contract of employment and that the Council was in breach of contract in convening a panel of two members instead of a panel of three to look into Mrs. Benneworth’s complaint.

The judge rejected Mr. Deadman’s claim in tort partly because he did not accept that the Council had acted in breach of its duty of care towards him. That is a matter to which I shall have to return, but it prompted Mr. Hogarth Q.C. on behalf of the Council to submit that there was a clear inconsistency between the judge’s rejection of the claim in tort and his finding that the Council was in breach of contract. The argument proceeded on the footing that the Council’s common law duty of care was necessarily co-extensive with its contractual obligations, but as Mr. Allen Q.C. observed, that is not necessarily the case. It all depends on the terms of the contract. If the contract imposes an obligation on one party to exercise reasonable skill and care in performing professional duties (as was the case in Henderson v Merrett Syndicates Ltd[1995] 2 A.C. 145 , a case on which Mr. Hogarth placed some reliance) or to exercise reasonable care to avoid causing foreseeable harm, it is unlikely that there will be any significant distinction between the scope of his duty at common law and the scope of his obligation under the contract. In other cases there may be. It is necessary, therefore, to consider what were the relevant terms of Mr. Deadman’s contract of employment in order to see whether they added in any relevant respect to the Council’s duty of care at common law and whether the judgment contains an inconsistency of the kind suggested by Mr. Hogarth.

The judge gave few reasons for holding that the Council’s ‘Procedure for Stopping Harassment in the Workplace’ were incorporated into Mr. Deadman’s contract of employment other than that he accepted the evidence of Mrs. Harris, a member of the Personnel Department, to that effect. In fact Mrs. Harris had done little more than cautiously agree with the suggestion to that effect put to her by Mr. Deadman’s counsel in cross-examination. In my view that scarcely counts as evidence of any kind, but in any event, with all respect to Mrs. Harris, her understanding of what did or did not form part of the contract was of no relevance. Mr. Hogarth submitted that the Integrated Equalities Policy is a very general and diffuse document that is not suitable for incorporation into the contracts of employment of the Council’s employees and that the Procedure, being a document brought into being under that Policy, cannot have been intended to have contractual force either. He also relied on the fact that it covers much more than complaints of harassment by one employee against another, extending to complaints by or against anyone coming on to the Council’s premises or making use of Council services, councillors, members of the public and even “unknown perpetrators”.

In Westminster City Council v Cabaj[1996] I.C.R. 960, to which Mr. Allen drew our attention, this court had to consider the consequences of the Council’s failing to comply with a provision of its disciplinary code that a tribunal convened to consider an appeal against a decision to dismiss an employee should consist of three members. The Council submitted that the defect was merely procedural and did not invalidate the tribunal’s decision. The court held, however, that the requirement had contractual force and that the failure to observe it went to the heart of the decision, thus rendering his dismissal unfair. The case provides a good example of the type of procedure that is apt to be incorporated into an employee’s contract of employment and of the consequences where it has been.

The conditions, policies and procedures referred to in paragraph 13 of Mr. Deadman’s Statement of Terms and Conditions of Employment vary in their nature and content. Some of them are clearly capable of constituting terms of his contract; others are not. In my view Mr. Hogarth was right in submitting that Integrated Equalities Policy is not a document which naturally lends itself to incorporation into the contracts of the Council’s employees, but it does provide a useful insight into the standards which the Council itself considers that it is appropriate to observe in its dealings with them. The recognition of the need to deal with harassment positively, quickly and sensitively provides one example, but rather than constituting a term in its own right it is in my view properly to be understood as illustrating the manner in which the Council expects to conduct its relationship with its employees, both in complying with its contractual obligation not to undermine the mutual relationship of trust and confidence and in observing its duty of care towards them under the contract and at common law. The Procedure for Stopping Harassment in the Workplace is rather different. Although some parts of it also contain little more than statements of policy, other parts, particularly section 7, are of a more detailed and formal nature and are capable of being incorporated into contracts of employment. In my view where an employer has published and implemented with the concurrence of employees’ representatives formal procedures providing for the manner in which complaints are to be investigated, it will usually become a term of the contract of employment that those procedures will be followed unless and until withdrawn by agreement. The fact that in this case the procedures were made in the implementation of a non-contractual policy is in my view of no significance. What matters is whether they were in fact adopted as part of the contract of employment, as in my view they were in this case.

For these reasons I have reached the conclusion, contrary to that of the learned judge, that it was not a term of Mr. Deadman’s contract of employment that the Council would investigate complaints of harassment sensitively, but that it was a term of his contract that it would follow its published procedure in the investigation of any complaints of harassment made against him. It follows from my conclusion on the first of these points that the question whether there is an inherent inconsistency between the judge’s finding that the Council was in breach of contract in failing to act sensitively in the manner in which it informed Mr. Deadman that there would be another investigation and his finding that it was not in breach of its duty of care to him at common law does not arise. There was no separate contractual obligation to act sensitively; there was merely an obligation on the Council not to undermine the relationship of mutual trust and confidence and a duty to take reasonable care to avoid causing him foreseeable harm.

This makes it unnecessary to decide whether, on its true construction, any duty to act sensitively that might arise under paragraph 4 of the procedure would be owed to the complainant alone, as Mr. Hogarth submitted.

It is convenient at this point to consider Mr. Deadman’s contention that in the light of his findings of fact the judge ought to have held that the Council failed to handle the investigation properly and as a result was in breach of its duty of care, thereby causing him psychiatric harm. In considering this submission it may be helpful to begin by summarising the relevant principles of law before looking at the judge’s findings in the light of them.

The nature and scope of an employer’s duty of care to his employees in relation to stress at work was comprehensively considered by this court in Hatton v Sutherland[2002] I.C.R. 613. The four cases considered by the court on that occasion were all concerned with stress induced by the nature of the work involved rather than by the operation of disciplinary or similar proceedings in the employment context, but the legal principles involved, stemming as they do from the fundamental principles of the law of tort, are equally applicable to a case such as the present. In paragraph 43 the court set out a number of practical propositions, of which the most important for the purposes of the present case are these:

Since, as the court observed, the threshold question is whether this kind of harm to this particular employee was reasonably foreseeable, it is necessary to bear in mind that to all appearances Mr. Deadman was a person of robust good health. He had worked for the Council for over thirty years and had an excellent attendance record, having been absent from work for only five days during that period due to ill health. There is nothing in the judge’s findings to suggest that the Council should have been aware that he was liable to be severely adversely affected by the ordinary operation of its procedure for investigating complaints of harassment.

Mrs. Benneworth made her complaint on 6^th February 1998. Having failed to resolve it by the informal procedure she made a formal complaint which led to the appointment of an investigation panel. The convening of a panel of two, rather than three, members as required by the Procedure, one of whom was Mr. Deadman’s immediate line manager, was undoubtedly an error, but it has not been suggested that it was reasonably foreseeable that a mistake of that kind might have adverse consequences for Mr. Deadman’s health and the judge made no finding to that effect. There are therefore no grounds for contending that the error constituted a breach of the Council’s duty of care, whether at common law or under his contract of employment.

On 19^th March Mr. Deadman invoked the Grievance Procedure and on 5^th May 1998 the Staff Joint Consultative Committee sat to hear the matter. In the event the committee accepted his arguments and set aside the findings of the investigation panel. The judge found that at the end of the hearing one member of the committee, Councillor Bees, had said that the complaint was still “on the table” and that it had not yet been decided whether it would be the subject of any further investigation. Since the committee’s decision had rested solely on the composition of the panel and had not dealt with the merits of the complaint, it might have been difficult for the Council simply to drop the matter at that stage. At all events, after speaking to Mrs. Benneworth Mr. Graham Sims, a more senior manager within Mr. Deadman’s department, decided on 5^th May that there should be a further investigation.

That decision was conveyed to Mr. Deadman by a letter dated 6^th May 1998 in the following terms:

At the trial there was a dispute about the date on which Mr. Deadman had received that letter from Mr. Sims. Mr. Deadman said that he had arrived at work on 6^th May to find a brown envelope on his desk containing the letter. However, that was challenged by the Council in the light of a letter which Mr. Deadman himself had written to Mr. Knight on 12^th May in which he stated that he had received the letter on his return to work on 11^th May. The council regarded this as an important issue because, if it was right, the fact that he already consulted his doctor again on 7^th May would suggests that the manner in which the news that the investigation would be renewed was conveyed to him may did not precipitate his illness. After hearing evidence from Mr. Sims, Mr. Deadman and various members of Mr. Deadman’s family the judge found in his favour on this question, but Mr. Hogarth submitted that the decision was not one to which he could properly come on the evidence before him.

Having regard to the conclusions to which I have come on the other issues in this appeal, it is not necessary to resolve this particular issue, but since it was fully argued I propose to express my view on it as briefly as I can.

Mr. Sims said that following the committee’s decision he had spoken to Mrs. Benneworth to find out whether she wished to pursue the matter and on learning that she did had prepared letters to her and Mr. Deadman for typing by his secretary. He pointed out that in his letter to Mrs. Benneworth he had referred to the committee meeting as having taken place “yesterday” and to references on the two letters which suggested that the letter addressed to Mr. Deadman had been typed after that addressed to Mrs. Benneworth. He thought it unlikely that either letter had been drafted on 5^th May and doubted whether either of them had been ready for delivery until the latter part of the morning or early afternoon of 6^th May.

Mr. Deadman said that he had found the letter on his desk when he got to work at 7.00 a.m. as usual on 6^th May and that he had telephoned his sister, Mrs Baker, some time after 8.00 a.m. to tell her. Later that morning he had spoken to his brother-in-law, Mr. Martyn Baker, who told him he had already heard about it from his wife.

Mr. Baker said in his witness statement that Mr. Deadman had telephoned him at about 1.00 p.m. on 6^th May to tell him that a letter had been left on his desk informing him that the complaint against him was to be investigated again. He said that they had spoken again that evening when he had urged Mr. Deadman to make a complaint about the way in which he had been treated. However, in a second statement Mr. Baker said that when he had arrived at work at about 9.00 a.m. on 6^th May he had received a note asking him to ring his wife urgently. When he did so she told him that she had received a call from her brother telling her about the letter which he had found on his desk. He said that Mr. Deadman had telephoned him at about 9.30 a.m. sounding distraught and unable to speak coherently. In cross-examination he explained that apparent discrepancy by saying that there had been several conversations that morning and that both statements were true. Mrs. Baker said that Mr. Deadman had first telephoned her at about 8.30 a.m. and that part of her evidence does not seem to have been challenged in cross-examination.

Their daughter, Victoria, said that she had received a call at work from her mother on 6^th May telling her about the letter and that she had later received a call from Mr. Deadman. That evidence was not directly challenged either.

Mr. and Mrs. Baker and Victoria spent much of the following week-end at home drafting Mr. Deadman’s complaint which he submitted to the Council under cover of a letter dated 11^th May addressed to the Director of Housing, Mr. Irwin. Mr. Deadman himself joined them on Sunday 10^th May, but according to them was unable to take a very active part in the process. Although in the covering letter and in the complaint itself Mr. Deadman referred to the investigation, accusing the Council of harassment and victimisation, he made no reference of any kind to Mr. Sims’s letter of 6^th May which he now says had such a serious effect on him. Taken in conjunction with the letter dated 12^th May that suggests that Mr. Deadman had not received the letter of 6^th May at the time these documents were prepared, or, if he had, that it had not had anything like the effect on him which he and the other witnesses described.

In his witness statement dealing with this aspect of the matter Mr. Deadman said that the reference in what he described as the “covering letter” to receiving Mr. Sims’ letter on his return to work on 11^th May was a simple error which he had been too tired to notice. Mr. Baker said that he had been responsible for composing the complaint and the covering letter and that tiredness had caused him to put in the date of 11^th instead of 6^th May. Mrs Baker, who did the typing, said the same. Mr. Deadman was unable to explain why there was no mention of Mr. Sims’s letter in his formal complaint.

In fact, as one can see from the documents, the error (if it be one) is not in the covering letter to the complaint at all but in the letter dated 12^th May from Mr. Deadman to Mr. Knight written apparently in response to Mr. Sims’s suggestion that he should take up any queries with his line manager. In cross-examination Mr. Baker said that he had drafted the letter of 12^th May as well and appears to have accepted that it was drafted on the date it bears (unlike the letter of 11^th May), but he too was unable to give any very convincing explanation of how it had come into existence. Mrs. Baker said in cross-examination that she had typed it at her husband’s dictation. Her answers suggest that she typed it at the same time as the other documents, but she was not directly asked about that. Victoria Baker said that the reference to there being a mistake in the covering letter was wrong, but she too was unable to give satisfactory evidence of the circumstances in which the two letters had been written. Mr. and Mrs. Baker both said that Mr. Deadman had left their house late on 10^th May taking with him the complaint which he intended to hand in to the Council when he went to work the next day.

I have some sympathy for the witnesses, all of whom were being asked to deal with matters that had occurred some eight years earlier and in respect of which they could rely on nothing beyond their unaided recollections. However, their evidence on this question was in my view highly unsatisfactory. They failed to provide any plausible explanation for the absence of any reference in the letter of 11^th May or the accompanying complaint to Mr. Deadman’s receipt of Mr. Sims’s letter (other than that he had not received it by that time) and failed to put forward any plausible account of the circumstances in which the letter of 12^th May came into existence. (Apart from anything else, the typeface is markedly different from that of the complaint and its covering letter). The original explanation given in their witness statements that an error had been made in the covering letter to the complaint was clearly wrong and the suggestion that it was a mistake induced by tiredness does not carry much weight unless that letter was also composed during the afternoon or evening of 10^th May. However, Mr. Baker seems to have said that it was written later and there is no apparent reason why it should have been post-dated by two days. The judge found that it was likely that Mr. Deadman was away from work from 6^th May, although it seems clear that he went back on 11^th May when he handed in his complaint. If so, it would be quite natural to speak of “returning to work”; he would be less likely to do so, perhaps, if he were referring simply to coming in for the next day’s work during the week.

Mr. Allen submitted that it would be wrong for this court to overturn the judge’s finding that Mr. Deadman received the letter on 6^th May, based as it was, at least in part, on his assessment of the witnesses who gave evidence before him. I certainly accept that this court should be very slow to differ from the judge in relation to findings of fact that depend to a large extent on the assessment of witnesses, but I am persuaded that in this case there are strong grounds for doing so. As I have already observed, none of the members of Mr. Deadman’s family who gave evidence were in a position to rely on anything other than their unaided recollection when describing the circumstances in which the two letters and the complaint came to be drafted and do not appear to have refreshed their memories by reminding themselves of their terms before giving evidence. Eight years after the events their memories were inevitably less reliable than they might have wished. More importantly, the explanations which they gave for the supposed error do not bear scrutiny in the light of the documents themselves.

Apart from that there was other evidence before the judge which tended to support the conclusion that Mr. Deadman did not receive the letter until 11^th May. Although Mr. Sims composed the letters to Mrs. Benneworth and Mr. Deadman, they were typed by his secretary and it may have been a matter of chance which she typed first. However, the judge accepted that he composed them both on 6^th May and if that is right, it is difficult to see how the letter addressed to Mr. Deadman can have found its way to his desk by 7.00 a.m. as he said. The judge also accepted that Mr. Deadman telephoned members of his family on 6^th May to discuss the letter, but unless Mr. Sims’ secretary started work very early in the morning, the telephone calls are unlikely to have begun as early as 8.00 a.m. The judge recognised that because he did not accept that the various events that Mr. Deadman and the other witnesses described as taking place that morning occurred at the times they remembered, but in my view it tends to emphasise the unreliability of their recollections as to the date. To receive telephone calls of the kind they described first thing in the morning would tend to stick in the mind and could easily have occurred at the times and in the manner they recalled if Mr. Deadman had found the letter on his desk when he returned to work on 11^th May after the week-end. Finally there is the evidence to be found in the doctor’s notes. When Mr. Deadman visited his doctor on 12^th March he was found to be suffering from stress at work and a degree of depression for which he was prescribed medication. When he consulted the doctor again on 7^th May he reported that the medication had helped and that he was not depressed, although he did say that he had major problems relating to his work. That does not reflect a man who was variously described as having been “distraught”, “absolutely devastated” and “on the edge of tears” only the day before. Taken as a whole the evidence in my view points strongly in favour of the conclusion that Mr. Deadman did not receive the letter until he went to work on 11^th May.

The judge found that during the period of the investigation Mr. Deadman had felt somewhat isolated and under a certain amount of stress. He accepted Mr. Deadman’s evidence that he felt devastated, unsupported and humiliated in the face of the decision of the investigation panel, but considered that his reaction was nothing more than normal under the circumstances. There was a good deal of evidence of his demeanour at the hearing before the Staff Joint Consultative Committee, but in the end the judge found that there was little to put Mr. Knight or Mr. Sims on notice that there was anything amiss at that stage. Nonetheless, he found that if Mr. Deadman had been given the support at work to which he was entitled, the growing effect upon him as noted by his family would also have been apparent to the Council.

The judge made a number of other findings to which it is necessary to refer in this context. He found that there was nothing in Mr. Deadman’s demeanour or behaviour prior to 6^th February to put the Council on notice that an investigation might be damaging to his health; he found that if in the run up to the hearing before the committee a manager had advised him to see his doctor Mr. Deadman would not have taken that advice; he found that, even if the Council had provided support to Mr. Deadman of the kind envisaged by the Guide, he would have declined any suggestion that he receive counselling or medical treatment other than that which he sought from his doctor, although the Council would then have appreciated that the matter was taking a heavy toll of him; he found that Mr. Deadman could have sought the help of the Occupational Health Officer, but did not do so, and that even if the Council had referred him itself he would he would have declined to see him. Most importantly, he found that the lack of support given to Mr. Deadman made no appreciable difference to the eventual outcome. In the light of those findings, none of which were challenged, it is not surprising that the judge also found that even if the Council had provided the support indicated by the Guide, it would not have halted the investigation and that it really had little choice under the circumstances but to continue with the hearing before the Staff Joint Consultative Committee without delay.

In paragraph 76 of his judgment the judge held that in failing to provide support of the kind envisaged by the Guide, the Council was in breach of its duty of care to Mr. Deadman, but that its breach of duty was not the cause of his illness.

Mr. Allen submitted that in the light of his earlier findings the judge ought to have held that it was negligent of the Council to break the news of the fresh investigation to Mr. Deadman by leaving a bald letter on his desk because in the light of what had gone before it was eminently foreseeable that if the matter were not handled carefully he might suffer some kind of harm as a result. In effect, his submission was that the letter was the last straw that broke the camel’s back and the Council should have realised that it might have that effect.

I am unable to accept that submission which depends not on the content of the letter but on the manner of its transmission. Apart from what he regarded as the insensitivity of dealing with the matter in that way, the only criticism that the judge made of the Council’s handling of this matter was that it had not provided Mr. Deadman with the support he was entitled to expect prior to the hearing on 5^th May. The letter itself was not insensitive; it simply stated the position in neutral terms and Mr. Allen was constrained to accept that it contained nothing for which the Council could fairly be criticised. The real difficulty in the way of this argument is that the judge did not find that the Council was or should have been aware that Mr. Deadman had been so badly affected by events leading up to the hearing on 5^th May and by the hearing itself that merely informing him that the investigation would be renewed might cause him psychiatric harm. On the contrary, he held that the way in which the Council broke the news to Mr. Deadman did not involve a breach of its duty of care which must, I think, implicitly involve a finding that it was not reasonably foreseeable that he would suffer harm as a result. In the light of the judge’s findings as a whole I do not think that there is any basis on which this court could hold to the contrary.

That brings me back to the alternative ground of the judge’s decision, namely, that the Council was in breach of contract by convening a panel of two rather than three members to carry out the original investigation. The judge held that that amounted to a breach of contract and for the reasons I have given I think he was right to do so. He was also right in saying that the consequences of doing so included the proceedings before the Staff Joint Consultative Committee and the need for a second investigation, but it is the next step in his analysis that is open to doubt. In paragraph 79 of his judgment he said

Mr. Hogarth criticised that passage on the grounds that the judge had failed to distinguish between foresight of stress and foresight of injury, but I do not think that is the case. As I read his judgment, he was saying that it was reasonably foreseeable that either of the breaches he had identified would cause stress sufficient to lead to psychiatric harm. The difficulty I have is in accepting that the appointment of panel consisting of only two members could have been expected to have that effect.

The case of Victoria Laundry v Newman[1949] 2 K.B. 528, to which the judge referred, is one of the classic authorities on remoteness of damage in contract. It is now generally accepted that the most authoritative statement of the relevant principles is to be found in Koufos v C. Czarnikow Ltd (The ‘Heron II’)[1969] A.C. 528, although it is not possible to identify in their Lordships’ speeches any single proposition which can be said to encapsulate the rule. For present purposes, however, I would adopt the following statement in Chitty on Contracts, 29^th ed. para. 26-047:

It is not clear when the Procedure for Stopping Harassment in the Workplace became part of Mr. Deadman’s contract, but it seems likely that it did so a few weeks before Mrs. Benneworth made her complaint against him. If one had asked either of the parties at that time whether they thought it at all likely that an error of that kind in convening a panel to investigate a complaint of sexual harassment would result in psychiatric harm to one or other of those involved, I think they would have been astonished. If they had thought about it they would probably have said that the investigation might have to be carried out again with a properly constituted panel and that that would add to the stress inevitable in any process of that kind, but I can see no grounds for believing that they would have thought it at all likely to cause either party to suffer psychiatric harm. In this context it should be borne in mind that the judge did not hold that the appointment of only two persons to the panel involved a breach of the Council’s duty of care, despite the fact that it was in a better position at that time to assess the risk of causing him psychiatric harm by doing so. In my view the judge’s conclusion on this issue was wrong. Any damage flowing from the Council’s breach of contract in this respect was too remote in law to be recoverable.

For these reasons I have reached the conclusion that the claim based on this breach of contract was not well-founded and must also fail, with the consequence that the appeal must be allowed. In reaching this conclusion I have much sympathy for Mr. Deadman. He had worked for the Council for over thirty years and had an excellent attendance record. It is understandable that he and others should take the view that something has gone badly wrong, a conclusion with which I find it hard to disagree. Exactly what that was, however, is more open to debate. However, for the reasons I have given I do not think that the Council can be held liable in law for his illness.

This makes it unnecessary to consider the question of causation and the attribution of damage to different causes. In the light of the court’s statement of principle in Hatton v Sutherland that where the harm suffered has more than one cause, the employer should only pay for the proportion attributable to his wrongdoing Mr. Hogarth submitted that the court should do its best to attribute damage to the different causes at work and should apportion the loss accordingly. I readily accept that in a case where damage is caused by one event which is exacerbated by a succeeding event it will often be necessary to identify the extent to which each caused the ultimate loss. However, a defendant who seeks to raise an issue of that kind should do so in his defence so that both parties are able to put before the court the evidence necessary to resolve the question.

In the present case the consultant psychiatrists instructed by the parties did not give evidence, although they had each prepared a report and had subsequently provided joint answers to questions submitted to them by the parties. They agreed that Mr. Deadman’s perception that the investigation was unfair and his perception of the manner in which he was told that there would be a further investigation both materially contributed to the development of his depression, but they were not asked to, and did not, express any opinion about whether his illness had been brought on by the first event and aggravated by the second, and if so, the extent to which each contributed to the final outcome. Their failure to do so reflected the fact that the Council had not raised the issue in its defence; had it done so I have little doubt that it would have addressed in the questions put to them. In those circumstances the judge cannot be criticised for failing to deal with it and in my view it would be wrong to allow the Council to raise it on appeal.

For these reasons I have reached the conclusion that the appeal must be allowed and the judgment against the Council set aside.

I agree.

I also agree.