0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

Yapp v Foreign and Commonwealth Office, Court of Appeal, 21 November 2014

19 December 2014

The issues
Psychiatric injury – stress – breach of contract

The facts
In January 2007 the claimant was appointed British High Commissioner in Belize. In June 2008 he was withdrawn from the post on operational grounds with immediate effect and suspended pending investigation of allegations of misconduct. The Foreign & Commonwealth Office’s (FCO) disciplinary procedures were implemented. Some, but not all, of the allegations against him were found to have been established and he was given a written warning. His suspension was lifted but in the meanwhile he had developed a depressive illness and had had to undergo heart surgery. He did not in fact receive any other appointment in the FCO until his retirement in January 2011. In May 2011 he started proceedings against the FCO complaining of his withdrawal from the post of High Commissioner and the way in which the disciplinary process was conducted and its outcome. He said that the resulting stress had caused a depressive illness. He claimed damages both in respect of the injury and in respect of loss of earnings. Liability was tried in March 2013 by the High Court. The judge found that the withdrawal of the claimant from his post was both a breach of contract and a breach of the duty of care which the FCO owed him at common law. The claims relating to the disciplinary process were dismissed. The judge found that in principle, the claimant was entitled to recover for the depressive illness which he had developed and its consequences and on the basis of those findings the parties were able to agree damages in the sum of £320,000.

Under the heading of breach of contract the judge found the withdrawal of the claimant from his post in Belize was wrongful; and that it was wrongful that the same individual had conducted both the investigation and the disciplinary hearing. As to causation, the judge found that the claimant’s withdrawal from the post of High Commissioner had caused him a loss of earnings. He found that the depressive illness was caused by the withdrawal; and that the cardiac illness did not break the chain of causation. However the conducting of both stages of the process by the same individual had caused no loss.

As to remoteness, the judge found that the claimant’s financial losses were not too remote; that as regards to his depressive illness and consequences that it was foreseeable that when the claimant was appointed as High Commissioner in 2007 that depression would be a not unlikely result of a knee jerk withdrawal from the post.

The duty was derived from the implied term of mutual trust and confidence or from the duty of care which the FCO owed as an employer. He found that the FCO was in breach of its duty to the claimant in withdrawing him from the post without informing him of the case against him. The FCO appealed.

The decision
The judge had been entitled, on the evidence, to conclude that the claimant’s withdrawal, carried out in the way it was, was unfair. The Court of Appeal disagreed with the judge’s findings that it was unfair for the same individual to act as both fact finder and disciplinary decision taker. That the role should be separate was an Acas recommendation. However, that recommendation did not represent a basic principle of natural justice. It might represent good practice, but it was not a requirement of fairness in every case. The FCO had taken the view that the individual’s knowledge of the detail and his experience of having interviewed the witnesses was an important advantage which justified him taking the role of decision taker and the Court of Appeal could see nothing wrong in that.

As to remoteness, the issue was whether the judge was entitled to award the claimant damages for his depressive illness and for the pecuniary losses that flowed from it. The following propositions could be established from a review of case law:

  1. In considering in the context of the common law duty of care whether it was reasonably foreseeable that an employer’s acts or omissions could cause an employee to suffer psychiatric injury, such an injury would not usually be foreseeable unless there were indications of which the employer was or should have been aware of some problem or psychological vulnerability on the part of the employee (Hatton/Barber).
  2. That approach was not limited to Hatton type cases but extended to cases where the employer had committed a one off act of unfairness such as the imposition of a disciplinary sanction. See Croft v Broadstairs & St. Peter’s Council and Deadman v Bristol City Council.
  3. In neither case should that be regarded as an absolute duty. Each case turned on its own facts. Hatton was no more than guidance, but reinforced by Barber and Hartman.
  4. In claims for breach of the common law duty of care it was immaterial that the duty arose in contract as well as tort. (Walker v Northumberland; Hatton/Barber). In order to establish whether the duty was broken it was necessary to establish whether psychiatric injury was reasonably foreseeable and if established no issue as to remoteness could arise.

In claims for breach of an express contractual term, the contractual test of remoteness would be applicable. The same would apply to claims for breach of duty of the type in Malik v Bank of Credit and Commerce International – the implied term of mutual trust and confidence (Deadman v Bristol City Council). It would often be possible for the same conduct to constitute a breach of the common law duty of care and the breach of another contractual duty – most obviously the Malik term, but perhaps also an expressed term. This overlap could lead to a regrettable complexity in the formal analysis and further thought needed to be given to whether the Malik term really had any separate role to play in this area. The problem however might not matter much in practice.

Where a breach of the common law duty of care could be established, it was unclear what the employee gained by formulating a distinct contractual claim. On the facts of this case there was nothing about the circumstances which rendered it foreseeable that the claimant’s withdrawal from his post would cause him a psychiatric injury. It was a setback to his career and was bound to cause distress and anger, but it was not tantamount to dismissal. Nor was it a disciplinary sanction or based on any established misconduct. This conclusion was in line with the outcomes in Croft and Deadman and with the views of the Court of Appeal and of Lord Steyn in Johnson v Unisys – in all of which the claim for psychiatric injury failed because of the absence of any evidence of vulnerability on the part of the claimant. Accordingly, the losses attributable to the claimant’s psychiatric injury were not reasonably foreseeable and could not found a claim for breach of the common law duty of care. They were also too remote to be recoverable in his claim for breach of contract where the test of remoteness was more favourable to defendants. The appeal would be allowed and the case remitted to the High Court to decide quantum.

focus on...

Legal updates

Non-payment of insurance premiums during the Coronavirus pandemic

The forced closure of many businesses as a result of the Coronavirus pandemic has had a huge impact on the nation’s Gross Domestic Product (GDP). Recent reports from the Office for National Statistics state that the economy was 25% smaller in April than it was in February this year.

View

Legal updates

Reinstatement for property damage losses – when does it apply?

The Court of Appeal has recently considered the correct test for measuring the indemnity for property damage losses and has provided useful guidance on whether an insured needs to intend to reinstate the property to its pre-loss condition.

View

Legal updates

Coronavirus (COVID-19) insurance considerations

With instances of COVID-19 rapidly increasing throughout the UK, many businesses are considering the options available to limit staff and customer exposure to Coronavirus.

View

Legal updates

Insurance annual review 2019-2020

Welcome to our review of 2019 as we look ahead to what is on the horizon for the insurance sector in 2020.

View

The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

mailing list sign up



Select which mailings you would like to receive from us.

Sign up