when is compensation for injury not compensation for injury

My client had an out of court settlement from former employer for £25K, in exchange for withdrawing an employment tribunal brought about whether she had experienced discrimination and harassment at work.  ESA say this is capital and cannot be disregarded for 52 weeks, and have stopped paying her.  Client wants to argue that it was paid in consequence of injury (to feelings) and should therefore be disregarded for 52 weeks as personal injury compensation.

Anyone know of any useful caselaw etc? 

Sched 9 para 17 of ESA regs 2008 talks about payment ‘in consequence of’ injury which to me seems quite wide - she would not have got the out of court settlement had she not had the injury.  But I wasn’t sure if that was stretching it too far. 

Thanks

don’t know the answer and don’t have caselaw on the point, but seems to me that an out of court settlement of this nature (settled for the purpose of BOTH SIDES avoiding the need to go through an ET alleging harassment and discrimination) means that no injury or liability for injury has ever been properly established and certainly (I would imagine highlighted in the terms of the settlement) not admitted….the payment cannot be therefore said to have been made specifically in consequence of injury ...it may, for example, have been settled due to considerations of time, cost or reputational damage ...or any number of other potential reasons…..just an opinion

I don’t know the answer either, nor do I know of any case law one way or the other, but I do think it is worth a challenge.

I don’t think it matters why the employer agreed to pay compensation. Most ET cases and most tort cases in the courts are settled with some payment to the claimant. Respondents/defendants are motivated by commercial considerations: the risks of losing big and the cost of fighting a case are an incentive to offer something, especially in the ET where an employer wouldn’t usually be able to recover their legal costs even if they win. The question is; what was the compensation for? Strictly speaking it’s for discrimination and harassment under employment legislation. Discrimination and harassment are not of themselves personal injury. But if the discrimination and harassment cause distress then it seems to me that is personal injury. It’s well established in PI law that injury is not just physical injury.

Another way of looking at it is to consider the purpose of compensation. It is to place the victim in the same position as they would have been if the wrong had not been done to them, insofar as money can compensate. In this case assume there hadn’t been any discrimination or harassment and the client moved onto benefits anyway. There would be no capital so the benefit would be paid. in fact there was discrimination and harassment and the compensation is meant to balance that out. But the consequence of the DWP’s decision is that the client loses her ESA so is worse off than if the discrimination and harassment never happened.

The Employment Tribunal’s guidance form T420 says:

In a discrimination case the tribunal can also award compensation for injury to feelings – that is a sum of money paid to compensate for the upset and distress caused by discrimination. The amount awarded will vary depending on how badly a person has been affected. Evidence will be needed so the tribunal can assess this. In extreme cases if there is evidence that a person has become ill because of discrimination, then compensation can also be awarded for personal injury. However in cases like this the tribunal will require medical evidence which explains what illness has developed and how it is linked to the discrimination.

Whilst its not of any high authority, that accords with what I think the general meaning of “personal injury” is. It is something which goes beyond general unpleasantness and into something which registers medically, whether in psychiatric terms or otherwise. I don’t see that a garden variety harassment claim would necessarily be a “personal injury”.

However as the guidance also notes, it is perfectly possible for personal injury to come about through discrimination and for such a claim to be pursued in the Employment Tribunal.

I think that in order to give informed advice therefore, you would need to better understand the nature of your client’s claim. If the claim was being pursued on the basis that damages for personal injury ought to be awarded, then it may well follow that the sums ought to be at least partially disregarded.