Recently, the Court of Appeal has made an important ruling concerning the payment of “stigma” compensation.

The judgement established that, in principle, claimants are able to obtain compensation to cover the fact that they may encounter difficulties in future in finding employment due to the stigma of having been involved in legal proceedings with their former employer.

The case of Chagger v Abbey National plc examined the issue in detail. Mr Chagger was dismissed from his position at Abbey National in 2006 by reason of redundancy. He subsequently brought a claim against them at the Employment Tribunal for race discrimination, which he won.

During the case, it was revealed that since being made redundant, Mr Chagger had applied for 111 posts - some of which were of lower status than his former position at Abbey - and had not been successful in obtaining any of them. He had even offered to work on a voluntary basis and had used 26 different employment agencies in his attempts to find work.

He concluded that it was the stigma of bringing proceedings against Abbey that was hampering his search for employment. The tribunal agreed, and, because they considered that he would probably never find a job in the financial services again, awarded him a total of £2,794,962.27. However, the tribunal made no finding specifically relating to the issue of whether Mr Chagger had suffered any stigma.

After a series of appeals and cross-appeals, the Court of Appeal made a final ruling on the case, finding that stigma loss is, in principle, recoverable. Liability for stigma loss lies with the original employer, not with the third party employer who discriminates, even if their actions constitute unlawful victimisation.

Technorati Tags: Race Discrimination, Redundancy, Stigma Damages