When, in July, retired housing officer Beverley Lancaster succeeded in suing her employers for personal injury caused by work-related stress, the case made headlines.1 She was awarded£67,000 in compensation by Birmingham city council - heralded by the press as the first time an employer had admitted liability for causing psychiatric injury by reason of exposure to excessive stress at work.

The decision was unremarkable and, since liability was admitted, will not set a legal precedent. Why then, was the media attention focused on the case so substantial? And why was the union supporting the claim so successful in persuading the press to share its interest?

The facts

The case reported as a breakthrough in this area was Walker v Northumberland county council in 1995.2 But Walker was not novel, either. Claimant John Walker suffered a nervous breakdown because of his work conditions, for which his employer was not liable because it had no means of foreseeing his injury. But he subsequently went back to work in similar or worse conditions, which meant the employer was liable for the second breakdown. This outcome was entirely predictable on the basis of the general law of breach of duty, foreseeability and causation.

The facts in the Lancaster case can be analysed similarly. Ms Lancaster had been employed by Birmingham city council since 1971 in technical, administrative and supervisory posts which involved little contact with the general public. In April 1993 her part-time position as an estate improvement assistant was abolished and she was given alternative employment as a housing officer.

The work was of a very different character and involved sometimes difficult contact with the public. Although Ms Lancaster had no appropriate qualifications or experience in this field, she was promised training and support. Yet, despite her many requests, no such assistance was ever given to her.

Ms Lancaster felt unable to cope and was diagnosed with clinical depression. She was prone to mood swings, lethargy and insomnia and eventually retired from work on the grounds of ill health. She brought a claim for work-related stress and the council admitted liability.

What can be learned?

The case demonstrates that the factual background to most stress claims is one of change. Granted the acknowledged need for training and the failure to deliver it, the foreseeability of the psychiatric injury is obvious. The admission of liability is not surprising.

So, if neither Walker nor Lancaster v Birmingham city council is a landmark case, have there been any other relevant decisions and what general conclusions can employers draw?

The most interesting case from a defendant's point of view is Firman v British Telecom which, although only a county court decision, is closely reasoned.3

In that case the claimant, a telephone engineer, suffered three psychiatric injuries. The first was said to be nothing to do with his work so there was no causative link and no liability. Consequently, the employer was not on notice that work conditions might cause psychiatric injury. When the second breakdown occurred it was not therefore foreseeable that the claimant would suffer injury, so again no causation. Between the second and third breakdowns the defendants took all practical steps to prevent a recurrence, but it still occurred. This time there was no breach and thus no liability for any of the claimant's injuries.

Drawing all this together, we know from Walker that too much work might lead to a claim provided the impact on the claimant is foreseeable. After Lancaster we know that work of a different type can result in liability if the claimant is not properly matched with the job and training given.

But as all reported stress cases can be analysed on a conventional liability basis, there is no reason to fear an opening of the floodgates, provided employers follow good human resources practice.

This is borne out by the experience of practitioners in the field. In many common law stress claims the facts complained of are remarkably similar to those in claims for constructive dismissal and invariably fall short of what would be required to establish such a claim. Often, good HR practice has been scrupulously followed and claimants simply do not like, for example, the adverse outcome of a grievance procedure.

Very few stress claims have been settled and many have been quietly dropped. So the answer to the question of why Ms Lancaster's case attracted such attention seems to be because there are so few cases to which those promoting them can point.

But employers must stay abreast of best practice and so we need to consider the present and possible future regulatory and employment law framework.

How claims are brought

As there is no legislation that specifically covers the risks from work- related stress, the Health and Safety Commission is consulting on to what extent stress at work should be regulated. There is a general duty to ensure, so far as is reasonably practical under the Health and Safety at Work Act 1974, that an employee's mental as well as physical health and safety is looked after. The HSE is seeking views on what else should be done. For example, issuing an approved code of practice, recommending that regulations be made about work-related stress or issuing guidance.

Apart from personal injury claims, an employee suffering from stress may have other claims against their employer. The employee may claim that the position at work has become so intolerable that they are entitled to walk out of the job and claim constructive unfair dismissal. The qualifying period for a claim of unfair dismissal is now reduced to one year and the maximum compensation will soon rise from£12,000 to£50,000 (see page 12).

Claims for unfair dismissal may also be coupled with a claim under discrimination legislation. For instance, the employee may be able to show they are suffering from a disability within the meaning of the Disability Discrimination Act. According to the first government study on the DDA published in May this year, depression, bad nerves and anxiety were among the commonest disabilities cited by applicants in the first 19 months of the DDA's operation. The definition of disability breaks down into three main parts:

The person must have a physical or mental impairment.

The effect of the impairment must be adverse, long term and substantial.

The impairment must have an effect on normal day-to-day activities.

In a number of cases the employment tribunal has held that depression, post-traumatic stress disorder and reactive depression are clinically well-recognised illnesses amounting to a mental impairment within the meaning of the DDA. They have also shown that under the DDA (unlike a personal injury case), the depression does not have to arise from work- related circumstances for the employee to put in a successful claim. As there is no limit on the award for compensation in relation to a claim under the act, a successful claim may have significant financial consequences for an employer.

But a number of such DDA cases have failed on the basis that the employee's normal day-to-day activities were not adversely affected to any substantial extent by the depression or that the effects were not long lasting.

Another area where the discrimination legislation may be used in relation to a stress claim is that of sex or race discrimination. Discrimination legislation can be used to obtain damages for personal injury in the employment tribunal rather than the High Court or county court.

In Sheriff v Klyne Tugs (Lowestoft) Limited the Court of Appeal ruled that compensation for injury to feelings in a race discrimination claim covered damages for psychiatric damage.3 In this case the employee had suffered a nervous breakdown as a result of racial harassment, intimidation, abuse and bullying in the workplace. As a result of this case, employees may find it more attractive to bring a claim in the employment tribunal covering not only the employment aspects but also the personal injury aspects arising out of a discriminatory act. This may well mean that medical evidence will need to be put before the tribunal in order for it to assess quantum.

It is not just civil liability to which an employer may be exposed. Under the working time regulations an employer that works its employees for more than an average of 48 hours a week over the reference period is liable to a criminal prosecution.

The way forward

The law surrounding work-related stress is a developing area. While the floodgates may not be open in relation to personal injury actions, a significant trickle of claims is arising out of employment legislation. But, if employers adopt good HR and management practices, the risks of a successful claim are minimal.


1 Lancaster v Birmingham city council. 5 July 1999. Birmingham county court.

2 Bradley D. Rising Pressure. HSJ 1995, Law special report; 105 (5453): 1-4.

3 Firman v British Telecom. 1996 (unreported).

4 Sheriff v Klyne Tugs (Lowestoft) Limited. Court of Appeal. 24 June 1999 (unreported).

Elizabeth Adams is head of employment law and Tony Cherry is head of liability claims (London) at Beachcroft Wansbroughs.