Malik v Bank of Credit and Commerce International (BCCI); Mahmud v Bank of Credit and Commerce International: HL 12 Jun 1997

Allowance of Stigma Damages

The employees claimed damages, saying that the way in which their employer had behaved during their employment had led to continuing losses, ‘stigma damages’ after the termination.
Held: It is an implied term of any contract of employment that the employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. An employer might be liable in damages to an employee stigmatised by association with employers’ improper methods of conducting business, even though he had only learned of the misdeeds after the termination. Addis was not concerned with direct economic losses, but rather with injury to feelings, and was decided before the modern idea of trust and cofidence was developed. The breach of duty confidence when the act took place, not later when the employee learned of it. ‘The motives of the employer cannot be determinative or even relevant, in judging the employees’ claims for damages for breach of the implied obligation. If conduct objectively considered is likely to cause serious damage to the relationship between employer and employee a breach of the implied obligation may arise.’
Lord Steyn said that ‘the employer shall not: ‘without reasonable and proper cause, conduct itself in a manner . . likely to destroy or serious damage the relationship of confidence and trust between employer and employee.”
Lord Nicholls said: ‘The [employer’s] conduct must, of course, impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer. That requires one to look at all the circumstances . . The objective standard just mentioned provides the answer to the liquidator’s submission that unless the employee’s confidence is actually undermined there is no breach. A breach occurs when the prescribed conduct takes place . . Proof of a subjective loss of confidence in the employer is not an essential element of the breach, although the time when the employee learns of the misconduct and his response to it may affect his remedy.’

Lord Goff of Chieveley, Lord Mackay of Clashfern, Lord Mustill, Lord Nicholls of Birkenhead, Lord Steyn
Gazette 25-Jun-1997, [1997] 3 WLR 95, [1997] UKHL 23, [1998] AC 20, [1997] ICR 606, [1997] 3 All ER 1, [1997] IRLR 462
House of Lords, Bailii
Employment Rights Act 1996 1(1)
England and Wales
DistinguishedAddis v Gramophone Company Limited HL 26-Jul-1909
Mr Addis was wrongfully and contumeliously dismissed from his post as the defendant’s manager in Calcutta. He sought additional damages for the manner of his dismissal.
Held: It did not matter whether the claim was under wrongful dismissal. . .
CitedMaw v Jones 1890
An assessment of damages on a dismissal from employment might take into account the greater difficulty which an apprentice dismissed with a slur on his character might have in obtaining other employment. . .
CitedNorton Tool Co Ltd v Tewson NIRC 30-Oct-1972
(National Industrial Relations Court) The court was asked to calculate damages on a dismissal, and particularly as to whether the manner of the dismissal should affect the damages.
Held: The common law rules and authorities on wrongful . .
CitedLonrho Plc and Others v Fayed and Others (No 5) CA 27-Jul-1993
Defamatory statements causing pecuniary loss may give rise to an action in tort only. The boundaries set by the tort of defamation are not to be side-stepped by allowing a claim in contract that would not succeed in defamation. A claimant cannot, by . .
CitedFoaminol Laboratories Ltd v British Artide Plastics Ltd 1941
There is no justification for artificially excising from the damages recoverable for breach of contract that part of the financial loss which might or might not be the subject of a successful claim in defamation. A claim for mere loss of reputation . .
CitedHerbert Clayton and Jack Waller Ltd v Oliver HL 1930
When awarding damages for breach of contract courts should take care to confine the damages to their proper ambit: making good financial loss. When considering an award of damages to an actor who should have been billed to appear at the London . .
CitedGKN Centrax Gears Ltd v Matbro Ltd CA 1976
The court reinforced the distinction between damages in contract for financial losses, and for loss of reputation. . .
PreferredMarbe v George Edwardes (Daly’s Theatre) Ltd CA 1928
When assessing damages for loss flowing from a failure to provide promised publicity, the loss may include loss to existing reputation. . .
CitedWithers v General Theatre Corporation Ltd CA 1933
An artist was engaged to appear at the London Palladium. The defendant, in breach of contract, refused to allow him to perform.
Held: the plaintiff was entitled to damages for the loss of reputation which he would have acquired if the . .
CitedSpring v Guardian Assurance Plc and Others HL 7-Jul-1994
The plaintiff, who worked in financial services, complained of the terms of the reference given by his former employer. Having spoken of his behaviour towards members of the team, it went on: ‘his former superior has further stated he is a man of . .
CitedScally v Southern Health and Social Services Board HL 1991
The plaintiffs were junior doctors employed by the respondents. Their terms had been collectively negotiated, and incorporated the Regulations. During the period of their employment different regulations had given and then taken way their right to . .
At First InstanceMalik and Another v Bank of Credit and Commerce International Sa Chd 23-Feb-1994
A stigma arising from an association with a notorious employer gave rise to no cause of action. . .
Appeal fromMalik and Another v Bank of Credit and Commerce International Sa CA 17-Mar-1995
No compensation was payable for a stigma of innocent workers having worked for a fraudulent bank. . .

Cited by:
CitedMorrow v Safeway Stores Plc EAT 21-Sep-2000
The complainant appealed a decision that she had not been constructively dismissed. She had been told off in public, causing her great distress. The tribunal had found the employer’s behaviour regrettable but not such as to break the duty of trust . .
CitedHusain and Zafar v Bank of Credit and Commerce International SA CA 31-Jan-2002
The appellants challenged the refusal of their claims for stigma damages following the collapse of their former employer.
Held: If a relevant breach of contract is established, and causation, remoteness and mitigation are satisfied, recovery . .
CitedJohnson v Unisys Ltd HL 23-Mar-2001
The claimant contended for a common law remedy covering the same ground as the statutory right available to him under the Employment Rights Act 1996 through the Employment Tribunal system.
Held: The statutory system for compensation for unfair . .
CitedDunnachie v Kingston Upon Hull City Council; Williams v Southampton Institute; Dawson v Stonham Housing Association EAT 8-Apr-2003
EAT Unfair Dismissal – Compensation
In each case, The employee sought additional damages for non-economic loss after an unfair dismissal.
Held: The Act could be compared with the Discrimination Acts . .
CitedHorkulak v Cantor Fitzgerald International QBD 31-Jul-2003
The claimant sought damages for constructive dismissal. He said that verbal abuse he had suffered from the manager damaged his health and destroyed the relationship of trust and confidence.
Held: The manager was dictatorial and saw it as his . .
CitedDunnachie v Kingston-upon-Hull City Council HL 15-Jul-2004
The claimant sought damages following his dismissal to include a sum to reflect the manner of his dismissal and the distress caused.
Held: The remarks of Lord Hoffmann in Johnson -v- Unysis were obiter. The court could not, under the section, . .
CitedEastwood and another v Magnox Electric plc; McCabe v Cornwall County Council and others HL 15-Jul-2004
The first claimants were long standing employees. Mr Eastwood fell out with his manager, who disciplined him using false statements. When Williams refused to provide a false statement he too was disciplined. Each claimed damages for the injury to . .
CitedNottinghamshire County Council v Meikle CA 8-Jul-2004
The claimant was a teacher who had come to suffer a sight disability. She complained that her employers had failed to make reasonable accomodation for her disability, and subsequently she resigned claiming constructive dismissal and damages for . .
CitedLondon Borough of Waltham Forest v Omilaju CA 11-Nov-2004
Final Straw Act – Non-Trivial
The claimant had been involved in protracted disputes with the respondent. The respondent appealed a finding of constructive dismissal and victimisation. He had attended a tribunal hearing and the employer had refused to pay his salary whilst he was . .
CitedReda, Abdul-Jalil v Flag Limited PC 11-Jul-2002
PC (Bermuda) The courts should be reluctant to accept a fetter on the employer’s right to dismiss on notice where there is an express term in the contract empowering the employer to do so.
Lord Millet . .
CitedNational Westminster Bank plc v Spectrum Plus Limited and others HL 30-Jun-2005
Former HL decision in Siebe Gorman overruled
The company had become insolvent. The bank had a debenture and claimed that its charge over the book debts had become a fixed charge. The preferential creditors said that the charge was a floating charge and that they took priority.
Held: The . .
CitedMorshead Mansions Ltd v Mactra Properties Ltd CA 3-Apr-2006
Tenants of a block of flats were in dispute with their management company. Some tenants had ceased paying rent, and forfeiture proceedings had begun. There had been a compromise of the forfeiture proceedings. The parties now disputed the extent to . .
CitedWiseman v Virgin Atlantic Airways Ltd QBD 29-Jun-2006
The claimant said that he was refused permission to board a flight by the defendants representative without paying a bribe, and was publicly humiliated for not doing so.
Held: Whilst the claimant could recover for his own additional expenses, . .
CitedJohnson v Gore Wood and Co HL 14-Dec-2000
Shareholder May Sue for Additional Personal Losses
A company brought a claim of negligence against its solicitors, and, after that claim was settled, the company’s owner brought a separate claim in respect of the same subject-matter.
Held: It need not be an abuse of the court for a shareholder . .
CitedRDF Media Group Plc and Another v Clements QBD 5-Dec-2007
The defendant had sold his business to the claimants and in part consideration had accepted restrictive covenants as to his not competing with them. On indicating his desire to leave the claimants and work for a competitor, made statements which the . .
CitedSG and R Valuation Service Co v Boudrais and others QBD 12-May-2008
The claimant sought to require the defendants not to work during their notice period to achieve the equivalent of garden leave despite there being no provision for garden leave in the contracts. It was said that the defendants had conspired together . .
CitedJamie v Management Solution Partners Ltd EAT 31-Jan-2006
The claimant received an email from his employers and resigned claiming unfair dismissal saying that it was repudiatory. The employers objected to the admission of the email into evidence saying that it was marked without prejudice and subject to . .
CitedTransco Plc v O’Brien CA 7-Mar-2002
The company appealed against a finding that they were in breach of their contract of employment in not including the claimant in those considered for an enhanced redundancy package.
Held: The appeal failed. Tribunals should be cautious before . .
CitedHamilton v Tandberg Televison Ltd EAT 12-Dec-2002
The applicant claimed unfair constructive dismissal.
Held: The appeal failed. McMullen QC J said: ‘It is suggested that the Employment Tribunal erred in law in failing to condemn the investigation. The standard against which investigation . .
CitedClaridge v Daler Rowney Ltd EAT 4-Jul-2008
EAT UNFAIR DISMISSAL: Constructive dismissal
The Employment Tribunal held the employee had not been constructively dismissed. One of the complaints related to defects in the handling of the grievance . .
CitedMorrow v Safeway Stores Plc EAT 21-Sep-2001
The claimant appealed against dismissal of her claim of unfair constructive dismissal. She complained of having been publicly told off. The court considered whether this amounted to a breach of a fundamental term of her contract entitling her to . .
CitedBank of Credit and Commerce International SA v Ali, Khan and others (No 1); BCCI v Ali HL 1-Mar-2001
Cere Needed Releasing Future Claims
A compromise agreement which appeared to claim to settle all outstanding claims between the employee and employer, did not prevent the employee later claiming for stigma losses where, at the time of the agreement, the circumstances which might lead . .
CitedAmnesty International v Ahmed EAT 13-Aug-2009
EAT RACE DISCRIMINATION – Direct discrimination
RACE DISCRIMINATION – Indirect discrimination
RACE DISCRIMINATION – Protected by s. 41
UNFAIR DISMISSAL – Constructive dismissal
Claimant, of . .
CitedGAB Robins (UK) Ltd v Triggs CA 30-Jan-2008
The claimant had been awarded damages for unfair constructive dismissal. The employer appealed an award of damages for the period prior to the acceptance by the employee of the repudiatory breach.
Held: Where a claimant’s losses arose before . .
CitedBournemouth University Higher Education Corp v Buckland EAT 8-May-2009
EAT UNFAIR DISMISSAL: Constructive dismissal
Whether fundamental breach of implied term of trust and confidence cured, so that the Claimant’s resignation did not amount to constructive dismissal.
CitedChagger v Abbey National Plc and Another CA 13-Nov-2009
The claimant appealed against the limitation of 2% placed on the uplift of his award of damages for having failed to comply with relevant dispute procedures. The tribunal had found exceptional reasons for reducing the uplift given the size of the . .
CitedBuckland v Bournemouth University Higher Education Corporation CA 24-Feb-2010
The claimant had been dismissed from his post as chair of archeology after criticism of his marking practices. Though a report vindicated him, the respondent continued with disciplinary procedures. He claimed unfair dismissal. The EAT had allowed . .
CitedEdwards v Chesterfield Royal Hospital NHS Foundation Trust CA 26-May-2010
The claimant, a consultant doctor, sought damages saying that his employer had failed to follow the contract when disciplining and dismissing him. The GMC had dismissed as unfounded the allegation on which the dismissal was based. He sought damages . .
CitedBotham v The Ministry of Defence QBD 26-Mar-2010
The claimant had been employed by the MOD. He was summarily dismissed for gross misconduct, and he was then placed on the list of persons unsuitable for work with children. He succeeded at the Tribunal in a claim for unfair and wrongful dismissal. . .
CitedWatson v University of Strathclyde EAT 1-Feb-2011
EAT UNFAIR DISMISSAL – Constructive dismissal
Apparent bias. Whether Employment Tribunal had erred in failing to find that there was apparent bias where a member of the panel (the University Secretary) . .
CitedEdwards v Chesterfield Royal Hospital NHS Foundation Trust SC 14-Dec-2011
The claimant had been employed as consultant surgeon. He had been dismissed in a manner inconsistent with the extress terms of his employment contract. He sought common law damages for the manner of his dismissal. The employer appealed.
Held: . .
CitedDresdner Kleinwort Ltd and Another v Attrill and Others CA 26-Apr-2013
The bank appealed against judgment against it on claims by former senior employees for contractual discretionary bonuses.
Held: The appeal failed. The bank’s unilateral promise made within the context of an existing employment relationship to . .
CitedChelsfield Advisers Llp v Qatari Diar Real Estate Investment Company and Another ChD 15-May-2015
Application for summary judgment in respect of an agreement relating to the proposed redevelopment of the site of the embassy of the United States of America in Grosvenor Square.
Held: The court considered the authorities and principles to be . .
CitedMr H TV Ltd v ITV2 Ltd ComC 8-Oct-2015
The claimant had contracted with the defendant for the production of a series of reality TV shows featuring celebrities. After severe personal clashes between the people involved on the claimants side, the contract was terminated. The claim was that . .
CitedJames-Bowen and Others v Commissioner of Police of The Metropolis SC 25-Jul-2018
The Court was asked whether the Commissioner of Police of the Metropolis (‘the Commissioner’) owes a duty to her officers, in the conduct of proceedings against her based on their alleged misconduct, to take reasonable care to protect them from . .

Lists of cited by and citing cases may be incomplete.

Employment, Damages

Leading Case

Updated: 02 November 2021; Ref: scu.158898