Fox v British Airways Plc
| Jurisdiction | England & Wales |
| Judge | Lord Justice Underhill,Lord Justice Pitchford,Lord Justice Moore-Bick |
| Judgment Date | 31 July 2013 |
| Neutral Citation | [2013] EWCA Civ 972 |
| Docket Number | Case No: A2/2012/2259 |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 2013 |
[2013] EWCA Civ 972
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM the Employment Appeal Tribunal
Mr Justice Langstaff
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Moore-Bick
Lord Justice Pitchford
and
Lord Justice Underhill
Case No: A2/2012/2259
Akash Nawbatt (instructed by Baker & McKenzie LLP) for the Appellant
Thomas Coghlin (instructed by Darbys) for the Respondent
INTRODUCTION
Gary Fox was employed by British Airways ("BA") for over twenty years. Latterly he suffered from a serious back condition following an accident and had to be away from work for long periods. In June 2010, when he had been off work for more than six months and had exhausted his sick pay entitlement, he was given notice of dismissal for medical incapacity with effect from 21 September 2010. Five days after his employment terminated he went into hospital for a major operation. He was expected to make a recovery in due course; but sadly he died on 16 October 2010. He was aged only 44. He was unmarried and childless. He did not leave a will.
Mr Fox was entitled under his contract of employment to membership of BA's pension scheme and had made regular contributions over the course of his employment. Rule 21 of the scheme provides for a lump sum to be payable on the death of an "FSS Member" — that is, a member currently in employment — equal to three times his annual salary at the date of death. I will refer to this as "death-in-service benefit". The benefit is not payable to his estate; rather, the Management Trustees are given a discretion to pay it to any member or members of one or more of six classes of beneficiary identified in rule 24 (a), namely: the member's family (classes (i), (ii) and (vi)); his dependants (class (iii)); "any individual or individuals, charity, society or club" nominated by the member during his lifetime (class (iv)); and his personal representatives (class (v)). Rule 24 (b) provides that any part of such a lump sum not paid under rule 24 (a) within two years of the member's death shall be paid to his personal representatives.
If Mr Fox had still been in employment when he died the death-in-service benefit payable in his case would have amounted to approximately £85,000. Who would have been the beneficiary or beneficiaries of the payment would have been a matter for the discretion of the Trustees in accordance with rule 24 as summarised above. In the event, the Trustees were obliged only to repay his pension contributions, with interest, which totalled some £29,000. That sum was in fact paid in equal shares to his parents and a surviving brother and sister: I dare say that those payees would have been the recipients of the death-in-service benefit had it been payable.
Mr Fox's father (to whom I will refer as "Mr Fox senior") has commenced proceedings in the Employment Tribunal claiming that his son's dismissal was unfair and/or that it constituted unlawful discrimination contrary to the Disability Discrimination Act 1995. The principal object of the proceedings is to obtain compensation for the loss of the death-in-service benefit: his case is that if Gary Fox had not been — unfairly and/or discriminatorily — dismissed when he was he would still have been in employment at the date of his death less than a month later, and the benefit would have been payable. Strictly speaking, the claim must be for the loss of the chance of the benefit being paid; but in the particular circumstances of this case the chance is said to be tantamount to a certainty.
It is common ground that Mr Fox senior has standing to bring such a claim. Strictly speaking, the formal basis differs as between the unfair dismissal and discrimination claims. Taking them in turn:
— As regards unfair dismissal, section 206 (3) of the Employment Rights Act 1996 permits such a claim to be "instituted or continued" by a personal representative of the deceased employee. Section 206 (4) provides that where there is no personal representative the claim may be instituted or continued on behalf of the estate of the deceased employee by "any appropriate person appointed by the employment tribunal". Mr Fox senior was granted letters of administration on 18 January 2011 only after he had first issued proceedings, and BA initially took the point that the claim was not validly instituted. That led to duplicate proceedings being issued after the grant of letters of administration, and also to an order being made appointing him as an "appropriate person".
—As regards discrimination, this Court decided in Lewisham and Guys Mental Health NHS Trust v Andrews [2000] ICR 707 that a claim in the employment tribunal under the anti-discrimination statutes constituted a "cause of action" within the meaning of section 1 of the Law Reform (Miscellaneous Provisions) Act 1934 and could accordingly be pursued by a personal representative for the benefit of the employee's estate.
It is the position of BA that even if Mr Fox senior were to succeed in establishing liability for either unfair dismissal or disability discrimination he would not as a matter of law be entitled to recover compensation for the lost death-in-service benefit. That question was directed to be determined at a preliminary hearing (together with certain other issues with which we are not concerned). It was heard by Employment Judge Hyams in the Watford Employment Tribunal on 2 September 2011. He reserved his decision and promulgated a judgment with written reasons on 12 October 2011. He decided that any award in respect of the loss of the death-in-service benefit should not reflect the loss to the potential beneficiaries but only "the loss [to Mr Fox] of the comfort of knowing that his relatives would receive a lump sum insurance benefit on his death". He thought that it would be appropriate to award a sum comparable to the conventional sums awarded for loss of statutory rights in unfair dismissal claims, which is nowadays typically £350.
Mr Fox senior appealed against that decision. The President of the Employment Appeal Tribunal, Langstaff J, in a judgment handed down on 30 July 2012 ([ [2012] UKEAT 0033 12 3007; [2013] ICR 51), allowed the appeal and made a declaration to the effect that if liability were established Mr Fox's estate would be entitled to compensation in a sum equivalent to the full amount of the benefit that would have been payable under the Scheme if Mr Fox had remained in employment at the date of his death.
BA has appealed against that decision. The matter has been well argued before us by Mr Akash Nawbatt for BA and by Mr Tom Coghlin for Mr Fox senior.
TWO PRELIMINARY POINTS
I start by recording two matters which were common ground both before us and before the Employment Appeal Tribunal.
First, in assessing the compensation that would be awarded if the claim were to succeed the Tribunal was obliged to apply the principles applicable to the award of damages in claims of tort. Section 17A (3) of the Disability Discrimination Act 1995 so provides. Section 123 of the Employment Rights Act 1996, which governs the assessment of compensation for unfair dismissal, is differently worded, but it is accepted for present purposes that the underlying principles are the same. One consequence of this is that the issue of principle which we have to decide is one which would arise equally in relation to common law claims in tort where the chance of equivalent types of benefit being paid is said to have been lost or diminished in value; and in fact, as will appear, most of the authorities to which we were referred concern damages for personal injury.
Secondly, the estate stands in the shoes of Gary Fox. That is of course in the nature of a claim under the 1934 Act, as was confirmed by the House of Lords in Rose v Ford [1937] AC 826 (see, e.g., per Lord Russell at p. 838 and Lord Wright at p. 843): see also White v London Transport Executive [1982] QB 489, per Webster J at p. 494H. It must likewise be the case under section 206 of the 1996 Act. The viability of the claim for loss of the chance of death-in-service benefit being paid is accordingly to be approached as if it formed part of a claim brought by Mr Fox himself and he had remained alive at the time of the Tribunal's decision. (The loss would in those circumstances have been only contingent, and the chance that but for the dismissal it would have become payable might, depending on the particular evidence, have been quite small; but the issues of principle would be the same.)
THE ISSUES
BA's essential submission was that the claim in relation to the death-in-service benefit was bad in law because Mr Fox personally could never have enjoyed that benefit. As developed below, that argument was based both on the fact that the benefit was payable to third parties and on the fact that it would only have been paid after his death. As regards the latter point Mr Coghlin relied in the Employment Appeal Tribunal on the "lost years" cases of Pickett v British Rail Engineering Ltd [1980] AC 136 and Gammell v Wilson [1982] AC 27, as demonstrating that an employee can in principle recover for the loss of benefits that would only have accrued after his death; and those cases feature substantially in the judgment of Langstaff J and in the skeleton arguments before us. But it became clear in the course of the oral argument that it was the former point that was fundamental, and I will take it first.
Mr Nawbatt's core submission was based on the...
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