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Whistleblowing Compensation - Can a Claimant Claim for Post-Termination Losses?

on Friday, 09 February 2018.

In the recent case of Wilsons Solicitors LLP v Roberts, the Court of Appeal (CoA) determined that post-termination losses could be awarded if they can be attributed to pre-termination detriments.

Facts

Mr Roberts was a member and the managing partner of Wilsons Solicitors LLP (Wilsons), a law firm. When Wilsons' senior partner became the subject of allegations of bullying, Mr Roberts conducted an investigation and produced a report into these allegations. This led to a dispute with the other members, resulting in a vote to remove Mr Roberts from his post.

Mr Roberts alleged that the action of the members amounted to a repudiatory breach of the LLP members' agreement and that, as a result, the members' agreement terminated in February 2015. Wilsons denied this, but went on to expel Mr Roberts from the LLP in accordance with its terms.

Mr Roberts subsequently issued a claim in the Employment Tribunal (ET) on the basis that he had suffered a detriment due to making protected disclosures (i.e. a whistleblowing claim). He also alleged he had been constructively dismissed.

Mr Roberts' claims were struck out at a preliminary hearing, with the ET finding that there was no reasonable prospect of success due to a previous high court decision (Flanagan v Liontrust Investment Partners LLP) which held that repudiatory breaches do not apply to LLP agreements.

On appeal to the Employment Appeal Tribunal (EAT), Mr Roberts successfully argued that the Flanagan decision did not prevent him from recovering post-termination losses. This decision was then appealed by Wilsons on the basis that a lawful act of termination breaks the chain of causation between pre-termination detriments and post-termination losses.

What Did The CoA Decide?

The CoA held that there is nothing in law which prevents whistleblowers from seeking to claim post-termination losses where these losses can be attributed to unlawful pre-termination detriments. Whether losses can be recovered in a particular matter will be a question of fact, and one which had not been considered by the ET in this case. Mr Wilson was claiming approximately £3.4 million compensation, mostly relating to future loss of earnings.

The CoA did not accept the argument presented by Wilsons' that the chain of causation had been broken.

Best Practice

This decision demonstrates that it is possible for whistleblowers to claim for post-termination losses where they are attributable to detriments suffered before termination took place. The case highlights to employers the need to be cautious when dealing with whistleblowers given the wide scope of loss for which they may able to recover.

It was, however, emphasised that the success of such claims will be a question of fact for the tribunal to decide and that it may well be extremely difficult to prove causation in these cases.


For more information please contact Charlotte Rose in our Employment Law team on 0117 314 5219.

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