The future of stress-related claims in the courts

For our final article for Mental Health Awareness Week we look to the future for stress-related claims.

The last article for this week looks at the changing face of stress-related claims in the courts.

Stress-related illness is on the increase. In 2010–11 the Labour Force Survey reported 440,000 cases of work-related stress, anxiety and depression. As we mentioned in our article on Monday, just over ten years later in 2021–22 this figure had more than doubled to 914,000 cases. The Covid pandemic inevitably had a huge impact on mental health as many of us found ourselves working in very difficult circumstances. However, the figures had been on an upward trajectory for many years.

Claims are also on the increase. It is almost inevitable that the more stress-related illness there is, the more claims will be made – but there are other factors at play. There has been increased media attention on mental health in recent years and recent campaigns, such as #metoo, have focused on unacceptable behaviours in the workplace. The HSE has also made it a priority to focus on reducing work-related stress and has issued improvement notices to several public sector organisations which were found not to be tackling the problems arising from stress in their workforce. There have not been any prosecutions yet, but this may only be a matter of time.

The gradual expansion of the principle of vicarious liability (where an employer is liable for the acts committed by employees ‘in the course of employment’) may also have been a factor as it has allowed more bullying, harassment and assault claims to be pursued against an employer.

Costs have also played a part. Stress-related claims are often document heavy, highly fact-specific and less predictable, so have always been riskier for claimants’ solicitors to pursue on ‘no win, no fee’ arrangements. However, the introduction of qualified one-way costs shifting significantly reduced the risk and made it more likely that the case would be settled. When the fixed costs regime was introduced for personal injury claims, disease claims were excluded so claimants’ solicitors could continue to recover reasonable costs. These two factors combined made stress-related claims attractive to pursue.

Is this about to change? From October 2023, fixed costs will extend to disease claims. The costly nature of stress claims may discourage some solicitors from accepting these matters, but, as cases worth more than £100,000 will be excluded from fixed costs, the actual impact may be to encourage claims inflation.

The change to fixed costs may also result in an increase in stress-related claims where personal injury is not claimed. In claims for data protection breaches, housing disrepair, public discrimination and harassment under the Protection from Harassment Act 1997, the court can award compensation for the stress and distress caused even if there is no actual personal injury. If there is no claim for personal injury then costs will not be limited to fixed costs, so we may see a shift towards these type of claims.  

There has also been a gradual shift in the approach taken by the courts to stress at work claims. Historically, employers were only expected to take a reactive approach to the risks to mental health in their workforce. The obligation has been to take steps once an employee put them on notice of a foreseeable risk of psychiatric harm. However, as society’s understanding and awareness of mental health issues has improved, the courts are starting to expect employers to take a more proactive approach to assessing the risks of stress in the workplace and offering support to employees. This may make it more difficult to defend the claims that are pursued.

So what does the future hold? Unless employers really tackle the issue of increasing mental health in their workforce, we are likely to continue to see an increase in claims.