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Clyde & Co successfully defends workplace stress allegations as claimant discontinues

  • 08 January 2021 08 January 2021
  • UK & Europe

  • Insurance & Reinsurance

Clyde & Co successfully defends workplace stress allegations as claimant discontinues

Clyde & Co recently secured the successful discontinuance of a complex and long running stress at work claim. Claims of this nature are on the rise especially in a variety of professional fields. This claim illustrates the importance of fully investigating each claim carefully and raising fundamental dishonesty where appropriate.

The Claimant alleged that his stress was as a result of his workload but upon leaving his former employer, a number of discrepancies were found, including providing false information to clients and forged signatures.

Furthermore, at the time of his medical examination, the Claimant's expert had not been made fully aware of the relevant work history including professional misconduct. We argued the Claimant had been dishonest in the presentation of his claim, and raised that the Claimant would be directly liable for our costs should he be found fundamentally dishonest.

Background

The Claimant was a former Senior Equity Partner and Director at a firm of solicitors. The Claimant alleged that he had been overworked whilst working for the Defendant and had suffered a psychiatric injury as a result.

After the Claimant departed from the Defendant's practice, a number of incidents of professional misconduct were identified and reported to the Solicitors Regulation Authority. We were instructed to act for the Defendant by our insurer client.

Causation

The diagnosis of the Claimant's medical expert was that he was suffering a mixed anxiety and depressive disorder. However, our medical expert favoured a recurrent depressive disorder given that the Claimant had presented with similar problems previously and owing to a family history of psychiatric ill health.  

The Claimant's expert at the time of examination had not been made aware of the Claimant's professional misconduct which we considered to be relevant to his state of mind.  Our expert was of the clear view that the recurrence of the Claimant's condition was caused by his professional misconduct, and that the effect of this stress and fear of discovery was the massive “threat” which caused the relapse.  

Discontinuance

A denial of liability was maintained throughout the claim, and after exchange of lay witness evidence and medical evidence, the Claimant was invited to discontinue. We highlighted multiple weaknesses in his case. Extensive and compelling documentary and lay witness evidence provided cogent evidence that there was nothing to suggest that there was a reasonably foreseeable risk of psychiatric injury arising from the Claimant's workload. The Claimant was in charge of his own team/department and had the benefit of fee-earning and administrative support. The Claimant was reminded of the significance of Fundamental Dishonesty and the risk that he could be personally liable for defence costs.

Following receipt of our correspondence and offer to discontinue, the Claimant filed a Notice of Discontinuance. This conclusion was an excellent outcome for the Defendant who had been keen to defend the matter from the outset.  The overall savings across the Claimant's costs and damages amounted to £150,000.

What can we learn?

  • This was a complex and unusual case involving a Senior Equity partner/Director who was in charge of his own department, budget and staffing. The professional misconduct was identified only after he had left the practice which allowed us to plead Fundamental Dishonesty from the outset.
  • However, a full investigation was still necessary to ensure that we could defend the claim on the grounds of breach/negligence, foreseeability and causation. It was only when all this evidence was obtained and the Claimant was placed under pressure to withdraw his claim that he finally discontinued. There was no doubt the Claimant understood the financial implications of a finding of Fundamental Dishonesty. The risk of losing the claim and, more seriously, QOCS protection ultimately left him in a difficult position.
  • Fundamental Dishonesty arguments are quite rare in cases of this nature. However, each case should be assessed on its own facts with careful scrutiny of medical records and other disclosure to see if this is an additional line of defence.  Inconsistencies should be highlighted and used as a tool to persuade the Claimant to discontinue.
  • Workplace stress and harassment claims especially in professional fields are on the rise. Despite the temptation, at times, to consider a commercial settlement owing to the costs of fully investigating, each case should be assessed on its own merits and where the claim is found to be without merit a full defence maintained in order to avoid encouraging further claims.
  • This rise in claims may well be further exacerbated by the pandemic. Workers may have had to take on additional work and responsibilities either because their work place has been busier or because there have been redundancies or they have covered for furloughed colleagues. Employers may not have had the opportunity to fully train employees or support staff.  Home working brings additional risks with some staff citing feeling isolated and anxious and so this is an area for insurers to watch carefully and ensure careful investigation to avoid encouraging meritless claims.

End

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