Surgeon awarded compensation for loss of status

25 June 2010

How much compensation for loss of status and position following mistakes made in a disciplinary process can be claimed in a breach of contract claim?

This issue was recently decided in the case of Edwards v Chesterfield Royal Hospital NHS Foundation Trust Court of Appeal (Civil Division) 26 May 2010.

Claim for loss of status and position

Michael Edwards was a consultant surgeon at the Chesterfield Royal Hospital NHS Foundation Trust (the Trust). The contract under which he was employed provided that in matters of personal conduct Mr Edwards would be subject to the hospital's general procedures and that in matters of professional misconduct he would be subject to a procedure agreed by the Local Negotiating Committee in respect of medical practitioners. Mr Edwards was summarily dismissed from his post for gross professional and personal misconduct. He subsequently worked as a locum with another NHS Trust, but has been unable to obtain a permanent consultant post. He claimed that he would not be able to do so in the future because of the finding against him. He said that he was unable to pursue his medical career in the manner which he would have wished.

The Investigating Committee of the General Medical Council summarily dismissed a complaint against Mr Edwards based on the same allegations for which he was dismissed. Mr Edwards claimed that the Trust had failed to correctly follow the disciplinary procedure as described in his statement of employment particulars and that if the procedure had not been defective, a finding of misconduct would not have been made against him.

He sought damages of around £4.3 million for breach of contract. This included a claim for expenses and loss of earnings up to the date of the proceedings, future loss of earnings to retirement and future loss of pension. The Trust stated he could not claim so much and the matter was appealled to the Court of Appeal.

Court of Appeal decision

The matter was considered by the Court of Appeal (the Court). The Court stated that Mr Edwards was entitled to recover damages not only for loss of earnings during his contractual notice period, but also in respect of the period during which he would have remained employed while the disciplinary process ran its course. The Court also stated:

“...the common law does not imply into a contract of employment a term that the employer will not act unfairly towards the employee in relation to his dismissal and that the courts are not at liberty to develop the common law implied term of trust and confidence in order to give rise to such an obligation. However,…where a breach of contract by the employer can be identified, the employee is entitled to obtain any remedy available to him under the general law.”

As a consequence, the Court stated that it was difficult to see why Mr Edwards should not be able to recover damages for the Trust's breach of contract. Also, English law did not stop Mr Edwards from claiming damages for the loss of opportunity to hold another full-time appointment with the NHS as a surgeon. Lord Justice Moore-Bick stated: “…wrongful dismissal is not his only cause of action and his claim for damages for failure to carry out proper disciplinary proceedings is not excluded by (case law).”

Could Mr Edwards recover damages for the loss of the opportunity to hold a full-time consultant post with the NHS until his retirement at the age of 65 and status?

Public authorities like the NHS, are effectively monopoly employers, and are obliged to treat their employees fairly and may be held liable in breach of contract if they fail to do so, he claimed. Mr Edwards claimed that his contract of employment contained an implied term that the Trust would not terminate his contract otherwise than for good cause, thereby giving him the right, subject to good behaviour, to remain in its employment until normal retiring age. The Court rejected this argument saying that such an implied term would be incompatible with Mr Edwards' contract, which expressly gave each party the right to terminate it at will on three months notice.

The Court decided that if current case law was correct:

“…….damages for wrongful dismissal are limited in all cases to loss of earnings during the period of disciplinary proceedings followed by any relevant period of contractual notice, it is difficult to see how any greater measure of damages could be recovered if the employee's contract were terminated in breach of a term that he would be dismissed only for good cause.”

Comment

This case raised an important question of whether a person who suffers damage as a result of findings of personal or professional misconduct leading to dismissal and loss of professional status that were made against him in disciplinary proceedings conducted in breach of contract, but which would not otherwise have been made, can recover damages at large. Mr Edwards could recover no more than damages for loss of earnings during his contractual period of notice and such additional period as would have been required for the completion of disciplinary proceedings that complied with the contract.