Following publication by the HSE of its latest statistics on occupational stress, there has been a plethora of articles quoting the figure of 18,000 stress related claims in the banking and finance sector for 2010/2011. Speculation has been rife that "stress in the city" is about to spiral out of control and generate a high volume of potentially high cost and high profile employment and personal injury claims.
Overall, according to the HSE, the number of claims for work related stress are slightly reducing. One would think that working in an office environment is low risk, but a survey released by the Chartered Institute of Personal and Development last year revealed that the proportion of organisations reporting stress as the most common cause of absence for non manual workers has risen from 24% in 2010 to 32% in 2011. Indeed, in relation to claims for disability benefits, mental health (depression and anxiety) form the largest proportion of claims, having overtaken claims for musculo skeletal problems. Whether these statistics will be followed by a sudden surge in claims in the law courts has been the subject of some debate.
Work related stress is defined as "a harmful reaction people have to undue pressure and demands placed on them at work". The HSE developed a series of management standards for tackling stress to help employers identify the primary sources of stress within their organisation. It categorises these "stresses" into six key areas:
It is recommended that an organisation measures how it performs against these standards so that strategies can then be put in place to reduce stress. The key to successful stress management is to have clearly defined policies in place. HR play a vital role here as they are in a prime position to monitor an organisation's overall portfolio of policies and practices to ensure that all policy areas are adequately covered.
Claims are normally rigorously defended. Claims for breach of contract and negligence require the claimant to prove he or she has suffered a recognisable psychiatric injury (stress alone will not suffice) which was caused by the workplace and which was reasonably foreseeable as a result of any breach of duty. Lady Hale's 16 Practical Propositions, as set out in the judgment that went under the collective title of "Hatton v Sutherland" in 2002, have caused the number of successful stress cases since that time to be greatly reduced. Lady Hale's guidelines resulted in the issues of foreseeability and causation becoming significant hurdles for the claimant to surmount. However, subsequent cases such as Dickens v 02  EWCA Civ 1144 have arguably lowered some of the hurdles and, in particular, place a duty on employers to use some "managerial intervention" and do more than simply refer their employees to a helpline when notified of the employee suffering from severe stress.
Bullying is another problem for an employer to keep in check. Since 2006, an employer has become vicariously liable for the acts of its employees to other members of staff, and if those acts form a course of conduct which the employee knew, or reasonably ought to have known, would cause harm, then it may be liable under the Protection from Harassment Act 1997 ("PHA"). Under this act, a claimant only has to prove hurt feelings and anxiety (as opposed to psychiatric injury) and recent case law also removes foreseeability from the equation: if the claimant can prove deliberate conduct which the defendant knows or ought to have known will amount to harassment, then in those circumstances, an employer will be liable in damages for the injury and loss that flow from that conduct (Jones v Ruth (2011)).
The PHA 1997 is also likely to be used in future in connection with "cyber bullying". This does not just relate to internal emails, for example, but with the growth of social media such as Facebook, Twitter and LinkedIn, there are issues which could affect clients as well as employees. A clear social media policy is one of the measures that can be introduced - a strategy aimed at minimising the risks associated with potential claims.
How these issues will affect the finance sector will depend upon an organisation having good stress management policies in place, and keeping them under review. Rising claims equate to rising insurance premiums, so it is critical to have a pro-active approach to managing what has been statistically shown to be an increased risk of claims arising.
Susan Hogg, solicitor in the insurance group at DLA Piper Sheffield
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