89: Court of Appeal rules that whistleblowers can recover post-termination losses if they are attributable to pre-termination detriments
In Wilsons Solicitors LLP v Roberts, the Court of Appeal held that post-termination losses can be recovered if they are attributable to pre-termination detriments on whistleblowing grounds.
Mr Roberts was a member, managing partner and compliance officer of Wilsons Solicitors LLP. When Wilsons’ senior partner was accused of bullying, Mr Roberts was asked to investigate. The report he produced led to a dispute with the other LLP members who then voted to remove him from the posts of managing partner and compliance officer. Mr Roberts alleged that Wilsons’ actions amounted to a repudiatory breach of the LLP members’ agreement and that, as a result, this agreement terminated in February 2015. Wilsons denied being in breach but, in April 2015, lawfully exercised provisions in the members’ agreement to expel Mr Roberts from the LLP.
Mr Roberts subsequently issued proceedings in the Employment Tribunal alleging that he had suffered detriments due to making protected disclosures and that he had been constructively dismissed. He claimed compensation of around £3.4 million, mostly relating to loss of future earnings.
The Employment Tribunal struck out Mr Roberts’ claims at a preliminary hearing because of the previous High Court decision of Flanagan v Liontrust Investment Partners LLP which held that repudiatory breaches cannot apply to LLP agreements.
Mr Roberts appealed successfully to the Employment Appeal Tribunal, arguing that the Flanagan decision only dealt with repudiatory breach and did not address liability or compensation under the whistleblowing legislation. It therefore did not preclude him from recovering post-termination losses resulting from detriments suffered prior to his expulsion. Wilsons then appealed to the Court of Appeal on the basis that Mr Roberts’ lawful expulsion broke the chain of causation between pre-termination detriments and post-termination losses.
The Court of Appeal rejected Wilsons’ argument and held that, in principle, whistleblowers can claim post-termination losses where those losses are attributable to unlawful detriments suffered before termination. Mr Roberts’ case was remitted to the Tribunal to decide whether in fact his losses are recoverable.
This case confirms that, as a matter of law, whistleblowers can claim post-termination losses which result from pre-termination detriments, although it may be difficult for employees to prove causation in these cases. Given the wide scope of potential losses, employers must always proceed carefully when dealing with an employee who has made protected disclosures.
16 April 2018