15 June 2012

Refusing a settlement offer

Refusing a settlement offer

Can a claimant be found to have failed to mitigate their loss if they refuse an offer of settlement during the course of tribunal proceedings? No says the EAT, unless the refusal is "wholly unreasonable".

In Konczak v BAE Systems (Operations) Ltd, an employer made a settlement offer of £75,000 which the claimant employee refused. She went on to succeed on liability but, in a separate remedies hearing, an employment tribunal considered that she should not be permitted to recover compensation for any period after she turned the offer down. (The offer had been made "without prejudice," but came out during the remedies hearing because the employee had waived privilege). The EAT considered that this approach was wrong:

It should be remembered that unreasonable refusal of an offer of settlement will still be relevant to consideration by the tribunal of whether to make a costs order against the claimant.

"Absent a wholly unreasonable refusal to countenance settlement, which on the evidence is not shown in this case, the Claimant was perfectly entitled to pursue her remedy for what the Employment Tribunal found was her unfair and discriminatory treatment at the hands of the Respondent. It is well documented in ordinary personal injury litigation that the fact of the litigation may contribute to the prolongation and possible exacerbation of the Claimant's medical condition. That is what appears to have happened, on the whole of the medical evidence, in this case. Provided the condition is genuine the Respondent must take its victim as it finds her"