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 Employment Appeal Tribunal, 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, at 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 Employment Appeal Tribunal considered that this approach was wrong:
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
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.
It should also be noted pursuing the case was quite an achievement for Mrs Konczak. She had worked as a secretary for BAE from 1998 to July 2007. Her employment tribunal case was listed for hearing on 14 July 2008 and on 11 July her solicitors, Thompsons, withdrew from the case. This was also the day on which Mrs Konczak refused the offer in settlement of £75,000. She then went on to represent herself throughout the 10 day hearing. It is also notable that a counter-offer of £85,000 was rejected by BAE before the tribunal started and, a week prior to the remedy hearing in April 2011, BAE made a substantially increased offer of £pound;200,000.
The case will now be referred to a new tribunal to determine the amount of compensation which Mrs Konczak is to receive.