Employers could be protected from paying out compensation for "causing" mental health problems among their employees, following a landmark ruling in the UK.
The ruling came after John Yapp, a former British high commissioner to Belize, was suspended and subjected to a disciplinary process in 2008 after being accused of making a sexual advance towards the wife of a local politician.
Although it quickly became apparent that the accusation was false, Yapp fell into a clinical depression and three years later his ill health meant he had to retire.
The case that ensued will help to determine whether employees who claim they have suffered mentally at the hands of employers should be given compensation.
Although the Court of Appeal said it recognised Yapp's breakdown was caused by the FCO's actions, it decided the FCO did not have to pay damages for his illness because the outcome could not have been foreseen (Yapp had no history of psychiatric illness).
Under British law, an employer has to have reasonably foreseen the possibility of mental illness resulting from their actions in order to be punished.
“Applying the test is challenging: it involves a subjective assessment by judges, influenced by their own experience and assessment of human nature," Howard Hymanson, partner at Harbottle & Lewis, told The Sunday Times.
The outcome has raised questions about how the law should approach these kinds of situations, since according to Hymanson the decision in the case of Yapp and the FCO is likely to make it more difficult for employees to win damages unless they had a history of mental illness or were treated exceptionally badly.
"Employers will doubtless see this decision as setting high the foreseeability threshold in psychiatric injury cases: employees with no pre-event psychiatric history must demonstrate 'devastating' factual circumstances to succeed," explained Jane McNeill, QC, is at Old Square Chambers