Foat v Department of Work and Pensions: EAT rules on PIP deductions and future loss calculations

Mr Darron Foat had succeeded at liability stage in claims of disability-related harassment, constructive unfair dismissal, and failure to make reasonable adjustments. The Employment Tribunal at London South assessed compensation at £373,936.69. He appealed on four heads; the DWP cross-appealed on one.

ACAS uplift

The tribunal had identified two code breaches but reduced its headline uplift from 7.5% to 2%, concluding the higher figure would be disproportionate. Mr Foat argued the tribunal gave inadequate reasons, ignored the punitive character of an uplift, and disregarded its own liability findings. Mr Justice Mansfield rejected each limb. Drawing on Slade v Biggs [2022] IRLR 216 and Acetrip v Dogra, the EAT confirmed the tribunal had correctly applied the proportionality and just-and-equitable assessment at the appropriate stage, with reasons that were clear and adequate.

PIP deduction from loss of earnings

The most significant issue of principle concerned whether Personal Independence Payment — a non-means-tested benefit directed at the additional costs of disability — could be set off against a loss of earnings award rather than only against care-related losses.

The claimant argued for a "like for like" rule: a care benefit could only reduce a care claim. He relied on the statutory framework of the Social Security (Recovery of Benefits) Act 1997 and on Hodgson v Trapp [1989] 1 AC 807. The EAT was unpersuaded. Mansfield J held that the 1997 Act recoupment regime was an entirely separate statutory scheme with no bearing on the common law principles applicable in employment proceedings. The broad principle stated by Lord Bridge in Hodgson — that receipts enjoyed in consequence of the defendant's unlawful act must prima facie be set off against the aggregate of the claimant's losses — was not limited to like-for-like deductions.

The EAT found the analysis in Morgans v Alpha Plus Security [2005] IRLR 234 and Vento (No. 2) [2002] IRLR 177 more instructive, and noted that Clenshaw v Tanner [2002] EWCA Civ 1848 had permitted housing benefit to be set against a loss of earnings claim. The touchstone was correlation, not equivalence: PIP was received solely because the respondent's unlawful conduct had caused the claimant's injuries. But for those injuries, no PIP would have been paid. That causal nexus satisfied the necessary connection.

A secondary argument — that the tribunal should have recognised unclaimed care losses and used them to cancel out the PIP deduction — also failed. The claimant's witness statement had expressly acknowledged the absence of a care claim, and the tribunal had in any event considered and rejected claims for prescription costs and an adapted vehicle. There is no authority obliging a tribunal to assume the existence of losses that have not been pleaded and proved.

Future loss multiplier

The tribunal applied a 50% discount to the Ogden Table multiplier to reflect non-mortality contingencies, including a pre-existing 30% risk of health breakdown. The claimant contended the reasoning was inadequate and that the tribunal had overlooked positive contingencies such as promotion prospects and public sector pay rises. The EAT disagreed: the claimant had held the same grade for 17 years without advancement, no evidence of a specific promotion was before the tribunal, and the broad-brush assessment was one the tribunal was entitled to make on the material available.

Bonus claim

A claim worth approximately £2,793 for past and future bonus loss, raised for the first time in the claimant's skeleton argument, had not been included in the claim form, the original schedule of loss, or an updated schedule served shortly before the hearing. The EAT held the tribunal had not erred in declining to adjudicate on a claim that was not properly before it. Procedural flexibility does not extend to permitting late-introduced heads of claim to proceed without amendment of the schedule, particularly where the respondent has had no opportunity to address them.

Cross-appeal: gross versus net multiplicand

The cross-appeal succeeded. The tribunal had used net figures for past loss but a gross salary figure (£33,387.33) for the future loss multiplicand, despite having found that the compensation award would not be taxable in the claimant's hands under s.406 ITEPA 2003. No explanation for the departure appeared in the reasons. The EAT characterised it as an oversight — one incongruent with the tribunal's own tax analysis — and substituted a net multiplicand of £24,706.62. The future loss of earnings award was reduced from £147,071.19 to £108,833, bringing total compensation to £334,933.73.