UNCERTAINTY AS TO DAMAGES: JUST HOLD ONTO THE MONEY UNTIL FULL TIME
In Gibbs -v- Leeds United Football Club Ltd  EWHC 960 (QB) Mr Justice Langstaff made an order that dealt with the question of uncertainty in relation to the assessment of damages. Rather than speculate on sums to be paid which would reduce the damages award the judge ordered that a sum be paid into a stakeholder account, the claimant be paid the sums due and the balance be repaid to the defendant.
- There was uncertainty as to the amount of damages payable by the defendant because the claimant had found employment which included bonuses. The claimant’s earnings would reduce the sum that the defendant was liable to pay. The contract was a fixed term contract expiring in June 2016.
- The bonuses were not payable until the claimant had been in employment for a year. However when paid they would cover part of the period up to June 2016. Rather than attempt to estimate the bonuses the judge ordered that the disputed sum be paid into a stakeholder account to be held by the claimant’s solicitors.
- The sums due would be paid out to the Claimant and the balance (and interest) then repaid to the Defendant.
The claimant had successfully argued that he had constructively dismissed from his position as deputy manager of Leeds United.
THE ASSESSMENT OF DAMAGES
The central issue in relation to damages was whether the defendant could demonstrate that the claimant had failed to mitigate his loss. The claimant had found other employment. However his eventual net earnings were not clear because they depended on bonuses.
There is nothing inherently unreasonable about the Claimant’s approach in refusing the offer made to him by Mr Cellino in August, as expressed in his witness statement and adopted in evidence The way Leeds had acted towards him made it untenable for the Claimant to return, unless he wished to take the chance it would change its behaviour toward him. In my judgment he was not obliged to do so.
The Claimant obtained a contract with Millwall Football Club from 15th December 2014 to 30th June 2015, at a rate of £75,000 per annum and after that entered a permanent contract with Tottenham Hotspur Football Club (“Tottenham”) as Assistant Head of player development with effect from 21st August 2015. He continues in that role. Under that contract he is entitled to a player development bonus and a discretionary bonus. These are not payable until he has been in service for a year. However, they are payable, in respect, in part, of the period of time until 30th June 2016, when the Claimant’s contract with Leeds would have expired by the effluxion of time. In my view, credit must be given to the Defendant in respect of the net sums receivable in respect of those bonuses, by way of further deduction from the sum of £331, 426.05 set out in the Schedule of Loss and Damage which was filed in December last year.
How to adjust the award so as to achieve justice by setting off of an uncertain sum as yet unpaid may be achieved by a number of means. One would be to estimate the amount of bonus which may be payable; another to defer payment or final assessment until the bonus has been declared or it becomes clear none will be paid; but the first suffers from the problem that it is certain to be proved inaccurate in the immediate future, whatever care may be taken in its calculation, and the second from the problem that interest will continue to run on the sums the Claimant should be paid, to the disadvantage of the paying party, and leaves the Claimant unacceptably without much of what will undoubtedly be his entitlement. In the end, I propose (subject to submissions from either counsel to the contrary) that the full grossed-up sum of £331,426.05 be held to the account of the Claimant by his solicitors acting as stakeholders. I invite the parties to agree through Counsel what sum should be withheld from the grossed up total of £331,426.05 in order to ensure that the Claimant is not over-compensated: that sum will be retained by the stakeholders, and the balance will be payable forthwith to the Claimant. That sum retained will be held until the bonus is declared, and then so far as bonus is paid to the Claimant in respect of any period prior up to and including 30th. June 2016 a sum equivalent to the grossed-up value of that amount, plus any interest attributable to that sum accrued in the meantime, will be repaid to the Defendant.
I shall leave it to Counsel to draft the appropriate form of order of which the Claimant shall have carriage: it should, in accordance with the above, provide for the award of £331,426.05 to be paid to the Claimant’s solicitors to be held as stakeholder to the extent of the maximum which is realistic and reasonable to expect may be paid to the Claimant in respect of the two bonuses for which he must give credit. Those bonuses are annual in nature. The proportion of the year from 21st August 2015, to which any bonuses to be paid relate, which is attributable to the period 21st August 2015 – 30th June 2016 is not to be paid over to the Claimant until the bonus figures are confirmed: and if any issue arises between the parties at that stage the monies are not to be released without further order of the court, reserved to me. Save as required to be held by the Claimant’s solicitors as stakeholders, provided they are willing so to act, the balance is to be payable to the Claimant forthwith. Interest will run on the total sum of damages at the rate as provided for by the CPR until payment over to the Claimant’s solicitors. To the extent that sums are paid back to Leeds once the bonus payable from Tottenham to the Claimant has been established and agreed, they will carry the interest which has in fact been earned, if any, whilst in hands of the Claimant’s solicitor.”