In Malik, the two appellants were (respectively) a branch manager and a senior accounts executive of BCCI before the bank suffered a catastrophic (and notorious) collapse in the summer of 1991. The House of Lords allowed their appeal from a dismissal of their claim for substantial damages because of the way in which the nature of their (ex) employers breach of the implied term of trust and confidence had ‘blighted’ their future employment prospects. Once made redundant from BCCI, they would be seriously ‘tarred with the brush’ of the fraud linked to BCCI’s collapse. This was, perhaps, less to do with an award for ‘distress’ per se than for the loss to their reputation which the circumstances attending their loss of employment would produce: Mahmud and Malik v BCCI [1998] AC 20, pp 33–34, 36

doi:10.4324/9781843141518-265

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In Malik, the two appellants were (respectively) a branch manager and a senior accounts executive of BCCI before the bank suffered a catastrophic (and notorious) collapse in the summer of 1991. The House of Lords allowed their appeal from a dismissal of their claim for substantial damages because of the way in which the nature of their (ex) employers breach of the implied term of trust and confidence had ‘blighted’ their future employment prospects. Once made redundant from BCCI, they would be seriously ‘tarred with the brush’ of the fraud linked to BCCI’s collapse. This was, perhaps, less to do with an award for ‘distress’ per se than for the loss to their reputation which the circumstances attending their loss of employment would produce: Mahmud and Malik v BCCI [1998] AC 20, pp 33–34, 36

ABSTRACT

Mahmud and Malik v BCCI [1998] AC 20, pp 33-34, 36 Lord Nicholls of Birkenhead: In the Court of Appeal and in your Lordships’ House, the parties were agreed that the contracts of employment of these two former employees each contained an implied term to the effect that the bank would not, without reasonable and proper cause, conduct itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. Argument proceeded on this footing and ranged round the type of conduct and other circumstances which could or could not constitute a breach of this implied term. The submissions embraced questions such as the following: whether the trust-destroying conduct must be directed at the employee, either individually or as part of a group; whether an employee must know of the employer’s trust-destroying conduct while still employed; and whether the employee’s trust must actually be undermined. Furthermore, and at the heart of this case, the submissions raised an important question on the damages recoverable for breach of the implied term, with particular reference to the decisions in Addis v Gramophone Co Ltd [1909] AC 488 and Withers v General Theatre Corporation Ltd [1933] KB 536.