Most people will have seen the headlines covering the case of the Chelsea doctor, Eva Carneiro, and her rejection of a £1.2m settlement offer in her employment claims against the club.

Is this what employees can expect to receive from a tribunal for a discrimination claim?  Not usually.  The average discrimination award in the 2014/2015 financial year according to Ministry of Justice statistics was  £23,478, with the highest award made for sex discrimination being £557,039.

How is compensation calculated?

In contrast to most unfair dismissal claims, there is no cap on the potential compensation that can be awarded  for discrimination claims.  However, the award is based upon on the loss the employee has suffered.  Whilst there will be some speculation by a tribunal as to what should be awarded in order to put the claimant into the position they would have been in had the discrimination not taken place, the loss will generally relate to the individual's financial loss.  This would normally include net loss of earnings to the date of the tribunal (including any likely salary increases), future loss of earnings that the tribunal may assess, loss of pension and benefits and an award for "injury to feelings".  

Injury to feelings is not the same as personal injury and a tribunal will factor in matters such as the nature of the discrimination and hurt, distress or upset suffered, the vulnerability of the individual and their position, the position of the discriminator and the way in which the employer has dealt with the matter.  Injury to feelings awards range from £600 to around £33,000 for the most serious cases where there has been a prolonged campaign of discrimination or harassment.

It is important to note that a claimant will be under a duty to mitigate their loss, e.g. reduce the likelihood of future loss of earnings by obtaining new employment (if they are no longer employed).  A tribunal will reduce financial compensation if they feel the claimant has not adequately mitigated their loss.

Also a consideration is that discrimination may arise out of a dismissal and the employee is likely claim both unfair dismissal and discrimination. If successful in both unfair dismissal and discrimination claims, the tribunal will not allow double recovery, i.e. it will not award loss of earnings twice.