Channel Islands Co-op has overturned a £3.5m compensation award to former CEO Colin MacLeod in the appeals court – but judges have upheld findings that his was secretly targeted for removal.
MacLeod was awarded £3.5m in the Royal Court last December after suing his former employer over a stress-related disorder suffered during a boardroom dispute. Judges had said the retail society had breached its duty of care and caused MacLeod psychiatric injury and substantial financial losses.
Now the decision has been reversed in the Court of Appeal, which concluded that, although distress and anger were predictable consequences of his treatment, a recognised psychiatric condition was not.
But the appeal judges rejected CI Coop’s bid to overturn the underlying findings about the behaviour of senior figures.
The Royal Court ruled that Jennifer Carnegie, Paula Williams and Carol Champion, non-executive directors on the society’s Remuneration Committee (RemCo), had acted in bad faith over an extended period from early 2019 until MacLeod’s eventual dismissal in mid-2020.
It said their conduct was “improper, commercially unacceptable and unconscionable”.
The court heard details of their secret WhatsApp and email messages, targeted expense audits and an orchestrated, pre-determined and “robust [performance] appraisal” of MacLeod.
In its judgment the court said it was “troubling” that RemCo was acting in secret, and it described as “appalling” a WhatsApp remark from Champion who told colleagues: “When the noose starts tightening you get more stressed and end up off from work.”
Appeal judges upheld those findings, describing MacLeod’s treatment as “unpleasant” and “reprehensible”.
But MacLeod, described as an experienced executive with a “strong personality”, had no known vulnerability to psychiatric illness. The appeal judgment said: “It was not established that it was reasonably foreseeable that such an injury would be caused, whilst fully accepting that it would be entirely foreseeable that the respondent would be distressed, upset and angry at his treatment.”
In light of this, the appeal succeeded on the legal question of whether the psychiatric injury could reasonably have been predicted. But all of CI Coop’s challenges to the Royal Court’s primary findings of fact were dismissed.
In May this year, MacLeod had been granted an interim payment of £600,000 from the £3.5m award, while the appeal was pending, for outstanding legal fees and repayment of a loan from his parents. He will now have to pay this back.
After MacLeod’s employment ended in 2020, he separately brought claims for unfair dismissal and disability discrimination, which were settled in 2021 for £200,847.68.
Co-op News has contacted Colin MacLeod and CI Coop for comment. MacLeod replied that he will comment in due course.
