THE Channel Islands Cooperative has successfully overturned a £3.5 million compensation award to its former chief executive – despite appeal judges upholding damning findings that senior figures secretly targeted him for removal.
Colin MacLeod, who joined the Coop in 1990 and served as chief executive from 2010, was awarded £3.5m after successfully suing his former employer after suffering a stress-related disorder amid a bitter boardroom power struggle.
The Royal Court ruled in December that the Coop had breached its duty of care and foreseeably caused Mr MacLeod psychiatric injury and substantial financial losses.
But the Court of Appeal has now reversed that decision after concluding that, although distress and anger were predictable consequences of the way he was treated, a recognised psychiatric condition was not.
Crucially, the appeal judges rejected the Coop’s attempts to overturn the underlying findings about the behaviour of senior figures.
The Royal Court had found that members of the Society’s Recruitment and Remuneration Committee began “gathering evidence” against Mr MacLeod after committee chair Jane Carnegie took over in September 2018.
Private WhatsApp messages showed committee members discussing “the need for action sooner rather than later” and asking how colleagues were progressing with their “evidence gathering”.
The committee was found to have been “clearly targeting” Mr MacLeod and seeking his removal, while director Paula Williams wanted to replace him as chief executive.
After Mr MacLeod was signed off work in May 2019, one message read: “Totally non-PC comment coming up here… but when the noose starts tightening you get more stressed and end up off work! Mmmmm!!!!!! Wonder how many nooses there are?”
The Royal Court described the conduct of Ms Carnegie, Ms Williams and committee member Donna Champion as “improper, commercially unacceptable and unconscionable”.
Appeal judges upheld those findings, describing Mr MacLeod’s treatment as “unpleasant” and “reprehensible”.
They also endorsed the lower court’s description of former Coop president Ben Shenton’s “dysfunctional reactions” and “clumsy attempts to run with the hare and hunt with the hounds” during the dispute.
However, Mr MacLeod had no known vulnerability to psychiatric illness and was described as an experienced executive with a “strong personality”.
The 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.”
Mr MacLeod himself had not realised he was heading towards a breakdown and accepted that, if he was unaware, others were unlikely to have known.
The appeal therefore succeeded on the narrow legal question of whether his psychiatric injury could reasonably have been predicted.
All the Coop’s challenges to the Royal Court’s primary findings of fact were dismissed.
Mr MacLeod had received £600,000 of the £3.5m earlier this year to pay outstanding legal fees, repay loans from his parents and fund his defence of the appeal.
The earlier Royal Court judgment authorising the payment recorded that Mr MacLeod was “clear that if the appeal was successful he would have to repay this sum”.
It said he had sufficient equity in his home to protect the Coop and had undertaken not to sell, mortgage or otherwise encumber the property while the appeals continued.
The court acknowledged that repaying the money following a successful appeal would require the sale of his home.
After Mr 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.
The Court of Appeal also urged Jersey lawmakers to clarify whether employees should be able to claim damages for psychiatric injury resulting from dismissal.
In a final rebuke, the judges criticised the “lengthy, and at times repetitive and florid” paperwork filed in the appeal. The Coop’s written arguments ran to 150 pages, while Mr MacLeod’s response covered 140 pages.
The court warned that unnecessarily excessive submissions could result in special costs orders against a party or its advocate.
