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Malik v BCCI

[1998] AC 20

Case summary last updated at 04/01/2020 14:11 by the Oxbridge Notes in-house law team.

Judgement for the case Malik v BCCI

Ds were employed by BCCI, a bank whose collapse was disastrous and by being associated with it their future job prospects were worsened i.e they claimed for “stigma” being attached to them. HL allowed their claims. 

Lord Nicholls: Addis only applied to cases of “injured feelings”, whereas Malik was a case of financial loss, caused by a stigma (i.e. that the stigma per se was not compensable, but its effects were). 

Lord Steyn: Damages are recoverable for a breach of contract, which occurred here since there was an implied contractual obligation on the part of D not to run a “corrupt and dishonest business” (Lord Nicholls agreed with this point). However he distinguished Addis on the basis that that case was really about saying that the “manner” in which an employee is sacked cannot give rise to damages, whereas this case is about the breach of contract itself (not loss caused by the manner of the breach as was the case in Addis). Loss of reputation IS generally compensable where it is caused by the breach, and not simply the manner of the breach. 

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