Addis v Gramophone Co Ltd


Addis v Gramophone Co Ltd is an old English contract law and UK labour law case, which used to restrict damages for non-pecuniary losses for breach of contract.

Facts

Mr Addis was Gramophone’s manager in Calcutta. In October 1905, he was given six months' notice of dismissal as legally required and appointed a successor. However, Gramophone also immediately took steps during this 6-month period to prevent Addis acting as manager, resulting in Addis leaving his job 2 months later and returning to England. This was humiliating. The jury awarded Addis £340 for loss of commissions and £600 for wrongful dismissal. Could there be damages for the manner of dismissal?
The Court of Appeal had allowed damages for the manner of the dismissal.

Submissions

;Duke KC and Groser, for the appellant.
;Lush KC, for the respondents.

Judgment

Lord Loreburn held that £600 was not allowed, that he could only recover his six-month salary and no more. At 491 he said,

‘If there be a dismissal without notice the employer must pay an indemnity; but that indemnity cannot include compensation either for the injured feelings of the servant…’

Lord Collins dissented.
Lord Atkinson said the case was in fact about libel.
;Lord Loreburn LC
Lord James of Hereford.
Lord Atkinson.
Lord Collins.
Lord Gorell.
Lord Shaw of Dunfermline.

Significance

The case was met with immediate disapproval in a number of quarters. Sir Frederick Pollock, contrasted "an artificial rule or mere authority" to "the rationale of the matter":
In 1997, Lord Steyn explained the current jurisprudence relating to the ratio of Addis in his judgment in Malik v Bank of Credit and Commerce International SA:
In 2001, Farley v Skinner further distinguished Addis, in holding that "the plaintiff's claim is not for injured feelings caused by the breach of contract. Rather it is a claim for damages flowing from the surveyor's failure to investigate and report, thereby depriving the buyer of the chance of making an informed choice whether or not to buy resulting in mental distress and disappointment."