It has long been possible for companies to be sued if they discriminate against people. However, a judge has now ruled that companies can themselves claim for discrimination against those who refuse the company business because of the race, sex, age, disability, religion or sexual orientation (e.g. being gay), of someone associated with that company.

This partly fills a loophole in the law that it was more difficult for someone who for tax or other reasons traded through a limited company in obtaining justice if refused work because of discrimination than an employee or self-employed individual.

However, like any other possible legal claim, different people will use it for their own reasons. Such discrimination claims will certainly sometimes be raised for good reasons. However, they will probably also, frankly, now and then be raised for tactical advantage by companies wanting to throw everything they can at the other side in a dispute e.g. over an unpaid invoice.

Until now, discrimination claims mainly arose in employment or consumer disputes. However, they may now arise in commercial disputes too. Arguments between companies about the price or whether goods are defective may now turn into discrimination cases if either side claims “This isn’t just a problem about price or goods. You are discriminating against our company because of the religion / disability / sexual orientation (or whatever) of our owners / the account manager you were dealing with”. This may introduce an emotive, and sometimes embarrassingly newsworthy, element into commercial disputes and debt recovery.

In the recent case of EAD Solicitors v Abrams, which established this principle, a company claimed that a firm of solicitors discriminated against it because of the age of the company’s owner. The Tribunal said that not only could this claim proceed but in future companies can also bring claims for discrimination due to the race, religion, sex, sexual orientation etc., of anyone associated with that company.

Companies most likely to suffer this sort of discrimination may be small or family businesses, which are the most likely to be perceived as e.g. “a Jewish owned business” or “an Indian owned business”.  However, such claims could be brought even by a large and diverse corporation who, say, fail to win an order because of what they allege is prejudice against the race, religion, age etc., of their sales representative.

To reduce the risk of such claims, businesses not only need to have an Equality and Diversity / Equal Opportunities Policy but to:

  • Read and follow it – Think how it will look if a manager questioned at the trial of a discrimination claim has to admit they have never read their own company’s Equal Opportunities Policy. To encourage staff to properly read and understand the Policy it helps to keep it readable and easy to understand– many are not!
  • Keep the Policy practical for the business –It does not look good for a small business to have an elaborate policy committing them to regular equal pay audits or some such that they lack the resources to implement, and have to admit at the trial of a discrimination claim that they have failed to follow their own Equal Opportunities Policy.
  • Make sure the Policy says that it is unacceptable to discriminate against anyone: employees, job applicants, contractors, customers, suppliers or anyone else with whom the Company or its staff have dealings in the course of their work, and covers not just direct and deliberate discrimination but e.g. exchange of racist jokes amongst colleagues that could make others who hear them feel uncomfortable or unwelcome.

For help preparing an Equality and Diversity / Equal Opportunities Policy that will work for your business, or advice about anything else in this article, including if you believe you have been a victim of discrimination or are yourself being threatened with a discrimination claim, you are welcome to contact us.



Case Details

The case referred to above is EAD Solicitors & Ors v Abrams UKEAT/0054/15/DM. This was a judgment on a preliminary application to establish the principle and whether the case could therefore proceed. Whether EAD Solicitors were actually guilty of age discrimination was not decided but left to be determined later at trial. The case was in effect a dispute about retirement ages from the partnership, in which the company bringing the claim was itself a partner in the solicitors’ firm. However, as so often, the particular facts are less important than the general principle.

The case follows from Section 13 (1) Equality Act 2010 and the European Court decision in CHEZ Razpredelenie Bulgaria [2015] EUECJ C-83/14 (16 July 2015) which respectively impliedly created and extended the principle of “discrimination by association” e.g., discriminating against someone not because of their own race but because of that of a person they associate with, such as marrying someone of a different race.

Please note that the information in this article is not designed to provide legal or other advice or create a solicitor - client relationship. No liability is accepted for any loss caused in reliance upon its content and you should not take or refrain from taking action based upon the same.