Contracts of employment: "Stigma" damages are recoverable

In principle, employees can recover "stigma" damages in respect of their reasonably foreseeable loss of employment prospects resulting from their employer's breach of the implied term of trust and confidence, holds the House of Lords in Malik and another v Bank of Credit and Commerce International SA (in compulsory liquidation) [1997] IRLR 462. Accordingly, dismissed senior employees of BCCI could bring claims for damages for financial losses allegedly suffered because their reputations were tarnished as former employees of the bank, which put them at a disadvantage in the labour market. On the assumption that BCCI had operated its business in a corrupt and dishonest manner, it was in breach of its implied contractual obligation of trust and confidence.