The appellant's employers had been in breach of the implied term of mutual trust and confidence within his contract of employment when they failed to bring to the attention of the police that the reason that the appellant was in possession of a controlled drug was that it had been handed to him by his supervisor and the appellant was subsequently arrested.Appeal from the trial judge's dismissal of the appellant's claim for damages for breach of the implied term of mutual trust and confidence within his contract of employment. The appellant ('H') had worked as a nurse for 35 years and was employed at a hospital by the respondent NHS Trust. In February 1999 the hospital had been conducting investigations into missing drugs. On the morning of 10 February 1999 H was on duty at the hospital and was told by his supervisor ('K') to put a half tablet of Temazepam that was on his desk into the drug cabinet. H was busy and therefore placed the half tablet in his pocket. K then found drugs missing from the drugs cabinet once again and ordered a search of the nurses on duty. The half tablet was found in H's pocket, H's colleague ('W') was found with a quantity of the missing drugs and the police were called. H explained to his supervisors and the police the reason for his having the half tablet. Both H and W were arrested on suspicion of theft and possession of a controlled substance under the Misuse of Drugs Act 1971. H was released without charge that night but was suspended from work until 12 February. H attempted to return to work on 11 February 1999 but was told he was suspended. H never returned to work and eventually retired on medical grounds. H claimed damages for psychiatric injury and loss flowing from the humiliation and degradation caused by the circumstances of his arrest and what followed. The judge found that if K or another supervisor had spoken up for H he might not have been arrested. However the judge went on to hold that H had failed to show that any negligence or breach of implied duty on the part of the respondent's employees resulted in his arrest or that the arrest would otherwise not have happened. H appealed.HELD: (1) The trial judge had asked the wrong question and applied the wrong test. He should have asked whether any negligence or breach of duty caused the arrest. There were breaches for which the respondent was vicariously liable: (i) failure to check H's explanation for possession of the drug and tell the police accordingly; (ii) presenting the police with an uninvestigated allegation; and (iii) K's failure to speak up for H and tell the police that she had given him the half tablet. The judge should have first identified the respondent's breach of duty and then asked whether the breach caused H's arrest. (2) The respondent's breach of duty did not have to be the sole or dominant cause of the arrest as long as it was a material cause : Bonnington Castings v Wardlaw (1956) AC 613. The respondent's breach of duty did cause the arrest. H's possession of the half tablet, which the police believed he had no authority to have, played a part in the police decision to arrest him. It was far from clear that the police would have arrested H if they had known the truth about the half tablet. (3) The judge had stated that he would have found against the respondent on foreseeability of H suffering psychiatric injury therefore no difficulty arose in the chain of causation. (4) The appeal was allowed and the question of quantum would be remitted.Appeal allowed.

[2003] EWCA Civ 1696