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LONDON-A record U.K. award of 358,288 pounds ($581,600) in a racial discrimination case highlights the importance of developing and adhering to an equal opportunity policy, an employer attorney said.

The award against London municipal authority Lambeth Council by an appeal tribunal is the United Kingdom's largest since the 12,500 pounds ($20,300) ceiling on discrimination cases was lifted in a 1994 amendment to the Race Relations Act 1976.

Lambeth Council, which has no insurance to cover the award, is considering whether to appeal the amount, a spokeswoman said.

A spokeswoman for the Commission for Racial Equality, a government-funded agency that backed the case, noted that awareness of racial equality has improved markedly in recent years, resulting in better practices generally.

The chairman of the CRE, Herman Ouseley, welcomed the tribunal's decision.

"Employers must actively seek to eliminate discrimination from their employment practices, ensure that they are providing equality of opportunity and run effective and fair disciplinary procedures which do not penalize employees simply because they have complained of racial discrimination," Mr. Ouseley said a written statement.

Attorney Matt Dean, a senior assistant in the employment department of London-based Simmonds & Simmonds, one of the leading U.K. employment law firms, agreed that companies are more aware of the need to take racial discrimination seriously. Companies should have in place an equal opportunities policy to which they adhere, he said, noting the amounts of awards and settlements are increasing significantly.

The award came in a case first brought before an Industrial Tribunal in 1992, two years aftercomputer operator Donald

D'Souza was dismissed and two years before the scrapping of a ceiling on discrimination awards.

Indian-born Donald D'Souza had complained of constant racial discrimination and being denied promotions after complaining while working for Lambeth Council before being fired from his 28,000 pounds ($45,500)-a-year post in January 1990.

A 1992 Tribunal awarded him 16,000 pounds ($26,000) compensation for injury to feelings and ordered that he be reinstated.

After the Council's refusal to reinstate him, a 1995 Tribunal ruled it could not review the Tribunal's earlier award but assessed additional compensation for unfair dismissal under the Employment Protection (Consolidation) Act 1978.

Although the Tribunal assessed Mr. D'Souza's losses, including lost earnings and pension, as 377,546 pounds ($613,000), the statutory maximum award for this Act was limited to 8,925 pounds ($14,500).

Mr. D'Souza appealed, claiming the award should have been made under the amended Race Relations Act, which now has no ceiling on awards.

Lambeth Council claimed the 1995 Tribunal had no power to review the 1992 decision and that the Race Relations (Remedies) Act 1994 did not remove the cap before July 1994.

However, Mr. Justice Morison ruled at the Appeal Tribunal that the 1992 Industrial Tribunal had not completed its task, as the award had depended on Mr. D'Souza being reinstated, and that it was open to the 1995 Tribunal to have made an uncapped award of compensation.

This follows a 1995 ruling, Harvey vs. The Institute of the Motor Industry, which held that the lifting of the cap in sex discrimination cases applied to awards made after the date when the cap was removed, regardless of the date of the dismissal.

Although most companies in Europe do not carry insurance coverage for discrimination cases, insurers such as X.L. Insurance Co. Ltd. and AIG Europe (U.K.) Ltd. now are marketing stand-alone employment practices liability policies in Europe. Other insurers also provide extensions to directors and officers liability insurance policies to cover discrimination (BI, June 2).