High Court judge Justice Owen said that the campaign at the international banking firm against Helen Green involved a "relentless campaign of mean and spiteful behaviour designed to cause her distress" that left Green on some occasions crying silently at her desk.
The largest part of the award is the £640,000 awarded for future loss of earnings and a pension, and it is this portion which marks the case out as unusual.
"We have seen cases like this before a number of times but the court has awarded such a large amount because it took the view that this person would not be able to work at this salary level for a long time in the future," said Tom Potbury, a lawyer specialising in employment law at Pinsent Masons, the firm behind OUT-LAW.
Though the award will concern other City financial institutions, Potbury said that the problem of bullying at work was very real but very widespread. "It is a problem, but it is not confined to City firms. People get bullied at work everywhere, though the City is a higher stress culture than other workplaces," he said. "This will make other City firms make sure they are doing everything they can to avoid this."
The case heard that Green, who worked as a company secretary assistant, was ignored and verbally abused and subjected to crude and lewd comments. Her colleagues would move her papers, hide her post and remove her from document circulation lists.
Deutsche Bank paid for stress counselling and assertiveness training for Green but she had a nervous breakdown before returning to work and suffering a relapse.
"The best way for companies to deal with workplace bullying is to have a clear policy in place and to make sure that employees know about it," said Potbury. "The policy then has to be enforced. If someone complains it is important that the employer does not sweep it under the carpet," he said. "That is the best way of protecting yourself against claims. You can better defend yourself if you can show that you have done everything you can."
A Deutsche Bank statement said that "No decision about whether to appeal has been made at this stage".
Part of Green's case was argued under the Protection from Harassment Act, a 1997 anti-stalker law that is beginning to be used in employment cases. A House of Lords ruling last month permitted its use in employment cases, and the law differs substantially from existing employment legislation.
"I don't think anyone imagined when the law was made that it would be used against employers," said Potbury. "Employers have no real defence against this law. If an employee is harassed at work on more than one occasion they can be liable and there is nothing they can do about it."
In the case on which the Lords ruled, the NHS was vicariously liable for the harassment of employee William Majrowski, even though it was not guilty of causing the behaviour or of failing to prevent it. Previously, employees had to prove that the employer had been negligent in preventing bullying, but that is no longer the case.