Yes. Bullying can lead to psychological stress, depression and anxiety, as well as physical ill-health. It can also include physical assaults.
Employees who suffer ill-health in connection with their work may be able to sue their employer in the civil courts for a breach of any of the employer's duties. This is called making a personal injury claim
There's more about personal injury claims here.
24 Feb 2012: When do you start getting paid?
The Interns: Getting treated like a dogsbody?