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Case No: CCRTF/1999/0824/B2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
CAMBRIDGESHIRE COUNTY COURT
His Honour Judge O'Brien
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: Wednesday 26 July 2000
LORD JUSTICE PETER GIBSON
LORD JUSTICE MAY
LADY JUSTICE HALE
- - - - - - - - - -
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
- - - - - - - - - -
Mr. Paul Hollow (instructed by Messrs Lee Davies & Co. of Harlow
for the Respondent)
Miss Lisa Sinclair (instructed by Hertfordshire County Council for the
As Approved by the Court
Crown Copyright ©
- Local social services authorities look after the most vulnerable members of
our society, the old, the young and the disabled. They know only too well that
the people they look after are particularly vulnerable to abuse while in their
care. There are few more vulnerable people than a child who has been so
sexually abused by her father that she believes that anyone who loves her will
want a sexual relationship with her and so behaves in a sexually provocative
way towards those whose love she craves. This places enormous pressures on
staff, who are often untrained and inexperienced. They are also vulnerable to
suspicion both just and unjust. Local authorities have the unenviable task of
reconciling their duties as carer and their duties as employer. In this they
are no different from any other agency caring for vulnerable people, except
that they also have specific statutory duties towards children under the
Children Act 1989.
- The issue in this case is whether the defendant local authority acted
reasonably in suspending the claimant from her post in a residential home while
they investigated the circumstances surrounding a child living in that home.
The investigation concluded that there was no case to answer, but the claimant
suffered psychiatric illness and loss of earnings as a result of her
- We can now examine the circumstances of the case in some detail and with the
benefit of hindsight. What follows is largely taken from the case records and
other documents compiled around that time.
- EL was born on 6 May 1983. Her 13th birthday fell during the events in
question. She suffers from Fragile X syndrome. This means that she has both
learning and communication difficulties. Her IQ has been assessed at between 45
and 50. She has a younger brother, DL. He has the same syndrome, as does their
mother. Their parents needed a great deal of support in looking after them.
Eventually they were spending so much time away from home that in February 1993
they were accommodated under s 20 of the Children Act 1989. In September 1993,
they were placed in the Gables, a small children's home with only four
residents. They remained in regular contact with their parents.
- By the end of 1994, EL's behaviour had become very disturbed. Her father
began to suggest that she might be being abused by a member of the Gables
staff. In February 1995 however EL was suggesting more explicitly that she had
been abused by her father. He was interviewed by the police and in March 1995
he admitted to having extensively abused EL between February and September
1994. In August 1995 he was sentenced to 6 years' imprisonment for rape and
- The case records from the Gables show the sorts of things that EL was saying
to staff as 1995 went on. She spoke about her dad making her sick and Mum
holding her head, simulating this with her finger; about dad making her throw
up; about dad putting cream on her private parts, and also doing this to her
brother. After he was sentenced, she also spoke about dad making her brother
throw up, putting her finger in her mouth and pulling it in and out several
times. In a long conversation on 24 December 1995, she spoke about dad putting
his 'tinker' in her private parts, about her mum also being there, about her
dad telling her not to talk about this and about both her mum and dad hitting
her; 'however she then changed this, saying that she had hit herself'; her dad
had not hurt her brother but her Mum had made him cry; her mum had made her
sick. As time went on she became more and more explicit about her mother's
involvement in abusing them both.
- The claimant, whose first name is Julie, became a residential care worker at
the Gables on 30 December 1994. She had no training and no previous experience
of working with children. Around October or November 1995, EL began to develop
an obsession with the claimant: seeking her out, behaving in a sexually
provocative way, masturbating in front of her, and also bowing down and
worshipping her (EL showed great interest in Muslim styles of worship). At
first it was decided to 'bombard' EL with contact with the claimant in hope of
breaking her obsession. This was unsuccessful.
- On 6 March 1996 the 'CAR3' records note that the claimant asked not to be
left alone with EL. This was because of EL's overt sexual behaviour towards her
and because of a statement that EL had previously made to her keyworker at the
home, 'Julie crouches down to me. Julie touches my wotsits.' The keyworker
replied, 'Are you sure Julie touched your wotsits?' EL replied, 'No, she
didn't'. The next day she repeated that, unlike her mum and her dad, Julie did
not touch her wotsits.
- There is a very perceptive note for 7 March: 'EL appears to assimilate
liking a person and them liking her to them wanting to abuse her. She has made
several statements to this effect, ie "you like me, you won't make me sick?"'
The staff felt inadequately trained to manage this difficult situation, and
there were several meetings about it. On 8 March 1996, Diane Dack, deputy
manager of the Gables, met Mark Janes, the area manager, and staff guidelines
were drawn up to the effect that no member of staff should ever be left alone
with EL. These were discussed at a strategy meeting on 13 March 1996.
- The claimant found it all very worrying and stressful. She was off work for
a week or ten days in March 1996 and did not attend the meeting on 13 March
although she sent written comments. The area manager wrote offering support,
and emphasising that EL had made no allegations about her or any other staff
member and that he was impressed with the professional way in which events were
being recorded and managed.
- On 16 March 1996, it is recorded that EL was concerned about the claimant
putting her little brother to bed, saying 'she is the same as my mum'. On 27
March 1996, EL said 'Julie put cream on my wotsits' but when asked why, she
said 'on my rash', and asked where, she pointed to the tops of her thighs. On 2
April 1996, it is recorded that EL had said 'you won't leave me with Julie.
I'll be OK' on several occasions, and also that the claimant was not allowed to
dress her brother because she was like her mum, but had then agreed when told
that the home was a safe place. On 23 April 1996, she said 'Julie likes to put
cream on my wotsits', but again pointed to the tops of her thighs when asked
where, and when asked whether these were her wotsits, answered no and pointed
to her 'wotsits'. In May 1996 there are references to her saying that she
wanted to be sick, to throw up 'like with daddy', and 'I like Julie'. There was
a further reference to Julie being the same as her dad, meaning that 'they both
like me very much' and even that Julie had a 'tinker'.
- EL had been having therapy at the local Child and Adolescent Mental Health
Service since April 1995. At a meeting on 15 May 96, between the staff team at
the home and the local consultant child psychiatrist, Dr Kingsbury, to discuss
coping strategies concerning EL's obsessional and sexualised behaviour, he
suggested that EL could be experiencing 'anxiety attachment disorder' in
relation to the claimant.
- According to a later note (dated 22 August 1996) by her therapist, Mary
Ewers, EL often talked about the claimant during sessions, saying things like
'Julie crouches down to me' and drawing pictures of her. On 7 May 1996 she told
her therapist that 'her father put his tinker in her, on her back. He didn't
make a hole. Julie put a torch on her whatsit'. When the therapist said that
she thought that EL felt that the therapist did not listen to her, EL started
to talk about Muslims and how they spoke a different language. This led the
therapist to believe that EL felt that she was not being understood. On 18
June, EL drew a picture of the claimant horizontal on the page, a face, two
legs and a lot of scribble half way down between her legs, saying the scribble
was her knickers. According to her note, the therapist did not consider this an
allegation of abuse, but information which should be shared with EL's social
worker, Mandy Kavanagh-Vincent. This was done at a meeting on 4 July 1996.
- In the meantime, such were the concerns about what EL had been saying about
her mother that care proceedings had been brought and interim care orders
obtained in order to control or suspend contact between the children and their
mother. On 22 May 1996 EL's guardian ad litem, Mary Carden, came to the office
to go through the files. The social worker understood her to be expressing a
concern that if the authority were taking seriously what EL was saying about
her mother they should perhaps look into what she had been saying about the
- At a review meeting on 5 July, therefore, it was agreed by Marcelle
Ibbetson, Ms Kavanagh's senior, that all the information should be passed to an
independent person within the department to review. Soon afterwards the matter
was referred to David Gibson. Mark Janes, the Area Manager, recorded that Ms
Ibbetson had not requested an investigation, but pre-investigation phase in
which David Gibson would review the written case material to ascertain whether
an investigation would be necessary. Marcelle Ibbetson also sent a memo dated
15 July 1996 to Clare Walker, Head of Child Care practice. This referred to the
background of abuse by EL's father, the recent similar statements about her
mother, and continued:
'EL recently began to make statements about a worker at The Gables, which have
been recorded by other staff there. On reading them, they appear to be more on
a fantasy level, except for one reference to 'putting cream on her wotsits'.
Strategies have been out in place . . . to ensure no worker is left alone with
either of the children.
The guardian ad litem, Mary Carden, queries whether we ought not to take the
references about the worker in the same vein as those made about her
Recently, Mary Ewers, social worker at the child and family clinic who is
seeing EL weekly, spoke to EL's social worker, Mandy Kavanagh-Vincent. She was
concerned that she, herself, was re-interpreting things EL said about this
worker in a way she would not have if it had been anyone else.'
- It is not clear exactly what information David Gibson was given. He made no
note and by the time of the trial in February 1999 his recollection was not
perfect. He refers to 'diary sheets' from the Gables and oral information from
Marcelle Ibbetson (presumably to similar effect as that in her memo to Clare
Walker). He did not speak directly to Diane Dack at the Gables, or to Mary
Ewers, or to the Guardian ad litem. He decided that there should be an
investigation under section 47 of the Children Act 1989 and convened a strategy
meeting to consider and plan that investigation.
- This took place on 22 July 1996, chaired by David Gibson and attended by
Mandy Kavanagh, Jan Cuthbert (manager of the Gables) and Detective Constable
Alison Wright. It was agreed that 'The information was difficult to evaluate. A
section 47 investigation should be conducted to try to clarify the picture as
far as possible'. It was in both EL's and the claimant's interests that the
claimant should not continue to work with EL during this investigation. A
transfer or suspension was to be considered by Unit Management. Further
information was to be gained from the therapist about what EL had said in
therapy and from Diane Dack about the claimant's duties and the guidelines. It
is clear from the minutes and the later evidence that the main concern was that
EL had spoken in April about the claimant putting cream on her, while the
guidelines against one to one working had been agreed in March.
- That same day, the senior Manager, Mrs Janice Maher, hearing of the
decision of the strategy meeting, took the view that there was no alternative
to suspending the claimant pending the outcome of the investigation. Her letter
of that date informed the claimant that she was suspended
'without prejudice . . . This will allow an investigation to occur into a
possible offence of gross misconduct. The issue to be investigated is an
allegation of sexual abuse made by a young person in our care.
This letter was delivered personally to the claimant by Jan Cuthbert (her
manager). The claimant was extremely upset. It came as a 'bolt from the blue'
given the reassurances she had earlier been given.
I must stress that the suspension is not a judgment on the outcome of the
investigation but is a precaution to protect both you and the Department. The
suspension will be on full pay.'
- The section 47 investigation was eventually conducted by Gill Cazaly, a
social worker with expertise in both learning disabilities and child
protection. It took her from 15 to 22 August 1996. She interviewed Diane Dack,
who was certain that the claimant had never broken the guidelines; she had a
telephone conversation with the guardian ad litem, who denied that she had
queried whether EL's behaviour should be further investigated; and she
interviewed the therapist, Mary Ewers, whose information was to similar effect
as that in her note of 22 August. Presumably she also read all the records. She
concluded that EL had never disclosed any abuse in relation to any member of
staff, and while in therapy had never said anything which could be construed as
an allegation of abuse. She also recommended that the guidelines be strictly
adhered to at all times and noted, sadly, that this, coupled with firm
discouragement of EL's sexualised behaviour, might lead to EL feeling rejected
by her carers.
- The claimant was told of the outcome at a meeting on 28 August 1996,
followed by a letter of 30 August from Janice Maher, informing her that 'there
is no case to answer and you are therefore reinstated from today's date'. She
was ill then and unable to return to work until 23 September 1996. She then
worked in a day centre for the elderly until March 1997, was again off work
until September 1997, worked until October 1998, and has not worked since. She
is suffering from clinical depression and a 'substantial and significant cause'
of that depression was her suspension in 1996.
- The claimant brought these proceedings in December 1997, claiming loss of
earnings and damages for personal injury caused by a breach of her contract of
employment. It was common ground between the parties that her contract included
two implied terms:
(1) that the defendants would not without reasonable cause conduct themselves
in a manner likely to destroy or seriously damage the relationship of
confidence and trust between themselves and the claimant; and
It was not common ground that those terms had been broken or, if they had been,
that the claimant was entitled to damages.
(2) that the defendants would not act otherwise than in accordance with their
relevant statutory powers.
- In a written judgment dated 20 March 1999, His Honour Judge O'Brien found
that there was no proper legal basis for the initiation or continuation of the
section 47 investigation (para 87). The defendants were in breach of implied
term (1) because they had no reasonable grounds for suspending the claimant and
failed to carry out a proper investigation of the circumstances before
suspending her. They were also in breach of implied term (2) because they had
no reasonable grounds for believing that EL was suffering or likely to suffer
significant harm unless the claimant was suspended (paras 2, 3 and 88).
- At a further hearing on 9 July 1999, His Honour Judge O'Brien found that
the claimant was entitled to damages both for her loss of earnings and for her
personal injuries. He awarded her a total of £26,073.19 made up as
follows: £4899.25 special damages; interest thereon of £391.94;
£6712.18 future loss of income; £4800 to pay for private
psychotherapy which he found would enable her to return to work after six
months; £9000 general damages; and £270 interest thereon.
- The issues raised by the appellant local authority are (1) When is it
proper to hold an investigation under section 47 of the Children Act 1989? (2)
When is it proper to suspend an employee pending such an investigation? (3)
When if ever could this be a breach of an implied term of the contract of
employment? and (4) Are damages for psychiatric illness payable for such a
- Very late in the day, the claimant seeks permission to cross appeal. She
wishes to claim a further year's loss of earnings because the effect of the
appeal has been to deprive her of the funds needed to finance the private
treatment which, in the judge's view, would have enabled her to return to work
after six months. She has not had the treatment and is still unfit to work.
The law and the guidance
- Section 47 of the Children Act 1989, so far as is relevant to this appeal,
provides as follows:
'(1) Where a local authority -
(a) are informed that a child who lives, or is found, in their area -
the authority shall make, or cause to be made, such enquires as they consider
(i) is the subject of an emergency protection order; or
(b) have reasonable cause to suspect that a child who lives, or is found, in
their area is suffering or likely to suffer, significant harm,
(ii) is in police protection; or
to enable them to decide whether they should take any action to safe guard and
the child's welfare.
'(2) Where a local authority have obtained an emergency protection order with
to a child, they shall make, or cause to be made, such enquires as they
necessary to enable them to decide what action they should take to safeguard or
the child's welfare.
'(3) The enquires shall, in particular, be directed towards establishing -
(a) whether the autority should make any application to the court, or exercise
any of their other powers under this Act or section 11 of the Crime and
Disorder Act 1998, with respect to the child;...
(b) [relates to children under emergency protection orders]
(c) [relates to children in police protection]
'(4) [relates to gaining access to the child]
'(5) [relates to consulting the local education authority]
'(6) [obliges the authority to apply for an order if denied access to or
the whereabouts of a child]
'(7) [obliges the authority to consider whether or not to review a case if they
to apply for an order]
'(8) Where, as a result of complying with this section, a local authority
they should take action to safeguard or promote the child's welfare they shall
action (so far as it is both within their powers and reasonably practicable for
them to do
'(9) [obliges certain other public authorities to assist these enquires]
'(10) [unless this would be unreasonable]
'(11) [lists those other authorities: other local social services authorities,
education authority, any local hosuing authority, any health authority, special
authority or NHS trust, and the NSPCC]
'(12) Where a local authority are making enquires under this section with
respect to a
child who appears to them to be ordinarily resident within the area of another
they shall consult that other authority, who may undertake the neccessary
- It is immediately apparent that section 47 is principally directed towards
the investigation of the circumstances of children living at home or who have
been removed from home in an emergency. The object is to enable the local
authority to decide whether or not to apply for an order under the 1989 Act. It
is not obviously apt to deal with cases of children who are already subject to
such orders (as EL was at the relevant time), although section 47(1)(b) and (8)
are capable of covering that situation.
- There is a further complication in this case. EL was living in the Gables,
which was not within the area of this local authority at all, but just over the
border in a neighbouring county. This consideration was present to the mind of
Marcelle Ibbetson when she wrote her memorandum to Clare Walker. Janice Maher's
evidence was that it had been agreed between the two authorities that the
defendant authority would be responsible for the Gables.
- In any event, it would be ridiculous to regard section 47 as the only
provision empowering the local authority to make enquiries in cases of
suspected risk of harm to people in their care. They have an ordinary common
law duty to take reasonable care of the children they are looking after. They
have a statutory duty, under section 22(3) of the 1989 Act:
'It shall be the duty of a local authority looking after any child -
Irrespective of this, any authority or agency looking after vulnerable people,
whether they are old, young, or physically or mentally disabled, must be under
a duty to take reasonable care to safeguard them from harm. That duty must
include making reasonable enquiries when there is information to suggest that
they may be at risk of harm from within the agency.
(a) to safeguard and promote his welfare; and
(b) to make such use of the services available for children cared for by
their own parents as appears to the authority reasonable in his case.'
- Nevertheless, it is understandable that those involved in this case were
thinking in terms of section 47, because the regulations and guidance to which
they were subject quite properly encouraged them to treat any concern about
possible abuse in residential care in the same way as they would any other
concern about abuse. The Children's Homes Regulations 1991 (SI 1991/1506) apply
to all kinds of children's home, whether run by local authorities, voluntary
organisations or privately. Regulation 19 requires those responsible for the
home to notify certain people of serious events concerning the child, including
'the suffering of serious harm by a child accommodated at the home' (reg
19(2)(c)). Theoretically, where those responsible for the home are themselves a
local authority they do not have to notify themselves, because they should know
anyway, but they do have to inform the police if the child suffers serious harm
- The Department of Health Guidance and Regulations under the Children Act
1989, in volume 4, dealing with residential care, advises:
'1.179 All those concerned with children's homes must be aware of the
possibility that a child may be abused during the period he is in a home. Staff
in homes have key roles in identifying abuse when it occurs and in bringing it
to the immediate attention of the responsible authorities. Responsible
authorities must ensure that the home has clear policies and written procedures
for responding to abuse which are integrated with local procedures agreed by
the Area Child Protection Committee. . . . Abuse always constitutes serious
harm to the child and formal notification of it must be given as required by
'1.180 Whenever staff in a children's home receive evidence that a child is
suffering or has suffered abuse, they have no choice other than to pass that
information on to a person with the authority to investigate and evaluate the
information. Normally this means informing the local social services department
who will in turn involve other agencies, including the police or NSPCC who may
become involved with the investigation according to the circumstances and local
arrangements . . . '
'1.186 It has also to be recognised that children in children's homes can be
abused by a member of staff. What has been said above applies equally well to
this situation. . ..
'1.187 Those managing the home will also need to consider what steps are
required within their disciplinary procedures with respect to the staff member
concerned. It would normally be appropriate for the staff member to be
suspended from duty either on the grounds of the possibility of the alleged
abuse recurring or concern that his presence might interfere with the
investigation. . . .
'1.188 It is important for those managing homes, in situations where a
member of staff is alleged to have abused a child in the home, to appreciate
that each of three strands of investigation has to be followed through to a
i. The inter-departmental and inter-agency child protection investigation
which should proceed to a case conference . . .
'1.189 It is essential that the common facts of the alleged abuse are
applied independently to each of the three strands of investigation. The fact
that a prosecution is not possible, does not mean that action in relation to
child protection or employee discipline is not feasible or necessary. The
outcome of one strand of investigation may have a bearing on another. The
important thing is that a definite conclusion is reached in each case.'
ii. The police investigation of whether a crime has been committed. . . .
iii. The employer's disciplinary procedure should discover whether the staff
member has been guilty of misconduct or gross misconduct . . .
- This emphasis upon three separate strands of investigation is repeated in
the Department of Health and other Departments' then current guidance, on
Working Together - A Guide to Arrangements for Inter-Agency Co-operation for
the Protection of Children from Abuse, when dealing with 'Children in
Residential Settings', at para 5.20.11. It also advises:
'5.20.5 Where abuse by a member of staff is suspected, the action to be
taken would be the same as with any other suspected abuse, i.e. the local SSD
or investigating agency should be involved immediately, and other agencies
involved as appropriate . . .
'5.20.6 Investigations or allegations or suspicions of abuse by a member of
the SSD's own staff should, so far as possible, include an independent element
. . . '
- The defendant local authority have also produced their own guidance on
Working Together, which includes additional guidelines on child sexual
abuse. These include the very sensible advice that these cases
' . . . may vary from obvious abuse with a clear allegation and forensic
evidence, to a suspicion based on tangible but informed concern, and great care
must be given to the appropriate method of investigation. Child sexual abuse
rarely needs to be responded to as a crisis, but calls for a cool, clear and
The guidance on abuse by professionals requires that
'Any person receiving information, or having reason to suspect that a young
person may have been abused by another member of staff must immediately inform
their line manager of their concerns . . .
'Following receipt of allegations or suspicions, the line manager is then
responsible for reporting these to
(a) the local social services team for investigation under section 47
(b) their senior manager to consider disciplinary action.'
- These documents all draw a clear distinction between the child protection
investigations and the relevant disciplinary procedures. The claimant's
contract of employment dealt expressly with Disciplinary Rules and Procedures
in paragraph 13:
' . . . Any variance from accepted standards of performance and behaviour will
render you liable to disciplinary action. . ..
'In instances of gross misconduct, disciplinary procedure will normally
involve suspension. . . .
'It should be noted that suspension from duty is to allow time for
investigations to be carried out, and should not be seen as a prejudgment of
- The contract cross-refers to the authority's Discipline Procedure. Relevant
'4.1.2 If the manager considers the matter warrants formal investigation, then
he/she will instigate the disciplinary procedure. . . .
'4.1.3 The first stage of the process is to conduct a formal investigation of
the alleged misconduct or unsatisfactory performance. This investigation is to
establish whether or not there is a case to answer. . . .
'4.3.1 A brief period of suspension may be necessary where the possibility of
dismissal may arise or where it is inappropriate for the employee to remain at
the normal place of work.
'4.3.2 An employee will be suspended in cases where gross misconduct is
suspected . . . or where it is necessary to remove the employee from the
premises when his/her presence may inhibit proper investigations.'
- The observations of the Warner Committee (Report of the Committee on
Inquiry into the Selection, Development and Management of Staff in Children's
Homes, 1992) are also of interest, although they do not have the same statutory
force (under the Local Authority Social Services Act 1970, s 7) as does the
Secretary of State's Guidance:
'8.41 When allegations are made against a member of staff, employers have to
balance two considerations: the need to protect children and the need to ensure
that staff are treated fairly. These are difficult to reconcile given the
prevalent perception of staff that suspension from duty implies at least a
measure of guilt on behalf of the individual. . .
'8.42 There is no doubt in our minds that the foremost concern of the
employing authority must always be the welfare of the child. This would appear
to imply that a member of staff should always be removed from the home
immediately an allegation is made. However, other factors must be considered .
. . Options other than immediate suspension should be considered; and the
decision to suspend should depend upon the seriousness of the allegation.
Before any decision can be taken there must be some form of preliminary
investigation of the facts of the case. In our view there should be a brief
preliminary inquiry, to decide whether there is a case to answer rather than
whether the member of staff might be guilty; . . '
- This concern is picked up in the more recent draft of Working Together
to Safeguard Children (Department of Health and others, 1999):
'6.18 Staff and other individuals about whom there are concerns should be
treated fairly and honestly, and should be provided with support throughout the
investigation process. They should understand the concerns expressed and the
processes being operated, and should be clearly informed of the outcome of any
investigation and the implications for disciplinary processes. The
investigation should be completed as quickly as possible consistent with its
effective conduct. In any case involving a criminal investigation, when
to inform the suspect of the allegations should always be jointly agreed
between the police and other relevant agencies.'
- From all of this it is clear that there is a distinction to be drawn
between the process of investigating whether a child is at risk of significant
harm and the process of dealing with a member of staff who may be implicated in
that risk. It is a gross over-simplification to conclude that because some form
of investigation is taking place in relation to the child the employee must
inevitably be suspended. There are at least two reasons for saying this.
- First, the process of investigation is itself more complex and fluid than
such a proposition would suggest. It should usually follow recognised stages,
from referral through an initial consideration of whether there is anything to
investigate at all, and whether a strategy meeting should be convened, through
a strategy meeting which will consider what if anything should be done next, to
a formal case conference at which certain child protection decisions will be
taken, and culminating in the local authority's actual decision under section
47. But as David Gibson himself said in evidence, you have to take into account
everything that comes to light to ensure that the decision to investigate is
still the right one.
- Secondly, the issues are different. The child protection issue is whether
or not the child is suffering or likely to suffer significant harm and whether
or not the local authority should take any action to safeguard or promote that
child's welfare. There may have been something amounting to an 'allegation'
against a particular individual but very frequently there is not. There may not
even be a 'suspicion' about a particular individual as opposed to any one of a
number of people with whom the child has been in contact. The staff issue is
whether it is appropriate in the interests either of the child, or the staff
member, or the investigation, to separate the staff member from his or her
usual place of work. If that is appropriate, as often it will be, the next
issue is how this should be done: could a transfer be arranged, or a period of
leave, or are disciplinary measures appropriate?
- In my view, therefore, the understandable concentration on section 47 which
has dominated this case has been an unfortunate distraction from the real
issue, which is whether the authority were acting reasonably, on the
information available to them at the time, in suspending the claimant in the
way that they did on 22 July 1996.
The real issue
- In my view, it was not only reasonable but imperative for Marcelle Ibbetson
to refer the problem presented to her by Mandy Kavanagh to more senior
management. Here was an exceptionally vulnerable child with both learning and
communication difficulties. She had been seriously sexually abused. Her early
attempts to communicate that abuse had not been easy to understand or taken
seriously by those looking after her. But she had been proved right. She had
slowly begun to communicate more about her mother's involvement in the abuse.
Meanwhile her own behaviour was extremely difficult and provocative. She had
made a series of confusing comments which at times seemed to be likening the
claimant to her parents and at times contrasting her. Whatever the guardian ad
litem had meant to convey, she had drawn attention to the potential disparity
in treatment. This was reinforced by the information from the therapist, who
(according to the memo to Clare Walker) had voiced a similar concern.
- In my view it is also difficult to criticise David Gibson for deciding to
convene a strategy meeting. He could, of course, have undertaken more inquiries
himself beforehand. If he had done so, much grief would have been spared. But
the point of a strategy meeting is to bring together those who may have
something to contribute to deciding what, if anything, to do next. The specific
inquiries that the strategy meeting decided to make were exactly what was
needed: in particular to find out from Diane Dack whether there was any reason
to believe that the claimant had broken the guidelines and to gain further
information from the therapist.
- He can be criticised for failing to keep a record of the information
available to him at the time or of the information which was put before the
meeting. The account given in the minutes does not suggest that the detailed
records had been read with great care. The statement that 'Julie has put cream
on my wotsit' is said to come from the therapist when in fact it comes from the
keyworker's casenotes where it is much easier to see in context. In particular
there is nothing in the notes to suggest that the claimant had broken the
guidelines. The CAR3 records reveal that the claimant herself had asked for
- That being so, it would in hindsight have been preferable for the meeting
to have been even more tentative than its conclusion that the information was
'difficult to evaluate', although that was certainly true. But in my view the
meeting was quite right to decide that further inquiries should be made, given
that this had not already been done. There cannot, or should not, be any doubt
about the local authority's power to make those inquiries, whether as a result
of its ordinary common law and statutory duties or as a result of section 47.
Whether it was appropriate for David Gibson or the meeting to characterise
those further inquiries as a 'section 47 investigation' is a more difficult
- The judge rejected the authority's argument that it was for the authority,
rather than the court, to judge whether or not they had 'reasonable cause to
suspect' that EL was at risk, so that their judgment could only be questioned
on the well known principles in Associated Provincial Picture Houses v
Wednesbury Corporation  1 KB 223. This argument has unfortunate
affinities with the majority opinions in Liversidge v Anderson  AC 206. Where the liberty of the subject is in issue, there is now no doubt that a
statutory requirement for 'reasonable grounds' or 'reasonable cause' means just
what it says: there must be objectively reasonable grounds, not simply grounds
which the decision-maker thinks sufficient: see eg Castorina v Chief
Constable of Surrey (1988) 138 NLJ 180.
- That said, the cases on lawful arrest clearly establish that what is
reasonable has to be judged on the information available at the time the
decision was made. Generally speaking, police officers are not under an
obligation to make further inquiries before acting upon their reasonable
belief: see eg McCarrick v Oxford  RTR 117.
- There is a real distinction between those cases and this, in that the
constable must have 'reasonable cause to believe', whereas the authority need
only have 'reasonable cause to suspect'. Suspicion is obviously a lower
threshold than belief. The distinction is clearly deliberate: the power of a
police officer to take a child into police protection under section 46 of the
1989 Act requires him to have 'reasonable case to believe that a child would
otherwise suffer significant harm'; the court's power to make an emergency
protection order under section 44 of the Act requires that there be 'reasonable
cause to believe that the child is likely to suffer significant harm . . . ';
the court's power to make an interim care order under section 38 of the Act
requires it to be satisfied that 'there are reasonable grounds for believing
that' the necessary criteria are made out.
- This is just as one would expect. These powers involve a compulsory
intervention in the lives of both the child and those looking after him,
usually his parents (they are clearly an interference with family life for the
purpose of article 8 of the European Convention on Human Rights). In contrast,
a section 47 investigation does not generally infringe the legal rights of
anyone involved. It merely imposes upon the local authority a duty to carry the
investigation far enough to enable it to reach a conclusion. It also imposes
upon certain other authorities (not including the police) a duty to help if
- In my view, the courts should be slow indeed to hold that a local authority
does not have reasonable grounds such as will justify it in making further
inquiries in a case such as this. Given that no infringement of legal rights is
generally involved, the decision to hold such an investigation would normally
only be challenged through judicial review. The court would be reluctant to
grant such a remedy save in the most blatant case of arbitrary and unjustified
inquiry. (It should not be forgotten that the European Convention on Human
Rights may also impose positive obligations upon states to protect people from
inhuman or degrading treatment or from serious invasions of their personal
integrity: the immunity given to local authorities who fail to protect children
from abuse, in the case of X v Bedfordshire County Council  2 AC 633, is currently under challenge before the European Court of Human Rights:
see the Commission's opinion, reported as Z v UK  2 FCR 245, and
its earlier decision on admissibility, reported as KL v UK  2 FCR
- In my judgment, the issue should not have been presented to the judge on
the basis of an agreed implied term that 'the defendants would not act
otherwise than in accordance with their relevant statutory powers', still less
on the basis that the only relevant statutory power was in section 47 of the
1989 Act. As already explained in paragraph 29 above, there are other relevant
statutory and common law duties. The point in this case is not whether the
local authority should have conducted some inquiries. Clearly it had to do so.
It is not necessary for the court to decide whether or not the low threshold
for embarking upon a section 47 investigation was crossed at the point when
David Gibson decided that it had been crossed. Nothing in this case should
deter local authorities from making what they consider to be the appropriate
inquiries into the circumstances of children who may be at risk of significant
harm. The point in this case, as I have already said more than once, is whether
the local authority should have suspended the claimant in the way that it did
simply because such inquiries were being made.
- For the reasons given in paragraphs 38 to 40 earlier, it does not follow
that a staff member should be suspended simply because inquiries, whether or
not characterised as a section 47 investigation, are being made. There is
always a separate decision to be taken about the implications for staff. It is
not alleged that the decision was in breach of the express terms of the
claimant's contract of employment. It remains to be considered, however,
whether the authority's actions in this case were in breach of the implied term
of confidence and trust.
The implied term of confidence and trust
- It is now well settled that there is a mutual obligation implied in every
contract of employment, not, without reasonable and proper cause, to conduct
oneself in a manner likely to destroy or seriously damage the relationship of
confidence and trust between employer and employee. This requires an employer,
in the words of Lord Nicholls of Birkenhead in Malik v BCCI  AC 20, at p 35A and C,
'. . . not to engage in conduct likely to undermine the trust and confidence
required if the employment relationship is to continue in the manner the
employment contract implicitly envisages. . . . The conduct must, of course,
impinge on the relationship in the sense that, looked at objectively, it is
likely to destroy or seriously damage the degree of trust and confidence the
employee is reasonably entitled to have in his employer'.
Lord Steyn emphasised, at p 53B, that the obligation applies 'only where there
is "no reasonable and proper cause" for the employer's conduct, and then only
if the conduct is calculated to destroy or seriously damage the
relationship . . . '
- Miss Sinclair for the local authority argues that the breach must be such
as to indicate that the perpetrator no longer wishes to be bound by the
contract: hence a decision to suspend the employee in circumstances such as
these could not be such a breach. This is to confuse the question of whether
the term has been broken with whether such a breach entitles the employee to
treat it as a repudiation of the contract. It is quite clear that the term may
be broken even though the employer does not intend to bring the employment
relationship to an end: see eg Malik v BCCI, above; and French v
Barclay's Bank  IRLR 646, CA.
- Did the authority's conduct in this case amount to a breach of this implied
term? The test is a severe one. The conduct must be such as to destroy or
seriously damage the relationship. The conduct in this case was not only to
suspend the claimant, but to do so by means of a letter which stated that 'the
issue to be investigated is an allegation of sexual abuse made by a young
person in our care.' Sexual abuse is a very serious matter, doing untold damage
to those who suffer it. To be accused of it is also a serious matter. To be
told by one's employer that one has been so accused is clearly calculated
seriously to damage the relationship between employer and employee. The
question is therefore whether there was 'reasonable and proper cause' to do
- In my judgment there clearly was not. The information considered by David
Gibson and strategy meeting was indeed 'difficult to evaluate'. The difficulty
was in determining what, if anything, EL was trying to convey. It warranted
further investigation. But to describe it as an 'allegation of sexual abuse' is
putting it far too high. A close reading of the records coupled with further
inquiries of the therapist were needed before it could be characterised as
- Furthermore there was then a need to consider carefully what to do about
the member of staff concerned. Was there indeed any reason to suppose that she
had broken the guidelines for working with EL? How easy would it be to check?
If there was some reason, however slight, it might indeed be right to separate
her from EL for a short time. But how should this be done? Miss Sinclair argues
that transfer was impossible because all the people in their care are
vulnerable. But that leaves out of account the particular circumstances in this
case. It is difficult to accept that there is no other useful work to which the
claimant might not have been transferred for the very short time that it ought
to have taken to make the further inquiries needed. It is equally difficult to
accept that some other step might not have been contemplated, such as a short
period of leave. In any event, given the timescale involved, what was the rush?
- The authority's own guidelines point out that 'child sexual abuse rarely
needs to be responded to as a crisis, but calls for a cool, clear and
structured response' (see paragraph 33 above). Instead what happened here was
an immediate 'knee jerk' reaction. Had Janice Maher had a clearer picture of
the limited information available to the strategy meeting, the difficulty in
evaluating it, and the simple inquiry needed to deal with the meeting's
principal concern, she would surely have hesitated before sending a letter in
the terms which she did. Her evidence was that she was 'amazed' that there had
been a section 47 investigation and a suspension for what turned out to be no
- On analysis, therefore, the actions of the local authority towards the
claimant in this case were indeed in breach of its implied obligation not
without reasonable and proper cause to act in a way which seriously damaged the
relationship of confidence and trust between them. But in reaching this
conclusion, I would not want local authorities to feel in any way inhibited in
making the inquiries which they feel appropriate to safeguard the children in
their care. Nor should there be any doubt that if there is a conflict between
the interests of a child in their care and the interests of an employee, the
interests of the child should prevail. But the employee is entitled to
something better than the 'knee jerk' reaction which occurred in this case.
- Miss Sinclair argues that, even if there were such a breach, the claimant
would not be entitled to compensation for her depressive illness and resulting
inability to do residential care work. There is clear authority for the
proposition that general damages cannot be awarded for frustration, mental
distress or injured feelings arising from an employer's breach of the implied
term of confidence and trust: see Bliss v South East Thames Regional Health
Authority  IRLR 308, CA, holding that the principle laid down in
Addis v Gramophone Co Ltd  AC 488 applied to this breach as it did
to wrongful dismissal; and French v Barclay's Bank plc  IRLR 646,
affirming that proposition despite other observations of the House of Lords in
Malik v BCCI  AC 20.
- Malik, of course, was not concerned with injured feelings but with
financial loss, usually referred to as stigma damage, resulting from the
employer's breach of contract. Both Lord Nicholls (with whom Lord Goff of
Chieveley and Lord MacKay of Clashfern agreed) and Lord Steyn (with whom Lord
Goff, Lord MacKay and Lord Mustill agreed) held that such damages could be
recovered for breach of this implied term. Insofar as Addis v Gramophone
Co was thought to be authority to the contrary, it was a departure from the
normal principle that damages for financial loss, including loss of reputation,
were recoverable in contract, and should not be applied to a breach of the
implied term. Lord Nicholls said this at p 39D:
'Now that this term exists and is normally implied in every contract of
employment, damages for its breach should be assessed in accordance with
ordinary contractual principles. This is as much true if the breach occurs
before or in connection with dismissal as at any other time.'
- There is, however, a clear distinction between frustration, mental distress
and injured feelings, on the one hand, and a recognised psychiatric illness on
the other. In Page v Smith  AC 155, the House of Lords held (by a
majority) that once it was established that the defendant was under a duty of
care to avoid causing personal injury to the claimant, it mattered not whether
the injury sustained was physical, psychiatric or both. The cases limiting the
ambit of liability in tort for psychiatric injury to secondary victims did not
apply to primary victims to whom a duty of care not to cause personal injury
was established. As Lord Lloyd of Berwick observed at p 188F:
'In an age when medical knowledge is expanding fast, and psychiatric knowledge
with it, it would not be sensible to commit the law to a distinction between
physical and psychiatric injury, which may already be somewhat artificial, and
may soon be altogether outmoded.'
- Mr Hollow for the claimant argues that no such distinction should be drawn
in this case. The employer owes his employees duties both in contract and in
tort. In Walker v Northumberland County Council  IRLR 35, at para
74, Colman J pointed out that 'the scope of the duty of care owed by to an
employee to take reasonable steps to provide a safe system of work is
co-extensive with the scope of the implied term as to the employee's safety in
the contract of employment'. He awarded damages for a mental breakdown
resulting from a breach of that duty. The duty in this case is owed purely in
contract, rather than in tort, but there can be no more reason to distinguish
between physical and psychiatric injury in this case than there is in the case
of other breaches of an employer's duties.
- In my judgment that is correct. There is all the difference in the world
between hurt, upset and injury to feelings, for which in general the law does
not provide compensation whether in contract or (with certain well defined
exceptions) in tort, and a recognised psychiatric illness. The evidence of Dr
Goldie in this case was:
'She is undoubtedly depressed. The descriptions that she gave of the
fluctuations in her moods indicate that the depression is evidenced by profound
deepening of despair alternating with a hypomanic state. Anti-depressant
medication which has been offered and taken since the incident has not helped.
Nor has counselling.'
I would therefore hold such damages recoverable unless constrained by authority
to the contrary.
- One indication to the contrary is an observation of Waller LJ in French
v Barclays Bank, at para 57: 'In my view, the judge was right to conclude
that he was constrained by authorities from awarding damages for anxiety,
stress and even to health in this case'. There is, however, nothing in the
report to suggest that there was evidence of psychiatric illness in that case:
paragraph 52 makes it clear that the claimant was appealing against the finding
that he was not entitled to damages for injury to his feelings, including
stress and anxiety.
- Miss Sinclair understandably places great emphasis upon the decision of
this court in Johnson v Unisys  IRLR 274. The claimant claimed
damages for a mental breakdown allegedly caused by his wrongful summary
dismissal for gross misconduct. The Court of Appeal upheld the judge's decision
to strike out the claim. Lord Woolf MR explained the distinction between
Addis and Malik thus, in para 31:
'The true distinction between Addis and Malik is that the breach
of contract in Addis was confined to the manner of dismissal while the
breach in Malik, although it was repudiatory, was a breach by the bank
of the trust and confidence it owed to its employees during the period they
were employed. The breach in Malik was of a gravity which entitled the
employees to regard themselves as dismissed wrongfully but that was not their
complaint. Their complaint related to anterior conduct.'
In Johnson, the claimant's only complaint was as to the manner of his
dismissal. It was 'no more and no less than an allegation that the defendants
failed to follow their own dismissal procedures and that this was procedurally
unfair' (see para 21)
- I have to admit to some difficulty with the Johnson case. Lord Woolf
recognised that the Malik case 'does now, however, mean that damages for
loss of reputation can be recovered in a case where the damage to reputation is
caused by a dismissal which is summary, unfair or without proper notice' (para
24). Whatever may be the differences between the speeches of Lord Nicholls and
Lord Steyn in Malik, that much is clear. If damages for damage to
reputation can be recovered for a wrongful dismissal, why cannot damages for
psychiatric illness also be recovered? There would still be no breach of the
general principle that damages for upset feelings cannot be recovered. It is
difficult to discern from the report of Johnson that the distinction
between hurt feelings and psychiatric injury was explored before the court:
there is certainly no reference to Page v Smith.
- The case before us can be distinguished from Johnson. The complaint
here relates to a suspension, which manifestly contemplates the continuation of
the employment relationship. The clear import of Malik is that the ambit
of Addis should be confined. There are in this case two differences from
Addis: first this was not a dismissal, and secondly this was psychiatric
illness rather than hurt feelings. In my judgment, therefore, the judge was
right to award damages for both the financial loss and the non-pecuniary damage
resulting from the claimant's illness.
- I recognise that this produces the strange result that, according to
Johnson, the defendant authority would have done better had they
dismissed rather than suspended the claimant. That simply reinforces my view
that the sooner these matters are comprehensively resolved by higher authority
or by Parliament, the better.
- Finally, Miss Sinclair sought to argue that such losses were not
foreseeable at the time the contract was made. To that extent, of course, there
is a difference between breach of duty in tort and breach of duty in contract.
However, the judge made a clear finding that they were foreseeable at the
relevant time, and that is a finding of fact with which this court will not
The cross appeal
- The judge assessed the claimant's future loss of earnings on the basis
that, if she was able to receive appropriate treatment, she would be fit to
return to work within six months. The recommended treatment was
psycho-analytical psychotherapy for up to a year. This was not readily
available from the National Health Service, but could be provided privately at
a cost of some £4800. However, when granting permission to appeal, the
judge also granted a stay of execution. The claimant has therefore not received
any of the damages awarded, has not had the treatment and had not been able to
return to work. She wishes, therefore, to claim a further year's loss of
- The judge was, of course, dealing with the evidence presented to him at the
time. There were reports and oral evidence from Dr Goldie, a consultant
psychiatrist, and Dr Yardley-Jones, a Consultant in Occupational Medicine.
No-one has suggested that he was wrong to reach the conclusion that he did.
Judges always have to make the best prediction they can on the basis of the
evidence before them. Save in exceptional circumstances, such as fraud, it is
not open to either party to reopen the case should those predictions later
prove to have been wrong. But that principle applies to new proceedings: should
it also apply on appeal? It is surprising that, for a situation which cannot be
unprecedented, neither party has been able to refer us to any authority on the
- I am sympathetic to the logic of the proposed cross appeal, despite some
evidential difficulties. The medical reports before the court were based on
medical examinations in October 1998, twenty one months ago. We do not have up
to date psychiatric evidence. Moreover, the further six months' loss of
earnings was predicated on its taking longer for treatment to effect a cure,
but getting back to work being part of the cure. We do not know what
alternatives might have been explored during the time this case has taken to
come on. Instead, all we have is a brief statement from the claimant's
solicitor. Nevertheless, it is clear from that statement that the premiss upon
which the judge based his conclusions about future loss of earnings has been
- The normal principle is that a successful claimant should not be deprived
of the fruits of that success simply because there is to be an appeal. A stay
of execution has to be justified, usually by evidence that it will not be
possible to recover the money should the appeal succeed. Counsel for the
claimant did not resist the stay of execution. Had he done so, it is more than
likely that the judge would at least have ordered that the sums needed to pay
for the treatment should be paid immediately. This would have been to the
benefit of both parties. Whatever the outcome of an appeal, a good employer
might well have considered the money well spent. It is the local authority
which has prolonged the claimant's difficulties by pursuing an appeal which has
ultimately proved unsuccessful.
- In the circumstances, therefore, I consider that this court is justified in
concluding that the judge's decision, although right at the time, has been
proved wrong. The local authority has not been taken by surprise or prejudiced
by the delay in making the application. I would grant permission to cross
appeal out of time, and increase the damages awarded to the respondent claimant
by the sum of £13,424.36.
- I would therefore dismiss the appeal but allow the cross appeal.
- I agree.
Peter Gibson L.J.:
- I also agree.
Order: Appeal dismissed and cross-appeal allowed with costs.
(Order does not form part of approved judgment.)
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