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||Neutral Citation Number:  EWCA Civ 1068
||Case No: B2/2010/1798
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LIVERPOOL COUNTY COURT
HIS HONOUR JUDGE RODERICK GORE QC
||Royal Courts of Justice
Strand, London, WC2A 2LL
||15th June 2011
B e f o r e :
LORD JUSTICE MAURICE KAY
LORD JUSTICE RICHARDS
LORD JUSTICE LEVESON
(DAR Transcript of
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The Respondent appeared in person.
Mr James Boyd (instructed by Liverpool City Council) appeared on behalf of the Appellant.
HTML VERSION OF JUDGMENT
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Lord Justice Leveson:
- On 25 September 2007 the claimant, Mark Jackson, left his employment of some 12 years as a social worker on the youth offending team with Liverpool City Council ("Liverpool") in order to take up employment with Sefton Borough Council ("Sefton") in their Adult Services Department. For the purposes of securing that employment he received a favourable reference, dated 23 August 2007, from his then team manager, Pat Keegan. One year later he applied for a post at Sefton in its Youth Offending Service, which itself was subject to satisfactory references. Two references were provided which were satisfactory. One reference, however, was provided by his former employers at Liverpool, and in particular by Catherine Griffiths, who is the group manager of the Youth Offending Service, this reference raised a concern.
- In the event, Mr Jackson did not obtain the employment he sought and was unemployed for one year before obtaining further employment with similar earnings, albeit not in his preferred field. Before obtaining that employment Mr Jackson commenced proceedings for damages in relation to the reference which Liverpool had provided. On 28 July 2010 this action came before HHJ Gore QC in the Liverpool County Court. The judge held that the reference was unfair and found in favour of Mr Jackson, leaving the assessment of damages to a further hearing. With the leave of Rix LJ, Liverpool now appeal that finding.
- The facts were not essentially in dispute. There is no suggestion that the references which Mr Jackson received from Sefton were not clearly favourable and the original references from Liverpool had similarly been favourable. For this post, however, the Liverpool reference provided by Mrs Griffiths dated 3 October 2008 was not complete. It rated his time-keeping and relationships with colleagues as very good; his honesty and integrity as good, and his work performance as average. She did not provide answers to the questions "Would you re-employ them? Do you know of any reasons why we should not employ the applicant?"; but, in answer to a question about the applicant's weaknesses, observed:
"There were some issues identified by his team manager in respect of recording and recordkeeping. This was addressed by a supervision and would have led on to a formal improvement plan to assist Mark to make improvements in this area. Mark left the service before this process was instigated."
- By way of balance it is important to underline that she also identified Mr Jackson's strengths in this way:
"Mark was able to form good relationships with members of his team and was willing to assist colleagues. He is familiar with the youth-offending recording system and has extensive knowledge of court orders and the requirements of these orders."
- The background to the change of view as to the applicant's weaknesses was explained by Mrs Griffiths in this way. One month after Mr Jackson had left she had met his team manager, Pat Keegan, who then highlighted concerns that had been brought to her attention by other members of the team who had taken over supervision case files relating to young people who had previously been supervised by Mr Jackson. The concern was that work and contact with certain individuals had not been carried out, although the records suggested that it had been. She asked for written evidence and received three emails from different social workers concerning four offenders. In the light of the judge's comments we set out the detail, albeit without identifying individuals concerned.
- The first concerned a girl of 14, made the subject of a nine-month referral order for attempted robbery to start on 28 June 2007. There was an issue whether a document had been completed, but, more significantly, although she had attended on five occasions, no offending behaviour or victim awareness work had been done. She had failed to attend a referral in relation to reparation, stating that she was ill, which explanation Mr Jackson had accepted without supporting evidence. The girl reported, noted as an allegation only, that Mr Jackson told her that she did not have to worry about completing any work.
- The second concerned a boy of 14 convicted of possessing an imitation fire arm and attempted robbery. The judge accepted this allegation concerned inaccuracy or misrepresentation of record-keeping. The review panel report in his case stated that he had attended a programme for the violent offenders group, although there was no evidence to confirm that he had done so and the boy denied it. Further, he and his mother (who always attended with her son because of his medical condition) insisted that he had only had contact with the youth offending service at the end of July 2007, whereas he was reported as attending on three further occasions in August and September.
- The third concerns another boy in respect of whom there was no evidence that he had done any offending behaviour work other than 19 out of 40 hours' reparation. There were two other referrals but no follow up appointments. When asked what he had done the boy said that he used to talk to Mr Jackson about cars.
- Finally, another boy reported that Mr Jackson advised that he could see two social workers on the same day and that this would count as two appointments. There was also an absence of information as to significant personal risk which should have led to the system being updated to ensure that it was noted that the police had advised against home visits.
- It is important to underline that these were reports and allegations only; none has been tested or proved. When the report surfaced, however, the Head of Service at Liverpool had to consider the position in the light of the fact that Mr Jackson had left the service. It was concluded that none could be investigated. When the request for the reference was made, Mrs Griffiths again consulted the Head of Service and so was advised on the answers to the request. Mrs Griffiths made clear in her statement (although, as I shall record, the judge does not comment on this evidence) that when she received the telephone call from the Head of Sefton's Youth Offending Team she explained the specific concerns but made it clear that as Mr Jackson had left his employ with Liverpool the allegations had not been investigated formally so that she was unable to answer the questions "in either a positive or negative manner". In fairness to Mr Jackson I add, as did the judge, that when he was asked about the most specific allegation he said that he was not responsible for carrying out this work and no evidence was adduced to contradict what he said. As to the other allegations, HHJ Gore considered the concerns entirely unparticularised and unspecific. It is sufficient if I indicate that it does not appear to me that what appears in the emails from the social workers which I have summarised justifies being criticised in that way.
- The judge concluded that Mrs Griffiths was being truthful when she said that concerns or allegations had been raised. The judge went on:
"Moreover, insofar as the existence of those concerns surface in the reference process by which he seeks alternative employment, I am also satisfied that she is correct when she says that the position was accurately represented to Sefton. Accurately represented in these senses: she did not raise any specific allegations against him, nor did she allege that any investigation had been undertaken or that he was guilty of any of the allegations or concerns. In other words, the furthest that this was represented as having gone was the existence of concerns or allegations."
- Turning to the law, the judge quoted from Harvey on Employment Law 14th Edition, paragraph 2281, in these terms:
"The general rule is that the employer is under no duty to provide a character reference for an employee or ex-employee […] But if he does provide a reference then he should take care to provide a reference which is true, accurate and fair, otherwise he may incur liability."
- The judge considered that the reference was true and accurate. In considering the question of fairness, he went on to say that Mrs Griffiths had not personally gone to the computer records to investigate or verify these concerns, although he recognised that the circumstances fell outside any established code or guidance or practice, given that Mr Jackson was no longer an employee. The judge also accepted that Mrs Griffiths had not decided that Mr Jackson was guilty of any impropriety.
- Judge Gore recognised that there were many reasons why it was not practicable to establish a formal investigation against the employee, but he observed that, although possibly ill advised, they could investigate or refuse to provide a reference at all. To the observation of Mr James Boyd, counsel for Liverpool, that failing to provide a reference might expose them to an action for breach of contract based on an implied duty to provide references for ex-employees, the judge observed that such was not the subject matter of the action and, in any event, could be answered by saying that outstanding allegations or concerns had not been investigated, thereby rendering inappropriate to provide any reference. For my part, I consider the first of these possibilities does not deal with the point, and the second is that such a course would have put Mr Jackson in a far worse position than that which he faced. In the circumstances which arose in this case Sefton could have asked Mr Jackson about what had been explained by Mrs Griffiths and he could have dealt with it. The complete absence of a reference would not have provided any mechanism for Sefton to check the position with him at all and would probably have given rise to concerns of far greater gravity.
- In any event, HHJ Gore concluded:
"I stand back from all of this and ask myself the question: even if the reference in the circumstance that I have described was true and accurate, was it fair? I answer that in the negative -- it was not fair. It was not fair because it carried with it an unanswered, uninvestigated, unparticularised, unspecified allegation implying he was unsatisfactory for employment, that as I have already found, caused an offer of employment to be withdrawn in circumstances where the applicant for employment, the claimant, had no opportunity to refute or answer it, and that in my judgment is not fair. It is not that the process is unfair but it makes the reference unfair, it makes the reference unfair, even though it might be true and it might be accurate and, if that is right, it does not satisfy the duty […] based on the summary proposition in Harvey"
- In this court Mr Boyd argues that the learned judge erred in his application of the correct approach in law and the test of whether a reference was accurate and fair when there were unresolved disciplinary issues relating to an ex-employee. In particular it is submitted that he misapplied the approach set out in Bartholomew v London Borough of Hackney  IRLR 246 and that he failed to consider whether taken as a whole the reference was misleading or inaccurate. In that regard he further submitted that the judge should have taken account of the telephone call between Sefton and Mrs Griffiths in which she explained in what he argues is a fair and non-judgmental way why the reference requests had been answered as it had been. Rather, so it is said, he approached the matter on the basis of what should have happened rather than whether or not, taken as a whole, what did happen led to the conclusion that the reference was true, accurate and fair.
- Acting in person with great courtesy, Mr Jackson submits that the judge was not wrong to approach the question in the way that he did. There were no unresolved disciplinary issues relating to him; Judge Gore had not accepted the term "allegations" but merely as "matters" which had not been particularised or specified; and the judge accepted his evidence that he was not responsible for any malpractice or wrongdoing. He argued that the judge was entitled to conclude that what Liverpool had done by leaving him with the matters hanging in the ether was unfair. In that regard the judge was right to distinguish Barthololmew v the London Borough of Hackney as covering a totally different set of circumstances. In that case, as Mr Jackson explained, Mr Bartholomew had contrived to produce a state of affairs in which there would be no adjudication, whereas Mr Jackson had done no such thing.
- It is necessary to go back to consider the underlying principles which were originally enunciated in Spring v Guardian Assurance  2 AC 296 in which the House of Lords held by a majority (Lord Goff, Lord Lowry, Lord Slynn, Lord Woolf, Lord Keith dissenting) that on giving a reference to an ex-employee in response to a request by an identified prospective new employer, the ex-employer owes a duty of care to the ex-employee, that the breach can give rise to a claim for pure economic loss and the possibility of such a claim is not excluded by considerations of public policy which favour candour in references.
- The facts are important for what was not decided by the case. The reference in Spring concerned an employee in the financial services industry and, having spoken of his behaviour towards members of the team, went on (recounted at page 306F):
"... his former superior has further stated he is a man of little or no integrity and could not be regarded as honest ... Since 1 January 1989, Messrs Spring and Parker shared all their commission earnings on a 50:50 basis and left owing the company some £12,000 in funding which to date has not been repaid. This matter is now in the hands of solicitors. The current lapse ratio is running at 18 per cent and this is only for policies written since March of this year. Since their departure, we have found a serious case of mis-selling where the concept of "best advice" was ignored and the policies sold yielded the highest commissions."
- In relation to the mis-selling the trial judge had concluded that Mr Spring had acted incompetently but not dishonestly with the object of securing greater commission and, furthermore, that in relation to the other allegations those who had provided the information forming the basis of the reference had failed to exercise reasonable care in respect of them, without carrying out a thorough investigation into their truth (which would have shown Mr Spring had not acted dishonestly). He found that the reference was:
"motivated by leaping to a conclusion – of dishonesty and lack of integrity – careless of the true facts of the case."
- There was thus no discussion about whether a reference factually correct as far as it went might still be unfair. Lord Goff put the matter in this way at page 320C:
"...in considering the duty of care owed by the employer to the employee, although it can and should be expressed in broad terms, nevertheless the central requirement is that reasonable care and skill should be exercised by the employer in ensuring the accuracy of any facts which either (1) are communicated to the recipient of the reference from which he may form an adverse opinion of the employee, or (2) are the basis of an adverse opinion expressed by the employer himself about the employee."
- Lord Woolf spoke of the "advantage of being (if it be appreciated) that you cannot give a reference which could cause immense harm to its subject without exercising reasonable care" [at page 352E] and in relation to the policy considerations which could be brought into play on both sides, Lord Lowry observed, at page 226B:
"On the one hand looms the probability, often amounting to a certainty, of damage to the individual, which in some cases will be serious and may indeed be irreparable. The entire future prosperity and happiness of someone who is the subject of a damaging reference which is given carelessly but in perfectly good faith may be irretrievably blighted. Against this prospect is set the possibility that some referees will be deterred from giving frank references or indeed any references."
- Against that background I come to Bartholomew v the London Borough of Hackney. That case concerned a reference sought some 15 months after the cessation of employment which had come to an end when the employee took voluntary severance having been suspended from work pending determination of a charge on gross misconduct. The agreement for voluntary severance was part of a compromise of ongoing proceedings before an Industrial Tribunal for racial discrimination, but also included a confirmation that upon termination of employment the disciplinary action that had been instituted would come to an end. When a new employer sought a reference, Hackney did no more than recite the fact that Mr Bartholomew had taken voluntary severance following the deletion of his post, explaining:
"At the time of his departure Mr Bartholomew was suspended from work due to a charge of gross misconduct, and disciplinary action had commenced. This disciplinary action lapsed automatically on his departure from the authority."
- In this court Robert Walker LJ ,with whom Butler-Sloss LJ agreed, discussed Spring, observing, having regard to the nature of the reference in that case, that there was:
"understandably hardly any discussion of any question of nuances or, as it might be put in terms of defamation law, innuendo which might stop a reference, while factually correct so far as it went, from being unfair."
- He cited Lord Goff and Lord Woolf in Spring and noted that almost any reference would consist of:
"…opinion based on facts, some of which are capable of more or less precise and objective measurement and others of which depend on much more subjective perceptions."
- Robert Walker LJ then approached the case on the basis that Hackney had a duty to give a true, fair and accurate reference, noting that:
"the libel cases seem to me to serve as a salutary reminder that the fairness or unfairness, the accuracy or inaccuracy, and, indeed, truth or falsity of a statement have to be taken in the round and in context and cannot be in every case dissected into a number of discrete parts."
- Robert Walker LJ then posed the question as to what Hackney was to do in order to fulfil its duty to provide a fair reference to Mr Bartholomew without being unfair or misleading to the recipient. He concluded that had it omitted all reference to suspension and disciplinary inquiry it might well have considered itself as failing in its civic duty to other local authorities, even though the charges were unproven. Recognizing that a reference was not given unfair or misleading impression overall, even if discreet components were factually correct, he did not consider it need to be full and comprehensive or that this particular reference constituted a breach of Hackney's duty of care to Mr Bartholomew.
- This decision clearly forms the basis of the extract from Harvey on Employment Law to which I have referred. Judge Gore distinguished Bartholomew on the basis that there were three options open to Liverpool. Although he recognised there were many reasons why, as a matter of law, good employer relations or sheer practicability, there would be concerns about establishing formal investigation into the conduct of an ex-employee, he concluded that the investigations could have been investigated and either substantiated or refuted with an appropriate reference to follow or a reference could be refused.
- For my part, in the context of an action in negligence, the recognition that investigation was fraught with legal and practical difficulty is significant. Further, the fact that another cause of action might result is not a feature to be ignored when considering how to proceed, and in any event such a course would have put Mr Jackson in a worse position than that which he faced. I repeat that Sefton could have asked Mr Jackson about what had been explained by Mrs Griffiths and he could have dealt with it satisfactorily or otherwise; the complete absence of a reference would have not provided any mechanism for Sefton to check the position with him and would have been likely to cause any employer to draw adverse inferences, and probably more seriously adverse inferences, and in consequence not maintain an offer of employment.
- Before us Mr Jackson recognised the force of the argument that the alternatives were not satisfactory. He argued that Liverpool should have looked into the complaints at the time they were made, albeit that he was no longer an employee. Having said that, he equally recognised the difficulty of so doing and, furthermore, there was more than enough work in Liverpool without investigating this type of allegation, rather perhaps than more serious allegations touching an ex-employee.
- The judge was concerned that Mr Jackson had no control; nothing he could do would extract himself from the dilemma which was the consequence of allegations in what he described were "largely unspecified terms", whereas Liverpool had the three possible causes of conduct which I have discussed above and which, to my mind, create different problems. It is for that reason that he described the references "true and accurate" as not fair.
- I go back to the reference which Mrs Griffiths provided, and in particular the answer to the questions: "Would you re-employ them? Do you know of any reasons why we should not employ the applicant?" and her comment upon the applicant's weaknesses. In one sense, the issues raised by three different social workers in relation to four clients were about more than recording and record-keeping, but the reference makes it clear that the upshot, and the only upshot, would have been a formal improvement plan rather than more serious disciplinary action. It also makes it clear that Mr Jackson left before any process was instigated. As the judge observed, that is both accurate and true, and for my part I do not see how the employer could honestly have answered the questions posed by the reference without identifying the concerns being raised. When Sefton contacted Mrs Griffiths directly she identified the specific concerns, but equally underlined that there had been no formal investigation at all, with the result that she could not answer the question in either a positive or a negative manner. It was then a matter for Sefton whether it wished to raise these issues with Mr Jackson to give him a change to deal with them.
- Contrary to the view of the judge, who did not mention the discussion between Mrs Griffiths and Sefton in his judgment but observed in argument that he did not consider it relevant, in my judgment the conversation between Mrs Griffiths and Sefton is highly material and is in reality an integral part of the overall reference which Liverpool provided. It is important to bear in mind that Spring identified the existence of a duty of care owed by an employer to an ex-employee but that the nature of the duty remains based in the law of negligence. Accuracy and truth go to the facts which form the basis of the reference. In my judgment, fairness goes to the overall balance of the reference and any opinion contained within it. Going back to Lord Goff in Spring, the central requirement is that reasonable care should be exercised in ensuring factual accuracy communicated to the recipient from which he may form an adverse opinion or on the basis of an adverse opinion expressed by the employer himself.
- Fairness, according to Robert Walker LJ in Bartholomew, related to the nuances or innuendo which might be drawn from the factual assertions. That is different from requiring fairness in the form of some procedural mechanism which might permit the ex-employee to challenge an adverse opinion. In my judgment, Judge Gore was using the concept in this latter sense rather than the former.
- It might be, as the judge appeared to suggest, that when the request for the reference came to hand and the issue of concerns had to be addressed, Mrs Griffiths could have contacted Mr Jackson, told him what had been said and asked for his comments, but in reality it is difficult to see how this issue could have been resolved; in any event, it would inevitably have taken considerable time which, in the context of an inquiry for a reference, is unlikely to have been available.
- In my judgment Liverpool cannot be criticised for providing a reference and cannot reasonably be criticised for including within it a cautionary remark based on allegations that had been made by three social workers themselves based on what four young people had independently said in at least one case supported by a parent. The account of these persons had not been tested and was certainly not being taken as true, but it was made clear on the telephone that the allegations had not been investigated. The judge accepted that the written reference was true and accurate; taken together, the reference and the subsequent telephone conversation were careful and, in my judgment, by no stretch of the argument unfair.
- In the circumstances, although I emphasise my sympathy for Mr Jackson and the position in which he found himself, I would allow the appeal.
Lord Justice Richards:
- I agree.
Lord Justice Maurice Kay:
- I also agree. It follows that the appeal is allowed.
Order: Appeal allowed
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