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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Johnson v The Medical Defence Union Ltd (2) [2006] EWHC 321 (Ch) (03 March 2006)
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Cite as: [2006] EWHC 321 (Ch)

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Neutral Citation Number: [2006] EWHC 321 (Ch)
Case No: HC03C00538

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL
3rd March 2006

B e f o r e :

THE HONOURABLE MR JUSTICE RIMER
____________________

Between:
DAVID PAUL JOHNSON
Claimant
- and -

THE MEDICAL DEFENCE UNION LIMITED
Defendant

____________________

Mr Martin Howe QC and Mr Ashley Roughton (instructed by Withers LLP) for the Claimant
Mr Richard Spearman QC and Miss Jacqueline Reid (instructed by Fladgate Fielder) for the Defendant
Hearing dates: 19, 20, 21, 24, 25, 26, 28, 31 October, 2 and 3 November 2005

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    MR JUSTICE RIMER :

    Introduction

  1. The claimant is David Paul Johnson. He is a consultant orthopaedic surgeon. The defendant is The Medical Defence Union Limited ("the MDU"). The MDU is a mutual society which provides its members (who are principally in the United Kingdom and Ireland) with a range of discretionary benefits in the nature of advice and assistance. Until July 2000, it also provided them with discretionary professional indemnity cover, although since then such cover has been provided by an insurance policy underwritten by an insurance company for which the MDU's subsidiary company has acted as agent.
  2. Mr Johnson was a member of the MDU from 1980 to 1985 and again from 1 October 1986 to 31 March 2002. He has never been the subject of a claim for alleged professional negligence. Over the years he has, however, sought advice and assistance from the MDU in relation to professional questions and problems that concerned him, including complaints made against him. His contact with the MDU, and that from others about him, gave rise to the opening (at least since 1991) of 17 MDU files.
  3. On 17 January 2002, the MDU wrote to Mr Johnson advising him that it had exercised its discretion under article 11(a) of its Memorandum of Association to resolve not to renew his membership after 31 March 2002, when his then current annual subscription would expire. The letter gave no reasons. Mr Johnson sought the reasons, but none was provided.
  4. Mr Johnson was shocked. He had been given no forewarning of the possible termination of his membership. The immediate consequence of what he regarded as his "expulsion" from the MDU was the automatic termination of his professional indemnity cover, a serious thing for a professional person. He was able to obtain prompt alternative cover from the Medical Protection Society ("the MPS"), being cover of the like discretionary nature as the MDU had provided until July 2000 (the MPS does not provide its members with indemnity cover under an insurance policy). But he claims that his expulsion has caused him significant damage of a wider nature. He says he has had to disclose it to hospitals where he has, or has since sought, admitting rights or employment; and he asserts that it reflects that he was regarded by the MDU as a serious risk to its funds, which he says is likely to have had a chilling effect on hospitals who became aware of it. He claims it has damaged his professional reputation. He now asks to be compensated. His claim for compensation is brought under section 13 of the Data Protection Act 1998 ("the DPA") and is founded on the assertion that his expulsion was the consequence of the MDU's unfair processing of his personal data.
  5. The MDU disagrees with every step in his case. But perhaps its main point is this. It says that over the years Mr Johnson was involved in, or was the subject of, a number of incidents and allegations in the course of his professional life, of which he and others made the MDU aware. By May 2001, his track record had caused the MDU's risk management department to carry out a risk assessment review in relation to him. That involved an assessment of the various incidents and allegations, with particular features of his case history also being scored by reference to a standard form system that the MDU applies to its members under its risk assessment policy. Mr Johnson's score was at a level which, in accordance with that policy, justified consideration of his future membership of the MDU by a committee of senior clinicians. The outcome of that consideration was the termination of his membership. The MDU's position is that the termination was properly in line with the operation of its risk assessment policy.
  6. More particularly, the MDU's position is that its risk management policy, of which the scoring system is part, is not dependent on any allegation against the member being well founded, a question which the MDU does not attempt to answer. It depends simply on the fact that the allegation was made: the MDU does not endeavour to investigate its merits. It applies the same policy to all its members. If (which it disputes) it processed any of Mr Johnson's personal data whilst carrying out its risk assessment in relation to him, it asserts that he consented to it, that he knew that his data was liable to be processed for the MDU's risk management purposes and that the processing was in line with its established policy and was fair. It emphasises that it is a non profit-making body, with a duty to protect its funds in the interests of all members, and it asserts that the termination of Mr Johnson's membership was a decision responsibly made by it in the performance of that duty. It emphasises that, under its contractual relationship with Mr Johnson, it had an absolute discretion to terminate his membership.
  7. Mr Johnson's riposte to that is that a risk management policy geared to an assessment of risk by reference to a catalogue of allegations and what he says is an irrational and arbitrary scoring system is inherently unfair. He says that the MDU should have brought his side of the allegations and incidents into consideration and taken account of it when engaging in the risk review. The MDU's unfair failure to do so is said to have been reflected in the manner in which it processed his personal data whilst performing its risk review and entitles him to statutory compensation for the damage to him to which he says it ultimately led. He accepts that the MDU had an absolute discretion to terminate his membership, but his case is that, but for the unfair processing, the decision to terminate it would not have been made.
  8. The central questions which I have to decide are, therefore: (i) did the risk review involve any processing of Mr Johnson's personal data; (ii) if it did, was the processing unfair; (iii) if it was, has it been shown that, if the processing had been fair, the termination decision would probably not have been made; (iv) if Mr Johnson succeeds thus far, to what (if any) compensation is he entitled? The answer to each question is in issue.
  9. It is fair to note that Mr Johnson's case is an apparently exceptional one. I was told that the MDU currently has about 160,000 members. The evidence was that in 2002 there were 26 risk review references (including Mr Johnson's) to the MDU committee which considers such matters. The committee recommended that 16 of the referred members (including Mr Johnson) should not have their membership renewed, and that was the decision that the MDU's Board of Management made in each case.
  10. Mr Johnson – background

  11. Mr Johnson was inspired into a medical career from his youthful experience playing what he called semi-professional basketball, in which he gained an England Junior Cap and later played for English and British Universities. He became exposed at an early stage to the world of sports injuries and knee surgery. He attended medical school at Manchester University, spending part of his fourth year undertaking sports injuries experience at the University of California. He graduated from Manchester in 1980 with MB and ChB degrees. He trained for six months in general and orthopaedic surgery at Park Hospital, Manchester and did six months accident and emergency work at Wythenshawe Hospital, Manchester. He passed Part I of the MRCP examination in July 1981, Part I of the FRCS examination in January 1982 (which he said only about 7%, including him, pass first time), the US Visa Qualification Examination in July 1982 and Part II of the FRCS examination in 1984, saying that in his year the pass rate was four (including him) out of 67.
  12. He is now a consultant orthopaedic surgeon practising out of St Mary's Nuffield Hospital, a private hospital in Bristol owned and run by the Nuffield Hospital Group. All surgeons have to practise from a licensed institution. In the private sector, where Mr Johnson practises exclusively, this is usually a private hospital which provides admitting and practising privileges to the surgeon. These privileges have to be regularly analysed and reviewed. Mr Johnson has been working with Nuffield for 12 years and exclusively out of St Mary's for seven years. On average, each week he works on about four operations, has about ten out-patient appointments and provides one medico-legal report. His cases are all concerned with orthopaedics, especially joint replacement, knees and sports injuries. His practice now relates to very specialised areas, where he says his research is world recognised, such as surgery for patellar tendonitis and anterior knee pain. It derives from what he calls a trickle of referrals from GPs; from other orthopaedic surgeons; and some patients come to him directly on recommendations. He currently does little research work, but has done a considerable amount in the past: his CV is testimony to that. It has not been questioned in these proceedings that Mr Johnson is a competent and successful surgeon. He says, however, that since 2003 the number of patients referred to him has fallen, although he has not presented any supporting proof of that or produced any material showing a downturn in income since then.
  13. Mr Johnson became a member of the MDU on 9 July 1980, when he was a fourth year medical student undertaking locum house officer's positions. He said it was his then understanding that MDU membership provided insurance cover that was maintained throughout a doctor's professional career and into his retirement. If that was his understanding, it was imprecise, as I shall explain. His membership lapsed on 31 July 1985 when, following his move to Oxford, he delayed paying his renewal subscription. It was, however, restored on 1 October 1986, after which it continued until it was terminated on 31 March 2002. When he rejoined in 1986, he did so expressly "in accordance with the Memorandum and Articles of Association" of the MDU.
  14. The MDU – background

  15. The MDU is a company limited by guarantee which was incorporated in 1885 and whose members are mainly medical practitioners. It is a mutual organisation run for their benefit. In May 2000, its records and systems were transferred to MDU Services Limited ("MDUSL"), in which the MDU holds 75% of the ordinary shares and 50.1% of the voting shares. Since then MDUSL has, as agent for the MDU, provided various services to MDU members, including advice and assistance of a medico-legal nature. It is a nominated representative of the MDU for the purposes of the DPA.
  16. The constitution of the MDU is contained in its Memorandum and Articles of Association, which bind its members to the same extent as if they had respectively been signed and sealed by each member (section 14 of the Companies Act 1985). The latest version relevant to these proceedings was adopted by a special resolution of 14 September 2000. The main objects of the MDU in its Memorandum include (by reference to the numbered paragraphs of the Memorandum, although this is a major paraphrase): (i) the promotion, support and protection of such categories of medical practitioners involved in the practice of medicine as are eligible for membership; (ii) the promotion of high standards of professional practice; (iii) the giving of advice or legal assistance to members who may seek advice or who are or are likely to become involved in litigation or disputes in relation to their professional activities; (iv) the indemnification in whole or in part, on such terms as may seem expedient, of members from liabilities and losses arising from claims made against them in relation to such activities; and (x) the provision to members of advice, assistance or services on any matters relating to their professional or business affairs. The Memorandum provides that the MDU's income and property are to be applied solely to the promotion of its objects.
  17. The provisions of the MDU's Articles of Association of primary relevance are in the section headed "Members" in articles 4 to 15. Article 4 empowers the Board of Management ("the Board") to specify the categories of persons eligible for membership of the MDU. Article 11 provides:
  18. "11. The Board of Management shall be entitled in its absolute discretion
    (a) and subject only to giving 42 days' prior notice to the member of its intention to do so to refuse to renew the membership of any member with effect from the date on which that member's current subscription expires ('the expiry date') and in such event at the end of the expiry date such member shall cease to be a member of the MDU
    (b) to terminate the membership of any member by not less than 14 days' notice given at any time and, in such circumstances, a due proportion of that member's subscription (if any), reflecting the period from the date of such termination until the expiry date, shall forthwith be refunded to that member by the MDU."

    Mr Johnson's membership of the MDU was terminated under article 11(a).

  19. I should refer to article 14, although it is of only minor relevance:
  20. "14. If any member or applicant for election to membership or any group to which the member belongs makes default in any payment of whatsoever nature due to the MDU then if such default shall continue for 30 days after such payment shall become due the member shall, unless the Board of Management at any time otherwise determines, cease to be a member."

    It was under that provision that Mr Johnson's membership of the MDU lapsed in 1985, although it was renewed in 1986.

  21. Finally, I should refer to article 46, dealing with the power of the Board to delegate its powers. The decision to terminate Mr Johnson's membership was made by Dr Christine Tomkins, a Board member, acting under a delegated power. Dr Tomkins is the MDU's Professional Services Director. She had joined its Medical Secretariat in 1985, became Head of Claims Handling in 1993 and was appointed to her present post in 1995. Article 46 provides:
  22. "46. The Board of Management may delegate any of its powers to any committee or sub-committee. It may also delegate to any member of the Board of Management or employee or agent such of its powers as it considers desirable to be exercised by such person. Any such delegation may be made subject to any conditions the Board of Management may impose and either collaterally with or to the exclusion of its own powers and may be revoked or altered."

    Benefits of MDU membership

  23. I should first say something about professional indemnity insurance for doctors. Doctors working within the NHS hospital service are covered by a state indemnity scheme for claims arising out of their NHS practice. The risk of claims arising out of any private practice they may conduct has to be covered by professional indemnity insurance. Down to July 2000, professional indemnity cover was provided by the MDU to its members, although only on a discretionary basis. That is, whilst in practice the MDU would indemnify its members against claims, it assumed no contractual obligation to do so: the MDU is not an insurance company
  24. In July 2000, that position changed when one of the benefits of membership enjoyed by MDU members included a policy of professional indemnity cover. Cover for UK members was provided by Zurich Insurance (Irish members had the benefit of an Eagle Star policy). MDUSL, also part-owned by Zurich, acted as the members' agent for this purpose. The change was an important one: indemnity cover was no longer provided at the discretion of the MDU, it became a matter of contractual right. This brought doctors into line with most doctors practising in mainland Europe and the USA, the majority of whom were covered by insurance. The premium the member pays for such cover comes out of his MDU subscription. The cover is written on a "claims made" basis: that is, it covers claims made during the policy year regardless of the date of the occurrence occasioning the claim. The cover is in respect of medical negligence claims, but not matters such as General Medical Council ("the GMC") inquiries or other non-claim matters.
  25. The institution of the new indemnity arrangement in July 2000 obviously reduced the potential for calls on MDU funds in respect of medical negligence claims, including for occurrences pre-dating July 2000 and giving rise to claims made later. It did not, however, extinguish it. Cessation of MDU membership automatically also terminates the separate insurance cover (as in Mr Johnson's case). In such cases, the MDU remains answerable (but only on a discretionary basis) for claims subsequently made against a doctor who was an MDU member at the time of the occurrence occasioning the claim. Thus, in Mr Johnson's case, if a claim were now to be made against him for alleged professional negligence in respect of occurrences during his MDU membership, it would be to the MDU that he would look for an indemnity; and the fact that he ceased to be a member of the MDU at the end of March 2002 would not prevent him from claiming it. It is a fact of medical life that a claim is often made long after the occurrence said to have given rise to it. In short, the discretionary indemnity benefits, as well as all other benefits, of membership of the MDU are and have always been provided on an "occurrence" basis rather than a "claims made" basis.
  26. As regards the indemnity cover that the MDU still so provides to former members, it is, therefore, important to note that it remains strictly discretionary. Dr Tomkins acknowledged that the expectation of former members is that the discretion to indemnify them would be exercised in their favour, but there have been cases in which it has not. Mr Johnson's evidence in cross-examination was that, for all practical purposes, he regarded the MDU as having no discretion in the matter and that he had never heard of an instance in which the MDU had decided not to indemnify a doctor in a medical negligence claim. In fact, the MDU had written to him on 1 December 1997 explaining that it was not an insurance company and that its assistance to members was discretionary.
  27. Dr Tomkins was asked during her oral evidence about the incidence of claims arising in Ireland out of the birth of children with cerebral palsy. The claims have been against obstetricians and have resulted in the recovery of substantial damages. They have caused great concern over recent years. Dr Tomkins accepted that in 2004 the MDU had declined to provide assistance and indemnity to some 11 consultants in relation to such claims (presumably they were not entitled to insurance cover). The situation had arisen because it had become apparent that the MDU had raised insufficient subscription money in the past to fund the cost of such claims: and by 2003 the statistics showed that perhaps 150 children with cerebral palsy would be born each year in Ireland. The MDU's experience by then was that some 20 to 30 cases could be expected to be litigated each year, of which about eight would attract damages then running at between 3 million and 4 million euros: the MDU had not predicted in the distant past how claims in such cases would escalate. An example given was that a claim that settled in 2001 for 1.5m euros would, by 2004, settle for twice that. The situation in Ireland had for some time been regarded by the MDU as a crisis, which it hoped the Irish government would take steps to meet. Dr Tomkins agreed that the MDU's refusal to provide its discretionary indemnity in respect of certain Irish claims had given rise to a legitimate apprehension on the part of consultants but also said that she did not regard the MDU's stance with regard to meeting claims for indemnity by Irish obstetricians as comparable to the way in which it would exercise its discretion to meet an indemnity claim by an individual English consultant practising in a different area, such as an orthopaedic surgeon. I add that I was shown a copy letter dated 22 February 2005 from the Secretary General to the Irish Government and addressed to the Secretary General of The Irish Hospital Consultants Association recording in welcome terms that the Government "… has today endorsed the Tanaiste's position on the issue of cover for past liabilities of consultants arising from decisions by the [MDU] to withdraw cover, namely, that no person who has suffered from a medical mishap in Ireland would be left without compensation and no consultant would be left without cover in all reasonable circumstances and in accordance with law."
  28. The provision of discretionary indemnity cover is not the only benefit that the MDU provided until July 2000 and which it continues to provide in the circumstances I have mentioned. It is, and always has been, also a key part of its functions to provide advice and assistance to members in relation to problems that may concern them in connection with their professional life, and this may also entail the incurring of expense on the member's behalf. The MDU classes its work as "advisory" when it relates to a matter not directly affecting a patient (for example, advice on a general question of principle), being a matter which is not likely to require any legal advice and where there is little prospect of any indemnity or expenditure; and as "assistance" when the help sought relates to a patient-related problem and may involve a requirement for legal advice or assistance. The legal advice or assistance the MDU provides may include advice from outside lawyers or the provision of legal representation in relation to a complaint made to the GMC.
  29. As regards complaints to the GMC, the first stage is a screening stage. The complaint is considered in order to see whether it raises a serious matter. The doctor is notified of the complaint and may, if he chooses, respond by letter. The outcome of that stage is that the complaint may or may not proceed further. Dr Tomkins's evidence was that in 2002, for example, only about 13% of some 4,500 complaints to the GMC went beyond the initial screening stage to the Preliminary Proceedings Committee. Her evidence, again in reference to 2002, was that it was unusual for a doctor to be the subject of a complaint to the GMC, and even more unusual for any such complaint to filter beyond the initial screening stage. It is only if it passes that stage that it has been adjudged to have at least something to it. If it does proceed to the Preliminary Proceedings Committee, the MDU will then usually instruct solicitors on behalf of the doctor. The Preliminary Proceedings Committee may itself screen out the complaint; or, if there appears to be something serious in it, may refer it to the Professional Conduct Committee, the Health Committee or the Interim Orders Committee.
  30. I was referred to some of the MDU's publicity material. It describes the MDU as "the market leader" whose "sole purpose is to serve our members and that is why we pride ourselves on providing the best and most personal service to you." It says that "We may not be the cheapest, but we aim to be the best." It includes extracts from letters from grateful doctors for its help, attention and advice. Its brochure includes smiling, understanding faces. It conveys that it is there to provide help to doctors on a 24-hour basis and is a mere telephone call away. What it does not convey is that if the doctor picks up the telephone as often as Mr Johnson did, he may – without any warning - one day find a letter on his doormat terminating his membership. In cross-examination, Dr Tomkins said that whilst the MDU's annual report would encourage doctors to contact the MDU if they were concerned about any circumstances or adverse incident, there was no obligation on them to do so; and if, for example, a doctor failed to report any circumstances which might give rise to a claim or complaint, and one did later arise, the MDU would not close its doors on him merely because he had not earlier made a report.
  31. It is worth quoting from this material. It is said to be a 2005 document, and the MDU did not admit that like material was published during the prior period with which this claim is concerned. I will, however, set out some extracts so as to give a flavour of what the MDU offers (the emphasised parts are as in the original):
  32. "Today, more than ever, you need MDU membership
    Today's doctor works in a litigious and increasingly regulated environment. In the last 10 years the number of complaints to the [GMC] has risen significantly, as have performance reviews by hospital trusts. While many doctors, particularly at the beginning of their career, do not believe they will ever face these threats, statistics show that every doctor is likely to have at least one claim or complaint made against them during their career.
    By joining the MDU, the world's first and longest standing medical defence organisation, you can gain access to the finest personal support available to defend you when need it most.
    You can rest assured that should you receive a complaint or are subject to a disciplinary investigation, you can ask for the assistance of fellow doctors. We are just a telephone call away.
    Furthermore if that complaint turns into a criminal negligence claim [sic: there is no mention of a civil negligence claim, which is presumably to what the material is really referring] that is not covered by NHS indemnity, you have the peace of mind of knowing that you have, as an integral part of MDU membership, a policy of insurance, underwritten by Converium Insurance (UK) Ltd, which can indemnify you up to £10 million subject to the terms and conditions of the policy.
    MDU membership is not only for when times are difficult. To help you understand the law and your ethical requirements, you can access the MDU's range of risk management tools and advisory publications, while to assist with your professional development you can make use of our helpful educational support programme, and our extensive website of articles and case histories.
    More UK doctors are members of the MDU than any other medical defence organisation. We look forward to welcoming you into membership soon."
  33. Mr Johnson would agree with the comment about the litigious nature of the current environment. His evidence (which was consistent with the MDU's experience) was that doctors working in his field of orthopaedic surgery face a higher incidence of claims than those in most other fields, his assessment being that (unlike himself) most of his colleagues have had claims against them. The brochure also lists certain of the particular advantages of membership of the MDU, as follows:
  34. "24-Hour telephone advice on the ethical and legal aspects of clinical practice provided by specially trained doctors, dentists, nurses and lawyers
    Support with [National Clinical Assessment Authority] investigations
    Support in preparing a case and representation at [Primary Care Trust], NHS trust and disciplinary hearings
    Support in responding to a complaint and representation at GMC hearings
    Support with CHRE referrals to the High Court as a result of a GMC decision
    Support in preparing responses to patients' complaints
    Support with criminal investigations and proceedings arising from clinical practice
    Support in preparing a case and representation in a Coroner's Court
    Advice and representation in dealing with the press or media enquiries …
    Insurance cover for Good Samaritan acts worldwide
    Indemnity for claims arising out of fee paying services (Category 2 work) such as preparing insurance reports
    Insurance cover for claims arising from private work (at no extra charge, up to £7,000 income per annum, subject to type of work)
    Should your private income exceed £7,000, you can request for your cover to be extended …
    In addition, MDU membership can provide you with:
    Invaluable advice
    Advice to help you avoid common pitfalls of practice and to keep you up-to-date on medico-legal issues, including:

    Mr Johnson's membership of the MDU

  35. Mr Johnson's annual subscription to the MDU was £5,600 for the year ended 31 March 1998, and it increased in each subsequent year until his last year (that ended 31 March 2002), when it was £10,000. The premiums he paid reflected that his practice was exclusively a private one; and they provided the full range of cover for him that the MDU offered, including, after July 2000, indemnity insurance cover via MDUSL. They also reflected a weighting that the MDU attaches to the doctor's specialty according to its position on the risk scale. For example, obstetrics (not Mr Johnson's field) is a high risk area and orthopaedics (which is) is regarded as a fairly high risk area. Dr Tomkins's evidence was that the MDU's experience showed that an orthopaedic surgeon could expect one professional negligence claim every ten years. Mr Johnson, however, had attracted none. Dr Tomkins gave some evidence as to the incidence of claims against orthopaedic surgeons in private practice over the 15-year period from 1990. 49% had not been the subject of any claims and 51% had had at least one claim. Of those claims, the MDU paid out on 22% of them. The others proved to have no merit. An MDU review of private orthopaedic claims carried out in 2002 of a prior ten-year period focused on 192 claims that had led to £16.6 million being paid out in compensation and legal costs, making orthopaedics the most costly private surgical specialty after obstetrics. Claims relating to lower limb surgery were the most prevalent, with spinal claims (although less frequent) being the most expensive in costs and damages. The most common procedure to be performed on the wrong side was arthroscopy. The report found that "Cases commonly arose through incorrect marking of the operative site, either because the patient was not involved in identifying the site or because members of the surgical team did not communicate clearly with one another."
  36. The MDU's practice was to send its members an annual renewal invitation, containing relevant renewal information. Mr Johnson paid his annual subscription by direct debit and so it was not necessary for him to sign and return the invitation. The only renewal invitation I was shown was that sent to him in about March 2001 (just before the due date for the renewal of his subscription for the year commencing 1 April 2001). It is not suggested that Mr Johnson actually read all of it or applied his mind to what it said, but it is admitted that it was a notification to him of its terms. They contain the following provisions, which are relevant to the issue as to whether he consented to the processing of his personal data by the MDU and MDUSL for their own risk management purposes and whether he was informed they were to be used for those purposes. I shall later refer to this as "the processing agreement":
  37. "I agree that by renewing my membership I consent to [MDUSL], the MDU and the Zurich Insurance Company processing information about me, including sensitive personal data, (Personal Data) for administration of my membership, the insurance policy and indemnity claims, risk management, marketing and advisory purposes. I consent to [MDUSL], the MDU and the Zurich Insurance Company disclosing my Personal Data to legal advisors, regulatory bodies, the Compensation Recovery Unit and to other medical defence organisations as part of their advisory and claims handling process as well as to third parties.
    I consent to the transmission of my Personal Data overseas.
    I acknowledge that I have the right to apply for a copy of my personal data (for which [MDUSL] may make a small charge) and to have any inaccuracies corrected." (My emphases in both places: these words are relevant to the later discussion)

    The MDU's risk assessment practice and policy

  38. Dr Stephen Green has been head of risk management for the MDU since 1994 (he is actually employed by MDUSL). He qualified as a medical practitioner in 1975 and, after various hospital training posts, trained as a general practitioner. He practised as a GP until March 1992, when he joined the MDU as a medico-legal adviser. In 2002, he was working full time for the MDU, but he has since resumed part-time practice as a GP. He explained that the MDU has, it considers, an obligation towards all its members to protect its funds and regards it as prudent to have an internal procedure for carrying out risk assessments with regard to members about whom it has concerns. That procedure in relation to any member involves a consideration of his case history, which is contained in files opened by the MDU (or MDUSL on its behalf) following any contact made with the MDU either by the member himself or by another member in relation to him. Such contact will typically be made in circumstances in which the member seeks advice, assistance or insurance indemnity. A file will normally only be opened in relation to cases in which correspondence in relation to the matter is already in existence and is provided to the MDU. Dr Green explained that his department also provides and advertises a clinical risk-management service to MDU members and he accepted that it had been doing so since at least about the mid 1990s.
  39. The MDU's risk assessment procedure in operation by 2002 (when Mr Johnson's membership was terminated) dates from early 1998, when the MDU executive first implemented a formal procedure directed at identifying and assessing members whose membership might represent a disproportionate risk to MDU funds. Dr Tomkins said that the MDU had been giving thought to a risk assessment procedure since 1994. Dr Green, as head of the risk management department, had a central role in its formulation. The procedure was based on the MDU's experience of the underlying risk factors in complaints and claims reported by members. In devising the procedure, the MDU identified common features in cases reported by members which might be regarded as assisting as an early warning system of future losses. This was regarded as important because the benefits of MDU membership were and are provided on the "occurrence" basis I have mentioned. In time, the risk review process became carried out by MDUSL, but nothing turns on that.
  40. Dr Green produced in evidence a document headed "Risk Assessment Procedure", which he said dated from May 1998 and was the subject of amendments resulting in a final version dated April 1999. It formed the core of the MDU's risk review policy but is drawn only in very general terms. It opens by stating that some members present a disproportionate risk to MDU funds and can be identified in a number of ways, and it gives three generalised explanations of how they might do so (including "having an unfavourable track record of claims/complaints/disciplinary matters"). It summarised the essence of the review procedure, including the scoring of the subject member. It regarded a score of up to 49 as representing a low risk; one of 50 to 74 as medium risk; and one of 75 and above as high risk. Cases with scores of over 50 were referred to the Risk Assessment Group ("the RAG"), a committee of medical practitioners appointed by the Board. The RAG's function was to consider the subject member's case, and make recommendations to the Board as to how it should be dealt with, and the document summarised the options so open to the RAG. It suggests that only a score of above 80 will deserve a recommendation of article 11 treatment. As I shall explain, Mr Johnson's score was exactly 80. It is not, however, said that this undermines the lawfulness of the recommendation that the RAG made in his case, namely that his membership should not be renewed after his subscription expiry date of 31 March 2002. Mr Johnson expressly disclaims any criticism of the fairness of the RAG's procedure or recommendation, or indeed of the ultimate decision itself, which was made by Dr Tomkins acting under a delegated power from the Board. His case is built exclusively on the assertion that the recommendation and decision were probably inevitable given the material with which the RAG was presented and that the real problem was that that material had been unfairly processed at an earlier stage. His case focuses on that earlier stage.
  41. The 1998 document provides little detail as to the risk assessment procedure that was devised and has in practice been operated since then. The procedure was more fully explained in the evidence. It involves the completion in relation to the subject member of three documents: a Risk Assessment Review form ("the RAR form"); a pro forma score sheet ("the score sheet"); and a Risk Assessment Group sheet ("the RAG sheet"). The work is carried out by an MDU risk manager. In an appropriate case, the completed documents will all be referred to the RAG for consideration. Dr Green's evidence was that about 50% of members who are the subject of a risk assessment review have their cases referred to the RAG. It was still the practice of the MDU in 2001 and 2002 (when Mr Johnson's case came up for review) that a score of 50 or more was the level at which there would be a reference to the RAG, but Dr Green said that in cases where special factors were present there could be a reference even if the score was lower (for example, if it turned out that the member had provided misleading information to the MDU when applying for membership). The review of a member may lead to one of several outcomes: for example, (i) he may be notified under article 11(a) that his membership will not be renewed after the expiry of his current subscription; (ii) his membership may be terminated under Article 11(b); or (iii) he may be retained on the adverse risk register, with any instances of further contact being closely monitored. I now refer in more detail to the RAR form, the score sheet and the RAG sheet.
  42. The RAR form

  43. The completion of the RAR form is based on files opened in respect of the member. It will contain a summary of the member's case history. Any allegation, claim or complaint in respect of a member which is the subject of contact by that member with the MDU will generally have resulted in the opening of a file in the member's name. These files are so-called "lead files". Files opened with respect to like contact made by another member, but in which the member in question is also identified, are known as "non-lead files". The files are regarded by the MDU as the member's case history. When a file is opened a brief summary of the nature of the matter with which it is concerned is given to it. This is known as the "day one summary." When a risk manager is required to consider a particular member, he will consider the day one summary in relation to each file and will also review some or all of the underlying files, which will be held either in electronic or manual form. The usual practice is for review managers to consider the member's files over the previous ten years or, if there is a significant number of them, then at least the last ten files. Both assistance and advice files will be reviewed, the task being to identify potential risk factors. The risk manager will make summaries of his review in the RAR form and may add his own observations on matters that occurred to him in his review.
  44. Dr Green made it clear, as did all the MDU witnesses (in particular, Dr Roberts, the risk manager who dealt with Mr Johnson's case), that it is no part of the review procedure for the risk manager, or anyone else, to form or express a judgment on the truth or otherwise of any allegations against the member recorded in the files. If the outcome of a particular allegation is known, it will be included in the review, but it will not always be known: the member may not have reported it. Even if the outcome is known and favourable, that is not regarded as a factor material to the risk assessment exercise. The MDU's risk assessment policy is based on the principle that it is the nature of the allegation or the incident, not its ultimate outcome, which is regarded as potentially relevant. It is the fact that an allegation has been made that is regarded as predictive in terms of future risk to the MDU's funds; and the rights or wrongs of the particular allegation or incident are regarded as immaterial. The purpose of the procedure is to identify markers for future potential risk. Dr Green did, however, also make clear in cross-examination that the allegations are looked at in the context in which they had been made and that the RAR form would set out that context. He said that it would seem to him to be unfair if the form merely set out a list of allegations, with no other information at all.
  45. The MDU's experience in these respects is, as Dr Tomkins further explained, that the making of a claim or complaint, regardless of its merits, can be a marker of the likelihood of a future claim or complaint. The MDU engages in no attempt to establish the validity or otherwise of the allegation when engaging in a risk assessment review in relation to one of its members, or to assess blame or culpability, although if, by the time of the review any claim is a settled claim (that is, the MDU has made a payment), the MDU will take into account the fact of the settlement. In practice, it is obvious that the MDU could anyway rarely, if ever, conclusively investigate the merits of an incident or an allegation. The MDU's policy has been developed against a background in which the MDU's experience has taught it that there is no direct connection between clinical incompetence and the making of a claim or complaint. There are many doctors – the so-called "benign incompetents" (long on bedside manner, charm and communication skills but short on clinical skills) - who pose a risk to their patients but who will never suffer a complaint or claim; by contrast, a doctor who is clinically highly competent can attract claims; and there is often a long time-lag between the occurrence and the claim. Dr Tomkins referred to a study by Charles Vincent who had analysed some 8.5 million hospital admissions in three specialities and their related clinical records and had estimated that there had been avoidable adverse incidents in 5% of the cases, or in relation to 425,000 patients. But there had not been 425,000 claims or complaints.
  46. Dr Tomkins accepted that it is possible that the consequence of the policy is that a doctor who has been unlucky in terms of the incidents, complaints and claims in which he has become involved, but who may in fact have done nothing wrong, could find himself excluded from the MDU. She also accepted that the members are not told the nature of the MDU risk assessment policy but pointed out that they do have a copy of the memorandum and articles of the MDU, article 11(a) of which makes it clear that the MDU has an absolute discretion not to renew a member's membership. She said the MDU had also always made clear to its members that the benefits of membership are discretionary and that (prior to 2000, since when members have had the benefit of a policy of indemnity insurance) it did not invariably indemnify members against negligence claims. She accepted, however, that the general expectation of MDU members was that, even though the MDU had a discretion in the matter, its policy was never to exercise the discretion against them in respect of medical negligence claims. She regarded the Irish cerebral palsy cases as exceptional ones.
  47. It was put to Dr Tomkins in cross-examination that a fairer way of summarising the files would be to include a brief summary of the member's response to the allegation against him. She rightly accepted that that could be done, and accepted that the member might perceive it to be a fairer approach but she disagreed that it would in fact be fairer to the member if it was done. The inclusion of the member's comments would still not enable the RAG to form a judgment on the merits or otherwise of the claim. They could only do that if they conducted an inquiry into the claim or complaint, which is something they are not doing or trying to do. Nor, of course, could they do it. They know the basis on which the RAR form is compiled, namely by reference to allegations. They are making no judgment about the clinical competence of the practitioner, but only about future risk to MDU funds. Dr Green confirmed this, explaining that the basis of the procedure would have been discussed with the RAG members when the procedure was first introduced in 1999. Dr Roberts's evidence was emphatically (and repeatedly) to the same effect.
  48. Dr Tomkins was also asked why the MDU did not, as a matter of practice, consult the member in relation to the risk review exercise and ask for further information or explanations from him. Again, she accepted that the MDU could do this, but gave the same explanation as to why it did not: the RAG is not judging merits or clinical competence, it is assessing the potential risk to MDU funds. She very fairly accepted that she was not saying that, were this to be done, it could and would make no difference to the outcome of the RAG's consideration. But she said it was not part of the MDU risk review policy to do it. She also made the point that the task the RAG performs is not just a mechanical one of totting up scores and looking at allegations. Whilst the score may be absolute, the RAG will look at all the factors of the case set out in the material before them in coming to their recommendation.
  49. The score sheet

  50. The MDU's pro forma score sheet lists some 23 or so criteria derived from its experience of cases over the years, and the subject member is given a standard score against such of them as apply to him. The scoring provides no more than a general guide as to whether the review is to be taken further. The practice is that if it is more than 50 the member's case is referred for consideration by the RAG, although in certain cases a member who scores less than 50 may also be so referred if the review gives rise to particular concern. It is accepted that there is an element of subjectivity in the consideration by the risk manager as to whether a score should be given against any particular heading, but the outcome of the scoring is anyway not regarded as decisive as to the future course of the review. The scoring system looks only for negative criteria, since that is what the MDU is concerned with in trying to identify potential risk to its funds. An important feature of the scoring system is that if a particular complaint, falling within the listed criteria, is made against the member, the complaint will carry the standard score, even though it may be that the file will also show that the outcome of the complaint was that it was unfounded.
  51. The RAG sheet

  52. The RAG sheet is submitted to the RAG together with the RAR form and score sheet. It identifies the date of the RAG meeting and extracts certain of the basic information that is set out more fully in the RAR form.
  53. The RAG meeting

  54. The RAR form, score sheet and RAG sheet are considered at a meeting of the RAG. They are provided to the RAG about a week in advance of the meeting. Originally the RAG used to meet once a month but, by 2002, it was holding about six meetings a year, approximately once every two months. It usually considers five or six cases at each meeting. The RAG normally comprises about four members. They are very experienced clinicians, at least one of whom will have knowledge of the medical speciality of the member whose case is being considered. Some of those making up the RAG will be long-standing members of the MDU's Council and Cases Committee. Dr Tomkins's evidence was that they would have a very good understanding of the context in which MDU members report matters to the MDU. Dr Green's evidence was to the same effect. A risk manager will be present in order to answer any questions the RAG may have on the documents, although the underlying files are not brought to the meeting. Dr Green attends RAG meetings in his capacity as head of risk management, as does Dr Tomkins in her capacity as the professional services director: both attend in a non-voting capacity. Her function is to give any necessary advice to the RAG on the procedures it should follow. Neither Dr Green nor Dr Tomkins takes any part in the RAG's discussion of the merits of the case. After considering the matter, the RAG makes its recommendation to the Board. Minutes of RAG meetings are not kept, but the principal considerations leading to its decisions are recorded on the RAG sheet. Dr Green said that in his experience RAG members would occasionally (perhaps once every other meeting) ask for further information in relation to a particular case and that would be dealt with by adjourning the case until the next RAG meeting.
  55. The decision of the MDU Board

  56. The RAG will make a recommendation to the Board, but any decision made is that of the Board itself, which is not bound by the recommendation. In practice, decisions following RAG recommendations are made by Dr Tomkins acting under her delegated authority. She said that she could recollect only one case in which she had declined to follow the RAG's recommendation to terminate membership, although she could not remember why. She said each case is considered on its own facts and merits and that the member's score is not automatically determinative of the outcome. She had exercised the Board's discretion under article 11(a) in relation to a member with a score as low as 15 and had declined to exercise it in relation to one whose score exceeded 100.
  57. The Risk Assessment Review in relation to Mr Johnson

  58. In May 2001, the MDU's Board referred Mr Johnson for a risk review. That decision arose out of a recommendation of the Advisory Management Committee that he should be so referred, following a consideration of his file No. 0001331. The case was referred to Dr Karen Roberts. Dr Roberts has both medical and legal qualifications. She had joined the MDU in 1999 as a Senior Medical Claims handler and on 2 April 2001 she became employed by MDUSL as a clinical risk manager. There were about four other risk managers also carrying out reviews. Dr Roberts had received training for the task, in particular that her function was to summarise allegations against the member although she also understood that they had to be summarised in a sufficient context to show the circumstances in which they had been made. The review would also include the outcome of the allegation, if known, although often it will not. In Mr Johnson's case, as in others, Dr Roberts's task was to prepare an RAR Form, a score sheet and a RAG sheet. She had previously prepared like documentation in other cases and she followed the usual practice. Since 2001, she has carried out about one or two risk reviews per month.
  59. Dr Roberts worked on a blank RAR form, score sheet and RAG sheet on an MDUSL computer. She completed the RAR form on 27 November 2001, recording in its first six boxes Mr Johnson's initials (not his name), address, MDU membership number, GMC number, the date he joined the MDU (recorded as 1 October 1986: she made no reference to his prior period of membership), the date of the next renewal of his membership (1 April 2002), his qualifications ("MD MB ChB FRCS (Orth)"), his surgical speciality ("Orth/Trauma Surg"), and his non-indemnified income (£125,000, being his private practice income and so relevant to the professional indemnity cover provided). The form is deliberately anonymous and if (as with Mr Johnson) the case is referred to the RAG, they will not know the identity of the member.
  60. Dr Roberts derived from Mr Johnson's case history (held on computer under his MDU membership number) that 17 files had been opened for him since 1991 (the practice is to go back ten years). She recorded this in the RAR form, describing 11 files as "active" (an active file is one that has not been closed on the system, although she added that seven such files were apparently either inactive or raised statute-barred allegations) and the other six as "advice" files. She wrote "Nil" against "Costs", "Indemnity" and "Legal" and recorded a figure of £300 for "Reserves". That meant that the matters raised in the various files had not resulted in any call on MDU funds, although a small (and unexplained) reserve of £300 had been provided for.
  61. Dr Roberts listed in the RAR form each of the 17 files and their day one summaries. She also retrieved and reviewed ten of the underlying files going back to 1995: with regard to the earlier ones, she merely set out the day one summaries. She gave a compressed summary of each file she reviewed. Mr Johnson's RAR form as completed by Dr Roberts was central to the inquiry at the trial and there is no alternative to setting out her summary of the 17 files.
  62. The 17 files summarised in the RAR form

  63. Each file was summarised in a separate box. I will not re-create the precise format of the RAR form, but will simply set out the summary for each file, giving its reference number, its day one summary (in italics), and (where applicable) Dr Roberts's additional summary. She started with the most recent file and worked backwards. The files were recorded as follows (the first two digits of the file number indicate the year it was opened):
  64. "0010691
    GMC complaint re fee for private treatment and dissatisfaction with result of arthroscopy left knee
    Complaint to GMC that DPJ did not complete operation that he contracted to do (also disputed fees).
    Operation record of 29.01.98:
    Noted good recovery at 2/52 review.
    Patient requested further appointment 10/12 later – letter 11.11.98, pain and swelling related to squash, offered further arthroscopy but declined.
    NHS appointment (with a colleague) 16/12 later – letter 15.03.00 indicates degeneration lat meniscus, post horn tear, residual tear med meniscus, free flap, early degeneration.
    Letter from patient to DPJ 10/00 expressed dissatisfaction, further appointment offered, patient then sent complaint to GMC. Response to GMC by DPJ.
    GMC indicated 2.4.01 that taking no further action.
    GMC did criticise communication with patient.
    0010574
    GMC complaint re inaccurate and incomplete medico-legal report: failure to examine; failure to consider previous expert report; failure to consider history.
    DPJ asked to provide a second expert report on condition and prognosis relating to injuries sustained by the patient following an RTA. DPJ provided a report which indicated that following the attempted history he declined to continue with the report when the patient became aggressive and because of concern re the validity of the answers he received.
    Patient complained to GMC. Complaint at stage of preliminary screening. DPJ provided comments. Outcome awaited.
    0007509
    Concern re ownership of MDU assets following proposed changes with Zurich Insurance
    Advice file.
    0007466
    Advice re breakdown of dr/patient relationship/defamation re alleged erroneous prognosis; disappointment with treatment outcome
    Complaint
    Verbal complaint by husband during consultation with patient and husband. Unhappy with result/recovery following knee surgery. DPJ offered explanation during consultation and indicated that as dr/pt relationship broken down they should return to GP to seek alternative treatment. Also indicated if patient wanted to continue to see him could do so if they were happy to continue taking his advice.
    Also wrote to explain to GP.
    Informed MDU of situation and nothing further heard.
    0001331 [misrecorded by Dr Roberts as 0001311]
    Suspension of inpatient and outpatient admitting rights pending investigation into alleged breach of regulations; member asked other member of staff to log into computer data, to which he had no access.
    Member notified MDU of incident 2/00. The hospital manager had been approached by two separate junior members of administrative staff who reported that mbr had asked them to log onto system to which he had no access. Hospital manager indicated that similar problem had occurred in 1999, following which member assured management that he recognised error and would not repeat.
    Suspended following final occurrence.
    Member advised that this is a BMA issue, or that private legal proceedings an option. Board of Management decision that member be not assisted in this case and that member be referred to RA Group.
    9910222
    Witness statement for high court hearing re claim against BUPA for non-payment of fees following orthopaedic surgery at clinic which is unrecognised by BUPA and defamation of character
    Non-lead – another member was asked to provide a witness statement by DPJ in claim brought by him [DPJ] against BUPA re alleged non payment of fees and alleged defamation. DPJ appears to have been bringing private action, outcome unknown.
    9810073
    Refusal to appear as expert witness for court hearing 25/01/99 following witness summons by solicitors who have outstanding fees for previous case
    Previous non-payment of DPJ's fees by solicitors. Advised that will be obliged to appear as expert witness if subpoenaed. At same time can inform solicitors of reasonable fees and if solicitors' [sic] decline then option of seeking to get summons set aside.
    9710810
    Concern re circulation of publicity leaflet to GPs by colleague (member) following request for private second opinion for knee pain
    Advice file
    Non-lead, a [redaction] had been asked by GP to comment upon the leaflet that DPJ was circulating as the GP had concerns. Forwarded to MDU for advice. Suggestion that leaflet might be vulnerable to criticism by GMC with regard to suggesting superiority over other practitioners.
    9608165
    Concern re criticism of clinical skills by colleague in medical report for personal injury claim re exacerbation of anterior knee pain following fall
    Mbr referred matter to GMC at the same time as writing to the MDU. Concern was related to part of a medical report provided by a colleague for the claimant. Mbr was concerned that it denigrated his clinical skills, clinical exposure to knees, intelligence and background reading. Mbr independently referred to GMC, matter left with the GMC. Nothing further heard.
    9510999
    Defamatory remarks in 'leaked' memo criticising member's admitting rights to private hospital
    File not seen. Advice file.
    9500242
    Concern re letter from medical advisor at Western Provident Association re discretionary recognition for surgery
    Advice file.
    In the main employment/contractual matter and member advised to contact BMA. From brief correspondence it appears that member had been in correspondence with WPA from 1992 regarding refusal to recognise for surgery.
    9410740
    Letter from PPP re shortfall on account
    9404163
    Amorous patient
    9302572
    Concern that re-advertised post for consultant senior lecturer in orthopaedics was withdrawn for political or racial reasons
    9208720
    Request for information re formation and registration of clinical private orthopaedic companies set up by consultant
    Advice file.
    9205597
    Advice re member publicising in Yellow Pages
    Advice file.
    9107652
    Request for assistance from member who works in orthopaedic field and who has been refused admission rights by private hospital because he does not hold a local consultant appointment
    Advice file.
  65. Those were the files that Dr Roberts identified and (as to some) reviewed. All were "lead files" apart from files 991022 and 9710810, which were "non-lead files". The 11 "active" files were 0010691, 0010574, 0007466, 0001331, 9910222, 9810073, 9710810, 9608165, 9410740, 9404163 and 9302572. The six advice files were 0007509, 9510999, 9500242, 9208720, 9205597 and 9107652. Dr Roberts's evidence was that in her summaries of the files she tried to be brief and factual. She included the outcome of any reported incident if the file disclosed it, but said that often it will not be known from the file. She made clear, in line with Dr Green and Dr Tomkins, that it is the occurrence of the allegations and incidents which is considered in completing the RAR form, not the culpability (if any) of the member in relation to the allegation or incident, a matter which the MDU is in no position to judge. She said that it is also immaterial whether any assistance was given to the member on any particular matter. In that connection, it is only the practice of the MDU to give assistance in respect of claims or complaints in relation to patient-related matters. In Mr Johnson's case, for example, the MDU declined to assist him in relation to the computer security issue the subject of file 0001331, that not being regarded as patient-related.
  66. I will later return in more detail to the subject matter of each file, but one factual matter to which I draw attention here is that, in relation to file 0010574, Dr Roberts recorded that the outcome was "awaited". In fact, by the time she completed the RAR form, the outcome was known. Mr Johnson had reported it in a letter to the MDU of 12 April 2001 and it was that the complaint had been screened out as having no substance. In the same letter, he also raised issues relating to matters arising under file 0010691, and his letter was placed in that file, and not in file 0010574. Hence Dr Roberts's mistake. Her evidence was, however, that a favourable outcome to a particular incident is ordinarily immaterial to the RAG's assessment: what is material that the incident occurred or that the allegation was made.
  67. Having so listed and summarised the files, Dr Roberts added her own observations to the RAR form. These were points she regarded as relevant for consideration by the RAG. She also included a list of possible actions for the RAG to consider. Her observations and list were as follows:
  68. "Observations
    Consider:
    1. Refer to RAG.
    2. Place on register and review 6 months.
    3. Non renewal of membership.
    4. Erasure under Article 11."
  69. With regard to her "observations," Dr Roberts's evidence about the first of them was that the number of complaints and the frequency with which they occur are two aspects that the MDU considers when assessing future risk issues. As for the second observation, she said it was very unusual then, and still is unusual, for a member to wish to question the advice of the GMC in relation to a complaint that the GMC was not itself taking further. She said that it could or might provide an indication as to the way the member reacted to situations and might provide a marker for future risk. It was because it was unusual that she thought it appropriate to draw it expressly to the RAG's attention. More generally, she said that Mr Johnson was a member who had "an unusual pattern of cases and an unusual number of cases where adversarial situations occurred." As for her third observation, she said that her comment that "DPJ does not appear to take criticism well" was influenced by the four files which related to allegations which were apparently defamatory of him and also by his reaction to the GMC's criticism of him. As for the fourth observation, she said that even if her chosen language might suggest that she was making a judgment on the suspension issue, she was not in fact doing so and that the RAG, which understands the risk assessment procedure, would know she was not doing so. She also pointed out that she had there made clear that the outcome of the suspension was unknown. As for the fifth observation, it was put to Dr Roberts that if the whole scheme was based exclusively on allegations, there was no logical reason for her not to add the extra 20 points herself (I shall shortly come to the scoring process in more detail). That point appeared to me to be soundly made. Her explanation was that this is not a score which is added very often, she had not herself applied it before and she thought her thinking at the time was that she was unsure whether she should apply it and so she left it to the RAG to consider it themselves. The sixth observation was that there were no claims against Mr Johnson. That was a positive point, which I understood Dr Roberts to say was included as part of the overall context: the RAG would balance the negative points against the plus point reflected in this observation (I am not entirely clear how that squares with the MDU's basic policy of looking only for risk factors, but I suppose the answer is that the compilation of the RAR form is not an entirely mechanistic operation). As for the final observation, Dr Roberts's evidence was that this related exclusively to file 971010. She raised this point because it was not usual for another person to raise concerns about a member's advertising.
  70. Turning to Dr Roberts's "Consider" section, item 1 does not appear to me to be a real alternative for anyone's consideration: under the risk review procedure, Mr Johnson's score of 60 meant that his case was inevitably going to the RAG, and so alternatives 2 to 4 were the only real ones for the RAG.
  71. The next document that Dr Roberts completed in the risk assessment exercise was the score sheet. Each item on it applicable to the subject member is scored according to a standard score (some attract 5 points, most attract 10, but in certain instances up to 15 or 20 points can be scored). The standard form score sheet list is as follows, and I have added to it Mr Johnson's score against those headings which were regarded as applicable to his case, which I have highlighted in bold:
  72. "Qualifications inadequate for specialty
    Training incomplete
    Not on relevant Specialist Register of GMC/GDC
    Outside area of expertise/competence
    Number of complaints & claims files in last 10 years: 0 – 5 [0]; 6 – 10; 11 – 15; 16 – 20; 20+
    Number of settled claims in last 10 years
    Average time (months) interval between claim/complaint notifications: 0 -5 [20] ; 6 -12; 13 – 18; 19 - 24
    Rudeness/attitude/derogatory remarks
    Lack of co-operation with MDU
    Misled/failure to notify/declare on application form
    GMC/GDC involvement: 10
    Guilty of serious professionally misconduct/restricted practice
    Disciplinary/suspension problem: 10
    Fraud/criminal allegations/dishonesty: 10
    Technical competence questionable
    Allegations sexual impropriety
    Records: inadequate/missing/altered
    Health problems/alcohol/drug abuse
    Consent problems
    Concern/criticised by expert
    Dispute with colleagues: 5
    Private sector work only: 5
    Failure to change behaviour
    Risk Assessment Score: 60"
  73. In completing Mr Johnson's score sheet, Dr Roberts's evidence was that she was no more judgmental than she had been when compiling the RAR form: she did not form any view either way on the merits of the underlying incidents, she merely scored Mr Johnson according to whether or not an allegation had been made, or incident occurred, which she regarded as falling within one or more of the score sheet categories. I comment that certain of the items on the score sheet can be read as if they refer to matters of established fact rather than unproven allegations (compare, for example, "allegations sexual impropriety" with "Failure to change behaviour": if it is all about, and known to be all about, nothing but "allegations", why include that word anywhere?). The thrust of all the MDU evidence, which I accept, was however that everyone involved in the risk assessment procedure, including the RAG, would have understood that the score sheet was only listing items which were the subject of allegations against the subject member: the drafting of the score sheet may have been imperfect, and have reflected elements of apparent internal inconsistency, but the RAG would not have been confused by it.
  74. In elaboration of Mr Johnson's score sheet, I point out first that he received no scores for anything raised in either of the two non-lead files. Even if a non-lead file records a complaint against the member, that complaint is not scored against him. It is only complaints or other matters which are reported by the member himself and are recorded in the lead files that are capable of being so scored. Nevertheless, Dr Green accepted that non-lead files may include significant allegations or issues relating to the member and so they may be taken into account by the RAG when it reviews the case.
  75. The first applicable item in Mr Johnson's score sheet was "Number of complaints & claims files in last 10 years." A different score applies according to which of five potential brackets the member falls in. As Mr Johnson had been the subject of less than five complaints (only three), he scored 0 under this head (the maximum is 20 points for more than 20 complaints in the previous 10 years). The MDU's explanation of a nil score for less than five complaints or claims is that any member may be the subject of at least some claims or complaints, but the MDU's concern increases proportionately according to their total number. "Claims" are those in which damages are or might be sought against the member and could give rise to a claim for indemnity. "Complaints" are criticisms of the member's conduct but do not include a damages claim. "Complaint" files may involve the provision of advice or assistance, and perhaps indemnity, for example in relation to any legal costs that may be incurred in dealing with it.
  76. The next applicable heading was the "Average time (months) interval between claim/complaint notifications". Again, the scoring depends on the bracket in which the member falls. The brackets range from 19 to 24 months (with a minimum of 5 points) to 0 to 5 months (with a maximum of 20). Mr Johnson was in the maximum bracket, as the three complaints against him had been notified to the MDU within a five-month bracket in 2000 (0007466 on 12 September; 0010574 on 20 December; and 0010691 on 27 December). Dr Green said the MDU's experience is that one of the indicators of increased risk is the acceleration of the reporting of claims or complaints.
  77. Next, Mr Johnson scored a standard 10 points because of the involvement of the GMC in relation to the complaints the subject of files 0010574 and 0010691. Dr Green's evidence was that the involvement of the GMC is an indicator of increased risk. He emphasised in cross-examination that the fact that Mr Johnson was the subject of two GMC complaints in a relatively short period of time put him into a very small category of members – his evidence, based on some research carried out over a 15-year period from 1986 to 2001, was that over that period fewer than 1% of orthopaedic consultants had two such complaints. Even though both Mr Johnson's GMC complaints were screened out, Dr Green's evidence was also that the MDU's experience is that a doctor against whom an unfounded complaint is made may be as big a potential future risk as one against whom a complaint of substance is made.
  78. Mr Johnson next scored 10 points each for a "Disciplinary/suspension problem", relating to the incidents covered in file 0001331; and for alleged dishonesty, under the heading "Fraud/criminal allegations/dishonesty". Dr Roberts's evidence was that the file 0001331 incidents involved an allegation of dishonesty against Mr Johnson. She was satisfied by the correspondence in that file that it was alleged against Mr Johnson that, in seeking computer access, he had knowingly acted in a way he knew he should not have acted; she also had in mind that unauthorised access to computer data was potentially a criminal offence under the DPA. Dr Green's evidence was that the MDU's experience is that factors giving rise to these two 10-point scores are an indicator of increased risk.
  79. Next, Mr Johnson scored a standard 5 points for "Dispute with colleagues", files 0001331, 9510999 and 9500242 all possibly involving such disputes (Dr Roberts could not recall which particular file or files she had in mind). Dr Green's evidence was that this too was regarded as an indicator of increased risk: clinical practice is a team effort and problems are more likely to occur if relations between the team members are difficult.
  80. Finally, Mr Johnson was given a standard 5 points against "Private sector work only". Dr Roberts had deduced (correctly) from his subscription rate that he was exclusively in private practice. Dr Green's evidence was that practitioners with an exclusively private practice can generate more claims than those with an NHS practice as well. He said the MDU had no specific reasons as to why this was, but suggested it could be to do with factors relating to the patients, who (as private payers) have a higher expectation of a positive outcome; or relating to where the treatment takes place; or relating to the practitioners themselves. He also said that the case mix in the private sector is different from that undertaken in the NHS.
  81. Dr Roberts's total score for Mr Johnson was, therefore, 60. I have noted that in her observations in the RAR form, she drew the RAG's attention to the possibility of adding a further standard 20 points for "Failure to change behaviour" – a reference to the renewed complaint against Mr Johnson with regard to computer security (file 0001331). The RAG did add 20 points for this, taking the total score to 80. Dr Green's evidence was that it is important that practitioners heed, learn from and respond to criticism. An alleged failure so to respond is viewed as a cause for concern.
  82. Following the completion of the RAR form and score sheet, Dr Roberts prepared the RAG sheet. This summarised the core information about Mr Johnson set out in the RAR form, set out the four matters that Dr Roberts had listed in it as ones to "Consider", and included the following observations:
  83. " Observations
  84. Dr Green reviewed the papers that Dr Roberts had prepared for submission to the RAG but did not refer to the underlying files.
  85. The RAG meeting

  86. This took place on 15 January 2002. Mr Johnson was not invited to give his comments on Dr Roberts's work in advance of the meeting: he had no idea that the MDU was conducting the review. Dr Roberts was in attendance in order to answer any questions the RAG might have arising out of the RAR form, score sheet or RAG sheet. In accordance with MDU practice, the manual files were not taken to the meeting. Dr Green and Dr Tomkins were also present. No evidence was given as to the identities of the members of the RAG who considered Mr Johnson's case.
  87. There are no minutes of the RAG's considerations of Mr Johnson's case. All there is by way of any sort of note of them are some manuscript remarks on copies of the RAG sheet (copies being provided to all attendees). Towards the top of the first page of her copy, Dr Tomkins wrote "11a" (a reference to article 11(a)). She wrote that during the meeting. Lower down, she wrote "Put him on the reg [register] and tell him he's on it", which in her oral evidence she said she wrote after reading the RAR form, score sheet and RAG sheet, but before the RAG meeting. The "register" is the MDU's risk register, on which are entered those members regarded by the MDU as posing a risk of a future drain on its funds. Dr Tomkins confirmed, however, that this note reflected her own private thoughts, which she did not convey to the RAG at the meeting. Below that, she wrote "Private sector only", conveying that Mr Johnson had an exclusively private practice, which she said she wrote during the meeting.
  88. On the second page of the RAG sheet, there is a reference to an attendee with the initials DM (a RAG member who was not identified in the evidence, but who Dr Green said was a consultant orthopaedic surgeon: as I have said, it is the practice of the MDU to include at least one RAG member who practises in the same field as the doctor whose case is being considered), against and below which are the words "Accid. waiting to happen. ? 11(a). Discn re other – 2 GMC – illegal access to computer. Ask what doing? Long discn." These notes were made by Dr Green during the meeting, who was recording what, at least in part, DM had said. Dr Green recalled the explanation for the penultimate phrase in that note, and said it was that the RAG had discussed the financial exposure to which the MDU might be subject in relation to Mr Johnson's ongoing work. They knew he had been suspended from one hospital and were unclear as to whether he was still actively practising. That explanation is supported by the fact that, following the RAG meeting, the MDU's risk management department made an internal inquiry as to Mr Johnson's then current clinical activity, to which the response (on 17 January 2002) was a "don't know". As regards the "long discn" note, Dr Green said it was his habit, if the discussion was a long one, to write something along those lines. He said that RAG meetings normally last about an hour, which suggests an average time of 12 minutes per case. Dr Green's evidence was that Mr Johnson's case probably took longer than 10 minutes. He recalled that the RAG also dealt with five or six other cases at the meeting.
  89. Dr Tomkins accepted that it was open to the RAG to ask for more information from the member but could not remember the details of any discussion (if any) there may have been to this effect. She could not remember if she had made any comment at the meeting, nor could she remember the details of the RAG's discussion. It is, however, known that the RAG added an extra 20 points to Mr Johnson's score for "Failure to change behaviour". Dr Green's evidence was that, in so deciding, the RAG would have been focusing on the allegation that there had been repeat behaviour: they would not have accepted, or assumed, that there had in fact been repeat behaviour.
  90. Dr Roberts also gave no evidence of the discussion that took place between the RAG members. She said she could not remember it: she could not even remember if she was asked a specific question about any of the files. One piece of evidence about the meeting to which I should refer is this. Dr Tomkins referred to the mistaken note that Dr Roberts had made in her summary of file 0010574, namely that the outcome of the patient's complaint to the GMC was awaited, a complaint which had in fact been screened out. Dr Tomkins offered her view that even if the RAG had known of this, it would have made no difference to their recommendation. Her explanation for that was the familiar point that it is the fact of the complaint to the GMC which is the marker for future risk. That raises the question as to why, therefore, Dr Roberts troubled to mention that the outcome was awaited, since it would seem to be of little relevance. Dr Tomkins's answer to that was not unambiguously clear, but I understood it to be that, if the files do show the outcome of any claim or complaint, it is included in the RAR form "so that we aren't selecting what is put before the [RAG]." Dr Tomkins said that she expected the RAG to "look at all the cases in the round when forming their view and in that regard they have put before them all the case histories. We do not screen any out." She said that she had not said that only the incidents of complaints and allegations were looked at: but they were the factors which in the MDU's experience were the markers for future risk. The RAG can take account of "any or all of the information that is in front of them when looking at a case." She agreed that, although the policy in preparing the RAR is based on the markers, the RAG can take a broader view in deciding whether the member represents a risk. She also said that the RAG members understand the MDU's risk assessment process very clearly. They know they are being presented with allegations, that there may well be another side to the story and that the member may, with justification, deny the allegations.
  91. The decision of the RAG was to recommend the MDU Board to take action under article 11(a). It was recorded in the following minute, prepared by Dr Green:
  92. "Dr DPJ Ortho/trauma surgery 208607J
    Outcome – After a long discussion about his position – to recommend to the board of management to take action under article 11a so that his membership will not be renewed as of April 02. Features which were taken into account was the score of 80, the fact that he had 2 GMC complaints in the last 15 months, had been suspended for illegally accessing computer systems in a private hospital twice and that his track record suggested a difficult personality with regard to current disputes with colleagues."

    The decision not to renew Mr Johnson's membership of the MDU

  93. On 16 January 2002, acting under her delegated power, Dr Tomkins considered the RAG's recommendation and made the decision that the MDU would not renew Mr Johnson's membership on 1 April 2002. She wrote to him on 17 January 2002 notifying him that the Board had "exercised its discretion in accordance with Article 11a of the Memorandum and Articles of Association. I must, therefore, advise you that The MDU will not renew your membership with effect from 1st April 2002." She added that the Board had an absolute discretion to decide upon continuing membership under article 11(a) and enclosed a copy of article 11.
  94. Mr Johnson responded on 22 January 2002, saying that the letter of 17 January had come as a complete surprise and had "very serious implications for my continued practice and livelihood." He said that in 25 years of membership he had never been accused of negligent practice and had never had to seek the MDU's assistance with the defence of any claim. He asked for the reasons and grounds for the decision and for all the information upon which it was based. He asked for copies of all the correspondence and data held on his file and enclosed the standard £10 fee payable under the DPA. No reasons were provided to him, because it is the Board's practice not to provide reasons; and Dr Tomkins wrote to him on 22 January 2002 informing him that the Board was not required to provide reasons. He was, however, entitled to proper disclosure under the DPA, as Dr Tomkins acknowledged in her letter, and she said in evidence that other members in similar circumstances had made a like request. On 1 March 2002, the MDU (by Mr Nicholas Bowman, the MDU secretary) provided Mr Johnson with information pursuant to his DPA request. On 4 March 2002, Mr Johnson wrote to Mr Bowman complaining that the data provided was incomplete. On 8 March 2002, Mr Bowman responded with certain further information, which he said had previously been accidentally omitted, and said that the MDU was satisfied that it had properly complied with Mr Johnson's request.
  95. Mr Johnson applied for membership of the MPS on 22 January 2002. In his application form, he said that no claims for compensation or complaints had ever been made against him, although in his covering letter he referred to two complaints made to the GMC in 1999, both of which he said were dismissed at the preliminary investigation stage. On 26 March 2002, the MPS asked the MDU to "forward details of [Mr Johnson's] current and past claims and case experience, in accordance with our agreed protocol" and enclosed his authority to release it. Mrs Moss, a clinical risk manager with MDUSL, responded on 27 March 2002. Her accompanying schedule listed the 17 files in the RAR form, giving (i) the year of opening, (ii) the day one summary of each, and (iii) whether the files were active, lead or non-lead files. A £5,000 legal reserve for costs (in addition to a £100 reserve) was included in relation to file No. 0010574, although that was the file in respect of which the complaint had been screened out. Two other files also each showed a £100 reserve. That information had not previously been provided by the MDU to Mr Johnson, but Dr Tomkins's evidence was that if Mr Johnson (or any other member) had asked for details of their case history – the MDU calls it a "letter of good standing" – they would have provided it to him in the same format as it was provided to the MPS.
  96. Mr Johnson obtained membership with the MPS with effect from 31 March 2002. It is a mutual medical protection organisation dating from 1892 and now operating internationally in over 40 countries. His subscription for the year ending 30 March 2003 was £7,765 (£2,235 less than his MDU subscription for the year ended 31 March 2002). The rate was fixed by reference to his medical specialty of orthopaedic surgery and the size of his private practice: he had stated it in his application form as being between £50,000 and £75,000 a year net of practice expenses. Whilst that subscription was lower than his MDU subscription, he was also getting less for it: as regards indemnity cover, he had previously enjoyed the benefit of the contractual cover provided by the indemnity policy with Zurich. With the MPS, however, he only enjoyed the like discretionary indemnity cover that (until July 2000) had been provided by the MDU: the MPS is not an insurance company and, as with the MDU, the benefits of membership of it are discretionary. They are similarly provided on an occurrence basis. Equally, however, as Dr Tomkins pointed out, the MDU subscriptions in at least some categories of membership were historically higher than the MPS's even during the period when it was only providing discretionary indemnity cover.
  97. An undated claim letter from solicitors followed on about 1 April 2002. The MDU responded on 9 April 2002, explaining (inter alia) that, despite the termination of his membership, Mr Johnson could still approach the MDU for assistance in respect of any incident arising from his period of membership: this was consistent with the MDU's assistance being on the "occurrence" basis. The claim form was issued on 11 February 2003.
  98. The nature of Mr Johnson's claims

  99. I have explained that it is no part of Mr Johnson's case to challenge the fairness of the RAG's procedure or the recommendation it made on the basis of the material before it. Mr Howe QC, for Mr Johnson, nevertheless submitted that the decision-making process leading to the termination of Mr Johnson's membership of the MDU was clearly incompatible with present day concepts of procedural and substantive fairness. He was referring there to the process carried out by Dr Roberts and said it was obvious that a process in which no attempt is made to check facts with, or invite observations from, the person affected by the review has an inherent risk of error, misunderstanding and unfairness. He described the process as "intrinsically grossly unfair thanks to the arbitrary nature of the point-scoring system and the MDU's intentional failure to take any steps to distinguish between serious, and frivolous or irrelevant, claims or complaints."
  100. General points of that sort have an instinctive appeal to a lawyer but I do not regard them by themselves – and apart from the critical question of whether Dr Roberts's activities involved a breach of the MDU's obligations under the DPA – as carrying Mr Johnson anywhere. When performing its risk review in relation to Mr Johnson, the MDU was not performing a judicial, quasi-judicial or disciplinary function. Mr Howe's points ignore that the MDU is a commercial organisation which has a duty, in the interests of its members, to protect its funds and which, in that context, properly operates a commercially devised risk management procedure with a view to minimising the risk posed, or potentially posed, to those funds by particular members. It is not obliged to admit anyone to its membership in the first place; under article 11, it has an absolute discretion to terminate the membership of those members whom it has agreed to admit; and it is not required to give its reasons for any such decision. Its decisions in these respects are commercial ones in respect of which in principle – save perhaps in a case in which an assertion of bad faith is made, and none is here – it is unaccountable to the affected member. That is implicitly recognised in the present case, in which (contrary to the unarguable assertions originally advanced by his solicitors) Mr Johnson now makes no claim that the termination of his membership of the MDU involved a breach of contract or gave him any other remedy under the general law.
  101. The only challenge that Mr Johnson does mount is a rather narrower one turning on the fairness of the gathering of the material that was put before the RAG. His case is founded on the propositions (i) that the exercise involved a material element of unfair processing under the DPA, which (ii) inevitably caused the subsequent decision to terminate his membership, which (iii) in turn caused him loss and damage. His claim in fact asserts that the MDU committed breaches of three of the data protection principles identified in the DPA, although his particular case just summarised relies only an alleged breach of one of them. The heart of the unfairness charge that Mr Johnson levels against the preparation of the material that Dr Roberts put before the RAG is that it did not fairly reflect his case in relation to each of the allegations. His case is that it was not enough for the MDU merely to identify allegations and score them. The fairness requirements in relation to processing under the DPA demanded that the MDU should not just have made a selection from the material it had in its files, it ought also to have sought Mr Johnson's input on its assessment of the contents of those files in carrying out its risk review. The case is also that the scoring system was irrational and arbitrary and that its application to Mr Johnson was likely to, and in fact did, lead to an irrational and arbitrary result.
  102. That is, I hope, a sufficient thumbnail summary of the main issue of liability that I have to decide. Mr Johnson has, however, also made other claims in these proceedings, to which I should refer. One claim was under section 7(9) of the DPA, for a right of access to his personal data. That claim was tried by Laddie J as a preliminary issue in February 2004. His decision was that, following Mr Johnson's request of 22 January 2002, the MDU had fully complied with its section 7 obligations and he ordered Mr Johnson to pay the costs of that issue. Permission to appeal was refused both by Laddie J and the Court of Appeal. Nothing more needs to be said about that.
  103. Until the commencement of the trial before me, Mr Johnson was also pursuing a claim under section 10 of the DPA (Right to prevent processing likely to cause damage or distress). On day two of the trial, Mr Howe abandoned that claim.
  104. Mr Johnson also has claims under section 14(1) and (2) of the DPA (Rectification, blocking, erasure and destruction). They remain alive and are based on alleged breaches of the fourth data protection principle in Part I of Schedule I to the DPA, which requires that "Personal data shall be accurate and, where necessary, kept up to date." The determination of that claim requires a judgment on countless issues identified in a Scott Schedule (Schedule II in the proceedings) setting out the parties' arguments and counter-arguments on the alleged inaccuracies. The exercise, if it is to be performed, is potentially an enormous one. On day nine of the trial, when Mr Spearman QC, for the MDU, had just embarked on his closing submissions in relation to the Schedule II claim, Mr Howe stated that he was content that the further consideration of that claim should be deferred until after the delivery of this judgment. Mr Spearman very fairly reminded Mr Howe that, on one interpretation of Mr Johnson's pleaded case, it was being asserted that the alleged inaccuracies in the data had also contributed causally to the decision not to renew his membership: and the central issue I am required to decide in this judgment is whether any alleged breaches by the MDU of their obligations under the DPA could be said to have caused that decision. The deferral of the Schedule II issues until after this judgment would necessarily mean that the alleged inaccuracies could not be brought into consideration on that issue. Mr Howe accepted that, but made it plain that he was not giving up anything very material. That is because Mr Johnson's primary case is that the RAG recommendation was caused by unfair processing of his data in breach of the first data protection principle; and, to the extent that any of the alleged Schedule II inaccuracies is also alleged to have constituted relevant unfairness for the purposes of that principle, a separate list of them is in Schedule I, the unfairness schedule. The practical position is that I am, therefore, not required at this stage to consider Mr Johnson's separate case based on the alleged breach of the fourth data protection principle.
  105. The primary claim I am concerned with is under section 13 of the DPA (Compensation for failure to comply with certain requirements). I have explained that Mr Johnson's case is that he is entitled to such compensation because he says the MDU's alleged unfair processing of his data in breach of the first data protection principle was directly causative of the termination of his MDU membership. All aspects of that claim are in issue, and I now turn to it. I must first refer to the relevant provisions of the DPA.
  106. The Data Protection Act 1998

  107. The preamble to the DPA describes it as making "new provision" for the regulating of the processing of information relating to individuals, and it was enacted so as to give national effect to Directive 95/46/EC. The Directive was adopted on 24 October 1995 and was to be implemented by member states by 25 October 1998. The DPA must, if possible, be interpreted in a manner consistent with the Directive, and to that end reference can be made to the Directive for assistance. I refer first to certain of the basic interpretative provisions in Part I, contained in section 1, and will then also set out the material parts of sections 4 and 13:
  108. "Basic interpretative provisions
    1.-(1) In this Act, unless the context otherwise requires –
    'data' means information which –
    (a) is being processed by means of equipment operating automatically in response to instructions given for that purpose,
    (b) is recorded with the intention that it should be processed by means of such equipment,
    (c) is recorded as part of a relevant filing system or with the intention that it should form part of a relevant filing system,
    (d) does not fall within paragraph (a), (b) or (c) but forms part of the accessible record as defined by section 68; or …
    'data controller' means, subject to subsection (4), a person who (either alone or jointly or in common with other persons) determines the purposes for which and the manner in which any personal data are, or are to be, processed;
    'data processor', in relation to personal data, means any person (other than an employee of the data controller) who processes the data on behalf of the data controller;
    'data subject' means an individual who is the subject of personal data;
    'personal data' means data which relate to a living individual who can be identified –
    (a) from those data, or
    (b) from those data and other information which is in the possession of, or is likely to come into the possession of, the data controller,
    and includes any expression of opinion about the individual and any indication of the intentions of the data controller or any other person in respect of the individual;
    'processing', in relation to information or data, means obtaining, recording or holding the information or data or carrying out any operation or set of operations on the information or data, including –
    (a) organisation, adaptation or alteration of the information or data,
    (b) retrieval, consultation or use of the information or data,
    (c) disclosure of the information or data by transmission, dissemination or otherwise making available, or
    (d) alignment, combination, blocking, erasure or destruction of the information or data; …
    'relevant filing system' means any set of information relating to individuals to the extent that, although the information is not processed by means of equipment operating automatically in response to instructions given for that purpose, the set is structured, either by reference to individuals or by reference to criteria relating to individuals, in such a way that specific information relating to a particular individual is accessible.
    (2) In this Act, unless the context otherwise requires –
    (a) 'obtaining' or 'recording', in relation to personal data, includes using or obtaining or recording the information to be contained in the data, and
    (b) 'using' or 'disclosing', in relation to personal data, includes using or disclosing the information contained in the data. …
    4. – (1) References in this Act to the data protection principles are to the principles set out in Part I of Schedule I.
    (2) Those principles are to be interpreted in accordance with Part II of Schedule I.
    (3) Schedule 2 (which applies to all personal data) … [sets] out conditions applying for the purposes of the first principle; …
    (4) Subject to section 27(1), it shall be the duty of a data controller to comply with the data protection principles in relation to all personal data with respect to which he is the data controller. …
    Compensation for failure to comply with certain requirements.
    13. – (1) An individual who suffers damage by reason of any contravention by a data controller of any of the requirements of this Act is entitled to compensation from the data controller for that damage.
    (2) An individual who suffers distress by reason of any contravention by a data controller of any of the requirements of this Act is entitled to compensation from the data controller for that distress if –
    (a) the individual also suffers damage by reason of the contravention, or
    (b) the contravention relates to the processing of personal data for the special purposes.
    (3) In proceedings brought against a person by virtue of this section it is a defence to prove that he had taken such care as in all the circumstances was reasonably required to comply with the requirement concerned."
  109. Those are the central provisions in the body of the DPA which are relevant to the claim. I must now set out the provisions in Schedule I which identify the data protection principles said to have been breached by the MDU and which relate to their interpretation. Part I of Schedule I lists the principles and Part II provides an interpretation of them. Schedule 2 identifies the "Conditions relevant for purposes of the first principle" but it is no part of Mr Johnson's case that none of the Schedule 2 conditions was met and so I need not consider Schedule 2 further (paragraph 1(a) below of the first data protection principle shows why).
  110. "SCHEDULE I
    THE DATA PROTECTION PRINCIPLES
    PART I
    THE PRINCIPLES
    1. Personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless –
    (a) at least one of the conditions in Schedule 2 is met, …
    4. Personal data shall be accurate and, where necessary, kept up to date.
    5. Personal data processed for any purpose or purposes shall not be kept for longer than is necessary for that purpose or those purposes. …
    PART II
    INTERPRETATION OF THE PRINCIPLES IN PART I
    The first principle
    1. – (1) In determining for the purposes of the first principle whether personal data are processed fairly, regard is to be had to the method by which they are obtained, including in particular whether any person from whom they are obtained is deceived or misled as to the purpose or purposes for which they are to be processed. …
    2. – (1) Subject to paragraph 3 [which is not material], for the purposes of the first principle personal data are not to be treated as processed fairly unless –
    (a) in the case of data obtained from the data subject, the data controller ensures so far as practicable that the data subject has, is provided with, or has made readily available to him, the information specified in sub-paragraph (3), and
    (b) in any other case, the data controller ensures so far as practicable that, before the relevant time or as soon as practicable after that time, the data subject has, is provided with, or has made readily available to him, the information specified in sub-paragraph (3).
    (2) In sub-paragraph (1)(b) 'the relevant time' means –
    (a) the time when the data controller first processes the data, or …
    (3) The information referred to in sub-paragraph (1) is as follows, namely –
    (a) the identity of the data controller,
    (b) if he has nominated a representative for the purposes of this Act, the identify of that representative,
    (c) the purpose or purposes for which the data are intended to be processed, and
    (d) any further information which is necessary, having regard to the specific circumstances in which the data are or are to be processed, to enable processing in respect of the data subject to be fair. …"

    Was there any processing of Mr Johnson's personal data?

  111. Mr Johnson's primary complaint is that the MDU processed his personal data unfairly in breach of the first data protection principle. It is that breach, and that alone, that is said to have caused the non-renewal of his MDU membership. The first issue is whether MDU did in fact "process" any of his personal data. The only acts of processing alleged by Mr Johnson are (i) selecting the information contained in his personal data and thereby presenting a false picture of the situation, and (ii) holding inaccurate personal data. Only the first act is relied upon in relation to the alleged breach by the MDU of the first data protection principle. The reference in it to the selection of information is a reference to Dr Roberts's activities in preparing the material for the RAG. Mr Spearman's submission was that that selection of information did not amount to "processing" either for the purposes of that principle or at all. If that is correct, it provides a complete answer to the claim. Mr Howe submitted that it was incorrect.
  112. The definition of "data" in section 1(1) of the DPA shows that it encompasses information which is "being processed by means of equipment operating automatically in response to instructions given for that purpose" as well as information that is recorded with the intention that it should be processed by means of such equipment. Those parts of the definition refer to information stored on a computerised system. But "data" can also encompass information recorded as "part of a relevant filing system or with the intention that it should form part of a relevant filing system, …". That part of the definition extends to information held within certain types of manual filing systems, although such a system has to be a "relevant" one. A "relevant filing system" is defined in section 1(1) as meaning a "structured" filing system as there explained and its meaning was considered by the Court of Appeal in Durant v. Financial Services Authority [2000] FSR 28, in particular in paragraph 50 of the judgment of Auld LJ.
  113. In the present case, 12 of Mr Johnson's files were manual ones and it is not suggested by Mr Howe that any of them amounted to a "relevant filing system" within the relevant definitions. Of the other files, three (0010691, 0010574 and 0001331) were held in electronic form; one (9208720) was held on a compact disc (which was similarly capable of being electronically searched); and one (9205597) was held on a microfiche file, which was not readily searchable and which I understood to be agreed to be outside the definition of "data" within the definition in section 1(1). The day one summaries in relation to all the files were, however, computerised: they formed part of Mr Johnson's case history, which also included the numbers of the various files relating to him and identified any applicable reserves or costs provisions.
  114. As it is disclaimed that any of the manual files constituted a relevant filing system, Mr Spearman said it followed that there was no relevant processing of any of those files by Dr Roberts. Nor, he said, did her selection of material from the computerised files amount to "processing". Mr Spearman referred to various recitals of the Directive, which he said provide the basis upon which the relevant provisions of the DPA have to be interpreted. He referred to recitals (2), (3), (10) and (11), which emphasise the intention of the Directive as being to protect individuals' right to privacy. He then focused on recitals (15) and (27). The latter is concerned primarily with manual filing systems, but the former provides:
  115. "(15) Whereas the processing of such data is covered by this Directive only if it is automated or if the data processed are contained or are intended to be contained in a filing system structured according to specific criteria relating to individuals, so as to permit easy access to the personal data in question."
  116. Mr Spearman said that showed that, in relation to computerised data, only its "automated" processing will amount to relevant processing. He referred also to article 3 of the Directive (in a part headed "Scope"), which he said was similarly in line. In doing so, he did not overlook the definition in article 2(b). Article 2(b) and paragraph 1 of article 3 provide respectively:
  117. "(b) 'processing of personal data' ('processing') shall mean any operation or set of operations which is performed upon personal data, whether or not by automatic means, such as collection, recording, organization, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction; …
    1. This Directive shall apply to the processing of personal data wholly or partly by automatic means, and to the processing otherwise than by automatic means of personal data which form part of a filing system or are intended to form part of a filing system."
  118. Mr Spearman said that the intention reflected in recital (15) and article 3 was faithfully reflected in the DPA but that the DPA had achieved it by a different drafting technique. Whilst he recognised that article 2(b) appeared to recognise that "processing" could be done by automatic or non-automatic means, he said this could not override the effect of article 3, which he said made it clear that it was only the automatic processing of computerised data that constituted relevant processing (a submission which does not perhaps pay full recognition to the "or partly"). Reverting to the DPA, he said that section 1(1) defined "processing" in an open-ended way, and I understood him to recognise that Dr Roberts's "selection" of information from the four computerised files could, on the face of it, be said to amount to "any operation or set of operations on the information or data, including … use of the information or data…." within that definition. The definition of "using" in section 1(2) was also consistent with that. Mr Spearman's point was, however, that the apparently open-ended sense of those parts of the section 1(1) definitions is subject to a narrowing effect by the earlier definition of "data". His submission was that, in relation to electronically held data, it will only be "data" within the meaning of the DPA if it is (or is intended to be) "processed by means of equipment operating automatically in response to instructions given for that purpose." The key word for the purposes of the submission is "automatically" and he said that it is in that provision that is to be found the national equivalent of the provisions in recital (15) of the Directive ("automated" processing) and article 3 ("automatic means"). It follows, said Mr Spearman, that it is only data that is (or is intended to be) processed automatically in response to relevant instructions that is "data" within the meaning of the DPA; the definition of "processing" of data in section 1(1) has, therefore, to be interpreted as referring only to various types of operation in relation to "data" within the meaning of the prior definition; and that means "data" which is processed automatically. Here, he says, Dr Roberts was not engaging in any "automatic" processing of Mr Johnson's data. In relation to the four electronic files, she was not making her selection by any "automatic" process. She made it by applying her own, non-automatic judgment to a computer database. In relation to the manual files, they do not come into the picture at all because they are not part of a "relevant filing system". There was, therefore, no relevant processing at all of Mr Johnson's personal data.
  119. In response, Mr Howe relied upon the decision of the Court of Appeal in Campbell v. MGN Ltd [2003] QB 633 as providing a resolution of this debate. In delivering the judgment of the court, Lord Phillips of Worth Matravers MR said:
  120. "101. The definition of 'processing' in the Directive and the Act alike is very wide. 'Use of the information or data' and 'disclosure of information or data by transmission, dissemination or otherwise making available' are phrases, given their natural meaning, which embrace the publication of hard copies of documents on which the data has been printed. Is such a meaning consistent with an interpretation which gives effect, in a sensible manner, to the objects of the Act?
    102. While the Act extends to certain manual filing systems, it is otherwise concerned with the automated processing of personal information. Almost all of the provisions of the Act relate to activities prior to the moment when that information is transferred to hard copies. It would conflict with the overall nature and object of the Directive and the Act to seek to apply their provisions to the acts of those who distribute and make available to the public the product of prior data processing in which they have not been concerned. Extending 'processing' to embrace such activities need not, however, have that result.
    103. The Directive and the Act define processing as 'any operation or set of operations'. At one end of the process 'obtaining the information' is included, and at the other end 'using the information'. While neither activity in itself may sensibly amount to processing, if that activity is carried on by, or at the instigation of, a 'data controller', as defined, and is linked to automated processing of the data, we can see no reason why the entire set of operations should not fall within the scope of the legislation. On the contrary, we consider that there are good reasons why it should.
  121. The critical paragraph is paragraph 103, which Mr Howe said encapsulated the correct approach to the interpretation of section 1 of the DPA. His submission was that it is enough that the material representing the selection that Dr Roberts made (whether it was derived from the manual files or the computerised files) was then held on a computer. Article 2(b) of the Directive shows that the "processing" of data includes "any operation" performed upon it, "whether or not by automatic means" and includes the various activities there listed; and the opening words of article 3.1 are consistent with that: "… processing … wholly or partly by automatic means… ". Mr Howe said that, in paragraph 103 of Campbell, the court had recognised that there could be relevant processing when part of the operation was automatic and part was manual. </