The plaintiff, who worked in financial services, complained of the terms of the reference given by his former employer. Having spoken of his behaviour towards members of the team, it went on: ‘his former superior has further stated he is a man of little or no integrity and could not be regarded as honest . . Since 1 January 1989, Messrs Spring and Parker shared all their commission earnings on a 50:50 basis and left owing the company some 12,000 pounds in funding which to date has not been repaid. This matter is now in the hands of solicitors. The current lapse ratio is running at 18 per cent and this is only for policies written since March of this year. Since their departure, we have found a serious case of mis-selling where the concept of ‘best advice’ was ignored and the policies sold yielded the highest commissions.’ The judge at trial had found these allegation ill founded, and the reference: ‘motivated by leaping to a conclusion – of dishonesty and lack of integrity – careless of the true facts of the case.’
Held: An employer was liable for a negligently given and damaging reference given on behalf of an employee. A duty of care was owed to a former employee. The notion of a ‘master and servant’ relationship has become obsolete. The changes which have taken place in the employment and employee relationship, impose greater duties on the employer than in the past, whether by statute or judicial decision, to care for the physical, financial and even psychological welfare of the employee. A duty of care in providing a reference continues even though the relation of employer and employee may have finished. The principle in Hedley Byrne rested ‘upon an assumption or undertaking of responsibility by the defendant towards the plaintiff, coupled with reliance by the plaintiff on the exercise by the defendant of due care and skill.’ The burden of proving malice is a heavy one and it may be extremely difficult to establish.
As to whether damages should be payable for a negligent mis-statement, Lord Lowry said: ‘The defendants’ second argument (which, in order that it may prevail, must be made to stand independently on its own feet) is that, even if one concedes foreseeability and proximity and even if it would otherwise be just and reasonable for the plaintiff to recover under the head of negligence, public policy dictates that the person who has been the subject of a negligent misstatement shall not recover. The argument is grounded on the proposition that the maker of the misstatement, provided he has acted in good faith, must, even if he has been negligent, be free to express his views in the kind of situation (including the giving of any reference) which is contemplated by the doctrine of qualified privilege which is part of the law of defamation.
This argument falls to be considered on the assumption that, but for the overriding effect of public policy, a plaintiff who is in the necessary proximate relation to a defendant will be entitled to succeed in negligence if he proves his case. To assess the validity of the argument entails not the resolution of a point of law but a balancing of moral and practical arguments. This exercise could no doubt produce different answers but, for my own part, I come down decisively on the side of the plaintiff.
On the one hand looms the probability, often amounting to a certainty, of damage to the individual, which in some cases will be serious and may indeed be irreparable. The entire future prosperity and happiness of someone who is the subject of a damaging reference which is given carelessly but in perfectly good faith may be irretrievably blighted. Against this prospect is set the possibility that some referees will be deterred from giving frank references or indeed any references. Placing full reliance here on the penetrating observations of my noble and learned friend, Lord Woolf, I am inclined to view this possibility as a spectre conjured up by the defendants to frighten your Lordships into submission. I also believe that the courts in general and your Lordships’ House in particular ought to think very carefully before resorting to public policy considerations which will defeat a claim that ex hypothesi is a perfectly good cause of action. It has been said that the public policy should be invoked only in clear cases in which the potential harm to the public is incontestable, that whether the anticipated harm to the public will be likely to occur must be determined on tangible grounds instead of on mere generalities and that the burden of proof lies on those who assert that the court should not enforce a liability which prima facie exists. Even if one should put the matter in a more neutral way, I would say that public policy ought not to be invoked if the arguments are evenly balanced: in such a situation the ordinary rule of law, once established, should prevail.’
Lord Slynn of Hadley, Gough, Lord Woolf
Independent 12-Jul-1994, Times 08-Jul-1994, Gazette 02-Nov-1994,  2 AC 296,  IRLR 460,  ICR 596,  UKHL 7,  3 All ER 129,  CLC 766,  3 WLR 354
England and Wales
Cited – Hedley Byrne and Co Ltd v Heller and Partners Ltd HL 28-May-1963
Banker’s Liability for Negligent Reference
The appellants were advertising agents. They were liable themselves for advertising space taken for a client, and had sought a financial reference from the defendant bankers to the client. The reference was negligent, but the bankers denied any . .
Appeal from – Spring v Guardian Assurance Plc and Others CA 1993
The test for malice is the same whether it arises in the context of libel or of injurious falsehood. Glidewell LJ said that ‘Maliciously’ in this context means either knowing that the words were false or being reckless as to whether they were false . .
Cited – Malik v Bank of Credit and Commerce International (BCCI); Mahmud v Bank of Credit and Commerce International HL 12-Jun-1997
Allowance of Stigma Damages
The employees claimed damages, saying that the way in which their employer had behaved during their employment had led to continuing losses, ‘stigma damages’ after the termination.
Held: It is an implied term of any contract of employment that . .
Cited – Johnson v Unisys Ltd HL 23-Mar-2001
The claimant contended for a common law remedy covering the same ground as the statutory right available to him under the Employment Rights Act 1996 through the Employment Tribunal system.
Held: The statutory system for compensation for unfair . .
Cited – TSB Bank Plc v L M Harris EAT 1-Dec-1999
EAT Unfair Dismissal – Reason for Dismissal
The employer appealed a finding against them. An employee, when applying for another job, discovered that the reference given revealed many complaints against her . .
Cited – Commissioner of Police of the Metropolis v Lennon CA 20-Feb-2004
The claimant police officer considered being transferred to Northern Ireland. He asked and was incorrectly told that his housing allowance would not be affected by taking time off work.
Held: The break between employments had affected his . .
Cited – Crossley v Faithfull and Gould Holdings Ltd CA 16-Mar-2004
The employee claimant was to retire. On his employer’s negligent advice he resigned and opted for discretionary benefits.
Held: The employer owed no general duty of care to an employee’s financial interests. Nor could a term requiring such a . .
Cited – Heath v Commissioner of Police for the Metropolis CA 20-Jul-2004
The female civilian officer alleged sex discrimination against her by a police officer. Her complaint was heard at an internal disciplinary. She alleged sexual harrassment, and was further humiliated by the all male board’s treatment of her . .
Cited – Gregg v Scott HL 27-Jan-2005
The patient saw his doctor and complained about a lump under his arm. The doctor failed to diagnose cancer. It was nine months before treatment was begun. The claimant sought damages for the reduction in his prospects of disease-free survival for . .
Cited – Polanski v Conde Nast Publications Ltd HL 10-Feb-2005
The claimant wished to pursue his claim for defamation against the defendant, but was reluctant to return to the UK to give evidence, fearing arrest and extradition to the US. He appealed refusal of permission to be interviewed on video tape. Held . .
Cited – JD v East Berkshire Community Health NHS Trust and others HL 21-Apr-2005
Parents of children had falsely and negligently been accused of abusing their children. The children sought damages for negligence against the doctors or social workers who had made the statements supporting the actions taken. The House was asked if . .
Cited – West Bromwich Albion Football Club Ltd v El-Safty QBD 14-Dec-2005
The claimant sought damages from the defendant surgeon alleging negligent care of a footballer. The defendant argued that he had no duty to the club as employer of his patient who was being treated through his BUPA membership. It would have created . .
Cited – Waters v Commissioner of Police for the Metropolis HL 27-Jul-2000
A policewoman, having made a complaint of serious sexual assault against a fellow officer complained again that the Commissioner had failed to protect her against retaliatory assaults. Her claim was struck out, but restored on appeal.
Held: . .
Cited – HM Customs and Excise v Barclays Bank Plc HL 21-Jun-2006
The claimant had served an asset freezing order on the bank in respect of one of its customers. The bank paid out on a cheque inadvertently as to the order. The Commissioners claimed against the bank in negligence. The bank denied any duty of care. . .
Cited – Welton, Welton v North Cornwall District Council CA 17-Jul-1996
The defendant authority appealed a finding that it was liable in negligence from the conduct of one of its environmental health officers. The plaintiff had set out to refurbish and open a restaurant. He said the officer gave him a list of things he . .
Cited – Clift v Slough Borough Council and Another QBD 6-Jul-2009
The claimant sought damages for defamation. The council had decided that she had threatened a member of staff and notified various people, and entered her name on a violent persons register. She alleged malice, the council pleaded justification and . .
Cited – McKie v Swindon College QBD 11-Feb-2011
The claimant sought damages after having moved jobs, his former employer wrote to his new one saying that he would not be welcome back on the campus, which would be a substantial part, giving reasons.
Held: The claimant succeeded on liability. . .
Cited – Bartholomew v London Borough of Hackney and Yeboah CA 23-Oct-1998
An employee was suspended, but complained of race discrimination. A settlement was reached. When applying for another job, the reference given mentioned only one side of the dispute.
Held: A reference had to be viewed as a whole, and to be . .
Cited – Jackson v Liverpool City Council CA 15-Jun-2011
Having left the defendant with a satisfactory reference, on moving jobs again a further reference was requested, but given this time in terms which the claimant said was defamatory, as to his record-keeping.
Held: The Council’s appeal was . .
Cited – Michael and Others v The Chief Constable of South Wales Police and Another SC 28-Jan-2015
The claimants asserted negligence in the defendant in failing to provide an adequate response to an emergency call, leading, they said to the death of their daughter at the hands of her violent partner. They claimed also under the 1998 Act. The . .
Cited – Steel and Another v NRAM Ltd (Formerly NRAM Plc) SC 28-Feb-2018
The appellant solicitor acted in a land transaction. The land was mortgaged to the respondent bank. She wrote to the bank stating her client’s intention to repay the whole loan. The letter was negligently mistaken and the bankers allowed the . .
Cited – Banca Nazionale Del Lavoro Spa v Playboy Club London Ltd and Others SC 26-Jul-2018
The Playboy casino required a reference for a customer, but asked for this through a third party. The bank was not aware of the agency but gave a good reference for a customer who had never deposited any money with them and nor to whom it had issued . .
Cited – Poole Borough Council v GN and Another SC 6-Jun-2019
This appeal is concerned with the liability of a local authority for what is alleged to have been a negligent failure to exercise its social services functions so as to protect children from harm caused by third parties. The principal question of . .
Lists of cited by and citing cases may be incomplete.
Updated: 11 February 2022; Ref: scu.89460