Hincks v Sense Network Ltd (High Court)
The High Court has held that where a reference contains opinions founded on the outcome of previous investigations into the relevant employee’s conduct, the referee need not inquire into the procedural fairness of those investigations in order to avoid claims for negligent misstatement.
Here, the Claimant brought a claim for negligent misstatement against his ex-employer in relation to an employment reference which included critical comments based on the outcome of internal investigations into his conduct during employment. He claimed that these ‘misleading’ comments flowed from a process which was an ‘inadequate sham’ and that a referee’s duty of care requires consideration of both the adequacy and procedural fairness of any investigations on which the contents of a reference depend.
The High Court noted formidable difficulties with the Claimant’s argument and dismissed his claim. Above all, it recognised that such a detailed, retrospective inquiry by a referencewriter, in particular where the reference request is made months or years after an investigation, would either be impossible (due to a lack of documentation or staff with relevant knowledge) or impose a disproportionate burden on employers.
In fact the scope of a reference-writer’s duty of care is more limited and further analysis of procedural fairness is only necessary where there is evidence of obvious errors or other ‘red flags’ which may reasonably prompt further enquiries. However, the Court noted that this did not give employer’s free rein when including opinions in references, which in all cases requires: (i) objective and rigorous assessment; and (ii) the taking of reasonable care to satisfy itself that the basis for any opinion has a proper and a legitimate basis. Steps must also be taken to ensure that any reference is not misleading either by virtue of any omission or by implication, nuance or innuendo.
This case highlights the issues employers can encounter when willing to provide references which go further than simply setting out factual particulars of employment. Where an employer’s policy allows this, it would be prudent – in line with defined retention periods - to retain sufficient records to justify the opinion given.