In Cheltenham Borough Council v Laird ( EWHC 1253 (QB)) the High Court considered whether answers given in a pre-employment medical questionnaire amounted to “representations” inducing the employer to enter into a contract of employment and, if so, whether a failure to disclosure information in answers to the questionnaire constituted misrepresentation.
In summary, this case makes clear that answers to a pre-medical questionnaire can amount to “representations” for misrepresentation purposes if the employment is stated to be conditional upon receipt of a satisfactory medical report. A claim for misrepresentation is only likely to become relevant where an individual’s employment has already terminated so that termination of the contract of employment is not an available remedy for the employer. This was the case here.
The case also flags for employers the importance of making sure that pre-employment medical questionnaires perform their intended function and enable the employer to assess both the suitability of a candidate for a role and whether any adjustments might need to be made in accordance with their obligations under the Disability Discrimination Act 1995.
In 2002 Mrs Laird was offered the position of managing director with the Council. The offer of employment was expressed to be conditional upon medical clearance being obtained from the Council’s medical adviser.
Mrs Laird therefore completed a medical questionnaire. Her answers made no reference to any history of depression, stress-related illness, or any history of taking anti-depressant medication. Mrs Laird had, however, suffered from three episodes of depression with associated anxiety during the five year period immediately prior to becoming employed with the Council.
In early 2002, Mrs Laird commenced employment with the Council. Not long afterwards a series of disputes arose between Mrs Laird and various members of the Council cabinet. In late 2004 Mrs Laird was suspended on full pay pending an investigation into disciplinary allegations against her. This investigation was not completed as Mrs Laird became unwell with mental health problems.
Mrs Laird was assessed by a psychiatrist and it became apparent that Mrs Laird had suffered from stress-related depression in the past and had been prescribed anti-depressants. Mrs Laird was certified as unfit to take part in the disciplinary investigation. It was concluded that there was no reasonable prospect of the substantive investigation into the disciplinary allegations against Mrs Laird ever taking place or being concluded. In August 2005, the Council notified Mrs Laird’s solicitors that they considered that the contract of employment had been frustrated and that her employment had therefore terminated.
In September 2005, Mrs Laird applied successfully to the Council for payment of ill health retirement benefits.
In August 2006, the Council obtained a copy of Mrs Laird’s pre-employment medical questionnaire and discovered that it made no mention of psychiatric illness. It brought a claim in the High Court against Mrs Laird alleging negligent and fraudulent misrepresentation, seeking damages of almost £1 million, to cover the cost of dealing with the internal disputes and amounts paid to Mrs Laird in respect of ill health retirement benefits.
Fraudulent or negligent misrepresentation
A misrepresentation is an untrue statement made by one party to another, which induces that other party to enter into a contract. Fraudulent misrepresentation is a false representation made knowingly, or without belief in its truth, or recklessly as to the truth.
Negligent misrepresentation is a false representation made carelessly or without reasonable grounds for believing its truth. In either case, a claimant may seek rescission of the contract (i.e. seek to have it set aside and the parties be put back into the positions they were in before the contract was entered into) and/or damages arising from the misrepresentation.
The Court was clear that Mrs Laird’s answers to the questionnaire had formed representations that had induced the Council to enter into the employment relationship as the offer of employment was stated to be conditional on receipt of a satisfactory medical report. Her answers could therefore potentially form the basis of a misrepresentation claim.
It did not, however, consider the representations by Mrs Laird to be false. They could not therefore form the basis of either a fraudulent or negligent misrepresentation claim. The Court concluded that in each case Mrs Laird’s answers were the, or at least a, correct answer.
The Council was here stymied by the fact that the questionnaire it used was poorly drafted. The questions were narrow and did not require disclosure of more than the current state of health or the most recent illness or injury. In particular, there was no sweep up question which would call for disclosure outside of the specific questions. The questionnaire simply did not fulfil its purpose; it did not adequately extract medical information which could then form a basis for assessing an applicant’s health.
Points to note
The judgment made clear the following:
- A medical questionnaire should be construed objectively, in the way a reasonable person in the position of the candidate would have done.
- If a question is ambiguous and more than one meaning might reasonably be given, an answer which correctly addresses either meaning would be true. An employer is under an obligation to make the questions clear and the candidate’s only duty is to answer the question to the best of their ability and knowledge.
- The answers given to a questionnaire can be relied on by the employer and therefore could cause loss or damage if care is not taken by the candidate to ensure that the answers are accurate.
- A disclaimer in a questionnaire to the effect that the only consequence of any material fact being materially withheld would be termination of employment should not prevent an employer from being able to seek appropriate remedies for actionable misrepresentation.