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Spring v Guardian Assurance plc [1994] UKHL 7


Employer in breach of duty of care by negligently providing defamatory reference

Facts

The plaintiff was dismissed from his job as a company sales representative for the first defendant. Upon seeking employment with another company, he received an unfavourable reference from the first defendant and the new employer refused to appoint him. At trial, the judge held that the defendants had been under a duty of care to the plaintiff and the reference given had been a negligent misstatement.

Issue

The Court of Appeal rejected the plaintiff’s case in negligence on the basis that untrue statements in references are within the preserve of the tort of defamation and that the tort of negligence should not intrude. In the House of Lords, the plaintiff argued that the law of negligence ought to develop over time. Lord Keith of Kinkel observed that the key question was whether a defamatory reference invokes liability in negligence to the subject of the reference if it is compiled without reasonable care.

Held

The House of Lords allowed the plaintiff’s appeal. An employer who provides a reference in respect of an employee to a prospective new employer owes a duty of care to the employee in respect of preparation of the reference. If the employer breaches this duty then they are liable in damages for the economic loss suffered by the employee as a result. Lord Woolf noted that it was necessary to extend the law of negligence in this way because the law of defamation does not provide an adequate remedy in circumstances where damage is caused to an employee by a reference which, due to negligence is, inaccurate. This is because the law of defamation requires the establish of malice and not simply negligence.

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