Singh v Royal Life Insurance Ltd & Ors

Permission for a second appeal requires an important point of principle or practice, or another compelling reason. Disagreement between judges below does not itself satisfy that threshold. In a negligence claim concerning an employment reference, the duty of care arises from the employer–employee relationship. The claimant need not first prove that the reference was inaccurate or unfair before alleging breach. The relevant questions include what information the employer possessed, what investigations it conducted, the sources of that information, and why the reference was considered proper. Whether the investigation was adequate and whether the duty was breached are ordinarily matters for trial, not a permission application or interlocutory appeal.

The applicant, a former financial adviser and branch manager, brought negligence proceedings against his former employers concerning references supplied under LAUTRO rules. The references stated that the employers were unable to provide a fit and proper reference while matters concerning him remained under investigation.

Master Murray struck out the negligence claim but allowed a fresh pleading based on the duty recognised in Spring v Guardian Assurance [1995] 2 AC 296. On appeal, Mr Walter Aylen QC held that the pleading was tenable because the employer’s duty could require investigation of matters included in a reference. The present application sought permission for a second appeal. The central questions were whether the statutory and procedural second-appeal threshold was met and whether the pleaded duty depended on proof of inaccuracy or unfairness before trial.

1. Application refused. The court refused permission to bring a second appeal.
2. Under section 55 of the Access to Justice Act 1999, and the Civil Procedure Rules, permission for a second appeal requires an important point of principle or practice, or another compelling reason. The fact that the judge below disagreed with the master did not itself constitute a compelling reason. Any compelling reason had to be intrinsic to the decision.
3. The negligence claim was properly treated as founded on the duty recognised in Spring v Guardian Assurance [1995] 2 AC 296, namely that an employer may owe a duty of care when preparing a reference for an employee or former employee.
4. The existence of the duty depended on the relationship between the parties. It did not depend on the claimant first establishing that the reference was materially inaccurate or unfair. Those matters went to breach, not to the existence of the duty.
5. The pleaded case was tenable because it raised whether the employer had properly investigated the matters included in the reference. The appropriate inquiry could include what information the employer had, when it had it, what investigations it conducted, the sources of the information, and why it considered the contents of the reference proper.
6. Whether further investigation was required and whether the duty was breached involved factual assessment and experience. Those issues were for trial. The court should not use a second-appeal application to determine the merits on assumptions favourable to the respondent.

• Court of Appeal (Civil Division): Master Murray struck out the negligence claim but permitted a fresh pleading based on the duty concerning employment references. Mr Walter Aylen QC, sitting as a Deputy High Court Judge, allowed the appeal and held the pleading tenable. The Court of Appeal refused permission for a second appeal.