Dike v Rickman

A person giving a reference must take reasonable care to provide information that is accurate and fair. A reference may properly identify genuine compliance concerns, allegations of bad advice and complaints of sexual harassment, even where some complaints have not been upheld, provided the description is supported by the information available and is not misleading. In ordinary usage, sexual harassment may consist of a single unwanted incident. The conduct need not be persistent or intentionally sexual if, viewed objectively, it is degrading or offensive and related to sex.

Ian Dike, a self-employed independent financial adviser, sued his former company, Ziegler Rickman Ltd, and its director, Gerald Rickman, over a reference supplied to St James’s Place Wealth Management Group plc. He alleged breach of contract, negligence and malicious falsehood, contending that answers concerning compliance, complaints, advice, his reasons for leaving and his conduct towards female workers were false or misleading.

The company accepted that, having elected to provide a reference, it owed contractual and tortious duties to take reasonable care. The court had to determine whether the challenged answers were inaccurate or unfair, whether the director was personally liable, whether the reference was malicious, and whether it caused the withdrawal of the claimant’s prospective engagement.

1. The claim was dismissed. The challenged statements in the reference were true. The company therefore did not act in breach of contract or negligently in giving the reference.
2. The answer concerning compliance was justified. At the relevant date there were current and important compliance concerns, including attempts to influence complaints, an allegedly unlawful fee for an aborted equity-release transaction, unauthorised pensions advice and delayed assistance with a pensions review. The reference was not required to set out every supporting detail.
3. The answer concerning complaints and bad advice was also accurate. A complaint may be rejected on the documentary file while still containing allegations of poor oral advice. The fact that a compliance officer or ombudsman did not uphold a complaint did not eliminate evidence contained in the complaint of advice which, if given, was bad advice.
4. The description of two complaints as complaints of sexual harassment was fair in ordinary language. The court was not applying a statutory definition. Sexual harassment could comprise a single incident. Uninvited touching of a woman’s clothing and a threat to smack a woman’s bottom could objectively be viewed as degrading or offensive conduct related to sex. Persistence, proof of intention and a prior express indication that the conduct was unwelcome were not necessary to justify the description.
5. The answer that Mr Dike was difficult to work with and that the company would not be sorry to lose his services was supported by the consistent evidence. The reference did not convey that he was wholly unemployable; it identified matters which a prospective engager should take into account and monitor.
6. It was unnecessary to decide whether Mr Rickman personally owed a duty of care because, even assuming that duty existed, it had not been breached. The malicious-falsehood claim also failed because the relevant answer was true and there was no evidence of malice.
7. The court did not need to decide causation. It nevertheless considered that the reference had prompted closer scrutiny rather than conclusively ending the application, and that later concerns, including the claimant’s business practices and another reference, were at least principal causes of the final refusal.