Seeking legal remedy for bad references?

Nobody likes a tell-tale, and it's a label most people are taught to avoid from an early age. Nonetheless, in our increasingly information-led existence we rely on the tittle-tattle of others for making decisions.

Book reviews on Amazon; online stores have a ratings attached to their profiles, and internet DVD renters encourage users to supply film reviews. Even the CUK bulletin board displays a humorous reference about users in the form of "Not worth listening to," or "More time posting than coding."

These examples are simply the digital equivalent of "taking up references." Humans have indulged in the exercise for thousands of years, and it's common practice among contractors' clients and agents.

But that doesn't mean it's harmless.

Writing on the CUK bulletin board, Contractorcontractor, reports losing two jobs as a result of bad references and wonders if anything can be done about it.

"It seems the hatchets were out. I have no explanation for it," he says.

And PrivateEye, also writing on the bulletin board, found himself at the receiving end of bad references after refusing to renew a contract.

"She [his project manager] was never nominated as a referee by me, but a couple of recruiters went through the switchboard to find who my ex project manager was, and she gave an exceptionally bad reference on both occasions," he says.

It is not illegal to give a bad reference. Tom Potbury at law firm Pinsent Masons explains how as long as a referee is "fair, accurate and true," they can write, or say, what they wish.

This seems like clear instruction for reference writers, but there are hidden dangers.

In Cox v Sun Alliance Life Limited, Cox sued his former employer for giving a misleading reference which implied dishonesty. Sun Alliance Life Limited stated that Cox resigned during an investigation into financial irregularities – which was true – but the investigation was never completed and the implication never proved.

The courts found that the given reference provided the wrong impression, and despite being true, it was not fair.

Potbury didn't want to overstate the importance, and pointed out that cases of this nature are quite rare. "But it does happen," he says, and companies have real reasons to fear providing references, which is why many refuse to take part.

"Companies are not obligated to provide references. Apply a policy of not giving references and you will probably be safe. If you venture opinion, be sure you have evidence to back up your assertions," advises Potbury.

Recruitment agency Computer People has an ISO9000 policy enforcing the uptake of references for each candidate. They ask contractors to supply contacts for the last two positions as part of the selection process.

"We put quite a lot of credence on written references," says Howard Greenwood, associate director at Computer People.

When contractors cannot provide references because companies refuse to help, prospective clients are informed of the reasons. A CV with few gaps, obvious extensions and long contracts is a good reason to put the candidate forward, explains Greenwood, "but in a competitive situation, strong references are a massive help."

But as long as there isn't a trend of bad references all is not lost. Computer People will "dig into references to make sure they match up," he adds.

For the contractor, this is not ideal. If an agent does not bother to check out previous positions or if their opinion is tainted by a poor reference, the contractor may simply never know why they fail to receive interview requests.

As Ben Straw, long-time contract architect points out, "The trick is to find out if someone has given you a bad reference and not use the beggar again."

Both bulletin boarders, Contractorcontractor and Privateeye, say they have moved on in their contracting careers, and suffered little or no long term damage from their brush with bad references.

This is a favourable outcome, but it is certainly possible to take matters to the courts. The Data Protection Act empowers contractors to request copies of references that have been supplied to third parties, and laws of negligence allow a case for damages to be formulated.

Yet Potbury warns this can be a long, and expensive road. If you fail to prove a reference was unfair, inaccurate or false, you could have your own costs and the defendant's costs to cover.

William Knight

Wednesday 2nd Aug 2006