Negligent references!

The casino granted the individual a cheque cashing facility on the basis of a reference from the bank stating that the individual was trust worthy up to £1.6 M in any one week. The individual drew down on the cheque cashing facility but presented cheques that were found to be forged.

The reference was subsequently found to be inaccurate as the individual never had funds in his accounts with the bank. It also appeared to have been sent by an employee of the bank who did not have actual authority to do so. In coming to its decision the Court considered the two possible tests for liability: whether the negligent statement was made with the employer’s actual or apparent authority, or whether it was done in the course of the employee’s employment. The High Court found that the court was liable for the actions of the employee whichever test applied.

Once again the perils of providing references is highlighted.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.