MAGRATH LLP HUMAN RESOURCES UPDATE:
LENNON V COMMISSIONER OF POLICE OF THE METROPOLIS

The Court of Appeal has recently given judgment in the above case, the consequences of which will have far reaching implications for directors, managers, and in particular human resources professionals.

The facts were simple. The Claimant, Lennon, a Metropolitan Police Officer, applied for a transfer to Northern Ireland. He obtained advice regarding the transfer from the Metropolitan Police's personnel executive officer (the "Personnel Officer"), and specifically enquired about his housing allowance entitlement (the "Allowance").

The Personnel Officer made the transfer arrangements, and Lennon's employment with the Metropolitan police ceased on 11 January 1999. Before commencing employment in Northern Ireland, Lennon took three weeks leave, which he understood to be unpaid leave.  In fact, this served as a break in the continuity of his employment and he lost entitlement to the Allowance.

Lennon brought a claim against the Commissioner of Police (“the Commissioner”) in negligence, and at first instance the judge found that the Commissioner, as the Personnel Officer's employer, owed Lennon a relevant duty of care. The judge observed that the relationship between Lennon and Commissioner was sufficiently proximate and the Commissioner, having voluntarily assumed responsibility for the transfer, had given advice which he knew the Claimant would rely on. Consequently, the Commissioner had failed in this duty (albeit via the Personnel Officer) by making a negligent omission, and not warning Lennon of the implications of taking the leave.

The Commissioner appealed the decision.  The Court of Appeal held that the Personnel Officer was not a 'professional advisor' within the narrow definition usually required for a Claimant to recover purely economic loss, resulting from a negligent act or omission.  However, the Court of Appeal said this was a managerial position, and gave access to specific knowledge of the implications to service benefits of transfers.  Furthermore, the Personnel Officer had held herself out as the person responsible for the transfer arrangements, and had not notified Lennon that this was outside her usual area of responsibility.

Therefore, despite the fact that no current contract of employment existed between Lennon and the Commissioner, a similar relationship existed and a duty of care did arise. Consequently, the Commissioner, and those acting under him, were under a duty of care to give advice to Lennon which protected him from economic loss.

This case has serious implications for Managers and HR Professionals, especially when acting outside their normal area of expertise.  Care must be taken to ensure that the advice is accurate and will not place the employee at risk of economic loss or cause them to suffer any other detriment.   If in doubt, the matter should be referred to someone with the appropriate expertise, or the employee advised of the precise ambit of advice and the limits of that advice.  Full details of any such advice should be retained.