Keoghs Insight


Terry Zindi

Terry Zindi


T:01204 677187

Nothing to declare?

Disease Aware Issue 5

Medical questionnaires are a common part of the job application processes. It is well established that, so long as the procedure complies with the provisions of the Disability Discrimination Act 1995 (DDA) an employer can, and should, question a potential employee about relevant medical conditions.

Only information that is directly relevant to the position should be obtained, the questionnaire should be confidential and there should be a procedure whereby the employer’s medical advisor views the completed form and provides advice to the employer. If the answers reveal that the applicant has a disability, then the DDA will apply.

The basis of a counterclaim

If a claim is made for a condition that the claimant knew of but did not declare at the pre-employment medical evaluation, can the employer subsequently pursue the claimant for any established losses - such penalties that might arise for non-performance or delays on a contract, or contractual sick pay or pension contributions for example? There is a tort of deceit. It is set out in Lord Herschell’s judgment in Derry v Peek (1889):

“First, in order to sustain an action of deceit, there must be proof of fraud and nothing short of that will suffice. Secondly, fraud is proved when it is shown that a false representation has been made (i) knowingly, (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false.”

The standard of proof required in relation to an allegation of fraud in a civil claim is that of the balance of probabilities.

The Misrepresentation Act 1967

This act specifically allows for damages that might arise after misrepresentation and states, at Section 2:

  1. Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made the facts represented were true.
  2. Where a person has entered into a contract after a misrepresentation has been made to him otherwise than fraudulently, and he would be entitled, by reason of the misrepresentation, to rescind the contract, then, if it is claimed, in any proceedings arising out of the contract, that the contract ought to be or has been rescinded, the court or arbitrator may declare the contract subsisting and award damages in lieu of rescission, if of opinion that it would be equitable to do so, having regard to the nature of the misrepresentation and the loss that would be caused by it if the contract were upheld, as well as to the loss that rescission would cause to the other party.
  3. Damages may be awarded against a person under subsection (2) of this section whether or not he is liable to damages under subsection (1) thereof, but where he is so

liable any award under the said subsection (2) shall be taken into account in assessing his liability under the said subsection (1).

There is very limited civil case law to provide any guidance. However, in Cheltenham BC v. Laird (2009) the local authority sued for the recovery of an early retirement pension, valued at £500,000, on the grounds of fraud / negligent misstatement. The basis of the claim was partly on the Misrepresentation Act 1967.

Mrs Laird had suffered from depression induced by workplace stress prior to her employment with the local authority. The selection process (for the post of managing director) involved a pre-employment medical questionnaire, and she answered “no” to the following:

    • Do you have either a physical and/or mental impairment?
    • Have any of your near relatives suffered from… Mental Trouble?
    • Have you any ongoing condition which would affect your employment? – to which she answered, “No - nb I get occasional migraine but this does not affect my ability to work or usually require time off from work. (Treated with Zonig)”

The form also contained a declaration:

“I declare that all the statements on the above answers are true and given to the fullest of my ability and acknowledge that if I have wilfully withheld any material fact(s), I am, if engaged liable to the termination of my contract of service. I agree to the Council’s Medical Advisor seeking information from any Doctor who has at any time attended me and I authorise the giving of such information.”

She was appointed and given a remit to restructure the Council. Elections led to the appointment of a new council leader and their relationship deteriorated. Subsequent complaints made by the leader about Mrs Laird led to an investigation. She suffered a nervous breakdown and, as a result, retired on ill health grounds.

The Court indicated that potentially the part of Mrs Laird’s pension attributable to her employment with Cheltenham BC could be recovered, but found that the medical questionnaire was poorly drafted and inadequate. As a result, the allegedly fraudulent/negligent misrepresentations made by Mrs Laird were not false nor in context were the answers misleading, the court finding that she had believed her answers to be true.

Hamblen J commented that: “in many cases material representations made in a job application form will induce the Contract of Employment made, and yet it appears that there is no precedent for an action for damages such as that brought in these proceedings. The likely reason is that in most such cases there will be no damages. The appropriate remedy will be rescission and termination of the Contract of Employment.”

The judge went on to state however, that if there had been a fraudulent or negligent misrepresentation, then the Council did have an actionable claim. The current statute and case law therefore does provide some guidance for claims of this nature.

Application in disease claims

There are some specific diseases where consideration of a counterclaim might be more prominent. In claims for HAVS for example, where the construction industry often has a migratory work force who have carried out similar work over a number of years, an employee may be tempted to withhold symptoms of HAVS in any pre-employment screening.

Indeed, this is often an issue encountered by Insurers and defendants quite regularly, where a claimant will admit to long-standing symptoms for a number of years in his letter of claim, which might be at odds with his pre-employment health questionnaire.

This situation also often arises in repetitive lifting claims where a relevant history of back pain is often withheld, and claims for a stress-related illness where previous episodes of work-related stress or continuing medication for symptoms of depression are often not disclosed. If the failure to disclose is materially relevant, i.e. the claimant would not have been offered that particular role due to the nature and extent of his symptoms (with regard to the terms of the DDA), then there are potential grounds for a counterclaim, providing a loss can be established.

There are sensitivities to this tactic that merit consideration. If seen as an attempt to bully or intimidate a claimant out of pursuing a meritorious claim then the court is likely to take a dim view.

In addition, some aspects of non-disclosure will prove problematic, such as ambiguity in a question or in situations where the claimant’s symptoms wax and wane. It should also be apparent that a failure by the claimant to disclose a relevant medical history does not negate any subsequent breach of duty by an employer. If that employer has been negligent and caused a further injury or the exacerbation of one, damages to the claimant will still follow.

Negligence will, of course, be predicated by what the employer knew. An employer’s duty to a fit and healthy employee may well differ to one already injured - for example a healthy employee may be able to use vibratory tools up to the recommended action levels, whilst one with symptoms of HAVS, may suffer further injury at low levels of exposure. Nevertheless, a counterclaim can be a valid response in a claim where a claimant pursues an employer for damages in respect of injuries that were present long before the claimant’s employment commenced.

The Theft Act 1968 and Fraud Act 2006

The 1968 Theft Act established the offence of obtaining pecuniary advantage by deception (section 16). Where an employee obtains employment by misleading an employer, that would be an offence under the act. The 1968 Act was largely repealed by the 2006 Fraud Act, however this particular offence is also detailed in the Fraud Act (section 3).

In neither of the two statutes is there specific mention of a civil remedy and the statute would not form the basis of a claim against the claimant but, tactically it is worth raising in pursuit of a counterclaim. It could potentially be a criminal offence for an employee to deceive his employer and obtain employment as a result. Examples of prosecutions under either of these acts include the following:

R v Denice Stewart: Ms Stewart obtained employment as a nurse by fraudulently referring to qualifications that she did not hold. She received a two year suspended sentence and 100 hours of community service.

R v Harem Amin: Mr Amin used a false immigration card to obtain employment and received a custodial sentence for the offence.

Any reference to the criminal law must, it goes without saying, be both judicious and cautious. It is not the basis of a civil action but can assist tactically if a claim of this nature is to be pursued.

The recent Jackson reforms will benefit any employer making a counterclaim. Qualified One Way Costs Shifting (QOCS) applies to a counterclaim made within a personal injury claim. Therefore a defendant could recover costs in respect of a successful claim, whilst facing no costs liability in the event that the claim was unsuccessful.

A valid counterclaim could offset some of the non-recoverable costs incurred in defending a claim without merit. A successful counterclaim may also, in addition, assist in proving dishonesty and whether a claimant can enjoy the benefit of QOCS protection. On a claim considered to be without merit, this may be a useful step to take therefore.

The decision to pursue a counterclaim must be subject to careful consideration. There should be scrutiny of any medical records, as well as any employment records from non-sued employers to determine whether there has been full and open disclosure.

In circumstances where an employer’s breach of duty is not in issue, then the decision to pursue a counterclaim may be seen as bullying or intimidation and should be used judiciously. With the advent of the Jackson reforms however, alternative means of litigation certainly bear consideration.