AXA 'breached duty of care' to former agent

Logos of France's biggest insurer Axa are seen on a building in Nanterre, near Paris on March 8.
Logos of France's biggest insurer Axa are seen on a building in Nanterre, near Paris on March 8.PHOTO: REUTERS

Appeal Court partly overturns judgment in defamation suit over job references provided

AXA Life Insurance "breached the duty of care" to a former agent who claimed references from the insurer cost him a $2.2 million remuneration package with Prudential, the Court of Appeal ruled yesterday.

Mr Ramesh Krishnan, 45, had accused AXA of defaming him when providing references on his work performance. He lost the defamation suit in the lower court last year but that judgment was partly overturned yesterday.

Mr Ramesh said AXA's reference would lead an ordinary person to infer that he had been incompetent.

He said the reference cost him potential remuneration from two prospective employers - a $2.2 million package with Prudential and a $20,000 sign-on fee with Tokio Marine.

AXA had told the two firms of the "persistency" rates of policies sold by financial advisers under Mr Ramesh's supervision. Persistency rates refer to how long the plans were still in force after a given period.

High Court Judicial Commissioner George Wei ruled last year that AXA did not breach the duty to take reasonable care when responding to Prudential, Tokio Marine and the Monetary Authority of Singapore (MAS) because the accuracy of AXA's calculations of the persistency ratios were "supported by evidence and remained largely unchallenged" by Mr Ramesh.

But the Appeal Court held that Mr Ramesh succeeded in his claim of negligence against AXA in respect of his application to join Prudential but not his application to join Tokio Marine.

"We find, on the facts, that (AXA) breached the duty of care which it owed (Mr Ramesh) in providing the information set out in the reference check form to Prudential as well as in its subsequent correspondence with Prudential and MAS, and this caused Prudential not to employ him," wrote Chief Justice Sundaresh Menon, who delivered the judgment yesterday.

"We do not go so far as to say that an employer is required to guarantee the accuracy or truth of a reference. What is required is the exercise of reasonable care in the preparation of the reference so as to meet the foregoing requirements of truth, accuracy and fairness."

Although the information provided in the reference check form was factually true, a substantial part was incomplete, misleading and unfair to Mr Ramesh, it found.

Further, it found that AXA had unfairly withheld information that was relevant to clarify other information that it had earlier included in the reference check form, despite Prudential's requests for the further information.

The matter has been referred to the High Court for an assessment of the damages.

The Court of Appeal awarded Mr Ramesh the costs of the appeal, and of the trial in respect of only the negligence claim pertaining to his application to join Prudential, but not the negligence claim pertaining to his application to join Tokio Marine, nor the defamation and the malicious falsehood claims.


Correction note: An earlier version of the story stated that Mr Ramesh Krishnan was a former employee of AXA Life Insurance. This is incorrect. He is a former agent. We are sorry for the error.

A version of this article appeared in the print edition of The Straits Times on July 28, 2016, with the headline 'AXA 'breached duty of care' to former employee'. Print Edition | Subscribe