AXA's references cost ex-director job with Prudential, Court of Appeal rules

SINGAPORE - The Court of Appeal has found that AXA Life Insurance "breached the duty of care" to a former senior financial services director who had claimed its references cost him a S$2.2 million remuneration package with Prudential.

Mr Ramesh Krishnan, 45, had lost a defamation suit in the lower court against AXA. He had accused AXA of defaming him when providing references on his work performance.

Mr Ramesh said AXA conveyed a much lower persistency rate, one that would lead an ordinary person to infer that he had been incompetent. Persistency rates refer to how long the policies were still in force after a given period.

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

But High Court Judicial Commissioner George Wei, in a ruling last year, found that AXA did not breach the duty to take reasonable care in responding to Prudential, Tokio Marine and the Monetary Authority of Singapore, because the accuracy of AXA's calculations of the persistency ratios was "supported by evidence and remained largely unchallenged" by Mr Ramesh.

The Court of Appeal, however, 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," the Court of Appeal wrote.

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.