Blacklisted workers could get up to £60 million in compensation

Ian Kerr

Blacklisted workers in Britain may receive up to £60 million in compensation – with individual claims averaging £20,000 – in a case being brought against construction company, Sir Robert McAlpine Ltd. The following article explains how and why and also details some of the legal problems for future cases…

First concerted legal action against blacklist will reveal the need for a radical rethink of employment regulations, by Mike Hughes.

In July last year, 86 blacklisted workers launched a High Court action against the construction firm Sir Robert McAlpine Ltd for compensation as a result of the firm’s alleged central role in creating “The Consulting Association” (TCA). TCA was the resurrection of ” The Services Group”, the Economic League’s long standing operation to blacklist alleged political and trade union activists in the construction industry. To keep away from public scrutiny TCA was established as a trade association, rather than a limited liability company, and it was managed by Ian Kerr, who before the League was wound up in 1993 had been the Economic League’s senior manager responsible for “The Services Group”.

The TCA’s activities were exposed by the Information Commissioner’s Office (ICO) in 2009. The ICO raided TCA’s office, and seized evidence including its blacklist. Kerr was successfully prosecuted for breaches of the data protection legislation. There were around 3.200 names on the blacklist, and those lodging claims are just the first to be considered. If they are successful, more of those on the blacklist victims will come forward to make claims. Rory O’Neil of the Blacklist support group which is supporting the claim suggests that with settlements in the order of £20,000 the action could be worth up to £60m to claimants. if successful the legal costs for McAlpine will be huge.

Guney Clark & Ryan, solicitors, served a claim on behalf of 86 claimants in July, Early this month papers were served to the high court on behalf of 81 of these, who will be represented by Sir Hugh Tomlinson QC, who represented many of those in the News of the World phone hacking scandal. This is the first group action on behalf of blacklist victims seeking substantial damages. But to bring the case forward the lawyers have had to resort to an obscure and rarely used aspect of the common law: “the tort of unlawful means conspiracy”. This means that McAlpine’s defence will be complicated, and as well as challenging facts much will also depend on legal points and interpretation.

Establishing the facts of the case in court has now become slightly more complicated. This is ironic because since the claim was lodged last July, as well as the information from the ICO, Kerr himself gave quite detailed evidence to the House of Commons Scottish Affairs select committee. This included information about McAlpine’s involvement in establishing TCA. Unfortunately Kerr died the following week, and McAlpine are challenging some of his evidence. The complexity of the legal argument, and obscurity of the law means that it is hard to see that – even if this case is successful it will set sufficiently clear precedents to change recruitment practices in general.

In law economic torts identify relationships or perhaps more correctly duties between individuals and organisations where there is no explicit contract drawn up between them that could lead to a claim of negligence, or a breach of a contractual duty such as the duty of care. There are two types of conspiracy within the torts: ‘conspiracy to injure’ and ‘unlawful means conspiracy’. The former relates to conspiracy to specifically harm an individual, in ordinary terms “malice”, the second relates to a conspiracy to act unlawfully in self interest, but by doing so deliberately harming an individual. This amounts to a breach of a duty not to harm.

The use of this tort in the case against McAlpine is what lawyers would call “innovative litigation”. But it is also clear that in there are a number of unique features of the case against McAlpine’s that make it an attractive option… The creation and use of blacklists is in its very nature conspiratorial, but the ICO’s evidence gathering and prosecution laid bare much of the workings of the conspiracy and the involvement of McAlpine’s, and director Callum McAlpine. Ian Kerr’s evidence to the House of Commons Select Committee has subsequently added to that evidence. There were individuals on the blacklist who have suffered significant harm, although we believe the ICO has not contacted those on the list, and only responds to queries from individuals, so there could be hundreds of potential claimants to be found. The means by which this harm was done would also seem to be “unlawful”, which in the field of the law of tort would mean “actionable” in court not criminal. This would certainly seem to be be the case, but we may guess that this is likely to be one of the points of law tested in the case. One of the conspirators – McAlpine’s – is a major company with substantial resources. TCA in contrast was an unincorprated “trade association”.

Unfortunately these are not circumstances that are likely to be replicated for others who find themselves blacklisted. Also, with the appearance of the website HR Blacklisting the technology of blacklisting is moving offshore and embracing wiki models where the conspiracy becomes more dispersed and tortuous and certainly less actionable.

The most important implication of the case for the future of blacklisting is that it exposes the inadequacy of the current specific legislation against blacklisting to deal with significant harm done by blacklisters to individuals and their families. This legislation is restricted to the Data Protection Act and, only since the prosecution of Ian Kerr by the ICO in 2009, the Employment Relations Act 1999 (Blacklists) Regulations 2010. Kerr’s prosecution resulted in a fine of £5,000, paid, he told the select committee, by McAlpine’s; there was no prosecution of the participating firms and no compensation for those blacklisted.

The facility to introduce regulations to prevent blacklisting was introduced in the 1999 Employment Relations Act, but the regulations were not introduced until the activities of the TCA were exposed. Even if the regulations had in fact been introduced earlier it is unlikely that they would have been of use to many on the TCA blacklist. This is because there are a number of important constraints to their application… It only applies to trade unionists and those taking part in trade union actions, although for it to be prohibited it must include trade unionists who are listed because of their trade union activity. It would be heard by an employment tribunal, with the complaint being made against an employer or employment agency and not necessarily the blacklisting agency. Cases would generally be heard within three months of the unlawful act of refusing employment or dismissal. Special pleas would have to be lodged with tribunals to set this restriction aside. Each occasion of denial of employment would have to be heard individually.

Although there is a minimum payout of £5,000, the tribunal is free to pay lower if they believe the complaint was in some way responsible for their inclusion on the prohibited list. There is an absolute maximum payment of £65,300. The average claim in the case against McAlpine’s is around £20,000. In one case it is believed to amount to £300,000.

The future of blacklisting legislation is being considered by the House of Commons Scottish Affairs select committee. However it is not clear how, or if they will be able to influence employment regulations. Equally, it not clear whether the prosecution or outcomes of the action against McAlpine’s will have an impact on regulations. What is clear is that legislation against blacklisting is too weak, too late and misses the point by focusing on the blacklist – the specific and changing technological delivery mechanism of the offence – rather than the act of blacklisting that should be in the law’s sight.

This needs a radical rethink of the approach to eradicating blacklisting, which is generally regarded as unacceptable in liberal democracy. There are two ways that English or UK law could approach this. The first would be by making political beliefs a protected factor in employment, in the same way that race, gender, disability, sexual orientation are. The second approach would be to replace the current piecemeal requirement on employers to recruit fairly only in respect of those protected groups currently recognised in law, with a general duty on employers to recruit fairly and not take into account factors that are not relevant to the post being recruited to, such as membership of a trade union or political party or the holding of any particular political views.

To date, the trade unions who have been leading the campaign against blacklisting have not explored or made the case for either of these approaches, and as far as can be established the Select Committee has not considered, and is not planning to consider these issues. The result is, therefore, that most blacklisting employers will stay out of the hot water McAlpine’s have found themselves in, and most blacklisted employees will, unlike TCA victims, remain without access to the law.

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