Johnson v Medical Defence Union Ltd (No 2)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Buxton,Lady Justice Arden,Lord Justice Longmore |
| Judgment Date | 28 March 2007 |
| Neutral Citation | [2007] EWCA Civ 262 |
| Docket Number | Case No: 2006/0596 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 March 2007 |
[2007] EWCA Civ 262
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR JUSTICE RIMER
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Buxton
Lady Justice Arden and
Lord Justice Longmore
Case No: 2006/0596
Mr Martin Howe QC and Mr Ashley Roughton (instructed by Withers LLP) for the Appellant
Mr Richard Spearman QC and Miss Jacqueline Reid (instructed by Fladgate Fielder) for the Respondent
Hearing dates: 12–14 December 2006
Preliminary
1. This case raises some striking issues arising out of the Data Protection Act 1998 [the 1998 Act]. The case has nothing, or almost nothing, to do with the protection of the privacy and integrity of a person whose personal data is held by another person on a computer, which is usually regarded as being the central mission of the 1998 Act and, even more so, of Directive 95/46/EC [the Directive] that the 1998 Act seeks to implement: as to which see further §§ 15ff below. Rather, it is claimed that the 1998 Act has created rights between the parties that are in substance though not in form of a contractual nature; and rights to compensation for infringement of those primary rights of a nature that did not previously exist in English domestic law.
2. That claim arises in this way. As will be explained more fully below, Mr Johnson complains that the insurance cover and professional support that he had previously enjoyed under his membership of the defendant [the MDU] was withdrawn unfairly, and by reason of that withdrawal he suffered loss and damage. It is agreed that as a matter of contract, or otherwise in domestic law, he could not complain of that decision, however much he objected to it and however unfair it was. He accepts that the MDU had an absolute discretion to terminate his membership but (at this stage to speak generally of a much-contested issue) decision-making within the MDU that led to the decision to terminate Mr Johnson's membership involved dealing with and assessing information about Mr Johnson that was held on a computer. That is said to change the entire case, because Mr Johnson can now claim, not that the decision itself was unfair, or not open to the MDU, but that the processing of information that led to that decision was done unfairly. That was a breach of the requirements of the 1998 Act; it caused the decision to withdraw cover; and Mr Johnson can thus recover damages for the loss caused to him by that withdrawal. It should be emphasised that those damages are not calculated according to the common law principles that would be applied if Mr Johnson's claim had its legal basis in the removal of his cover, but rather are damages calculated and assessed according to the special rules attaching to breach of the terms of the 1998 Act that are set out in section 13 of that Act. Absent the computer, none of these claims would have been maintainable, under the 1998 Act nor under any other chapter of English law.
3. These propositions, as far as this court is aware novel in their nature, have led to difficult and complex litigation both in this court and below. I apologise in advance for the length of this judgment, which nonetheless only sets out the very minimum required to understand the various issues to which the case gives rise.
Background
4. Both we and the parties have the benefit of what, if I may respectfully say so, was an eminently thorough and careful judgment by Rimer J, extending to 79 pages of single-space type. The parties were good enough to indicate to this court that they did not take issue with the Judge's account of the facts, background or structure of the MDU's operations. In explaining what occurred I shall draw heavily on that account, in many places verbatim. If anyone thinks that they need further information about the case over and above what is contained in the present judgment they may safely resort to the judgment of Rimer J.
The parties, their relationship, and the dispute
5. I can take this directly from the first nine paragraphs of the Judge's judgment.
1. The claimant is David Paul Johnson. He is a consultant orthopaedic surgeon. The defendant is The Medical Defence Union Limited (“the MDU”). The MDU is a mutual society which provides its members (who are principally in the United Kingdom and Ireland) with a range of discretionary benefits in the nature of advice and assistance. Until July 2000, it also provided them with discretionary professional indemnity cover, although since then such cover has been provided by an insurance policy underwritten by an insurance company for which the MDU's subsidiary company has acted as agent.
2. Mr Johnson was a member of the MDU from 1980 to 1985 and again from 1 October 1986 to 31 March 2002. He has never been the subject of a claim for alleged professional negligence. Over the years he has, however, sought advice and assistance from the MDU in relation to professional questions and problems that concerned him, including complaints made against him. His contact with the MDU, and that from others about him, gave rise to the opening (at least since 1991) of 17 MDU files.
3. On 17 January 2002, the MDU wrote to Mr Johnson advising him that it had exercised its discretion under article 11(a) of its Memorandum of Association to resolve not to renew his membership after 31 March 2002, when his then current annual subscription would expire. The letter gave no reasons. Mr Johnson sought the reasons, but none was provided.
4. Mr Johnson was shocked. He had been given no forewarning of the possible termination of his membership. The immediate consequence of what he regarded as his “expulsion” from the MDU was the automatic termination of his professional indemnity cover, a serious thing for a professional person. He was able to obtain prompt alternative cover from the Medical Protection Society (“the MPS”), being cover of the like discretionary nature as the MDU had provided until July 2000 (the MPS does not provide its members with indemnity cover under an insurance policy). But he claims that his expulsion has caused him significant damage of a wider nature. He says he has had to disclose it to hospitals where he has, or has since sought, admitting rights or employment; and he asserts that it reflects that he was regarded by the MDU as a serious risk to its funds, which he says is likely to have had a chilling effect on hospitals who became aware of it. He claims it has damaged his professional reputation. He now asks to be compensated. His claim for compensation is brought under section 13 of the Data Protection Act 1998 (“the DPA”) and is founded on the assertion that his expulsion was the consequence of the MDU's unfair processing of his personal data.
5. The MDU disagrees with every step in his case. But perhaps its main point is this. It says that over the years Mr Johnson was involved in, or was the subject of, a number of incidents and allegations in the course of his professional life, of which he and others made the MDU aware. By May 2001, his track record had caused the MDU's risk management department to carry out a risk assessment review in relation to him. That involved an assessment of the various incidents and allegations, with particular features of his case history also being scored by reference to a standard form system that the MDU applies to its members under its risk assessment policy. Mr Johnson's score was at a level which, in accordance with that policy, justified consideration of his future membership of the MDU by a committee of senior clinicians. The outcome of that consideration was the termination of his membership. The MDU's position is that the termination was properly in line with the operation of its risk assessment policy.
6. More particularly, the MDU's position is that its risk management policy, of which the scoring system is part, is not dependent on any allegation against the member being well founded, a question which the MDU does not attempt to answer. It depends simply on the fact that the allegation was made: the MDU does not endeavour to investigate its merits. It applies the same policy to all its members. If (which it disputes) it processed any of Mr Johnson's personal data whilst carrying out its risk assessment in relation to him, it asserts that he consented to it, that he knew that his data was liable to be processed for the MDU's risk management purposes and that the processing was in line with its established policy and was fair. It emphasises that it is a non profit-making body, with a duty to protect its funds in the interests of all members, and it asserts that the termination of Mr Johnson's membership was a decision responsibly made by it in the performance of that duty. It emphasises that, under its contractual relationship with Mr Johnson, it had an absolute discretion to terminate his membership.
7. Mr Johnson's riposte to that is that a risk management policy geared to an assessment of risk by reference to a catalogue of allegations and what he says is an irrational and arbitrary scoring system is inherently unfair. He says that the MDU should have brought his side of the allegations and incidents into consideration and taken account of it when engaging in the risk review. The MDU's unfair failure to do so is said to have been reflected in the manner in which it processed his personal data whilst performing its risk review and entitles him to statutory compensation for the damage to him to which he says it ultimately...
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