Legal and compliance matters

The Planning and Corporate Policy Division, which is managed by Jenny Bone, acts as a focal point for legal and compliance issues in the School. As well as updating Council on the general spectrum of legal and compliance issues which affect the workings of the School, this division also specialises in the areas of governance, student litigation and disciplinary issues, health and safety, equality and diversity, and information management, which primarily focuses on data protection and freedom of information.

Inevitably, other areas of legal and compliance work are dealt with by the most relevant departments, not only because it directly affects the work they do, but because they can effectively manage and monitor the implementation of legislative requirements. Two obvious examples are the School’s Estates Division, which oversees compliance with property law and environmental legislation, and Human Resources Division, which takes the lead on employment law.

This situation of delegating responsibility for the implementation of, and day to day compliance with, new legislative developments also applies to academic departments, where responsibility for such action lies with the Head of Department. The Central Administration is sensitive to the additional workload that legal and compliance work can create, and wherever possible, will provide clear and concise guidance and help in as direct a manner as it can. Ultimately, however, the effectiveness of any new working practices and procedures is reliant on the authority of a Head of Department usually with the help of his/her Departmental Manager.

A question that is often asked by academic members of staff is whether they are liable, or indeed insured, in the event of legal action being brought against the School. These areas are often subject to loopholes and complicating factors, but in general the university, as the ‘employer’, will be vicariously liable for torts committed by its employees when it has either approved or ratified the action in question, or, the tort has been committed in the course of the employee’s work. In most situations, therefore, the university would be liable for actions of negligence, although not in the case of private consultancy work.

With regard to insurance cover, the general principle is that the School’s employees are covered in the event of legal action being brought against them for work they have performed in the course of their employment. This cover is unlikely to apply to situations whereby the member of staff in question has committed a criminal act, breached the terms of his/her contract of employment, acted against the School’s instruction or been wilfully negligent in his/her work.

I realise that it would be more helpful to give a clearer picture of these kinds of issues, but like many situations concerning litigation, answers are often dependant on factors which are specific to a particular case, and usually resolved at great expense to the parties involved! More detailed guidance can be found in the following appendix.

Heads of Departments should be aware that the School has access to an external firm of solicitors, Pinsent Masons LLP, which can be accessed via the Planning and Corporate Policy Division. The person to contact for external legal advice, or if you require further information on legal and compliance issues, is Kevin Haynes on extension 7823 or at k.j.haynes@lse.ac.uk.

Adrian Hall
Secretary and Director of Administration

Appendix

The advice in this note has been discussed with relevant School Officers and checked with the School’s Solicitors.

1. Responsibility and Liability

   • Responsibility refers to a member of staff’s contractual obligations to the School for carrying out his or her duties and responsibilities.
      
   • Liability refers to the party against whom an individual or corporate body (e.g. a student, an outside supplier) may bring a civil action in the event of an alleged wrong against them arising from the conduct of the School’s business.
      
   • Failure to carry out a responsibility may not in the vast majority of cases lead to individual liability of members of staff, but could give rise to disciplinary action.
      

2. Vicarious Liability

   • Even if a civil action is brought arising from the alleged failure of an employee to fulfil a responsibility, statutory or otherwise, an aggrieved party is more likely to bring a claim against the School as the employer and not against the individual, provided that the employee was acting in the course of their employment. The School is not generally liable for the acts of “independent contractors”.
      
   • Although technically, both the individual and the employer are jointly liable for the individual’s civil wrongs committed within the course of the individual’s employment, the Common Law concept of Vicarious Liability offers substantial comfort to members of staff by making the School liable for the actions of its employees carried out properly in the course of their employment in the event of any civil action being brought by a third party arising from the said actions. Aggrieved parties in practice also tend to pursue an employer, as an organisation is likely to have “deeper pockets” (greater ability to meet a claim for compensation).
      
   • The School has Professional Indemnity Insurance which provides cover (subject to a £50,000 policy excess) for employees in respect of student litigation arising from tuition/examining in the course of LSE’s business. This cover extends to seconded employees whilst acting on behalf of LSE and also any member of a committee whilst acting on behalf of LSE. Thus, LSE’s cover extends to cover staff from other institutions who may carry out examination, review or appointment functions at LSE. LSE staff carrying out similar functions e.g. external examining at other institutions should check to ensure that the other institution has professional indemnity insurance to cover their activities, because LSE’s policy may not provide cover for LSE employees carrying out work elsewhere on behalf of another institution. Save in exceptional circumstances, the School will not look to the staff concerned to contribute to those costs, or to contribute to payments made to a wronged individual if the School loses the case.
      
   • Legal expenses incurred by the School and the cost of any award made against the School arising from actions of its employees are met from the Legal Fees budget
      
   • Given the above, it will not generally be necessary for Heads of Departments or other members of staff to take out personal professional indemnity insurance.
      

3. Specific instances where individual liability applies

   • There are a number of specific instances in which individual liability applies rather than the vicarious liability. In no case does a Head of Department carry any additional liability for the actions of members of staff in his/her Department.
      
   1. Criminal Acts
       
   • All members of staff are individually liable to action in the criminal courts for criminal offences they commit in the course of their employment and vicarious liability does not apply.
      
   • The Freedom of Information Act 2000 makes it a criminal offence for anyone to tamper with existing records that have been requested for disclosure: if an individual is caught tampering with such documents, the individual involved may face prosecution.
      
   • Various criminal offences may be committed under the Data Protection Act 1998. In most cases it is the School, as the data controller, which is open to prosecution – or the officers or managers of the corporate body if there has been neglect or connivance - but other individuals may also be prosecuted for their own criminal acts. These include knowingly/recklessly obtaining, disclosing, procuring, selling or offering to sell information about living persons without the consent of the School (for example, an employee in a bank was prosecuted for disclosing customer information to a private investigator);

   NB: Professional Indemnity or Liability Insurance cannot be taken out against criminal acts.

2. Actions by staff outside the course of their employment

• When undertaking consultancy under auspices of RPDD/ELSE, members of staff are covered by the School’s public liability, professional indemnity and directors and officers legal liability insurance.
   
• If staff undertake consultancy on their own or collaborate with others to set up an unincorporated association (for example for research), then individual liability applies. Staff in this situation are advised by the AUT to take out personal liability insurance. The AUT’s Public Liability Policy does not cover costs and damages incurred as a result of negligence in advice under a consultancy arrangement.
   
• Individuals who take up directorships of companies or trusteeships should also ensure that they know the duties attaching to these offices, including fiduciary duties and consider taking out their own directors and officers insurance.

3. Breach of Contract

• While the School is normally liable for Breaches of Contract, there are circumstances in which individuals may be liable, for example, if they have warranted that they have authority to sign a contract on behalf of the School when they do not. In practice however the third party will usually sue the School rather than the employee on the “deep pockets” principle.

4. Equality and Diversity

• Equality legislations, such as the Disability Discrimination Act (2005), Gender Equality Duty 2006 (an extension of Sex Discrimination Act 1975), Race Relations Amendment Act, 2000 (an extension of Race Relation Act, 1976), Employment Equality (Age) Regulations, 2006, Equality Act, 2006 and Human Rights Act, 1998, require organisations to:

• eliminate unlawful discrimination; and
• promote equality for all.

• The School, as a ‘Service Provider’, which includes the most senior to the most junior employee, whether full or part time, permanent or temporary, self employed, volunteer, contractor or agent, is legally responsible for its employees’ actions in the course of their employment, regardless of whether those actions were committed in the School’s knowledge or with its approval. The exception to this rule is if the School can demonstrate that all reasonable practical steps were taken to prevent the actions in question. For instance, by communicating to its employees the standards set out its disability, gender and race equality schemes. It is possible for an employer’s liability for discrimination to extend to a worker’s behaviour when s/he is ‘off duty’, but only if it can be shown to have occurred in a work-related situation.
   
• Individual employees, irrespective of their grade, may be held personally liable for their actions, if they are proven to be unlawful. Moreover, if a person knowingly helps another person to discriminate or harass someone unlawfully, s/he will be treated as if they have discriminated.
   
• For more information on equality and diversity issues, please contact Ms Tehmina Hammad at t.hammad@lse.ac.uk or on 020 7852 3698.

5. Health and Safety

• Vicarious liability generally applies, but there are two instances of statutory law the Health and Safety at Work Act 1974 and one under the Management of Health and Safety at Work Regulations 1999 where individual liability is specified.
   
• Under Section 7 of the 1974 Regulations, individual employees are liable for actions arising from their not taking reasonable care for their own safety and the safety of others who may be affected by their acts or omissions.
   
• Under Section 8, individual employees are liable for actions arising from their recklessly interfering with any equipment or measure provided for health and safety and not co-operating with their employer in respect to any measure or provision provided for health and safety.
   
• Under Regulation 14 of 1999 Regulations, employees are individually liable for actions arising from their not using all work items provided by their employer correctly, in accordance with their training and the instructions they received to use them safely. Employees are also liable for actions arising from failure to notify their employer of any situation that gives risk to serious and immediate danger and also of any shortfalls in health and safety arrangements, even if there is not a serious and imminent risk.
   
• It is not envisaged that Heads of Department have any more liability to individual action arising from health and safety issues than other members of staff.
   
• Where a health and safety offence is committed by a body corporate, a senior person in the management structures may also be individually liable. Equally an individual can be charged by the prosecuting authority if an offence by a body corporate is due to the neglect or act of that individual.

6. Student Grievances

• Individual members of staff may be named by students making allegations of harassment or lodging a grievance on an academic matter. (It should be noted that appeals against examination assessment decisions are dealt with under separate procedures and only cover procedural defects in the conduct of the examination.) School procedures emphasise that every effort should be made to resolve such matters informally between the parties at departmental level. If that is not possible, the student may make a formal complaint to the School. A grievance may amount to a recognised legal claim.
   
• If the School determines a financial settlement of a grievance case is appropriate, the individual member of staff is unlikely to be liable for the cost, but depending on circumstances, his or her Department may be asked to make a contribution. The School may also refer the case for consideration under other internal procedures, e.g. the staff disciplinary procedures.
   
• If the student exhausts the School’s internal procedures but remains dissatisfied, s/he can submit a complaint to the Office of the Independent Adjudicator for Higher Education (OIA). If the OIA recommends compensation, the School, not the individual, will be liable to pay it if it accepts the recommendation. If the student still remains dissatisfied, s/he may then look to the Civil Courts for redress: again, the principle of vicarious liability will usually apply in the event of any award by the Courts to the student.
   
• On occasions individual members of staff are named as defendants incorrectly in civil proceedings and steps will be taken as appropriate to have them struck out as defendants. It should also be noted that even though members of staff are protected from vicarious liability from being a defendant in most civil court actions, they may be subpoenaed by either side as a witness.
   
• In the event of staff industrial action, it may be legally possible for staff taking part in the industrial action to be held personally liable for breach of contract claims brought by students against the School concerning disruption to their studies.

^