A close reading of public domain information regarding the settlement between Philip Rutnam and the Home Office

5 March 2021

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 ‘Time to form a square around the Prittster’

– prime minister Boris Johnson, as reported on 20th November 2020

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‘Expected value is the product of variable such as a risk multiplied by its probability of occurrence’

– Central Government Guidance on Appraisal and Evaluation (‘the Green Book’), 2020 edition, p. 140

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We now know what appears to be the financial value of a square formed about the Prittster.

According to my Financial Times colleague, the well-connected Sebastian Payne, the cost of yesterday’s settlement of the claim brought by Philip Rutnam against the home offic is at least £340,000 plus £30,000 of legal costs.

There would also be other costs incurred by the home office, including for its own external counsel.

This is a substantial – indeed extraordinary – amount of money for a settlement of a claim – especially when on other matters the home office are often somewhat parsimonious over similar amounts of money

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So what can be worked out about this settlement?

Let us start on a light note with how the news of the settlement was released.

Here we should imagine a zoom call discussion between a home office lawyer and media advisor:

Media adviser – How do we spin – I mean present – the settlement with Rutnam?

Lawyer – We can say we have settled without admitting liability

Media adviser – Doesn’t that just mean the same thing as the case has settled?

Lawyer – Yes, but political reporters will not know that

Media adviser – Ok – but can we pad it out even more?

Lawyer – We can also say that we were right to defend the case

Media adviser – But isn’t that just another way of saying no liability is admitted?

Lawyer – Yes 

Media adviser – So we should say in effect that we have settled because we settled because we settled?

Lawyer – Exactly

Media adviser – And that will fill up their ‘breaking news’ tweets leaving little room for anything else – oh, that is genius

Lawyer – Thank you, that is kind

Ahem.

All that government statement says in that statement is that the home office has settled the case, three times.

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More important – and interesting – is how that settlement amount was authorised.

The home office released this statement yesterday:

‘The government and Sir Philip’s representatives have jointly concluded that it is in both parties’ best interests to reach a settlement at this stage rather than continuing to prepare for an employment tribunal.’

This statement shows that a decision was made by the government to settle rather than to proceed to trial.

The statement also expressly states that this decision was made in the government’s best interests.

This indicates – if not demonstrates – that the decision to settle was made in accordance with the principles set out in the ‘Green Book’ – the common name for Central Government Guidance on Appraisal and Evaluation.

The Green Book sets out how a government department should approach dealing with liabilities and risks.

In essence, the Green Book provides the basis for how cost-benefit analyses are conducted in Whitehall.

In civil service speak: ‘[e]xpected value is the product of variable such as a risk multiplied by its probability of occurrence’.

The ‘concluded…best interests’ language of the home office statement means that a decision was made that settlement was more beneficial to the home office than the risks of proceeding with the case.

Or more bluntly: the home office realised it was likely to lose at trial and to lose badly.

Only if this decision was made on that basis, would – absent a ministerial direction overruling officials – such a payment be permissible in accordance with Green Book principles.

And the ‘concluded…best interests’ language tells against any ministerial direction (which, in any case, would one day be disclosed).

So, if this assumption is correct, then the case was closed down not (just) to save a minister from embarrassment but because of the real risk of a heavy defeat at the tribunal – a defeat which ran the serious risk of costing the home office more than £370,000.

The prime minister may have wanted a square to be formed around the Prittster – but that would not itself explain a payment made in accordance with Green Book principles.

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And so we come to the claim.

The amounts recoverable from most employment tribunal claims are capped, and so an employment tribunal claim even by a highly paid senior civil servant would not normally result in compensation in the area of the amount paid in this settlement.

And employment tribunals do not normally award costs – in lawyer speak, costs do not ‘follow the event’.

So what was different here?

If we go back to the statement made by Rutnam’s trade union when the claim was launched, there is a clue:

‘This morning, Sir Philip, with the support of his legal team and the FDA, submitted a claim to the employment tribunal for unfair (constructive) dismissal and whistleblowing against the Home Secretary.’

This was, in part, a whistleblowing claim.

And as such – under sections 103A and 124(1A) of the Employment Rights Act 1996 (as amended) there is no cap on compensation if the reason – or principal reason – for the dismissal is in respect of a protected disclosure.

On this basis, and given the settlement amount, the claims made were regarded (at least potentially) as principally a whistleblowing case.

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But – is not this case more about bullying than whistleblowing?

Here a passage in this Guardian report may be relevant:

‘Rutnam’s case was expected to focus on his claims that in late 2019 and early 2020 he challenged Patel’s alleged mistreatment of senior civil servants in the Home Office, and that he was then hounded out of his job through anonymous briefings.

‘Reports claimed that a senior Home Office official collapsed after a fractious meeting with Patel. She was also accused of successfully asking for another senior official in the department to be moved from their job.

‘Rutnam, a public servant for 30 years, subsequently wrote to all senior civil servants in the department highlighting the dangers of workplace stress. He also made clear that they could not be expected to do unrealistic work outside office hours.’

Under section 1 of the Public Interest Disclosure Act 1998 there are many ways a disclosure can qualify for legal protection – but the key thing is that such disclosure can be internal to a workplace, even to a boss, and not external disclosure to, say, the press.

On the face of the available information, and on the assumptions made above, it would appear that:

(a) in 2019-20 Rutnam made one or more disclosures internally within government in respect of workplace bullying;

(b) his claim for unfair dismissal in April 2020 had as a principal ground that such disclosure was the main reason for his constructive dismissal; and

(c) by March 2021 it was plain to the home office that this principal ground would be likely to succeed at trial.

Unless these (or similar) facts are true, then it is hard to explain why the home office, following Green Book principles, would settle this claim, for this amount, and at this time.

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And so now: timing.

The obligations under the Green Book are constant and so would have been just as applicable when the claim was made as they are now.

But the home office waited nearly a year before settling the claim.

And a trial was fixed for September this year.

So something must have happened for the claim to have settled now rather than before now or later.

Something must have tipped the Green Book decision-making in favour of settlement.

There is more than one possibility for this.

It may well be that this was just when the settlement negotiations happened to come to an end, and the Green Book decision happened some time ago.

Or, if you are a conspiracy theorist, you can posit political pressure and even intervention – even though there is no evidence of a ministerial direction.

Or it could have something to do with the judicial review just launched by the FDA trade union in respect of bullying and the ministerial code.

But the most likely explanation is that something has happened in the litigation process that has changed things.

In civil litigation such a shift can sometimes be explained by some sort of costs tactic – where one side springs an offer with such costs implications which, in the words of the noted jurist Don Vito Corleone, is an offer that the other side can’t refuse.

But such costs traps are (I understand) uncommon in employment tribunal cases where there is a special costs regime.

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So if not costs, then evidence.

At this stage of this sort of claim, there would be what is called a ‘disclosure’ exercise where the parties ascertain and share the relevant documentary and witness evidence.

It is the one moment when the parties get to see the actual strengths and weaknesses of their cases.

Other than in respect of costs traps, it is the one stage where claims are most likely to suddenly settle.

On this basis, the most plausible explanation for a claim that launched in April 2020 and was scheduled to be heard in September 2021 to settle in March 2021 is that some documentary or witness evidence has emerged – or has failed to come up to proof.

And given the nature of the claim and the amount at which the parties have settled, this development in respect of documentary or witness evidence would have to be in respect of a protected disclosure under the Public Interest Disclosure Act.

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So if this is a whistleblowing case, does that mean the settlement silences the whistle?

Here one answer is given by section 43J(1) of the Employment Rights Act 1996:

‘Any provision in an agreement to which this section applies is void in so far as it purports to preclude the worker from making a protected disclosure.’

A similar answer is given by the Cabinet Office Guidance on Settlement Agreements, Special Severance Payments on Termination of Employment and Confidentiality Clauses:

‘Staff who disclose information about matters such as wrongdoing or poor practice in their current or former workplace are protected under PIDA, subject to set conditions, which are given in the Employment Rights Act 1996. This means that confidentiality 4 Settlement Agreements – guidance for the Civil Service – 18-July- 2019 clauses cannot and should not prevent the proper disclosure of matters in the public interest.’

On this basis, it is unlikely that the settlement agreement will contain such a confidentiality clause or, if it purports to do so, whether it would be enforceable.

The whistle is not silenced – at least at law.

It may well be that Rutnam believes his internal disclosures were sufficient.

Or it may well be that there may be another appropriate opportunity for disclosure, perhaps related to the FDA judicial review case.

We do not know.

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But what we do know that the government has gone from this (as reported in the Guardian):

‘After a report in the Times highlighted tensions between Rutnam and Patel, sources close to Patel were quoted in several newspapers as saying that Rutnam should resign.

‘In an article in the Times, allies of the home secretary said he should be stripped of his pension, another source in the Telegraph said he was nicknamed Dr No for negative ideas, while one in the Sun likened him to Eeyore, the pessimistic donkey from Winnie the Pooh.

‘At that time the prime minister’s official spokesman said Johnson had full confidence in the home secretary and in the civil service, though the same guarantee was not given to Rutnam specifically.’

To this, in yesterday’s statement:

‘Joining the civil service in 1987, Sir Philip is a distinguished public servant. During this period he held some of the most senior positions in the civil service including as Permanent Secretary of the Department for Transport and the Home Office. The then Cabinet Secretary wrote to Sir Philip when he resigned. This letter recognises his devoted public service and excellent contribution; the commitment and dedication with which he approached his senior leadership roles; and the way in which his conduct upheld the values inherent in public service.’

And:

‘The government regrets the circumstances surrounding Sir Philip’s resignation.’

We can bet they do.

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So, on the basis of the above we can perhaps understand how and why the government has settled at such a high payment.

The amount is not only ‘substantial’ – it is extraordinary.

And it can be explained best by an understanding of the Green Book as applied to the effects of relevant employment and whistle-blowing law in this particular case.

But what is perhaps most notable in yesterday’s statement from the government is what it does not say.

In his resignation statement, Rutnam said:

‘In the last 10 days, I have been the target of a vicious and orchestrated briefing campaign.

‘It has been alleged that I have briefed the media against the home secretary.

‘This – along with many other claims – is completely false.

‘The home secretary categorically denied any involvement in this campaign to the Cabinet Office.

‘I regret I do not believe her.’

As well as several other serious accusations against the home secretary.

Not one of these accusations is withdrawn – not even ‘clarified’.

The home office instead now commends ‘his devoted public service and excellent contribution; the commitment and dedication with which he approached his senior leadership roles; and the way in which his conduct upheld the values inherent in public service’.

If any square has formed, it is now around Rutnam and not the Prittster.

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24 thoughts on “A close reading of public domain information regarding the settlement between Philip Rutnam and the Home Office”

  1. Thank you for this clear thought process and the factual information re the Green Book. It’s such a huge amount of money to pay out if you have done nothing wrong.
    The use of ‘we can bet they do’ is glorious.

  2. So am I right in assuming that Rutnam is not silenced and there may well be more to come in the JR? If that is the case is it fair to say that the Government were caught between a rock and a hard place?

  3. Thank you David. A very interesting and troubling analysis. So, the government has spent neay £400k of our money to avoid a tribunal hearing, the evidence at and likely outcome of which, might well have made the Home Secretary’s position untenable. To defend the indefensible, in effect. What a shame the Prime Minister didn’t sack her last year, when he had the chance. Leopards don’t change their spots.

    1. Well, it may be that the government has spent £400k to avoid the possibility that if it went to tribunal it would have cost the public purse more. The fact that it permits the government to avoid the embarrassment of a tribunal at which unpleasantnesses might be revealed could be just a happy side-effect.

      Not all that long ago, a minister behaving thus would fall on her sword as a matter of honour. And even quite recently people would be asking about whether a minister was acting in a governmental role or a party political one in addressing such a situation, which is why that person would have had to resign even if unwilling to act honourably.

      We have moved a long way, in a bad direction.

      1. Given Patel’s form on lying about her actions, it is very plausible that the settlement was in no small part to avoid her being shamed in public. At the time she told No 10 that she had not been behind any of the harassment. Rutnam diplomatically “did not believe her”. If the odds of losing were worth 400k then probably the evidence was showing she had lied.

          1. Yes but nor is it likely to have been incidental. The fascinating piece from the employment lawyer suggests that his lawyers might have trapped her into being obliged to give evidence, presumably because they thought they had some really damaging stuff. I agree that the money and HMG image was key but PP was clearly a liability. And that probably included that she had lied – again. Where are the leakers when you need them?

  4. It may be that “likely” is more broad in legal terms, but if there is no cap on the potential compensation could the settlement be supported by a cost-benefit analysis where the claim was deemed unlikely to succeed but the potential damages were far higher? For example, a 10% chance of £4m being awarded?

    Perhaps I am wrong to think of legal cases in purely probabilistic terms, where a 10% chance of success is effectively zero?

  5. If the Permanent Secretary of whichever government department is carrying the cost of the settlement were of the opinion that the court case would cost less than the settlement he or she would have a duty to put a note to the appropriate Secretary of State for the file and eventual disclosure to the auditor and to the Public Accounts Committee. We can therefore conclude with even more certainty that the government thought it was going to lose this one badly.

  6. Based on recent experience, £30k would not be far off the costs to take the process to discovery if Rutnam was using a reasonably high end law firm. Discovery is costly and time consuming (remember costs of litigation aren’t just legal fees but also the management time a litigant needs to devote to it), particularly for the employer. It does provide a natural time for parties to consider settlement.

    As you say, the evidence must have been pretty uncomfortable for the Government to agree a figure as high as that.

  7. It would seem that until this juncture the Government lawyers (despite acres of “previous”) have given Patel the benefit of the doubt, despite the clear evidence that she broke the Ministerial code which Johnson then simply ignored (and lost another long serving and highly regarded civil servant) and that in the argot she is bang to rights. Every month when one has thought this administration has reached the nadir, it goes on to plumb further depths. They are so free to waste taxpayers’ money defending the indefensible. It is the most amoral administration I can remember: no sense of shame, no sense of honour, no self-respect, just entitlement.

  8. An employment lawyer writes:

    Thank you for this informative post. A couple of important nuances if I may.

    First, his claim against his employer for unfair dismissal in April 2020 is unlikely to have as a principal ground that any protected disclosure was the “main reason for his constructive dismissal”. “Main reason” is a high hurdle to clear. In any event, from the press coverage cited above, it seems there were a lot of reasons he could not work for the Home Secretary any longer, including allegedly actual bullying as opposed to merely reporting it.

    Rather, he is likely to have claimed that he suffered a “detriment” short of dismissal. As well as protecting against dismissal for whistle-blowing, the legislation protects against lesser action being taken against the whistle-blower. The legal hurdle he has to clear here is much lower: he would only have to have proved that the protected disclosure had more than a trivial influence on the acts complained of.

    In other words, he could say that something bad, such as bullying, happened to him in connection with his disclosure. That seems much more likely.

    The other reason it is likely is that he could have brought a ‘detriment’ claim against the Home Secretary personally. Technically, his employer is the Civil Service, or the Crown (you would know this better than me) but it is not Priti Patel. A claim for ‘dismissal’ can only be brought against the employer, not a minister. But the Home Secretary herself might have subjected him to a detriment, so he could bring the claim directly against her.

    That means that it would very difficult for the Home Secretary to avoid giving evidence herself. If the claim was just against the Civil Service, it might not have helped the defence if she stayed away, but if the claim was against her personally then if she didn’t turn up to answer it she would be very likely to lose. I don’t know if there are rules against bringing claims against ministers in their personal capacity whilst they hold office, but in the absence of such a rule his lawyers are likely to have looked at a way of all but forcing her into the Tribunal hearing to put maximum pressure on her, and the Government, to settle.

    Finally, if he brought a ‘detriment’ claim he could seek compensation for ‘injury to feelings’. This is not available for dismissal claims in this context. It could be worth tens of thousands, but probably at least several thousand. Small beer in the context perhaps but every penny counts.

    The other suggestion I wanted to make is that the whistle is in fact mostly silenced. It is very likely there will be a confidentiality provision in the agreement. It is likely to say that Sir Philip can make any disclosure required by law. It is likely to confirm a negative: nothing in the agreement will prevent him from making a disclosure to, for example, his doctor or the police or a regulator.

    However, these are very limited circumstances. You will know better than me if there is a Civil Service ‘regulator’ of any description to whom he might go, but given the publicity around the case to date he is unlikely to be telling that body anything of which they’re not already aware. Nor is there any suggestion that the Civil Service or the Home Secretary had committed any crime, so he has no reason to go to the police.

    The agreement is therefore likely to prevent him, for example, from giving an interview to the press. We are not likely to hear much from him in the near future. If there is some sort of enquiry into all this in future, that though is a different matter.

    1. That’s really helpful and interesting; a view from a specialist in the field is alway illuminating.

      I had my doubts that there would have been a settlement without some form of NDA; thank you for clarifying.

  9. Jonathan’s comments are insightful.

    A settlement is a bilateral agreement, and it takes two to tango. Philip Rutnam must have been given advice on whether or not this was a good settlement, compared to the damages he might realistically have been awarded at trial and the risks entailed by carrying on (not least, that he might lose and have to bear his own legal costs, and that the employer might appeal), and accepted that this settlement made sense for him too.

    I suspect he hopes to obtain a non-financial remedy of some sort by other means, such as the FDA judicial review, which he mentioned in his own statement – https://www.fda.org.uk/home/Newsandmedia/News/Sir-Philip-Rutnam-Statement-on-employment-tribunal-claim.aspx

    1. Oh. His firm was Slater & Gordon; I wonder if he had a conditional fee arrangement (“no win, no fee”) with them and whether that might have pushed the costs higher in the event of a govt. loss.

  10. Settling claims without admitting liability was a tactic used by the apartheid regime in South Africa. See link below (The Washington Post permits access to a limited amount of free articles)
    https://www.washingtonpost.com/archive/politics/1979/07/29/s-africa-pays-biko-family-76700-in-compensation/bfbac904-4d31-4bf4-b01b-340cf767692a/
    The regime was clearly anxious to prevent further scrutiny even in the South African courts of the horrendous circumstances surrounding Steve Biko’s death.

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