Legal Village

Bloxham bar set high by Freshfields

Posted 2/11/2007 by Clare Murray

I finally found the time to get through the detail of the Bloxham v Freshfields judgment. One thing that I find interesting from the tribunal's decision is that some commentators in the press indicated that the decision suggests it is now a straightforward matter for a firm to justify age discrimination by going through consultation. Having read the judgment, I'm not convinced it provides other firms with the level of comfort they suggest.

Yes, the decision says Freshfields comfortably passed the test of showing it was a proportionate means of achieving a legitimate aim but it is clear the hoops that Freshfields jumped through in preparing for and consulting with the partners were extensive. Instead, I would argue that the reason Freshfields "comfortably passed" the above test was precisely because of the painfully detailed level of steps and consultative process it apparently followed in finalising the pension reforms.

My understanding from the judgment is that the process ran from March 2003 to the time of the partners' vote in February 2006. It involved: consideration by the partnership council; a working group and Deloitte' s reward and benefit group; consultation papers being sent to partners six months before the vote was finally taken; and 18 consultation meetings, in which up to 250 partners from around the world participated (during which the legitimate aim of removing intergenerational unfairness between partners was supported by the partners and no suggestion was made of removing the 20% pension reduction that was at the core of Bloxham's case; given the number of partners involved, this is no mean feat).

Various iterations of the proposals were produced as part of the consultation process, including a consultancy arrangement to mitigate the effects for certain partners, which Bloxham made clear he didn't want; and a list of issues, including 29 drafted by the claimant, were raised with Jonathan Sumption QC, at whose consultation Bloxham attended. Every concern raised by a partner was apparently fully considered and the response documented. The changes were ultimately approved by 90% of all partners who voted on the proposal (representing 78% of all partners in the firm).

I think that rather than providing comfort to other firms as to how straightforward it is to satisfy the test of being a proportionate means of achieving a legitimate aim, Freshfields potentially sets a high standard of example as to the level of preparation and consultation that  may be required of firms to comfortably pass the justification test.

On the key issue of the removal of the 20% reduction claimed by Bloxham as part of the transitional provisions, it seems the firm was between a rock and a hard place as whilst removing it may have mitigated the effects of the changes for Bloxham, it would have potentially placed those partners aged 55 and 53 at a disadvantage as a result; it would also have improved his position in a way to which he was not otherwise entitled, again unfairly.

Critically too, at no point did Bloxham or the Grey Panthers (representing a group of older partners) suggest an alternative to the 20% reduction; in fact, the Grey Panthers' own proposal to the partnership council accepted that the normal discounting arrangements would continue to apply.

Overall, I thought this was an interesting and thoughtful decision. But I don't think it necessarily provides a particularly clear path through for the future handling of justification in age discrimination cases. Freshfields did apparently undertake extensive consultation and secured the support of 90% of partners who voted on the issue - but few other firms (or employers) facing age discrimination claims in the future are likely to have such evidence in support of their justification arguments.

If anything, the case supports the argument that firms need to adopt a more detailed, rationalised, documented and collaborative approach to issues that may amount to unlawful age discrimination than they tend to take at the moment. Freshfields has arguably set a high standard to which others should aspire...