[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
Can a reference be lawful (i.e. not negligent in its preparation) even though it is, to the layman, unfair?
Yes, says the Court of Appeal in Jackson v Liverpool City Council.
J worked for Liverpool City Council in its youth offending team. He left to join Sefton Borough Council with good references. He then applied for a post with Sefton in its youth offending service. One of his three references from his former employer (Liverpool) was caveated. It was suggested there were record keeping issues. But these had not been investigated before he left (this was made clear in the reference). He failed to get the job and was unemployed for a year.
The trial judge (upheld by the Court of Appeal (applying Spring v Guardian Assurance  2 AC 296) considered the reference true and accurate even though it referred to matters which were untested and unproved. The claim for negligent mis-statement therefore failed.
The moral of the tale is to try to agree your reference before you leave.