Should references always be marked confidential?
Yes. References should be marked "confidential" and for the attention of the addressee only. This helps to protect an employer from a potential libel claim and also adheres to the Data Protection Act 1998, which says that an employee's current or former employer is not required to give him or her access to any reference that it gives in confidence. A reference can be disclosed to the employee by the recipient of the reference only if the previous employer consents or it is reasonable for the recipient to disclose it without the previous employer's consent.
A good practice note from the Information Commissioner states that the former employer's refusal of consent in these circumstances will not necessarily justify the recipient of the reference withholding the information in the reference and that in most circumstances, the information should be provided to the employee.