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Adam Solomon succeeds in Injunction
Adam Solomon representing the insurer claimant in the case Ropner Insurance Services Limited v Wood and Clearwood International Limited, succeeded in obtaining significant interim relief at the High Court yesterday against a former broker and his new business. The judge gave an extemporary judgment, and ordered, pending trial or further order, compliance with the defendant’s restrictive covenants, delivery up and provision of affidavit evidence. The judge also assessed costs in favour of Ropner.
Adam was instructed by Tom Custance and Rebecca Richardson of Fox Williams LLP.
Matthew Neill, Reporter, of The Insurance Insider reported the case as follows:
“Ropner wins injunction against former employee
London market broker Ropner has secured a UK High Court injunction barring former divisional director Philip Wood from running his new firm Clearwood International, after a judge ruled that questions over whether he had broken non-compete clauses should be taken to trial.
In a hearing at the Royal Courts of Justice in London yesterday, Judge Patrick Moloney QC said Wood would be prevented from contacting clients of Ropner that have signed to his new venture, and ordered him to abstain from transacting business pending a trial early next year.
The judge also ordered Wood to return any information and documents taken from Ropner prior to his departure and to destroy any personal copies he may have.
Wood resigned from the Global Risk Partners-backed firm on 1 March this year, leaving on 1 September following the completion of his notice period.
The court heard that during this time Wood had taken steps to develop Clearwood and to receive approval for the business from the Financial Conduct Authority.
Wood brought in between £250,000-£300,000 of brokerage for Ropner annually as an extended warranty and financial lines broker at Lloyd’s, the barrister for the claimant said. He joined the company in 2011.
Before he resigned, Wood sought a deal with Ropner wherein he would cede three months of brokerage commissions in exchange for the lifting of the non-compete restrictions in his contract.
During the hearing, Littleton Chambers barrister Adam Solomon, representing Ropner, highlighted an email in which Wood had said it would be “foolish and stupid” not to accept a deal when the company’s reply underlined Wood’s contractual obligations.
Clearwood International was incorporated in the UK on 25 January, with a statement of capital following an allotment of shares filed on 25 July, according to Companies House.
Wood is the registered as the company’s sole director.
Solomon told the court Ropner first noticed clients abandoning the firm when they decided not to review their policies through the broker beginning in September.
Subsequently the company said it had received “positive information” in October that the clients had transferred to Clearwood. Following correspondence with Wood, Ropner sought the interim injunction late last month.
Wood and Clearwood’s barrister James Wynne, also of Littleton, said the broker did not deny breaching his contractual obligations to Ropner, but argued that the breadth and onerousness of those covenants rendered them unenforceable. He also cited Wood’s longstanding relationships with the clients in question.
Solomon argued Wood’s contention that the clients were his rather than Ropner’s was wrong “both in fact and in law”.
Solomon told the court that Ropner sought an opportunity to compete for the clients, who have switched to Clearwood, and that Wood’s contract was designed specifically to prevent the situation at hand.
He said there was “no reason why Mr Wood should continue thumbing his nose at the covenants” and that the broker never had any right to take information about Ropner with him when he left.
Judge Moloney QC said the question of enforceability of the contracts should be decided at a trial early next year.
The judge also ordered Wood to cover Ropner’s related legal costs totalling £21,000 by 9 January.
Wynne had asked for a decision on costs to be deferred until after a trial.
A spokesperson for Ropner said: “We are pleased with the court’s decision to issue an injunction against the defendant and the award of costs in our favour. We have no further comment to make.”
Wood declined to comment.
The case continues pending a trial in early 2017.”
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