Ex-employers need to protect their confidential information. Some of the most potent weapons in the ex-employers’ armoury are orders for preservation, return and protection of confidential information. However, two recent cases provide a warning of the dangers of making assumptions in relation to applications for that relief, and show the stringent approach taken by the courts to orders for the protection of confidential information.
MPT Group Ltd v Peel and others
In the first, the case of MPT Group Ltd v Peel and others  EWHC 1222 (Ch) which was heard in the High Court in May 2017, the claimant applied for relief including a springboard injunction to prevent the defendants obtaining an ongoing advantage from having taken and used its confidential information. In particular, the claimant argued that the defendants had taken and used technical information in order to produce specialist machinery which was being sold in competition with that produced by the claimant.
There was clear and undisputed evidence that the defendants had taken vast amounts of the claimant’s confidential information, and a strong inferential case of at least some misuse of this information. In particular, the defendants’ evidence was that they had disposed of the hard drives onto which they had copied the claimant’s information, although they insisted they had not misused that information before doing so. However, despite the Judge’s understandable skepticism at this evidence, ultimately he found that the claimant had not shown a sufficiently strong case that the misuse of the claimant’s confidential information had contributed to any ongoing springboard advantage.
Although this was determined at the higher NWL v Woods standard, rather than the usual American Cyanamid standard (i.e. not merely a serious issue to be tried, but whether the claimant would be likely to succeed at trial), it is still striking that despite the strong evidence before him, the Judge was not satisfied that there was sufficient proof of specific misuse to justify the springboard relief. This suggests the Court is becoming more wary of granting such strong relief.
Capita plc and another v Darch and others
The second case of Capita plc and another v Darch and others  EWHC 1248 (Ch) was also heard in the High Court in May 2017. The claimant alleged an unlawful team move and conspiracy, and as part of its interim application applied for various orders for the preservation, return and protection of confidential information.
However, despite finding that there was clear evidence of competitive activity giving rise to serious issues to be tried, the Judge refused to make any orders for the protection of the claimant’s confidential information.
Whilst recognising that the findings in both these cases turned on the particular facts, they do provide timely lessons as to how to approach applications for interim orders to protect confidential information, and perhaps point to a new trend of reluctance amongst the judiciary to grant swingeing interim relief. Three key points from these cases are:
This article was written by Charlotte Davies