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Chris Quinn writes on Falling Off the End of a Springboard: Aquinas Education Ltd v Miller and Others

The recent judgment of Nicholas Vineall QC (sitting as a Deputy Judge of the High Court) in Aquinas Education Ltd v Miller and Others  [2018] EWHC 404 (QB) makes sombre but vital reading for applicants for “springboard” relief even where they have uncovered evidence of quite extraordinary wrongdoing by their employees. The Judge concluded that the headstart which the defendants had secured themselves from their unlawful activity had been in the region of 6 weeks.

The claimant [“C”] is an education recruitment agency which employed two of the four defendants [“D1” and “D2”] as recruitment consultants. D1 and D2 had set up D4 (a company called Link3 Recruitment Ltd) along with D3. They had done so secretly on 2 August 2017 but had remained employed by C, not actually giving their notice until 13 December 2017. They were very busy indeed on behalf of D4 in the intervening period.  D2 had copied some of C’s information on to a memory stick in August 2017 and, from as early as September 2017 they had approached teaches whom they had identified from C’s records and had tried (sometimes successfully) to place them with schools on behalf of D4. In addition, again whilst he was still employed, D1 had asked C’s provider of IT services to provide him with lists of C’s candidates’ email addresses, their mobile telephone numbers and the email addresses of schools with whom it has placed teachers. On the face of it therefore, the sort of conduct which might encourage certain applicants for interim relief into a belief that they were likely to obtain pretty much any interim order they asked for.

That is not what happened in this case. To the contrary, despite the Judge deciding that it was “much more likely than not” that C will at trial establish all sorts of breaches by D1 and D2 of their duties as employees whilst they were still employed by C, C failed in its application for springboard relief.

There appear to be at least 5 important lessons to be learned from the reasons why this happened:

1. The Court may satisfy itself that it is enough to hold a respondent employee to his/ her contractual terms relating to the use or disclosure of confidential information. In this case, the Judge was so satisfied even though it appears there was no contractual definition of ‘confidential information’ and he stated he would expect one from the parties;
2. A clear distinction must be drawn between highlighting the nefarious attempts which respondents may have made to gain an unlawful headstart for themselves and the evidence that they have in fact attained such a headstart for themselves. In the present case, the slow start that D4 had actually made for itself (only 14 individuals had been placed, creating a profit of £8,806 on a turnover of £46,306) actually worked in their favour. The Judge was influenced by his finding that the first application for injunctive relief (made in January this year) had effectively brought a halt to D4’s business;
3. It will be in a respondent’s interest to try to show the court just how quickly it could have been lawfully up and running and competing. This was a consideration which appeared to have weighed heavily on the mind of the Judge- he concluded that this would have been the position on or very shortly after 14 January;
4. A claimant’s “opinion evidence” as to just how difficult it would supposedly be for a new company to successfully set itself up in competition may be given short shrift by a judge; and
5. The focus must always remain on the effect of the unlawful activity on a claimant i.e. the extent of the illegitimate advantage obtained by a defendant as opposed to it being the Court’s role (on an application for interim relief at least) for their wrongdoing.

The judgment is an important one. It corrects at least one widely held misapprehension, namely that the way in which to calculate the relevant duration of a springboard injunction is to work backwards from the date of termination of the employment contract to pinpoint the date on which misconduct commenced and then to injunct for that period going forward. The Judge was wholly unpersuaded by C’s claim that a 9 to 12 month restraint was appropriate and claimants may now need to be much more cautious in their expectations when making such applications. Importantly it is to be recalled that the burden is on the claimant when making an application for springboard relief to spell out the precise nature and period of the advantage: see Hadden-Cave J’s eighth principle in QBE Management Services (UK) Ltd v Dymoke [2012] EWHC 80 (QB). Ultimately it was this claimant’s failure to do so which led the judge to refuse to grant the relief which was sought despite the extraordinary evidence as to misconduct before him.
 
Chris Quinn has extensive experience of springboard cases and has been called “often the first port of call in high-value City disputes and is particularly recommended for injunctive relief cases” by Chambers & Partners.