Introduction
- This is an application for interim injunctions in proceedings brought by the Claimants against a number of individuals who they formerly employed (or, in the case of one Defendant, an individual who is still one of their employees), and a company with which the individual Defendants are associated or have previously been associated. Among other things, it raises the question of whether an employer has a claim to property in emails or the content of emails (on the facts, not limited to those concerning business matters) that are sent by employees from the employer's email accounts.
- Chris Quinn appeared for the Claimants (together "Capita" I will refer to the Claimants separately wherever that may be appropriate), Simon Devonshire QC for the First Defendant ("Mr Darch"), Richard Leiper QC for the Second Defendant ("Archus"), Daniel Tatton Brown QC for the Third Defendant ("Mr Short"), Sophie Belgrove for the Fourth Defendant ("Mr Dineen"), Andrew Marsden for the Fifth Defendant ("Mr Randall") and the Eighth Defendant ("Mrs Randall"), Judy Stone for the Sixth Defendant ("Mr Turner"), and Jeffrey Bacon for the Seventh Defendant ("Mr Coats"). The Ninth Defendant ("Mr Chalmers") and the Tenth Defendant ("Mr Tailor") did not appear and were not represented: they had previously offered undertakings in a form acceptable to Capita, and these undertakings were incorporated into an Order the terms of which were agreed between the parties following the conclusion of the hearing of the application.
The hearing
- The proceedings were begun by a Claim Form issued on 12 April 2017. Capita issued an application notice on the same day. Mr Chalmers and Mr Tailor alone seemed likely to agree to interim relief in a form acceptable to Capita. Capita therefore considered that the hearing of the application would be likely to take more than 2 hours, and were concerned that the application would not be the subject of an effective hearing in the applications list if they did no more than simply provide 3 days' notice to the Defendants. Accordingly, also on the same day, they applied to Marcus Smith J orally and without notice to any of the Defendants for an Order that the hearing of the application be expedited "to come on on a floating basis commencing on Thursday 27th April 2017 with a 1 day time estimate". An Order was made in those terms, pursuant to which the application was listed for hearing, for a single day, on 27 April 2017.
- It seems to me that, although it did not do so, in accordance with CPR 23.9(3), the Order ought to have contained "a statement of the right to make an application to set aside or vary the order under rule 23.10". It also seems to me that Capita (whose witness statements in support of the application are all dated 12 April 2017) ought to have suggested directions for incorporation into the Order which provided for a timetable for the service of evidence and Skeleton Arguments with a view to ensuring that (a) the Defendants had the opportunity to participate in the hearing on equal terms, and (b) the time estimate was revised if necessary in light of the stance(s) adopted by the Defendants. Fairness and effective use of court time both point to that conclusion.
- In the event, Capita served the Order on 13 April 2017, but did not serve the application notice and supporting materials until 18 April 2017. The materials then served included a Particulars of Claim of 25 pages, a draft Order of 16 pages which contains 45 paragraphs, and a first witness statement of David Barnard which is 50 pages long and which has an exhibit containing 410 pages. A "Confidential Appendix" to the Particulars of Claim and a second "Confidential" witness statement of Mr Barnard were not served at that time, and a covering email from Capita's solicitors said that these documents would not be served on each Defendant until undertakings had been provided by both the Defendant and the Defendant's solicitors not to use the "Confidential" materials save for purposes of responding to the present proceedings and not to disseminate the same to any third party. In the case of Mr Darch, for example, on 18 April 2017 he provided the undertaking demanded, on the same day his solicitors confirmed that they would respect the confidentiality of the materials, on 21 April 2017 Capita's solicitors accepted that confirmation in place of the solicitor's undertaking that they had previously been demanding, and the "Confidential" materials were served after 4.30pm on 24 April 2017 in 8 separate password protected and encrypted emails, 7 of which were held up by the fire-walls of his solicitors and were only accessed at about 10.20pm that night after his solicitors had obtained external IT assistance. Mr Quinn points out, however, that Mr Darch's undertaking was withdrawn on 19 April 2017 and only reinstated on 24 April 2017, and service followed very soon after that.
- Mr Devonshire complained that this approach was both unreasonable and unnecessary, not least because, as he contended, Capita's claim to confidentiality was specious or suspect in a number of respects. Among other things, he pointed out that there are a number of procedures pursuant to which, in appropriate cases, the Court can be invited to make express Orders designed to ensure that confidentiality is not lost as a result of materials being deployed in support of an application. He also contended, for example, that there was no or no significant secrecy vis-ΰ-vis the other Defendants about Capita's allegations of breach of confidence as against Mr Chalmers and Mr Tailor and the confidential information that they had obtained and the use that they had made of it, because those matters were ventilated in open correspondence that is exhibited to Mr Barnard's first witness statement; and that if Capita's concerns about confidentiality extended to other information which was not already known to the other Defendants, that did not prevent Capita from identifying in general terms the nature of the information allegedly taken or misused, by whom it is alleged to have been taken or misused, and the nature of the alleged taking or misuse. Counsel for other Defendants made submissions to broadly similar effect, including that the "Confidential Appendix" to the Particulars of Claim had not been served on some of them, and that no application bundle was prepared (or, if prepared, provided to them) until 25 April 2017. It was also submitted that, because the details of Capita's case were opaque or were provided late, it was not possible for the Defendants to assess whether and to what extent their interests conflicted, so that they had to obtain separate legal representation.
- Mr Quinn did not accept that these and other criticisms made of Capita and its legal representatives were valid. He also contended that Capita had complied with the only obligation that was material, by giving the Defendants 3 days' notice of the application. (In fact, on the basis of the above timings, Capita did not comply with that obligation in accordance with CPR 2.8, CPR 23.7(1)(b) and 23.7(3) the application notice was required to be served "at least 3 [clear] days before the court is to deal with the application" and to be accompanied by a copy of any witness statement in support, and service after 4.30pm on 24 April 2017 was not 3 clear days before 27 April 2017.)
- Against this background, the Defendants' primary stance at the beginning of the hearing before me was, broadly, that the application should be adjourned to be heard in the week commencing 8 May 2017 with an estimate of 2 days, on the basis that Capita's protection during the intervening period should be limited to such undertakings as each Defendant was willing to offer. Their secondary or additional stance was that as much progress should be made at the hearing listed to commence on 27 April 2017 with determining the issues raised by Capita's application on the basis of the materials currently available. Those materials include a witness statement of Mr Short, and both contemporary and party and party correspondence, but no other witness statements filed by them. They contended that Capita has no entitlement to the relief sought, and that this would emerge in the course of progressing matters in that way.
- In the event, the Court was able to make available more than 1 day, and the hearing proceeded as suggested by the Defendants' alternative position and (in addition to pre-reading time, which was estimated by a number of the parties at around 2 hours, although the estimate of Archus was a more realistic 4-5 hours) lasted 2½ days. I regret to say that I consider that the estimate of pre-reading time was wildly optimistic the Skeleton Arguments alone, without appendixes, attachments or other working papers, ran to over 70 pages and that the 1 day hearing estimate was entirely unrealistic. Due to the detail and complexity of the submissions made by the 8 Counsel who appeared before me, I was unable to give an ex tempore judgment as I had at one time hoped to do. Following the conclusion of the hearing an Order was agreed as mentioned above.
- In these circumstances, the Defendants have chosen to contest the merits of the application without serving any witness evidence save that contained in the statement of Mr Short. On the one hand, Mr Quinn is entitled to point to their failure to respond to specific aspects of Capita's evidence by witness evidence of their own, and to argue that, to the extent that they have not responded in this way, adverse inferences should be drawn. On the other hand, the Defendants suggest that their decision not to serve evidence in response is explicable on the basis that this would be futile because all that it would do is to give rise to issues of fact which the Court could not be expected to determine on an interim application of this kind. In addition, the Defendants (most of whom are individuals) are entitled to argue that, having been brought to Court on 27 April 2017 by the way in which Capita has chosen to prosecute this application, it is understandable that they should want to use the available Court time constructively and to avoid leaving every issue hanging over them until the week commencing 8 May 2017. In my view, to the extent that Capita makes concrete allegations which the Defendants might be expected to be in a position to answer and in respect of which they have served no opposing evidence, the Court should proceed on the basis that, for present purposes, those allegations are assumed to be correct; but, where assertions are made or questions are raised by Capita which are at the more speculative and uncertain end of the spectrum, Capita cannot complain if the manner in which this application has been prosecuted causes the Court to attach less significance than it might otherwise have thought appropriate to the Defendants' decision to serve no evidence in response.
The parties
- According to the Particulars of Claim, the First Claimant is a provider of business process management and integrated professional support service solutions. The First Claimant has a Health Division which supports organisations in the healthcare sector, among other things by providing property services through the medium of the Second Claimant including strategic estate planning, healthcare planning, assistance in the delivery of capital projects and financial planning. Capita's "relevant customer base is made up of NHS trusts and similar bodies" and Capita's "client relationships and confidential information are key to its business generation". Further, it is pleaded that Capita is the maker of a database within the meaning of section 3A(1) of the Copyright, Designs and Patents Act 1988 called the "Capita Benchmarking Database" ("the Database") and that the Database consists of "a large amount of historical and present day data relating to its NHS clients and their utilisation of health services buildings".
- Also according to the Particulars of Claim:
(1) Mr Darch was employed by the Second Claimant as Executive Director Health based at 65 Gresham Street, London EC2V 7NQ ("the Gresham Street Office") pursuant to a contract of employment which commenced on 1 July 2014. On 8 July 2016, Mr Darch entered into a written Settlement Agreement with the Second Claimant, which recorded the termination date of his employment as 30 June 2016, and by Clause 9 of which he agreed to abide by certain restrictive covenants for a period of 6 months (i.e. until 30 December 2016) including non-solicitation of customers and employees. While employed by the Second Claimant, Mr Darch was the most senior member of the Health Division, with direct managerial responsibility over the other individual Defendants, and he had ultimate managerial responsibility for the following individuals who have since been employed by Archus or have been offered employment by Archus: Michael Rope (Associate Director, Strategic Business); Matthew Williams-Gray (Director, Strategic Health); Ruth Evans (Senior Consultant, Strategic Health); Georgie Whitham (Consultant, Strategic Health); Emma Manby (Associate Consultant, Strategic Health); Mr Chalmers (Director, Finance Consultancy); Mr Tailor (Senior Consultant, Finance Consultancy); Anna Fawcett (Senior Consultant, Project Management); Kate Pattison (Consultant, Fire Team); Liam Pallett (Consultant Engineer, Fire Team); Beverley Letherby (Associate Director, Combined Services Team); Matthew Dearing (Associate Consultant, Combined Services Team); Kath Leeder (Creative, Combined Services Team); James Brenner (Associate Director, Property Team); Elaine Neal (Consultant, Property Team); Dawn Chambers (Associate Director); Mrs Randall (Business Support Manager and PA to (among others) Mr Darch and Mr Short). On 17 June 2009 Mr Darch was appointed as the director of Partnerships for Life Limited, which changed its name on 17 December 2016 to Archus, and he is currently the Chief Executive of Archus.
(2) Archus is in competition with Capita and (according to its website) it offers the same services as Capita, namely Strategic Healthcare consultancy and transformation including Strategic, Infrastructure and Clinical Planning, strategic planning advice and programme and project management. As at 16 February 2017, Archus had 7 directors who were either formerly employed or who were then currently employed by the Capita: Mr Darch (appointed 17 June 2009); Dr Williams-Gray (appointed 20 January 2017); Mr Short (appointed 20 January 2017); Mr Dineen (appointed February 2017); Mr Randall (appointed 20 January 2017); Mr Turner (appointed 20 January 2017); and Mr Coats (appointed 20 January 2017).
(3) Mr Short sold his interest in a company called Inventures Limited to a Group Company of Capita on 28 January 2010. He was then employed by the Second Claimant as Director South based at Pinesgate, Lower Bristol Road, Bath BA2 3DP ("the Bath Office") pursuant to a contract of employment which commenced on 28 January 2010. Mr Short was subsequently appointed to the position of Joint Managing Director and Operations Director, which was a senior managerial role within the Health Division, with direct managerial responsibility over Mr Coats and Mr Turner and, before his change of role, Mr Dineen. In light of his position, Mr Short also had ultimate managerial responsibility for the same individuals as are set out above in respect of Mr Darch. On 22 December 2016, Mr Short entered into a written Settlement Agreement with the Second Claimant, which recorded the termination date of his employment as 31 December 2016. It is pleaded that "Mr Short sought to negotiate his release from certain post-termination restrictions contained in clause 18.1 of his contract of employment ["Mr Short's Restrictive Covenants"] by untruthfully assuring Mr Simon Barnard, Operations Director of the Health Division, that he was going to retire completely from work. For the same reason, Mr Barnard also agreed to Mr Short's retention of his mobile phone number". Mr Short was appointed a director of Archus on 20 January 2017. It is further pleaded that Mr Short "has acted in breach of the warranties contained in Clause 7 of the Settlement Agreement such as to permit the Claimants to enforce Mr Short's Restrictive Covenants".
(4) Mr Dineen was employed by the Second Claimant as National Sales and Business Development Director of the Local Government, Health and Property division of the Second Claimant pursuant to a contract of employment commencing on 1 September 2010. Mr Dineen was based at the Bath Office, was formerly the Regional Operations Director South, and at divers times had direct managerial responsibility for each of Ms Pattison, Mr Pallett, Ms Letherby, Mr Dearing, Mr Brenner and Ms Leeder. On 7 January 2017, Mr Dineen gave 4 weeks' notice of termination, and he continued to be employed by the First Claimant (sic) until 3 February 2017. On 6 February 2017, Mr Dineen was appointed a director of Archus, and is currently Director, Property Management at Archus.
(5) Mr Randall was employed by the Second Claimant as Senior Finance Manager- Partnerships. He entered into a contract of employment with Inventures Limited (at that time called Newventures Limited) dated 1 June 2005. On 5 January 2017, he gave 4 weeks' notice of termination, and he continued to be employed by the First Claimant (sic) until 3 February 2017. He was appointed a director of Archus on 20 January 2017, and is currently Head of Finance at Archus.
(6) Mr Turner was employed by the First Claimant as Regional Operations Director- Midlands. He entered into a contract of employment with Inventures Limited commencing on 11 September 2009. Capita does not seek to enforce the post-termination restrictions contained in that contract. Mr Turner had managerial responsibility for Ms Fawcett, Ms Neal and Ms Chambers. On 7 January 2017, he gave 4 weeks' notice of termination, and he continued to be employed by the First Claimant until 1 February 2017. He was appointed a director of Archus on 20 January 2017, and is currently Director, Technical Advisory at Archus.
(7) Mr Coats is currently employed by the First Claimant as Regional Operations Director, London, based at the Gresham Street Office. He entered into a contract of employment with Inventures Limited dated 1 June 2009. Mr Coats has or had managerial responsibility for Mr Rope, Dr Williams-Gray, Ms Whitham, Ms Manby, Mr Chalmers and Mr Tailor. On 8 January 2017, he gave 6 months' notice of termination. On 20 January 2017, he was appointed a director of Archus.
(8) Mrs Randall was employed by the First Claimant as Business Manager within the Real Estate Advisory-Health Team. Mrs Randall entered into a contract of employment with Newventures Limited/Inventures Limited dated 1 June 2005. She was based at the Bath Office, and was the PA to, among other people, Mr Darch and to Mr Short. On 27 January 2017, Mrs Randall gave 4 weeks' notice of termination, but she continued to be employed by the First Claimant until 23 February 2017. Mrs Randall is currently Business Manager at Archus.
(9) Mr Chalmers was employed by the First Claimant as a Director in the Local Government, Health and Property division of the Second Claimant, based at the Gresham Street Office, providing financial advice on business cases and feasibility studies for NHS clients and other commissions requiring financial analysis. His contract of employment commenced on 1 September 2010. On 7 February 2017, he gave 4 weeks' notice of termination, but he continued to be employed until 8 March 2017. Thereafter, until shortly after receipt of the letter of claim in these proceedings, Mr Chalmers was employed by Archus as Director, Financial Advice.
(10) Mr Tailor was employed by the First Claimant as a Senior Consultant as part of the Health Division of the Second Defendant, focussing on benchmarking, modelling and sensitivity analysis in option appraisals. His contract of employment commenced 8 June 2015. He was based at the Gresham Street office, and reported to Mr Chalmers. On 17 February 2016, Mr Tailor gave 4 weeks' notice of termination, but he continued to be employed until 24 March 2017. Until receipt of the letter of claim in these proceedings, Mr Tailor intended to become employed by Archus.
The claim in outline
- The Particulars of Claim plead that each of the individual Defendants was subject to express and implied terms of their respective contracts of employment, that they owed Capita equitable duties of confidentiality, and that they were bound not to infringe Capita's rights in the Database. A number of these contracts of employment contained post-termination restrictive covenants, and those applicable to Mr Darch, Mr Short, Mr Dineen, Mr Chalmers and Mr Tailor are alleged to be enforceable on the basis that "at the date that they were entered into they extended no further than was reasonably necessary to protect the Claimants' legitimate business interests", namely Capita's interest in: (1) maintaining the confidentiality of Capita's information; (2) maintaining customer relationships; and (3) safeguarding Capita's relationship with employees.
- It is further alleged that "On dates unknown but in any event commencing at a time when relevant post-termination restraints precluding the same were in place in respect of Mr Darch/Archus and all the other Defendants were in fact still employed by the Claimants, the Defendants conspired and/or entered into a common design to do one or more of the following acts by unlawful means (the unlawful means being breaching their own contractual obligations, duties in equity and statutory duty as set out above) and/or inducing each other to do so ["the Common Design"]". The acts said to have been carried out pursuant to the Common Design are as follows: (i) to an impermissible extent (i.e. by going beyond steps which were merely preparatory) setting up Archus to compete with the Claimants; (ii) soliciting and/or inducing each other and also other employees of the Claimants to resign so as to compete with the Claimants; (iii) attempting to conceal their wrongdoing by deleting their emails from the Claimants' systems; (iv) soliciting and/or inducing each other to conceal their wrongdoing by deleting their emails from the Claimants' systems; (v) accessing and/or misusing the Claimants' confidential and proprietary information for the purposes of their future employment with Archus; (vi) infringing the Claimants' Database Right; (vii) failing to report their own misconduct and/or that of other Defendants despite knowing that such misconduct posed a serious and viable threat to the Claimants' business; (viii) acting in breach of relevant Restrictive Covenants; (ix) soliciting and/or inducing each other to act in breach of relevant Restrictive Covenants; and (x) acting in these ways with the common purpose and intention of furthering the business of a competitor (i.e. Archus).
- The Particulars of Claim plead that each of the individual Defendants has acted in breach of the express and/or implied terms of their contracts with Capita, in particular by (a) entering into and/or carrying out the Common Design, (b) recruiting one another for Archus, and (c) concealing these matters from Capita. It is further pleaded that by entering into the Common Design all or some of the Defendants (including Archus) have engaged in an unlawful means conspiracy, and that, as joint tortfeasors, they are all liable together for the damages that their actions have caused. It is further alleged that the Defendants have acted in breach of confidence, in essence by extracting, receiving and misusing Capita's trade secrets and confidential information, and that they have infringed Capita's rights in the Database by "diverting it to Archus".
- The relief to which Capita is alleged to be entitled comprises damages, an account of profits, equitable compensation, declaratory relief (including that Capita's information is confidential and as to the enforceability of the Restrictive Covenants that Capita are seeking to enforce) and delivery up of "all documents and other records belonging to them". It is further alleged that Capita is entitled to injunctions as follows:
"61. The Defendants threaten and intend, unless restrained by the court, to act in breach of the relevant Restrictive Covenants and/or to continue to misuse the Claimants' confidential information and/or to continue to infringe the Claimants' Database Right.
62. Further or in the alternative, in respect of all the Defendants it is appropriate for the Court to grant restraint on the ground that they have secured for themselves an unfair advantage on behalf of a competitor. The appropriate injunctive relief in respect of those Defendants who do not have enforceable Restrictive Covenants (or in the case of Mr Darch or Archus) is in the form of the enforcement of Mr Short's Restrictive Covenants until 30th June 2017 as if they themselves were subject to the same or such other Order as the Court thinks fit.
63. Accordingly the Claimants seek an Order:
63.1 as against Mr Coats, that he is to comply with the express and implied terms of his employment including his Restrictive Covenants;
63.2 as against Mr Short, Mr Dineen, Mr Chalmers and Mr Tailor, that they are to comply with their respective Restrictive Covenants;
63.3 as against Mr Darch, Archus, Mr Randall, Mr Turner and Mrs Randall, that they are to be restrained until 30th June 2017 in the form of Mr Short's Restrictive Covenants or such other form as the Court thinks fit."
- A number of specific allegations are made against different Defendants, largely based on the documents which are available to Capita at the present time. These include, for example, documents returned by Mr Tailor (see the letter from his solicitors, Slater & Gordon LLP, to Capita's solicitors dated 29 March 2017), the emails that Mr Dineen deleted before he left Capita's employment (which Capita have recovered in full, as appears from Mr Barnard's first witness statement), and extracts from the work laptop of Mr Coats. In his Skeleton Argument, Mr Quinn singled out three categories of documents which he suggested were "particularly compelling":
(1) The analysis of calls and text messages which Capita have been able to create from the itemised statements of the company mobile phones of each of Mr Short, Mr Dineen, Mr Turner and Mr Coats. These show a large number of calls or texts to Mr Darch at a time when (a) each individual communicating with Mr Darch was still employed by Capita, (b) Mr Darch was not, and (c) Mr Darch should have been abiding by the restrictions that he agreed to in his Settlement Agreement. Mr Quinn submitted that (i) the volume of calls and texts is extraordinary (e.g. as many as 62 in December alone on the part of Mr Dineen) and (ii) the fruits of this analysis are "entirely consistent" with Capita's case.
(2) The ghost image that Capita have been able to make from Mr Coats' work laptop has yielded extracts of emails that Mr Coats has sent and received from his gmail account. These extracts are said to show, among other things: (a) as early as 22 December 2016 (i.e. when his restrictions were still in place and all the other individual Defendants were still employed by Capita) Mr Darch circulated "final documents" relating to Archus hoping to secure signing of the same the next day; (b) on 31 January 2017 (before his last day of employment with Capita) Mr Dineen was working on Archus' website; (c) on 2 February 2017 (when he was still employed by Capita, as he still is) Mr Coats welcomed Mr Tailor (also then employed by Capita) to Archus; (d) on 21 February 2017 Mr Coats (again, while still employed by Capita) emailed Mr Randall (who had left Capita having by then) concerning "March starters" and "Revenue Tracker"; (e) on 23 February 2017 Mr Randall circulated a "Client Migration Plan" for review, and this email also states "You will see that there are some clients that we included in the December numbers, which do not appear in our latest pipeline report"; (f) on 23 February 2017 Mr Turner emailed the others re the Bristol CCG bid stating that "if we find out someone client side has shared our proposal with C then we should kick it into touch anyway for the issues its caused"; (g) on 24 February 2017 Mr Coats circulated a H&S policy; (h) also on 24 February 2017 Mr Coats and Mrs Randall exchanged emails relating to a contract of employment for Ms Buckley (who is still employed by Capita); (i) on 26 February 2017 Mr Short circulated Board minutes from 20 January 2017 thanking Mr Coats for "ensuring that we are compliant".
(3) The screenshots from a mobile telephone that Capita have obtained from Mrs Randall in circumstances which are in issue and which, in agreement with Mr Quinn, I consider that the Court cannot seek to resolve on an interim application. Mrs Randall's last day of employment by Capita was 23 February 2017. The screenshots are said to show, among other things: (a) that as early as 17 November 2016 Mrs Randall was actively looking for office space for Archus and doing so in such a way that Mr Short (who was then still employed by Capita and who, on Capita's case, had told Mr Barnard that he was retiring completely) could attend; (b) on 7 December 2016 Mrs Randall emailed Mr Short (who was then still employed by Capita) re "review of handbook"; (c) on 22 December 2016 and 23 December 2016 she emailed Mr Darch in respect of a 'Document'; (d) on 17 January 2017 (when she was still employed although by this time Mr Short was not) she sent Mr Short a Health Partners Operational Director's job description; (e) on 2 February 2017 she emailed to state that she had just spoken to Mr Darch concerning his visit to certain offices and she was to hang off ordering business cards; and (f) also on 2 February 17 (when he was still employed by Capita) Mr Dineen exchanged emails with Ms Leeder (who was also then still employed by Capita but who is now an employee of Archus) regarding logos.
- As discussed further below, and as I do not believe to have been seriously disputed by the Defendants during the hearing, these (and other) materials give rise to serious issues to be tried as to wide-ranging and protracted wrongdoing on the part of the Defendants.
- In my view, however, it is important to keep a number of matters well in mind:
(1) Not much of this material is unequivocal. It is, as Mr Quinn submitted, consistent with Capita's case. However, not much of it is unequivocally damning, and some of it, as discussed further below, is not as sinister as it might seem at first blush. While it is true that (apart from Mr Short) the Defendants have not put in evidence in answer to the allegations made against them, they are entitled to say not only that it is for the applicant to make its case, but also that matters such as planning to set up a competitive venture are not a matter of clear right and wrong, but depend on sometimes subtle issues of fact as to whether the line has been crossed between that which is and that which is not permissible. See, for example, Shepherds Investments Ltd v Walters [2006] EWHC 836 (Ch), [2007] 2 BCLC 202, [2007] FSR 15, [2007] IRLR 110, Etherton J at [108]:
"What the cases show, and the parties before me agree, is that the precise point at which preparations for the establishment of a competing business by a director become unlawful will turn on the actual facts of any particular case. In each case, the touchstone for what, on the one hand, is permissible, and what, on the other hand, is impermissible unless consent is obtained from the company or employer after full disclosure, is what, in the case of a director, will be in breach of the fiduciary duties to which I have referred or, in the case of an employee, will be in breach of the obligation of fidelity. It is obvious, for example, that merely making a decision to set up a competing business at some point in the future and discussing such an idea with friends and family would not of themselves be in conflict with the best interests of the company and the employer. The consulting of lawyers and other professionals may, depending on all the circumstances, equally be consistent with a director's fiduciary duties and the employee's obligation of loyalty. At the other end of the spectrum, it is plain that soliciting customers of the company and the employer or the actual carrying on of trade by a competing business would be in breach of the duties of the director and the obligations of the employee. It is the wide range of activity and decision making between the two ends of the spectrum which will be fact sensitive in every case."
(2) Moreover, for purposes of the present application, the question is not so much whether there are serious issues to be tried but is instead whether Capita have made out a case for all or any of the particular forms of injunction that they seek. For example, in the case of the springboard injunctions that are sought against a number of the Defendants, the question, as formulated by Lewison LJ in Willis v JLT [2015] IRLR 844 at [22] is not whether there has been wrongdoing in the past, but "whether the effect of the past wrongdoing continues to confer a present and future benefit on the wrongdoer which the court should prevent".
- In brief, Mr Quinn contended that the following summary of the Claimants' case in Devere Holding Co Ltd v Belgravia Wealth Management Europe KFT [2014] EWHC 3189, per Simler J at [10] applied equally to the facts of the present case:
"The claimants contend that the defendants have participated in a wide-scale, unlawful attack on the claimants' business, which has included the misappropriation of highly sensitive, confidential information about the claimants' clients in order to solicit those clients in breach of restrictive covenants and confidentiality obligations. There has been both planning and conducting of team moves during the currency of contracts and thereafter and the wholesale unlawful solicitation of contractors and staff, again in breach of restrictive covenants and tortious duties. The claimants' case is that the evidence of wrongdoing demonstrates that that wrongdoing has taken place pursuant to a common plan in which some or all of the defendants have participated, with knowledge of the central facts or turning a blind eye at the very least, where injury to the claimants was the inevitable consequence of their gain, so that there was an intention of causing economic harm to the claimants. In other words, on the claimants' case there has been a conspiracy by unlawful means."
The evidence in support of the application
- Mr Barnard's first witness statement runs to 50 pages. Under the heading "Background" it explains those parts of Capita's business which are relevant to the present application, how the Health Division is part of Capita Real Estate Advisory which itself is a division of the Second Claimant, and how, according to his understanding, the Health Division grew out of Capita's acquisition of Inventures Limited on 28 January 2010, which involved Mr Short and others being bought out of their interest in the business of that company and also, in essence, moving across to perform as employees of Capita the same roles as they had previously performed for it. Mr Barnard goes on to detail the importance of the roles played by various individual Defendants prior to their departure from Capita, and how (in addition to those Defendants) 15 individuals have either been approached to work for Archus and/or have agreed to work for Archus after the end of their employment with Capita. Mr Barnard then deals with a number of other topics, under the headings "The Claimants' Confidential Information", "Archus", "Resignation/Departure of the Third to Tenth Defendants", and "What we know about Archus' business".
- Mr Barnard's witness statement then moves on to detail the "Unlawful activities of the Defendants". He begins by making the general point that Capita's investigations are continuing, and he states that if further evidence of wrongdoing is revealed he will bring it to the attention of the Court prior to the hearing of the present application. Mr Barnard then sets out details of Capita's case against each of the individual Defendants. In respect of Mr Short, for example, Capita's case is developed under the headings "Meetings", "Attempts to recruit", "Phone records" and "Setting up Archus whilst employed by the Claimants". By way of further example, Mr Barnard states with regard to Mr Coats (who is still employed by Capita, and whose work laptop is therefore available to be examined by Capita) that "It is obvious from the material that the Claimants have been able to extract from Mr Coats' Capita laptop that he has been acting in breach of his obligations to Capita" and that "such activity has been carried out in conjunction with the other Defendants and has been designed to damage Capita and the Health Division".
- Mr Barnard then moves on to deal with the following topics: "Letters of Claim and Replies", "Why damages would not be an adequate remedy", and "Urgency".
- Mr Barnard also made a second, "Confidential", witness statement, the main purpose of which was to exhibit as "SB2" documents which, on grounds of confidentiality, had been redacted in, or omitted from, exhibit "SB1" to his first witness statement.
- A further witness statement of Vic Gysin verifies Capita's ability to meet the cross-undertaking in damages. Exhibit "VG1" to that witness statement includes a Consolidated Income Statement which shows that, for the year ended 31 December 2016, Capita plc's revenues were almost £4.9 billion, and cost of sales were over £3.6 billion, producing an operating profit of over £541m and a net profit of over £387m.
The Orders sought
- Having set the scene in that way, it is convenient to consider in turn each aspect of the draft Order sought by Capita. In carrying out that exercise, I will deal with the draft as amended in light of the points made by the Defendants during the course of the hearing.
Paragraph 1 of the draft Order
- By paragraph 1 of the draft Order, Capita seeks an Order that: "The Defendants are not to destroy, tamper with or (save as set out below) part with possession, custody or control of the Listed Items". The draft Order defines "Listed Items" as: "all property of Capita plc and its associated companies including documents, books, materials, records, correspondence, diaries, address books, company mobile telephones, ipad, laptop, databases, minutes, papers and information (in whatever media and wherever located) relating to the business or affairs of Capita plc and its associated companies and/or its business contacts".
- In his Skeleton Argument in support of the application, Mr Quinn submitted that paragraphs 1-5 of the draft Order sought by Capita "should commend themselves to the Court" and that "There is no conceivable basis on which [the Defendants] can assert that they have any right to retain or use [the Claimants'] property or confidential information". In his oral submissions, Mr Quinn argued that the relief sought by paragraph 1 of the draft Order is in a form which is often not opposed by Defendants in cases similar to the present case, and, indeed, is not opposed by Mr Short in this case (nor, it may be, by some other Defendants, who have offered undertakings to Capita).
- It may well be right that Defendants in many cases do not trouble to oppose an order in the terms sought by paragraph 1 of the draft Order. In the present case, however, some of the Defendants have not taken that stance. Instead, they contend that the burden is on Capita to demonstrate that it would be appropriate to grant an injunction in these terms, and that Capita has failed to discharge that burden. They argue, in a nutshell, (a) that there is no evidence in relation to any of them of any actual or threatened destruction, interference with, or disposal of any "Listed Items", and (b) that where an employer has not established any arguable case that a former employee has broken or intends to break or even that there is a real risk that the employee will break the terms of an obligation owed to the employer, the refusal of an injunction in the exercise of the discretion of the Court will not be impugned because "An employer is not entitled to injunctive relief simply because he seeks it" (see Caterpillar Logistics Services (UK) Ltd v de Crean [2012] EWCA Civ 156, [2012] ICR 981, Stanley Burnton LJ at [67]).
- I am not aware of any allegation either in Capita's pleaded case or in the evidence of Mr Barnard that, unless restrained by injunction, the Defendants threaten or intend to "destroy, tamper with or
part with possession, custody or control of the Listed Items". Moreover, if Capita had a serious concern that the Defendants might act in this way, I would have expected an application for such relief to be made without notice to the Defendants. If the application is made with notice, this suggests that Capita cannot say that the Defendants would take the opportunity to act contrary to the injunction that is being sought between the date that they receive notice of the application and the effective hearing date. However, if they are unlikely to act wrongfully between those dates, at a time when they are not subject to the restraint of an injunction, what are Capita's grounds for saying that they would act wrongfully thereafter unless enjoined?
- I would refuse this injunction against all the Defendants who resist it on this simple basis, and without exploring further the circumstances of individual Defendants. It is right to say, however, that some Defendants may be in an even stronger position than suggested by this analysis of the threshold requirement which would make the grant of such an injunction appropriate. For example, by letter 6 April 2017 Mr Darch's solicitors confirmed that he neither took with him nor retained any "Listed Items", and Mr Barnard's witness statement, served a few days later, advances no case in rebuttal.
Paragraph 2 of the draft Order
- By paragraph 2 of the draft Order, Capita seeks an Order that: "By 4pm on [INSERT DATE] the Defendants are to hand over to the Claimants' solicitors any of the Listed Items (including all copies of the same) which are in their possession or under their control by either delivering them to the Claimants' solicitors or as is otherwise agreed with Capita plc's solicitors". As set out above, "Listed Items" includes "information (in whatever media and wherever located) relating to the business or affairs of Capita plc and its associated companies and/or its business contacts".
- In this regard, section D of the Particulars of Claim is entitled "Acts pursuant to the Common Design". The first sub-heading under this section pleads "Generally" that each of the individual Defendants "has acted in breach of express and/or implied terms of their employment and/or in breach of their Restrictive Covenants (where relevant and/or enforceable)". The remaining sub-headings are as follows: "Meetings", "Conduct of Archus business whilst employed by the Claimants", "Other communications whilst still employed", "Misuse of the Claimants' Confidential Information/Database", "The role played by Mrs Randall", "The misleading of the Claimants by Mr Short", "Recruitment of other employees", "The attempt to recruit Dr Williams-Gray and his team", "The attempt to recruit Mr Johnson", "Diversion of the Bristol CCG business opportunity", and "Diversion of other business opportunities".
- These pleaded contractual terms include an obligation to return Capita's property to Capita. However, the only breach of that obligation which appears to be pleaded is in paragraphs 31 and 32 of the Particulars of Claim, which appear under the heading "Misuse of the Claimants' Confidential Information/Database". Paragraph 31 pleads as follows: "As set out in Confidential Appendix 1 hereto, the Defendants misused the Claimants' confidential information and/or Database by sending the same to their personal email addresses for the intended use of the same by Archus". The Defendants argue that, on the face of it, this wording suggested that the "Confidential" appendix detailed misuse by each of them. When the "Confidential" appendix was served, however, it became clear that it related to the activities of Mr Chalmers and Mr Tailor alone. In sum, it states that on various dates in January, February and March 2017 those two individuals sent a number of emails having attachments which are described in the appendix in mostly very general terms (e.g. "Monetisation of benefits"). I am unclear as to the basis of Capita's claim that the contents of this appendix are so sensitive that it could not be disclosed to the Defendants in the absence of express confidentiality undertakings, and that it should not be lodged on the Court file. Paragraph 32 then pleads: "Furthermore, at least four of the relevant emails have been saved to a computer belonging to Archus". This allegation accords with what has been said in correspondence passing between Capita and Mr Chalmers and Mr Tailor. The upshot of that correspondence is that Capita has been able to view the emails that those individuals sent to their personal email addresses. However, Capita has not been able to view the emails which those individuals saved to a computer belonging to Archus.
- On behalf of Mr Darch, Mr Devonshire submitted that Capita had laid no proper foundation for this claim for delivery up. He pointed out that Mr Darch left the employment of Capita on 30 June 2016, that Capita had not suggested then or since that he took with him or retained "Listed Items", and that (as set out above) his solicitors' confirmation in correspondence that he did not do so had not been rebutted by Capita.
- Mr Devonshire submitted that, as the application evolved, it had become clear that the sole basis of Capita's case concerning the removal and retention of "Listed Items" related to the activities of Mr Chalmers and Mr Tailor. Mr Devonshire submitted that even if the allegations contained in paragraphs 31 and 32 of the Particulars of Claim are assumed to be true, that does not suffice to make good a claim for delivery up against Mr Darch. In this regard, Mr Darch's position concerning the emails that Mr Chalmers or Mr Tailor "saved to a computer belonging to Archus" is set out as follows in the letter from his solicitors dated 6 April 2017:
"Mr Chalmers and Mr Tailor are not employed by Archus. Mr Chalmers was employed for one month but when the transfer of data became known he resigned from the company. Unknown to [Mr Darch] it appears Mr Chalmers had transferred a document (which our client understands was publicly available and so not within the category of confidential information) to the lap top computer that had been issued to him by Archus. The document is not on the company's server but the lap top has been stored securely pursuant to the undertaking demanded and given by [Mr Darch] to preserve all documents. Mr Tailor has not now joined the company. Our client cannot now say what information they may or may not have taken belonging to your client beyond the document referred to."
- Mr Devonshire submitted that both Mr Chalmers and Mr Tailor had confirmed Mr Darch's account in the course of correspondence between their solicitors and Capita. He also suggested that Capita must be satisfied that Mr Chalmers and Mr Tailor had returned all the "Listed Items" that they removed, because no delivery up orders are sought against them in the draft Consent Order (relating to them and to Mr Coats) that was served by Capita together with the application.
- With the exception of Mr Short, the remaining Defendants adopted a broadly similar approach. For example, on behalf of Archus, Mr Leiper submitted that the relief sought by paragraph 2 of the draft Order (and elsewhere) "is not justified by the evidence and is in any event unjustifiably broad in its scope". By way of further example, on behalf of Mr Turner, Ms Stone submitted that Capita had not put forward any evidence that Mr Turner had taken, retained, or had in his possession any "Listed Items", and that the claim for delivery up was therefore "hopeless".
- Mr Short's position, as expressed by Mr Tatton Brown, is that Capita has not alleged that Mr Short retained Capita's property or that he had any intention of destroying it, let alone adduced any evidence to support any such allegations, but Mr Short was nevertheless prepared "in the spirit of pragmatism" to agree to paragraphs 1 and 2 of the draft Order. Mr Short's evidence is that "I believe that the effect of my complying with paragraph 2 is that I will return a very small number of documents which are, or arguably are, the property of the Claimants, most of them historic, and none of which I have used whether on my own account or for the benefit of the Second Defendant". Mr Tatton Brown submitted that Mr Short's agreement to paragraph 2 of the draft Order sufficed to cover any part of paragraph 3 of the draft to which Capita might be entitled.
- On the footing that an application for an order in terms of paragraph 2 of the draft Order is governed by the principles enunciated in American Cyanamid Co v Ethicon Ltd (No 1) [1975] AC 396, the first question is whether the material that is presently available to the Court discloses that Capita has any real prospect of succeeding in its claim for a permanent injunction at the trial. Further, because this part of the draft Order seeks a mandatory injunction, the principles to be applied are those summarised by Chadwick J (as he then was) in Nottingham Building Society v Eurodynamics Systems [1993] FSR 468 at 474 (and later approved by the Court of Appeal in Zockoll Group Ltd v Mercury Communications Ltd [1998] FSR 354) as follows:
"First, this being an interlocutory matter, the overriding consideration is which course is likely to involve the least risk of injustice if it turns out to be 'wrong' in the sense described by Hoffman J.
Secondly, in considering whether to grant a mandatory injunction, the court must keep in mind that an order which requires a party to take some positive step at an interlocutory stage, may well carry a greater risk of injustice if it turns out to have been wrongly made than an order which merely prohibits action, thereby preserving the status quo.
Thirdly, it is legitimate, where a mandatory injunction is sought, to consider whether the court does feel a high degree of assurance that the plaintiff will be able to establish this right at a trial. That is because the greater the degree of assurance the plaintiff will ultimately establish his right, the less will be the risk of injustice if the injunction is granted.
But, finally, even where the court is unable to feel any high degree of assurance that the plaintiff will establish his right, there may still be circumstances in which it is appropriate to grant a mandatory injunction at an interlocutory stage. Those circumstances will exist where the risk of injustice if this injunction is refused sufficiently outweigh the risk of injustice if it is granted."
- In fact, the nature of the relief claimed by paragraph 2 of the draft Order is not only mandatory but also, in substance, final in form: in the event that the Defendants have any "Listed Items" and they comply with an order to deliver them up to Capita at this interim stage of the litigation, Capita will have no need of, and no basis for, a further order for delivery up at the trial. As a matter of logic, it seems to me that the proper approach of the Court to the grant of such relief ought, if anything, to be more cautious than that which applies to the grant of an injunction at the interim stage which is not, in practice, final in effect.
- In my judgment, and subject to limited exceptions which I address below, the material at present before me falls short of establishing a serious issue as to whether any of the Defendants who resist interim relief in terms of paragraph 2 of the draft Order in fact have any "Listed Items" to deliver up. Further, having regard to that material, and subject to those exceptions, I am not persuaded that Capita has any real prospect of succeeding at trial in claiming an injunction in terms of paragraph 2 of the draft Order. A fortiori, I do not feel a "high degree of assurance" that Capita will be able to establish the right to such relief at trial. These considerations militate against Capita's claims for this relief, whichever analytical approach is applied to the facts of this particular case.
- The limited exceptions referred to above apply to the 4 emails that were sent by Mr Chalmers to a computer belonging to Archus and, in one instance, to "another employee" of Archus, who Mr Chalmers' solicitors have stated to be Mr Turner. Those emails are detailed in a letter from Mr Chalmers' solicitors dated 30 March 2017. That letter asserts that two of those emails were not opened, and that, of the two which were opened, in one case "the attachment contained a checklist which would otherwise have taken very little time to create" and in respect of the other case it is stated that "all client data was removed for use as a template or pro forma for a business case. This was amended and sent on to another employee of [Archus]".
- Capita do not accept that these assertions are necessarily correct, or that, at trial, the other Defendants will succeed in distancing themselves from the activities of Mr Chalmers and Mr Tailor as they now seek to do. On other hand, and although Capita plainly do not have full visibility of what the Defendants have been up to, the evidence concerning these 4 emails is as summarised above.
- Accordingly, it seems to me that the central questions for the purposes of the relief sought by paragraph 2 of the draft Order so far as concerns the dissemination and use of these 4 emails are whether damages are an adequate remedy for Capita and where the balance of justice lies in that regard. I address these matters below.
- Because Mr Coats is still employed by Capita, it has been possible for Capita to access his work laptop, and extracts from that laptop are contained in exhibit "SB1". Capita's case is that it cannot obtain anything more than is shown in those extracts because they relate to emails sent from and to Mr Coats' "gmail" account. Accordingly, "SB1" contains only part of the text of the emails and only the title of email attachments.
- When I asked him for a prime example of what Capita contended to be wrongly transmitted data or "Listed Items", Mr Quinn took me to an email from Mr Coats to Mr Short dated 24 February 2017 with the Subject "H & S Policy" and an attachment entitled "Employee Health Safety manual_Jan 2006.doc, health-and-safety-policy-example.doc". The text of the email begins "As attached, also go to the HSE website for further info". Mr Quinn submitted that this evidenced wrongful transmission of an important Capita document. That allegation, if correct, might also be relevant to the grant of "springboard" relief. However, it seemed to me from the description of the attachment and the text of the email that it was likely that the document in question was not a Capita document, but was, instead, a publicly available Health and Safety Executive publication. Mr Quinn was unable to say on instructions whether Capita did, in fact, have a January 2006 version of an Employee Safety Manual, or what the HSE website showed, but I was told by Mr Devonshire on instructions that the Defendants had looked at the HSE website and the email appeared to refer to a HSE document. In light of these considerations, I am unable to accept that Capita's reliance on this email provides support for the orders for delivery up and "springboard" relief that they seek.
- Other parts of the extract to which I was referred concerned an exchange of emails between Mr Coats, Mr Dineen and Mr Randall dated 23 February 2017 with the Subject "Client Migration Plan" and emails from Mr Dineen to Mr Coats on the same day with the Subject "FW: Lewes Health Hub Business case support". It seems to me that, on the face of it, the former exchange supports Capita's case that there is a serious issue to be tried as to other aspects of wrongdoing on the part of the Defendants, but not as to transmission of "Listed Items". Further, I consider that the latter emails are more consistent with a proposed Archus project being discussed between Mr Dineen and Mr Short than with the diversion or extraction of information relating to Capita or other "Listed Items". These views accord with Mr Barnard's evidence concerning the extracts, which is that they evidence that "Mr Coats has clearly been working for and assisting a competing business since at least December 2016, which has included preparing business plans, revenue trackers and client migration plans on behalf of Archus. It is also clear that such activity has been carried out in conjunction with the other Defendants and has been designed to damage Capita and the Health Division".
- Accordingly, while I accept that the picture which emerges at trial may be different, on the materials at present available I do not consider that these extracts lend any or any significant support to Capita's claim for relief under paragraph 2 of the draft Order.
- Applying the American Cyanamid approach, if Capita were to succeed at the trial in establishing a right to the relief sought by paragraph 2 of the draft Order, I consider that Capita would be adequately compensated by an award of damages for the loss Capita would have sustained as a result of each of those Defendants continuing to retain such "Listed Items" as they may, in fact, have in their possession or under their control between the time of the present application and the time of the trial. On the material at present available, I consider that any such damages are likely to be modest, and I am not aware of any suggestion that those Defendants would not be in a financial position to pay such damages. With regard to the 4 emails discussed above, it seems to me that these are effectively ring-fenced by the measures that Archus has taken with regard to the material laptop and even more so because, during the course of the hearing, Archus signified that it would transfer that laptop to the safekeeping of its solicitors. In any event, delivering up those emails would not be straightforward, as the laptop would need to be accessed for that purpose, with attendant risks that Defendants who have not yet seen the contents of the emails would thereby come to see them, or that this process might give rise to fertile ground for accusations of contamination of evidence. Further, it seems to me that the commercial value and sensitivity of these emails is limited. In addition, especially in the electronic age, I consider it more likely than not that any misuse that any of the Defendants might be tempted to make of these (or, indeed, any other) "Listed Items" would leave a detectable trail, and that to the extent that such misuse occasioned loss or damage to Capita that would be capable of being ascertained and quantified. Accordingly, applying the guidance contained in American Cyanamid, one does not reach an assessment of the balance of convenience in the present case.
- Applying the Nottingham Building Society approach, in circumstances where Capita's case that the Defendants who are resisting relief have in their possession or under their control any "Listed Items" is as unimpressive as I consider it to be, the risk of injustice to Capita if the injunction sought by paragraph 2 of the draft Order is refused is slight. Moreover, that risk does not outweigh the risk of injustice to those Defendants if that relief is granted. At first sight, it may seem that the grant of relief poses no risk of injustice to them: all that they would be required to do is to return to Capita "Listed Items" that belong to Capita and that they ought not to have in their possession or under their control. However, that initial view overlooks both the width of the definition of "Listed Items" (which includes "information (in whatever media and wherever located) relating to the business or affairs of Capita plc and its associated companies and/or its business contacts") and the legitimate concern that the relief, if granted, could provide fertile ground for dispute and might weigh heavily on the Defendants. As Mr Short explains in his witness statement in the context of addressing other aspects of the present application (a) "Capita plc's business is vast", and (b) "I am also concerned
that an order of this sort increases the prospect of additional disputes and increased costs. If the Claimants are intent on exerting pressure on me
I can foresee future arguments about inadvertent or alleged non-compliance if this order were made".
- For these reasons, I decline to make an order in terms of paragraph 2 of the draft Order.
Paragraphs 3 and 4 of the draft Order
- By paragraph 3 of the draft Order, Capita seeks an Order that: "By 4 pm on [INSERT DATE] the Defendants are to forward to the Claimants' solicitors copies of all emails that they have received into any non-Capita email account from any email account at Capita (including their own)". Paragraph 4 of the draft Order reads as follows: "The Defendants are not thereafter to take any steps to delete any remaining copies of such emails unless he or she is directed to do so by the Claimants' solicitors".
- Paragraph 4 is based on the premise that an Order has been made in terms of paragraph 3, and I heard no separate argument concerning paragraph 4. I therefore propose to concentrate on paragraph 3 and to say no more about paragraph 4.
- The Defendants pointed out in argument that paragraph 3: (a) is not limited in time, (b) is not tied to or defined by reference to the acts of wrongdoing alleged against the Defendants in these proceedings, and (c) is framed in such a way that it would require the Defendants to forward emails to Capita regardless of the information they contain, including and in particular if it is private or confidential information of the Defendants.
- The Defendants accordingly submitted, and I agree, that the relief claimed goes considerably wider than the obligations that they will have when they are required to provide standard disclosure if these proceedings continue until that stage.
- The Defendants also submitted that the Order sought by paragraph 3 was one for early disclosure, and that there was no justification for such an Order in the present case.
- In this regard, it seems to me that the relevant question under this head is whether documents are (or information is) required (a) to assist persons in the position of Capita to give effect to other interlocutory relief or in undoing any harm which has been unlawfully done to them (in which case it is likely to be granted) or (b) in reality because that may assist such persons in establishing their claims (in which case it is likely to be refused on the basis that, in an adversarial system of litigation, it would be "putting the cart before the horse") or finding out whether there are further allegations that they could plead (which is likely to be regarded as impermissible): see Tullett Prebon Plc v BGC Brokers [2009] EWHC 819 (QB) at [18], Aon Ltd v JLT Reinsurance Brokers Ltd [2010] IRLR 600, Landmark Brickwork Ltd v Sutcliffe [2011] EWHC 1239 (QB), [2011] IRLR 976 at [62]-[65], and Thomson Ecology v APEM [2013] EWHC 2875 (Ch) [2014] IRLR 184 at [33].
- Mr Quinn argued, in my view correctly, that the judgment of Mackay J in the Aon case was not concerned with the disclosure of documents, but was instead concerned with an order that the Defendants provide affidavit evidence disclosing their wrongdoings.
- However, that does not appear to me to be a point of substance in the present case in light of the consideration that Mr Quinn promptly then argued that Capita were entitled to the relief sought in paragraph 4 of the draft Order in the present case in light of the following five factors which Mackay J identified as relevant to the exercise of his discretion in respect of the relief sought in the Aon case: (i) the inability of the claimant to plead a case without this relief; (ii) the width of the order sought; (iii) the saving of costs; (iv) the adequacy of damages as a remedy; (v) the need to take pragmatic steps to protect the business from future and further loss; (vi) the need to police the order.
- Addressing each of those topics briefly: (i) although Capita's understanding of material events may be incomplete and partial, and might be improved by early disclosure, I do not accept that Capita are unable to formulate a case without this relief, and indeed a detailed Particulars of Claim and witness statements are presently before the Court; (ii) the width of the order sought is, in my view, excessive; (iii) I am not persuaded that there will be any saving of costs by litigating in this way, with disclosure being required from only one side at this stage, and where that disclosure is both wider than and less full than what will be required from the Defendants on standard disclosure; (iv) I consider that damages are likely to be an adequate remedy for Capita, for the like reasons as are discussed above in respect of "Listed Items"; (v) I am not persuaded that Capita need these emails in order to be able to take pragmatic steps to protect their business from future and further loss; and (vi) nor do I consider that these emails are needed to police other aspects of the relief sought by Capita and in some instances agreed either wholly or to some extent by a number of the Defendants to the extent that Capita obtain other protection either by Court order or by concession it seems to me that is likely to be sufficient to protect Capita's legitimate interests at the present time, and to the extent that Capita is refused other relief there is nothing else to police.
- Next, the Defendants pointed out that Capita's employee handbook (at page 17 of Appendix 11 to the Particulars of Claim) states under the heading "Acceptable personal use" that "Capita believes that using the communication tools provided in the business for personal use is entirely acceptable, as long as that use is reasonable". Accordingly, it is only to be expected that some personal use would be made by employees of their Capita email accounts, and my attention has not been drawn to any part of Capita's voluminous contractual documentation which purports to assert that Capita are entitled to have sight of the contents of personal emails that are sent from such accounts.
- Mr Short's witness statement contains evidence which illustrates the effect of having to comply with an Order that is framed is such wide and unqualified terms (extending as it does (a) beyond the temporal and other boundaries of Capita's pleaded case and (b) further and in any event, to private and personal information of the employee):
"18. I am not aware of any allegation directed to me regarding the forwarding of Capita emails to a non-Capita email account. Since I have been aware of this proposed order, however, I have considered what it might require of me if it were made. It would require me to spend a lot of time trying to check for historic and irrelevant emails, and then to forward them to the Claimant's solicitors. Those emails will in turn have to be considered by the Claimant's solicitors. The proposed exercise is likely to incur costs of both sides, for no identifiable gain. An example of pointless emails covered by this proposed order are emails generated as a result of my having difficulties accessing Capita email accounts whilst on holiday in places such as Australia or New Zealand. When I was unable to do so in 2016 I asked Mrs Jessica Randall to try and solve the issues so that I could work on holiday. Emails generated as a result of that issue that were sent to my hotmail account would have to be sent over if this order were made. That would be pointless and expensive.
19. The proposed order would also require me to forward what are in effect personal emails. I sent photographs of my holidays in Australia and New Zealand to which Jessica and Stuart Randall replied from their Capita E mail account to my personal Hotmail account. I do not see why I should be ordered, under the threat of a penal sanction, to deliver up these emails. They are not relevant to the issues in the case."
- I did not understand Mr Quinn to dispute that evidence, or that similar considerations would be likely to apply to the other Defendants (who have served no evidence).
- In these circumstances, it seems to me that the proposed Order would infringe the right to respect for private and family life of Mr Short that is guaranteed by Article 8 of the European Convention on Human Rights, and would be likely to infringe the Article 8 rights of the other individual Defendants. It is possible that different considerations might apply to emails received by Archus from any email account at Capita, because it may be thought less likely that such emails would contain anyone's personal emails, but that is not the way in which paragraph 3 of the draft Order is framed, and I have already addressed the only documents that were sent to any Archus related destination in respect of which I heard detailed argument (namely the 4 emails discussed above).
- I was not addressed on the relevant law by any Counsel, but I consider that it is clear:
(1) Article 8 is a Convention right for purposes of the Human Rights Act 1998, and section 6 of that Act requires the Court not to act incompatibly with such rights.
(2) Where the Court is concerned with an interplay between Convention rights, the position was summarised in Re S (a child) [2005] 1 AC 593 by Lord Steyn at [17] in the following four propositions: "First, neither article has as such precedence over the other. Secondly, where the values under the two articles are in conflict, an intense focus on the comparative importance of the specific rights being claimed in the individual case is necessary. Thirdly, the justifications for interfering with or restricting each right must be taken into account. Finally, the proportionality test must be applied to each. For convenience I will call this the ultimate balancing test..."
(3) Where such a balancing exercise has to be conducted, the Court approaches the matter in two stages. The first stage is to determine whether the claimant has a reasonable expectation of privacy in the information. If that question is answered affirmatively, the second stage is to consider whether, in all the circumstances, the claimant's interest must yield to some countervailing right. (See McKennitt v Ash [2008] QB 73, Lord Browne of Madingley v Associated Newspapers Ltd [2008] QB 103, Murray v Express Newspapers Ltd [2009] Ch 481).
(4) Where the balance which requires to be struck is between a Convention right and one of the societal interests such as the "rights of others" which are recognised by Article 8(2) and Article 10(2) and which is not itself a Convention right, although in principle the Court may approach the balancing exercise differently, in practice it may make little or no detectable difference to the Court's approach (see, for example, Cream Holdings Ltd v Banerjee [2005] 1 AC 253).
- Mr Quinn devoted some time to the argument that the emails and/or their contents are Capita's property. If that were right, it might give rise to different considerations, not least because one of the rights which would then be engaged would be Capita's right to protection of property which is guaranteed by Article 1 of the First Protocol to the Convention. Even there, however, the nature of the rights would affect the balancing exercise. Denial of an interim remedy would do no more than delay such recovery of Capita's property as Capita may ultimately be entitled to assert, whereas once private information is disclosed the consequences are irreversible, as phrases like "the ice cube has melted" recognise. I consider that this argument faces particular difficulties so far as concerns personal emails, such as the exchanges between Mr Short and Mr and Mrs Randall to which Mr Short refers, and, because the relief sought includes such emails, I would hesitate long and hard before granting that relief even if I thought that the argument was otherwise correct. In my judgment, however, it is not well founded.
- In support of this argument, Mr Quinn relied on the decision of the Court of Appeal in Fairstar Heavy Transport NV v Adkins [2013] EWCA Civ 886; [2013] 2 CLC 272. That case concerned a claim by a company to retrieve and read its electronic business correspondence stored on the personal computer of its former CEO, on the basis that access to this electronic correspondence was essential for the conduct of its business. Emails relating to the personal or private affairs of the CEO were excluded from the relief sought. At first instance, Edwards-Stuart J was asked to determine an agreed preliminary issue, namely whether the company had an enforceable proprietary claim to the content of the emails held by the CEO in so far as they were received or sent by him acting on behalf of the company. The case for the company was that the content of emails created by, or coming into the possession of, an agent while acting for the principal is the property of the principal and remains so after the termination of the agency relationship, whereas that for the CEO was that the content of the emails was "information", that information is not recognised by the law as property, and that the purely proprietary claim to the content was for that reason misconceived. Edwards-Stuart J held that the content of the emails was information, which was not capable of being "property". The Court of Appeal allowed the company's appeal on the basis that the company had throughout asserted a legal right to the content of the emails in the context of an agency relationship between the parties, and that the asserted "proprietary" character of the claim was not necessary for its success.
- In my view, this case is authority for the proposition that "as a general rule, it is a legal incident of [the relationship of principal and agent] that a principal is entitled to require production by the agent of documents relating to the affairs of the principal" ([53] per Mummery LJ, with whom Patten LJ and Black LJ agreed; Khouj v Acropolis Capital Partners Ltd & Anor [2016] EWHC 2120 (Comm), Knowles J at [75]). I consider that, while the Court of Appeal deliberately refrained from expressing a concluded view as to whether the contents of emails are, or are capable of being, "property", the tenor of its reasoning is to the contrary effect. If the Court of Appeal had considered that such contents were property, it could and in my view would have reversed the decision of Edwards-Stuart J on that basis, but it did not do so. Mummery LJ said at [46]-[49]:
"In my view, it is unfortunate that the agreed wording of the preliminary issue introduced an unnecessary complication into the dispute. The reference to a "proprietary right" was a distraction from the centrality of the agency relationship and its legal incidents
The assertion of a right to inspect and copy the content of the emails on his computer relating to its business affairs arises from the legal incidents of an agency relationship that survive its termination. That question can be decided, as between those parties, without a jurisprudential debate about the legal characteristics of "property", or whether the content of the emails was "information" in which property existed in this case or could exist at all.
Everybody knows that "property" differentiates between things that are mine and things that are not mine. The law lays down criteria for determining the boundary between, on the one hand, those rights that are only enforceable against particular persons and, on the other hand, those rights attaching to things that are capable of being vindicated against the whole world. The claim to property in intangible information presents obvious definitional difficulties, having regard to the criteria of certainty, exclusivity, control and assignability that normally characterise property rights and distinguish them from personal rights.
In my judgment, the court should decline to enter into a controversy of that kind when it is not necessary to do so in order to decide the case on its particular facts. It would be unwise, for example, for this court to endorse the proposition that there can never be property in information without knowing more about the nature of the information in dispute and the circumstances in which a property right was being asserted. Some kinds of information, such as non-patentable know-how, are more akin to property in their specificity and exclusivity than, say, personal information about private life.
The conclusion that I have reached on this appeal makes it unnecessary to explore the question whether information in the content of the emails is property owned by Fairstar, either as a matter of fact or law. The distinction drawn in the preliminary issue between an electronic communication and the content of it and the claim to a proprietary right in the content was not the real point at issue
"
- In my opinion, the conclusion that the contents of emails of the kind in issue in the present case are not property is supported by later decisions of the Court of Appeal.
- In Your Response Limited v Data Team Business Media Limited [2014] EWCA Civ 281 the question arose as to whether a lien could be exercised over a database pending payment of outstanding fees. Moore-Bick LJ reasoned that the database could not be regarded as a form of intangible property to be distinguished from choses in action and capable of being possessed and wrongly interfered with, and, accordingly, that the data manager was not entitled to exercise a common law lien over the database. Floyd LJ, in agreeing with Moore-Bick LJ, said at [42]: "When information is created and recorded there are sharp distinctions between the information itself, the physical medium on which the information is recorded and the rights to which the information gives rise. Whilst the physical medium and the rights are treated as property, the information itself has never been. As to this, see most recently per Lord Walker in OBG Ltd v Allan [2007] UKHL 21, [2008] 1 AC 1 at [275]
"
- In Environment Agency v Churngold Recycling Ltd [2014] EWCA Civ 909, the question before the Court of Appeal was whether the tort of conversion may be extended to copies of documents or intangible goods. Moses LJ, with whom Gloster LJ and Vos LJ agreed, said at [15] that electronically stored information, as opposed to the media upon which it is stored, is intangible, and, accordingly, is not "goods" for the purposes of the Torts (Interference with Goods) Act 1977. At [16]-[17], Moses LJ referred to the reasoning and decision of the Court of Appeal in Your Response Limited and pointed out (among other things) that Moore-Bick LJ at [27] in that case had "acknowledged that there was a powerful case to be made for recognising that the essential elements of possession could be exercised over digitised material and that the dichotomy between choses in possession and choses in action and the recognition of a third category of intangible property susceptible to possession should be reconsidered". At [18], Moses LJ said: "This court was fortunate to hear a summary of his submissions by Professor McMeel arguing for the proposition to the contrary: a distinction could and should be drawn between the information which belonged to Churngold and the electronic media on which it was retained. But in the light of the authorities of OBG and Your Response Limited there is, in my view, nothing this court can or should do by way of reconsideration in the light of modern technology". For these reasons, Moses LJ held at [19] that His Honour Judge Havelock-Allan QC "was not entitled to take the view that it was strongly arguable that the copies, including the electronic data, could be the subject matter of the tort of conversion: he was not entitled to order their delivery up to Churngold".
- On behalf of Capita, and in spite of the points made by the Defendants about the width of the relief sought by paragraph 3 of the draft Order and the fact that it would require the forwarding of emails containing the private or confidential information of the Defendants, Mr Quinn declined to modify that relief. Moreover, for the reasons set out above, I am unable to accept Mr Quinn's submission that Capita is, at least arguably, entitled to this relief on the basis that the emails in question or their contents are the property of Capita. Some attempt was made by Mr Quinn, belatedly, to invoke the agency principle which I consider to be the true basis of the decision of the Court of Appeal in Fairstar, but this does not get round the problems as to the width of the relief sought in the present case or the fact that it is framed in such a way as to capture personal and private emails (which were expressly excluded from the relief claimed by the company against the former CEO in Fairstar).
- For these reasons, I reject Capita's claim for relief in terms of paragraphs 3 and 4.
Paragraph 5 of the draft Order
- By Paragraph 5 of the draft Order, Capita seek an Order that: "Until trial or further Order the Defendants are not for any purpose to divulge, use or endeavour to use any confidential information concerning Capita plc, its clients and its suppliers in whatever form (e.g. Statistics, documents, records, papers, personal employment documents, company forms, computer files, communication)".
- As suggested by the fact that this relief is claimed in identical terms against each of the Defendants, in spite of the fact that different individual Defendants were employed by different companies at different times and Archus was not an employee of Capita at all, it does not replicate the express terms of the contracts of employment of any of the Defendants. Accordingly, Mr Quinn accepted that it is based on equitable principles.
- On behalf of Mr Darch, Mr Devonshire's main ground of resistance to the grant of an injunction in the terms on paragraph 5 of the draft Order ultimately boiled down to the argument that it is "impermissibly vague and imprecise". Other Defendants made submissions to the like effect, although some of them added further points. These included that there was no, or no properly particularised, allegation of misuse of confidential information on their part; and that the nature of Capita's claim to confidentiality was unacceptably unclear, bearing in mind Capita's acceptance that in some instances at least the information was in the public domain such that Capita's claim to confidentiality depended on the secrecy of a compilation. For Mr Short, Mr Tatton Brown also added the argument that the principles underlying the constraints on the grant of such wide-ranging relief were of particular relevance where, as in the case of Mr Short, a former employee's health "has already suffered as a consequence of this litigation". They relied on well-known authorities in support of their main submission.
- In Lawrence David Ltd v Ashton [1989] ICR 123, Balcombe LJ said at 132:
"They first claim an injunction against disclosure of confidential information or trade secrets. On this aspect of the case I agree unhesitatingly with the view of the judge. I have always understood it to be a cardinal rule that any injunction must be capable of being framed with sufficient precision so as to enable a person injuncted to know what it is he is to be prevented from doing. After all, he is at risk of being committed for contempt if he breaks an order of the court. The inability of the employers to define, with any degree of precision, what they sought to call confidential information or trade secrets militates against an injunction of this nature. That is indeed a long recognised practice."
- In Caterpillar Logistics Services (UK) Ltd v de Crean [2012] EWCA Civ 156, [2012] ICR 981, Tugendhat J refused to restrain the misuse of the Claimant's confidential information on two grounds: first, that the absence of any time limit in the confidentiality agreement precluded its enforcement; and, second, that it was in any event too widely expressed, and did not sufficiently specify the information entitled to protection.
- In the course of explaining why he would reject the Claimant's claim for a barring-out injunction, Stanley Burnton LJ explained at [61] that the Claimant could have, but had not "required the respondent to enter into an express covenant not to enter the employment of a customer (or a competitor)" which "would have had to be limited in time and reasonable as between the parties and in the public interest", but that Claimant had "instead obtained from the respondent her agreement in respect of its confidential information". Stanley Burnton LJ then referred at [61]-[63] to three well-known cases:
(1) In Rakusen v Ellis [1912] 1 Ch 831, Fletcher Moulton LJ said at 839:
"In almost all businesses there must be persons in such a confidential relation to the employers
that the knowledge which they acquire
consists substantially of the secrets of their employer. Such employments come to an end
and thereupon difficulties necessarily arise, because the person who is no longer in employment still has in his breast secrets which are the property of his past employer. The view that the law takes of the rights of the parties in that position is too clear to be disputed. The employee is quite free to go into the service of people who may be the rivals or the opponents of his former master. The law does not say that the possession of those secrets shall cripple his work, or sterilize it. He may go into employment quite inconsistent with the employment which he had in the past. All that the law says is: you shall not disclose or put at the service of your new employer the secrets that belong to your old employer."
(2) In Printers & Finishers Ltd v Holloway [1965] 1 WLR 1, Cross J said at 6F (in a passage cited with approval by the Court of Appeal on four occasions, including in Faccenda Chicken Ltd v Fowler [1987] 1 Ch 117 by Neill LJ at 137H, and in Littlewoods Organisation Ltd v Harris [1977] 1 WLR 1472 at 1479C by Lord Denning MR, and by Megaw LJ at 1485C):
"If the managing director is right in thinking that there are features in the plaintiff's process which can fairly be regarded as trade secrets and which their employees will inevitably carry away with them in their heads, then the proper way for the plaintiffs to protect themselves would be by exacting covenants from their employees restricting their field of activity after they have left their employment, not by asking the Court to extend the general equitable doctrine to prevent breaking confidence beyond all reasonable bounds."
(3) In Balston Ltd v. Headline Filters Ltd [1987] FSR 330, Scott J said at 351:
"Employers who want to impose fetters of this sort on their employees ought in my view to be expected to do so by express covenant. The reasonableness of the covenant can then be subjected to the rigorous attention to which all employee covenants in restraint of trade are subject."
- Having rejected the Claimant's claim for a barring out order, Stanley Burnton LJ turned to consider the Claimant's appeal against the judge's refusal to restrain the misuse of confidential information. Stanley Burnton LJ expressly disagreed with the judge as to the first ground, but said that he would uphold the judge's refusal to grant an interim injunction "on the simple ground that the claimant has not established any arguable case that she has broken or intends to break or even that there is a real risk that she will break the terms of the confidentiality agreement". Stanley Burnton LJ then said at [68]:
"I add that the form of interim relief sought by CLS is hopelessly wide and vague. It does not specify the confidential information to be the subject of restriction with any certainty, but simply describes it as "all or any confidential information acquired by the respondent during her employment with [CLS] in whatever form". Paragraph 10 of CLS's Particulars of Claim does attempt to identify some of the confidential information it seeks to protect. I say some, because the allegation is that the respondent had access to the identified information "in particular, but not limited to" the listed information. It is I think significant that there is no evidence that the respondent has a copy of any of the documents referred to in that paragraph."
- In response to these criticisms, during the course of the hearing Mr Quinn on behalf of Capita produced the following suggested definition of confidential information:
"any information of a secret and confidential nature (whether or not recorded in documentary form, or stored on any magnetic or optical disk or memory) including but not limited to technical and non-technical information, business and marketing plans and policies, information regarding future bids, customer lists, contact numbers and customer database, telephone numbers of clients, terms of contracts, pricing structures and agreements, other similar information relating to the Claimants or any Group Company of the Claimants and such information of any of its suppliers or customers and any information which the Claimants or any Group Company of the Claimants have identified as confidential or in respect of which the Claimantsor any Group Company of the Claimants owe a duty of confidentiality to a third party".
- The Defendants disputed that this suggested definition met their grounds of complaint. I agree. I do not consider that this suggested definition produces a remotely acceptable degree of precision. Among other things, (a) it suffers from the vice identified by Stanley Burnton LJ of incorporating expressions such as "including but not limited to" and "other similar information", (b) it seeks to protect "information regarding
telephone numbers of clients" which I doubt can properly be claimed as confidential information of Capita, especially bearing in mind the nature of the client base of the individual Defendants' former employers, (c) it extends to "similar information relating to [not only] the Claimants [but also] any Group Company of the Claimants and [furthermore] of any of [Capita's] suppliers or customers", which seems to me to be far too wide, and (d) it also extends to "any information
in respect of which the Claimants or any Group Company of the Claimants owe a duty of confidentiality to a third party", the ambit of which the Defendants are likely to find it impossible to know.
- I am not prepared to make an Order in such wide and uncertain terms, for the reasons so clearly articulated in the authorities to which I have been referred by the Defendants.
Paragraphs 6 and 7 of the draft Order
- These paragraphs seek negative injunctions against Mr Darch alone "until whichever is [the] earliest of trial, 30th June 2017 or further Order of the Court", in the form set out below. In practical terms, having regard to the effective nature of the hearing before me and the fact that (as was accepted by all parties before me) the trial will not take place until well after 30 June 2017, Capita seeks the relief in question until that date.
- In these circumstances, it was common ground that the applicable approach is that stated by Staughton LJ in Lansing Linde Ltd v Kerr [1991] 1 WLR 251, at 258:
"If it will not be possible to hold a trial before the period for which the plaintiff claims to be entitled to an injunction has expired, or substantially expired, it seems to me that justice requires some consideration as to whether the plaintiff would be likely to succeed at a trial. In those circumstances it is not enough to decide merely that there is a serious issue to be tried."
- By paragraph 6 of the draft Order, Mr Darch is "not to solicit or endeavour to entice away from Capita plc the business or custom of a Restricted Customer with a view to providing goods or services to that Restricted Customer in competition with any Restricted Business". This wording reflects Clause 28.1(a) of Mr Darch's contract of employment, which contained an obligation to this effect lasting for 6 months from the date of termination of that employment (which is, as set out above, 30 June 2016).
- The draft Order defines "Restricted Customer" as: "Any firm, company or person who during the six month period before termination of their employment, was a customer of or in the habit of dealing with Capita plc or any of its businesses with whom that Defendant (or, in the case of Archus Limited, any Archus Limited employee) had contact or about whom that Defendant/Archus Limited employee became aware or informed in the course of his employment".
- The draft Order defines "Restricted Business" as: "The business of Capita plc or those parts of the business of Capita plc with which that Defendant (or, in the case of Archus Limited, any Archus Limited employee) was involved to a material extent in the six month period before the termination of his employment by the Claimants".
- By paragraph 7, Mr Darch is "not to offer to employ or engage or otherwise endeavour to entice away from Capita plc any Restricted Person". This wording reflects Clause 28.1(b) of Mr Darch's contract of employment, which contained an obligation to this effect lasting for 6 months from the date of termination of that employment.
- The draft Order defines "Restricted Person" as: "Any person who was an employee, agent, director, consultant or independent contractor employed, appointed or engaged by the employer to work in the business trading as Capita plc within the six month period before the termination of that Defendant's (or in the case of Archus Limited, any Archus Limited employee's) employment who by reason of such employment, appointment or engagement and in particular his/her seniority and expertise or knowledge of trade secrets or confidential information of the employer or knowledge over the clients, customers or suppliers of the employer is likely to be able to assist or benefit a business in or proposing to be in competition with the employer".
- Mr Quinn's Skeleton Argument contains the following summary of the relief sought by Capita: (1) as against Mr Short and Mr Dineen, Capita are seeking to enforce restrictive covenants contained in their contracts of employment which have not yet expired; (2) "In the case of Mr Short, having assured [Capita] that he was in fact retiring completely from work, the parties entered into a Settlement Agreement which released him from his covenants but which also contained certain warranties as to his conduct the breach of which [Capita] submit entitle them to now enforce the same"; and (3) as against Mr Darch, Archus, Mr Randall and Mr Turner "[Capita] are seeking so-called "springboard" relief".
- Accordingly, what are sought against Mr Darch (and these other three Defendants) are springboard injunctions.
- Mr Quinn explained that as against these Defendants, "[Capita] do not point to any continuing restrictive covenants but submit instead that they can show a serious issue as to their entitlement to so-called "springboard" relief to prevent the continuation of an unfair advantage that has been caused by the breach of duties: (1) Sun Valley Foods Ltd v Vincent [2000] FSR 825; (2) UBS Wealth Management (UK) Ltd v Vestra Wealth LLP [2008] IRLR 965; (3) QBE Management Services (UK) Ltd v Dymoke [2012] EWHC 80 (QB), [2012] IRLR 458 per Haddon-Cave J at [239]-[247]; (4) Vestergaard v Bestnet [2013] 1 WLR 1556; (5) Willis Ltd v JLT Group plc [2015] EWCA Civ 450".
- Mr Quinn further submitted that the springboard relief that is sought as against these Defendants "is in similar terms to the contractual restrictions in place against other [Defendants] and reflects the approach taken by Simler J in Devere Holding Company Ltd and Others v Belgravia Wealth Management and Others [2014] EWHC 3189 (QB) at [39-44]; see also Dorma v Bateman [2016] IRLR 616 per Spencer J at [53]". In light of that submission, it is appropriate to consider not only the approach and outcome in other cases but also the facts upon which the same were based. I will focus on Devere.
- In the Devere case at [8]-[9], Simler J summarised the relief sought, so far as concerns the material aspect of the present case, as comprising (in brief) (1) relief to prevent D6 and D10 from (a) approaching clients/policy holders of the claimants or attempting to have their policies cancelled; and (b) soliciting consultants of the claimants; (2) relief to prevent D3 from, whether directly or indirectly, alone or together with a third party and whether as principal shareholder, director, employee, agent, consultant, partner or otherwise, from dealing with clients or prospective clients, soliciting personnel, inducing customers or suppliers to stop dealing with the claimants by the use of confidential information and holding himself out as being associated with the claimants (in other words, preventing him from doing those matters identified at paragraphs 2(a)-(e) of the original draft order sought against D4, 5, 7, 8 and 9 in that case, but without the limitation to personal or material dealings in relation to clients and contractors); and (3) relief against D4, D5, D7, D8 and D9 to prevent those same steps being taken as in relation to D3 but with the limitation in relation to personal and material dealings (in other words, paragraphs 2(a)-(e) of the original draft order in that case).
- At [39], Simler J said:
"Springboard relief is only necessary on the claimants' case against D3, D6 and D10. Even if I am satisfied that the defendants, or some of them, have made unlawful use of material belonging to the claimants, that is not enough to found a claim for springboard relief. The claimants must show that the defendants have gained an unfair competitive advantage over the claimants and that that advantage still exists and will continue to have effect unless the relief sought is granted. It is clear from the authorities that the court should exercise considerable caution both as to whether to grant such an injunction at all and, if so, as to its form and duration. In particular, the duration of such an injunction should not extend beyond the period for which the defendants' illegitimate advantage may be expected to continue because such injunctions are granted to protect against and to prevent further loss, rather than being used to punish for past breaches of contract."
- At [40]-[44], Simler J said:
"40 Bearing all these considerations in mind, I am persuaded that there is an arguable case for springboard relief here. There is an arguable case based on the evidence available that unlawful use has been made of the claimants' confidential information and trade secrets by these defendants. If that is right and it is established at trial, it is highly likely that an unfair competitive advantage has been obtained, in that Belgravia has been able to hit the ground running even as a start-up. Unlike the ordinary start-up, starting up without the unlawful use of contacts and individuals, it has managed to establish itself with established teams of people in each office. Those teams have worked together and know how to work together and know how to work together in the business that they are working on. On the claimants' case, they have done so using confidential client information belonging to the claimants. That gives rise to a strongly arguable case if the claimants' evidence is ultimately accepted, that Belgravia has obtained an unfair competitive advantage.
41 There is plain evidence of attempted and successful solicitation on the claimants' case. How that occurred precisely, to what extent it flowed from coordinated action by the defendants, how widespread and successful it was, will be a matter for trial. But, in my judgment, there is evidence of an arguable case and evidence of ongoing dealings with clients. D9 effectively admitted this to be the case
so far as the absence of more up-to-date documentary proof of ongoing damage after July is concerned and relied on by the defendants, I am satisfied that this reflects the fact that disclosure has not yet been provided. It is not to be treated as positive evidence that damage to the claimants' business has ceased or that any unfair competitive advantage has ceased to have effect...
43
The question at the end of the day, in relation to springboard relief is whether an arguable case has been raised that the unfair advantage obtained by the defendants still persists, and whether it will continue to persist unless relief is granted. I am persuaded that this has been established. If the claimants are correct that D3 was involved in the misuse of confidential information and the team moves, it is undoubtedly the case that he has obtained an advantage which has accrued and which persists. I have already made reference to the adequacy of damages in the context of the covenant and confidentiality-based injunctions. The position is stronger in relation to the springboard injunction so far as adequacy of damages is concerned and I am satisfied that damages are not an adequate remedy
It is right to say that the relief must fit the facts of the case. It must reflect and restrain the spectrum of unlawful activities. Here, if the claimants' case is established at trial, the defendants stole a march on the claimants and gained an unlawful head start. Again, on the claimants' case they did so by misusing confidential information and by poaching teams of staff. In my judgment, the fair, just and equitable approach in these circumstances is to make an order in terms of paragraph 2 and 3 of the claimants' original draft order subject to what I say at the end of this judgment in relation to D6 and D10, for the short period until the speedy trial or any further order.
44 The evidence against D6 and D10 is strong. I recognise that such an injunction may have the effect of restraining what would otherwise be lawful activities, but those activities are, arguably at least, based on an unlawful foundation and therefore must be accepted. In the case of D3, I consider that springboard relief should also be granted and I propose to make an order in the same terms as for D6 and D10 subject to any further submissions that are made in relation to D3 and subject to what I say at the end of this section in relation to "services". In his case I am not prepared to make the wider order sought by the claimants at this interim stage. The wider relief sought is likely, or would be likely, to prevent D3 from working altogether as a financial adviser because he does not know who is and is not a deVere client in circumstances where, as I have described, deVere clients are a very extensive pool. It may be that the claimants will establish a right to the wider springboard relief sought at trial. The wholesale team moves from different offices with confidential information being taken, all formerly under D3's control, together with client solicitation evidence, the compelling telephone logs for May only from the Budapest office (perhaps representing the tip of the iceberg), are all compelling evidence. If established, and if the claimants demonstrate an unlawful means conspiracy, that will afford a strong basis for a wider springboard, but at this stage the evidence is disputed. D3 in particular says the evidence is exaggerated. He may be right; I cannot resolve these issues. At this stage, given the timing, I am persuaded that a limited springboard injunction, both in duration and in the restrictions that are placed on D3, best meets the justice of the situation and holds the ring most fairly. A speedy trial will take place within two months, and if it is wrongly obtained, damages will be met by the claimants' cross-undertaking."
- With regard to the applicable law, Mr Devonshire submitted that, first, where it is available, springboard relief must be a proportionate response to the advantage gained from the breach alleged; and, second, it is for the Claimant "to spell out the precise nature and period of competitive advantage" the injunction is said to be necessary to prevent (see QBE Management Services (UK) Ltd v Dymoke [2012] EWHC 80 (QB), [2012] IRLR 458, Haddon-Cave J at [240]-[247]). Mr Devonshire relied, further, on Dorma v Bateman [2016] IRLR 616, Spencer J at [47]: "even if [the Claimant] has raised an arguable case in relation to the unlawfulness of [the Defendant's] conduct, the Court must also be satisfied that the relief sought does no more than proportionately negate the springboard advantage improperly obtained in consequence".
- Mr Devonshire submitted that the facts of the present case are very different from those of Devere and Dorma, and he suggested that the limitations that are appropriate to be applied to the remedy are apparent from Willis v JLT [2015] IRLR 844, Elias LJ at [18]:
"[Counsel] emphasised that springboard injunctions are very exceptional and that there must be compelling evidence of serious wrong doing and he cites cases such as UBS Investoral Wealth [2008] IRL 654 and Tullett Prebon Plc v BGC Brokers [2009] EWHC 819. I would see more force in this if we were granting a long injunction, but at this stage, we are only concerned with granting the injunction pending the return date, which should be between one and two weeks
."
- Turning to the facts, Mr Devonshire submitted as follows:
(1) With regard to paragraph 6 of the draft Order, the injunction Capita seeks against Mr Darch is not justified by the allegations made in Mr Barnard's witness statement (or indeed the matters pleaded in the Particulars of Claim) even if they are all assumed to be true. Mr Darch's employment with Capita determined at the end of June 2016. He was subject to a 6 month prohibition on the solicitation of customers with whom he had dealt in the last 6 months of his employment. There is no claim (let alone evidence) that he acted in breach of this restriction by soliciting customers during the period of post termination restraint, such as might support an argument that because Capita did not get the benefit contracted for in the period of restriction, that restriction should somehow be extended.
(2) Equally, there is no logic to the assertion that because Mr Short allegedly misled Capita about his future intentions after 31 December 2016, and thereby secured his release from his non-solicitation obligations going forward, Mr Darch's post-termination restrictions should be extended (whether in respect of the customers of Mr Darch or those of Mr Short).
(3) Even if "customer springboard relief" was otherwise appropriate, the form of order sought is impermissibly vague and uncertain. Mere "awareness" that a particular entity had become a customer of Capita (or merely being informed of that fact) would not have given Mr Darch a competitive edge in his post-termination dealings with such a customer. Merely because Mr Darch was aware or was told that a particular person was a customer at some time between 1 January 2016 and 30 June 2016 does not give him a springboard advantage that must be restrained now.
(4) Further, quite apart from these difficulties, "how is Mr Darch to know who is caught and who is not when the touchstone is so loose and ill-defined?"
(5) The like points can be made in respect of the "recruitment springboard relief" that is sought by paragraph 7 of the draft Order. It would extend to any person engaged by the employer (i.e. the Second Claimant) to work in Capita's business in the six months prior to the termination of Mr Darch's employment. As such, it could apply to persons (i) who had long since left Capita's employment (provided only that they had been employed by Capita in the six months prior to 30 June 2016), (ii) who were involved in parts of Capita's business with which Mr Darch had no knowledge or involvement, and/or (iii) whom Mr Darch had never met (there being no requirement for prior personal contact) and/or about whom he knew nothing. According to the Second Claimant's published accounts for the year ending 31 December 2015, it had 2,852 employees as at that date. Mr Darch worked in the Health Division - a sub-division of Capital Real Estate Advisory, which was itself a (sub) division of the Second Claimant. The evidence does not support an entitlement to such sweeping relief. In any event, the injunction sought is vague and uncertain and so broad that Mr Darch will not know where he stands and what he can and cannot do.
(6) Nevertheless, to dispose finally of the application as against him, Mr Darch is prepared to undertake that he will not solicit, offer employment to or assist in the attempted employment of any person currently employed by the Health Division of Capita Real Estate Advisory, until 30 June 2017: "[While he] does not accept that such an order is justified by Capita's application, the Courts have been prepared to make recruitment freeze injunctions in cases where an alleged unlawful team move is said to have destabilised the Claimant's work-force. The undertaking in these terms is offered on the assumption that this is the case Capita is trying to make, although both the pleading and the evidence are very opaque. The undertaking offered is (in real terms) wider than the order sought on the application, but at least has the benefit of clarity and certainty".
- I prefer Mr Devonshire's submissions. In particular, I consider that there are significant grounds to doubt the enforceability of the customer-based protection contained in Clause 28.1(a) of Mr Darch's contract of employment. It seems to me that a restriction which relates not only to persons with whom (in the words of Simler J) the employee had "personal and material dealings" but also to those "about whom the employee becomes aware or is informed in the course of his (or her) employment" may well be held at trial to be too wide. Further, similar points arise with regard to the recruitment-based protection contained in Clause 28.1(b) of Mr Darch's contract of employment. It seems to me that the definition of "Restricted Person" may well be held at trial to give rise to problems of reasonableness and enforceability in light of the difficulty for the employee of knowing whether persons - who are not limited to those with whom he (or she) had "personal and material dealings" - are "by reason of their employment or engagement (and so forth)" by the employer "likely to be able to assist or benefit a business in or proposing to be in competition with the employer".
- On this footing, Capita faces difficulties in seeking springboard relief based on the wording of these Clauses, even before one comes to the consideration that the duration of the relief sought against Mr Darch is not based on the length of the post-termination restrictions in his contract of employment but is instead based on the length of such restrictions in the contract of a different former employee, namely Mr Short.
- It seems to me that, in broad terms, Simler J accepted that the Claimants in Devere had made out at least a serious case to be tried, and in some instances a clearer case than that in light of the documents or the Defendants' express admissions, of wrongdoing of the kind summarised in [10] of her judgment (which I have quoted in [20] above). In contrast, in the present case, although I accept that Capita has made out a serious issue to be tried in respect of most, if not all, of its various heads of claim, I am less impressed by Capita's evidence and arguments than Simler J appears to have been by the case of the Claimants in Devere. One consequence of this is that, as is true with regard to the other heads of interim relief that I have considered above, I am more inclined to view damages as an adequate remedy that was Simler J in Devere.
- Moreover, and in contrast to my understanding of the position in Devere, because it will not be possible to hold a trial before the period for which Capita claims to be entitled to a springboard injunction has expired, I am required to consider whether Capita would be likely to succeed at a trial. Capita have advanced a wide range of allegations which the Defendants have not suggested they could strike out. Further, Capita are entitled to say that the fact that they cannot make good their case on (for example) misuse of confidential information to any greater extent than it is made good in the witness statements and/or pleaded in the Particulars of Claim does not mean that they may not be able to adduce better evidence in due course that damage to their business is continuing and that an unfair competitive advantage has been obtained by the Defendants and is continuing to harm Capita or benefit them. Based on the materials at present before me, however, I am not persuaded this is likely to be so, or at least is likely to be so to such an extent that damages would not be an adequate remedy.
- On the basis of the decided cases, I am required to exercise considerable caution both as to whether to grant a springboard injunction at all and, if so, as to its form and duration. In particular, I am required to keep well in mind that the duration of such an injunction should not extend beyond the period for which the Defendants' illegitimate advantage may be expected to continue, because such injunctions are granted to protect against and to prevent further loss, rather than to punish for past breaches of contract.
- In all the circumstances, I am not persuaded that the relief sought against Mr Darch does no more than proportionately negate any springboard advantage that he may improperly have obtained in consequence of the wrongdoing Capita are likely to prove.
- For these reasons, I do not consider it appropriate to grant such relief against Mr Darch.
Paragraphs 8, 9 and 10 of the draft Order
- Paragraphs 8, 9 and 10 of the draft Order seek negative injunctions against Archus alone "until whichever is [the] earliest of trial, 30th June 2017 or further Order of the Court", restraining Archus from (a) soliciting or endeavouring to entice away from Capita plc the business or custom of a Restricted Customer with a view to providing goods or services to that Restricted Customer in competition with any Restricted Business, (b) offering to employ or engage or otherwise endeavouring to entice away from Capita plc any Restricted Person; and (c) procuring any individual in respect of whom Archus has notice of any relevant post-termination restriction contained in his/her contract of employment with Capita plc to act in breach of the same.
- As appears from the discussion of the relief sought against Mr Darch, paragraphs 8 and 9 of the draft Order are derived from the provisions of Clauses 28.1(a) and 28.1(b) respectively of the contract of employment between Capita and Mr Darch. The same provisions are also contained in the contracts of employment of some of the other Defendants. Paragraph 10 of the draft Order is dependent on the reasonableness and enforceability of those provisions: if and to the extent that post-termination restrictions contained in the contracts of employment of former employees of Capita are not enforceable, Archus can have no liability for procuring breach of the same.
- My reasoning in respect of the relief sought against Mr Darch includes a finding that Capita is not likely to succeed in upholding Clauses 28.1(a) and 28.1(b) at trial. In a sentence, and contrary to Capita's pleaded case as to reasonableness and enforceability, on the material that is at present available I consider that these provisions are not likely to be regarded at trial as reasonable as between the parties and in the public interest.
- That is sufficient to dispose of the application for relief against Archus. It is right to mention, however, that Mr Leiper had at least one additional point. He submitted that, even if Capita had a sound basis for seeking springboard injunctions, the grant of relief against the individual Defendants would be sufficient, and that there was neither a need nor a legal justification for such relief to be granted against Archus as well. In support of that submission, he referred to both Devere and Dorma and pointed out, I believe correctly, that, although injunctions were granted in those cases, in neither instance was springboard relief granted against the new employer of the departing employees.
Paragraphs 11, 12, 13 and 14 of the draft Order
- Paragraphs 11, 12, 13 and 14 of the draft Order seek negative injunctions against Mr Short alone "until whichever is [the] earliest of trial, 30th June 2017 or further Order of the Court". What is sought are Orders that Mr Short is not to:
(1) solicit, or accept, or facilitate the acceptance of, or deal with the custom of any person, firm or company with whom he dealt (or with whom staff that he managed dealt) in the period from 1st January 2016 to 31st December 2016 in respect of goods and/or services of a type which in that period were either supplied by Capita plc's business, or which Capita plc's business was in the process of negotiating to supply to the person or persons in question, or
(2) interfere or attempt to interfere with supplies to Capita plc's business (including the terms of business relating to those supplies) from any person, firm or company supplying goods and/or services with whom he dealt in the period from 1st January 2016 to 31st December 2016, or
(3) engage or be concerned or interested in or assist any business carried on in competition with the business of Capita plc, Capita Business Services Limited and the business or businesses operated by them and also any Group Company and the business or businesses they operate in which he was involved during the period from 1st January 2016 to 31st December 2016 ["the Capita business"] (except as a passive investor in not more than three percent of any class of securities quoted on any recognised investment exchange as defined by the Financial Services and Markets Act 2000), or
(4) employ or entice or attempt to entice away from the Capita business any employee who at any time during the period from 1st January 2016 to 31st December 2016 was the employee of any Group Company and with whom he had contact during the course of his employment during that 12 month period.
- These draft Orders replicate the wording of Clauses 18.1.1.1, 18.1.1.2, 18.1.1.3 and 18.1.1.4 of Mr Short's contract of employment (with Capita Symonds Limited). However, in accordance with Clause 5.2 of the Settlement Agreement between the Second Claimant and Mr Short dated 22 December 2016, Mr Short was released from all of those post-termination restrictions with effect from 31 December 2016.
- As set out above, it is alleged in the Particulars of Claim that Mr Short "sought to negotiate the release from [those] post-termination restrictions" by making statements to Capita that are alleged to be untrue. In principle, allegations to that effect could lay the foundation for a claim to rescind the Settlement Agreement. Further, in the event that rescission was granted, Capita might succeed in claiming (among other things) that these post-termination restrictions had revived and could be enforced against Mr Short. However, that forms no part of Capita's pleaded case, which instead alleges untruthful assurances on the part of Mr Short and nothing else that seems material in this context.
- In these circumstances, I am wholly unpersuaded that Capita would be likely to succeed at a trial in enforcing these restrictions against Mr Short, and, thus, in establishing an entitlement to relief in terms of paragraphs 11, 12, 13 and 14 of the draft Order.
- Mr Tatton Brown advanced a number of additional arguments on behalf of Mr Short. First, he submitted that Capita's pleaded case that because Mr Short allegedly acted in breach of various warranties contained in Clause 7 of the Settlement Agreement this permits Capita to enforce the post-termination restrictions in his contract of employment is "hopeless". Second, he submitted that the alleged false assurance was inadmissible, because it involved Capita in seeking to adduce evidence of "without prejudice" negotiations and it does not fall within the "unambiguous impropriety" exception to that form of joint privilege. Third, he submitted that the relevant restrictive covenants are clearly unenforceable: the breadth of Capita's business and the extension of the first restriction to persons who had dealings "with
staff that he managed" renders the covenants in Clauses 18.1.1.1, 18.1.1.2, and 18.1.1.3 far too wide; and the non-poaching covenant in Clause 18.1.1.4 relates to any employee, no matter how junior, with whom Mr Short had contact during 2016, and this is an unreasonably wide pool of employees, the precise members of which Mr Short is unlikely to know.
- On the materials at present available, my views on these points are as follows: I consider that Mr Tatton Brown is right about the first point, and certainly that Capita's case on that issue is a good deal more likely to fail than to succeed; I do not feel able to determine the rights and wrongs of the second point, and, therefore, I do not feel able to reach the conclusion that Capita would be likely to succeed at trial on that point; and I am not satisfied that Capita would be likely to succeed at trial on the third point.
- Mr Tatton Brown went on to say that in the event that, faced with these difficulties, Capita attempted to re-cast the relief sought against Mr Short as being in the nature of a springboard injunction, that attempt should be rejected for a number of reasons. One of these, as Mr Tatton Brown submitted, is that the course Capita should follow as a matter of proportionality in respect of costs and use of Court time is to seek protection against Archus, because this will, if granted, afford Capita all the protection they need against Mr Short, as there is no arguable case, and still one which has a likelihood of success, that Mr Short will do anything adverse to them independently of Archus.
- I do not believe that Mr Quinn did attempt at any time to re-cast the basis for seeking relief against Mr Short in this way. If I am wrong about that, however, I would hold that a springboard injunction should be refused for the like reasons as I have given above in respect of Capita's claim for springboard injunctions against other Defendants.
Paragraphs 15, 16, 17, 18 and 19 of the draft Order
- Paragraphs 15, 16, 17, 18 and 19 of the draft Order seek negative injunctions against Mr Dineen alone "until whichever is [the] earliest of trial, 3rd August 2017 or further Order of the Court". What is sought are Orders that Mr Dineen is not to:
(1) solicit or endeavour to entice away from Capita plc the business or custom of a Restricted Customer with a view to providing goods or services to that Restricted Customer in competition with any Restricted Business; or
(2) offer to employ or engage or otherwise endeavour to entice away from Capita plc any Restricted Person; or
(3) be involved in any Capacity with any business concern which is (or intends to be) in competition with any Restricted Business; or
(4) be involved with the provision of goods or services to (or otherwise have any business dealings with) any Restricted Customer in the course of any business concern which is in competition with any Restricted Business in any geographic area where any Restricted Business conducts business;
(5) represent himself as connected with Capita plc in any Capacity.
SAVE THAT nothing in this Order shall prevent him from:
(i) Holding an investment by way of shares or other securities of not more than 5% of the total issued shared capital of any company, whether or not it is listed or dealt in on a recognised stock exchange; or
(ii) Being engaged or concerned in any business concern insofar as his duties or work shall relate solely to geographical areas where the business concern is not in competition with any Restricted Business; or
(iii) Being engaged or concerned in any business concern, provided that his duties or work shall relate solely to services or activities of a kind with which he was not concerned to a material extent in the 6 months prior to 3rd February 2017.
- Mr Dineen, represented before me by Ms Belgrove, offered undertakings in terms of that relief until 3 August 2017, without prejudice to his position as to the validity or enforceability of the post-termination restrictive covenants in his contract of employment, and subject to a number of modifications. For example, the relief set out at (1) above has been modified to read "Solicit or endeavour to entice away from the Claimants the business or custom of those individuals/entities set out in Schedule 4 to this Order". The reference to Schedule 4 is to a list of clients of Capita that was produced during the course of the hearing in response to complaints from the Defendants that the relief sought by Capita was otherwise of uncertain ambit and in a form that made it impossible for them to know whether or not they were complying with it. Undertakings in those terms were incorporated into the form of Order which was agreed between the parties following the hearing, and it is my understanding that those undertakings are acceptable to Capita. Accordingly, nothing more needs to be said about this relief in this judgment. If that understanding is incorrect, I will hear submissions on behalf of Capita and Mr Dineen after judgment is handed down.
Paragraphs 20, 21, 22 and 23 of the draft Order
- Paragraphs 20, 21, 22 and 23 of the draft Order seek negative injunctions against Mr Randall alone "until whichever is [the] earliest of trial, 3rd August 2017 or further Order of the Court" in the same terms as the relief sought by paragraphs 11, 12, 13 and 14 of the draft Order against Mr Short.
- Mr Randall's contract of employment with Newventures Limited did not contain any post-termination restrictive covenants. Accordingly, the relief sought against Mr Randall comprises springboard injunctions.
- By the Order which was agreed between the parties following the hearing, Mr Randall offered undertakings until whichever is the earliest of trial, 3 August 2017 or further order, not to:
(1) Solicit or accept, or facilitate the acceptance of, or deal with the custom of any person, firm or company which whom he dealt (or with whom staff that he managed dealt) in the period from 4th February 2016 to 3rd February 2017 in respect of goods and/or services of a type with which he was involved during that period;
(2) Interfere or attempt to interfere with supplies to Capita plc's business (including the terms of business relating to those supplies) from any person, firm of company supplying goods and/or services with whom he dealt in the period from 4th February 2016 to 3rd February 2017; or
(3) Employ, entice or attempt to entice from Capita plc any employee who at any time during the period from 4th February 2016 to 3rd February 2017 was an employee of Capita plc or any group company and with whom he had contact during the course of his employment during that 12 month period.
- The Order agreed between the parties following the hearing was sent to me without any accompanying explanatory document, and I interpreted this form of words as indicating that Mr Randall was resisting the grant of relief under these heads on any longer term basis than until the handing down of this judgment. Mr Marsden's Skeleton Argument before me made clear that, in resisting relief, Mr Randall founded himself upon adoption of the arguments advanced by Mr Devonshire on behalf of Mr Darch. I have accepted those arguments. However, not all of them apply without adaptation to Mr Randall. For example, the wording of the post-termination restrictions which forms the basis of the claim for relief against Mr Darch is different from the wording of the claim for relief against Mr Randall, whereas the wording of the post-termination restrictions which forms the basis of the claim for relief against Mr Short is the same as the wording of the claim for relief against Mr Randall. Accordingly, the appropriate analogy in this respect is not between Mr Darch and Mr Randall but is instead between Mr Short and Mr Randall. However, I have accepted Mr Tatton Brown's submissions concerning the reasonableness and enforceability of the post-termination restrictions contained in Mr Short's contract of employment. On that basis, I would not consider it appropriate to grant the relief sought against Mr Randall. When the present judgment was circulated in draft containing wording to the above effect, I received an email from Mr Marsden saying that he had no comments on the draft. After that, however, I received a note from Mr Quinn making a number of points about the draft judgment, one of which was that, by the agreed Order to which I have referred, Mr Randall had given undertakings until trial "by way of a disposal of the application against him". If that is right, then the need for me to resolve the application against Mr Randall has fallen away. If the correct position cannot be agreed, I will hear further submissions.
Paragraphs 24, 25, 26 and 27 of the draft Order
- Paragraphs 24, 25, 26 and 27 of the draft Order seek negative injunctions against Mr Turner alone "until whichever is [the] earliest of trial, 1st August 2017 or further Order of the Court" in the same terms as the Orders that are sought against Mr Short.
- Although Mr Turner's contract of employment contained post-termination restrictive covenants, these were unlimited in time, and Capita therefore did not seek to enforce them. Accordingly, the relief sought against him comprises springboard injunctions.
- Ms Stone resisted Orders in these terms essentially on the grounds that (a) Capita has provided no or no sufficient evidential basis for such relief and (b) the Orders sought were oppressive and draconian, not least because it would be impossible for Mr Turner to know who is caught and who is not in light of the fact that the relief is not limited to persons he had dealings with or knew about during the course of his employment, and these forms of wordings would not be enforceable even as restrictive covenants.
- Ms Stone submitted, in particular, that the prohibition on being engaged or concerned in a competing business in any capacity, even if well removed from the work that the employee did while employed by Capita, is impermissible, and she made reference to Ashcourt Rowan v Hall [2013] EWHC 1185 (QB) in this regard.
- I should mention that the relief sought against Mr Turner contained a number of anomalies as to dates and so forth, which resulted in Ms Stone making a number of submissions as to why this relief was inappropriate, for example because it purported to restrain him from soliciting or dealing with clients who he had only dealt with for the first time after he had left his employment with Capita. During the course of the hearing it became apparent that these were mistakes in drafting, and so these points fell away.
- I would refuse this relief against Mr Turner for the like reasons as I have given above in respect of the springboard injunctions which are sought against other Defendants, which are substantially the same as, or overlap with, the reasons relied on by Ms Stone.
Paragraphs 28, 29 and 30 of the draft Order
- These paragraphs of the draft Order sought relief against Mrs Randall alone concerning the imaging of a mobile telephone and related matters. They became the subject of agreement in terms reflected in the Order that was agreed between the parties following the conclusion of the hearing before me, and I need say no more about them.
Paragraphs 31-44 of the draft Order
- These paragraphs contain an Order for, and directions designed to lead up to, a speedy trial on liability. As at present advised, I see no basis to make any such Order, but I will hear submissions on the matter after judgment is handed down if the parties so wish. It seems to me that for any such Order to be appropriate in the present case, it would need to comply with the principles stated by the Court of Appeal in WL Gore & Associates GMBH v Geox SpA [2008] EWCA Civ 622, at [28] per Neuberger LJ (as he then was); and Petter v EMC Europe Ltd [2015] EWCA Civ, 480, at [17], per Vos LJ:
"expedition will only be justified on the basis of real, objectively viewed, urgency. It is against that background that Neuberger LJ's four factors from W.L. Gore supra are to be considered, namely
(1) whether the applicants have shown good reason for expedition;
(2) whether expedition would interfere with the good administration of justice;
(3) whether expedition would cause prejudice to the party; and
(4) whether there are any other special factors."
Mr Coats, Mr Chalmers and Mr Tailor
- Agreements as to appropriate and acceptable injunctions or undertakings were reached between Capita and these Defendants, and have been incorporated into the Order that was agreed between the parties following the conclusion of the hearing before me.
- Mr Bacon attended the hearing on behalf of Mr Coats not because those matters were in issue but rather, as I understand it, because his client and Mr Chalmers and Mr Tailor had been invited by Capita to agree that the directions made in these proceedings in the Order made as between Capita and the other Defendants should also apply as between Capita and the three of them, and Mr Coats was unhappy or unwilling to agree to an Order in those terms because he did not know what directions he was thereby being asked to agree to. Mr Quinn raised the question of whether it was appropriate for Mr Coats to be represented at the hearing on this basis. It seems to me that this may go to costs, but that it does not require any substantive ruling from me concerning Mr Coats.
Conclusion
- For all these reasons, and save to the extent that the Defendants have offered protection or other concessions to Capita, I propose to dismiss this application. Having established a number of serious issues to be tried covering a relatively wide landscape, Capita may well be disappointed by this result. In my view, however, the explanation for it lies in the following principal factors: first, Capita face historic difficulties that are rooted in the terms of its contracts of employment, in particular because the breadth of the contractual restrictions that Capita have sought to impose upon employees is, in my judgment, likely to be held at trial to be too wide; second, Capita face current difficulties in respect of the various forms of relief that Capita have sought to obtain on this application, which are also, in my opinion, too wide; and, third, clouds of suspicion (albeit that they may transpire to have substance at trial) are not the same as cogent evidence of wrongdoing sufficient to warrant the particular injunctions that I have been asked to grant. The outcome at trial, of course, may be an entirely different matter.
- I am most grateful to all Counsel for their assistance. I ask them to endeavour to agree an order which reflects these rulings. I will hear submissions on any points which remain in dispute, and on any other issues such as costs and permission to appeal, either when judgment is handed down, or at some other convenient date.
