Arthur J Gallagher Services UK Ltd v Skriptchenkov [2016] EWHC 603 (QB)

Protecting against suspected breaches of employers’ confidentiality often requires powerful interim relief. The armoury of available orders was incrementally extended by the High Court (Slade J) in this case.  

In shortest summary, the dispute arose out of alleged (and partially admitted) misuse of confidential information belonging to the claimant insurance broking group (“G”) by defendants including Mr Skriptchenkov (“S”) and other former employees who had moved to a competitor company (“P”).

Proceedings were commenced by a G group company against S and P. In the ensuing months, those defendants disclosed about 4000 documents by consent. These documents included an email from one former G group employee to another stating “I don't think you can formally put [this information] in any presentation as we would obviously be breaching confidentiality but would suggest that we keep in our back pocket to show on a nudge nudge wink wink basis to interested parties.” So it is that emails remain a window into the soul and an embarrassment of riches for lawyers. The defendants’ disclosure by consent led to the addition of further claimants from G group and further individual defendants. A draft defence was filed admitting a “limited extent” of misuse of confidential information. In sum, therefore, the claimant’s evidential case at the interim stage was unusually strong.

The claimants sought inter alia an interim order “permitting the imaging and inspection of the defendants' computers and electronic devices and the deletion therefrom of confidential information belonging to the claimants” ([10]). As we shall see, this order was granted in an appropriately modified form including the necessary safeguards.  

(1) She noted that “neither counsel had found any authority supporting the granting of such relief” ([40]) but referred to paragraph 10.162 of the second edition of Employee Competition: Covenants, Confidentiality, and Garden Leave edited by Paul Goulding QC. The reader should be aware that times have changed (albeit slightly): this publication is now in its third edition and the relevant passage is now at paragraph 10.163:  

(2) The relief granted by Slade J expands the just-quoted proposition by requiring not that the defendant himself carry out the search and deletion exercise, but rather that the defendant permit another to inspect the electronic devices, search them and delete such confidential information as is found.  

(3) This expansion can be viewed as a principled and incremental development from cases such as Tata Consultancy Services Ltd v Sengar [2014] EWHC 2304 (QB) at [66] and [80] (ordering deletion by the defendant himself) and Warm Zones v Thurley & Anor [2014] IRLR 791 at [36] (ordering imaging and inspection but not deletion).

Having concluded that the relief sought was in principle available, Slade J applied (in conjunction with the familiar American Cyanamid test) the usual principles for interim mandatory injunctions as set out in Nottingham Building Society v Eurodynamic Systems plc [1993] FSR 468 (approved in Zockoll Group Ltd v Mercury Communications Ltd [1998] FSR 354):  

(1) “the overriding consideration is which course is likely to involve the least risk of injustice if it turns out to be wrong”;

(2) “the court must keep in mind that an order which requires a party to take some positive steps 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”;

(3) “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”; and 

(4) “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 outweighs the risk of injustice if it is granted.”  

In light of the strength of the claimants’ evidence as noted above, it was relatively easy for Slade J to reach such a “high degree of assurance” ([55]). She further concluded that “[the defendants’] behaviour as admitted and shown in the e-mails… shows a high degree of subterfuge in the use of the claimant’s confidential material” ([59]). Accordingly, Slade J was “not satisfied that the defendants can be trusted to seek out and delete such material themselves” ([60]).  

(1) the devices and computers will be delivered to an external computer expert appointed by the defendants;

(2) a copy of the images taken by the expert will be kept and preserved so that if information is found at trial to have been wrongly deleted it can be restored;

(3) the appointed expert will determine issues as to what falls within the scope of the confidential information to be deleted, subject to the defendants’ ability to refer disputes over scope to the court or an agreed arbitrator for decision.

This is a salutary lesson to practitioners seeking similar relief: the prospects of a successful application can be enhanced by tailoring the relief sought to include appropriate safeguards. 

Robert Weekes was counsel for the First to Fourth, Sixth and Seventh Defendants.