The court ordered, on an interim application, that the claimants’ confidential information be searched for and destroyed on the defendants’ computers. In an area of law where there was previously no direct authority, Arthur J Gallagher Services (UK) Ltd & ors v Alexandre Skriptchenkov & ors [2016] EWHC 603 (QB) provides clear guidance on the principles to be applied in such cases and the terms of the order which can be made.
The defendants had admitted to taking and using various confidential information upon leaving the claimants’ businesses and establishing their own competing businesses. The defendants stored the confidential information in electronic form.
By consent, the claimants initially obtained an order requiring the defendants to produce copies of documents which contained the claimants’ confidential information. The claimants then sought a further mandatory interlocutory injunction requiring search terms to be run across the defendants’ devices and computers to identify the claimants’ confidential information and for that information to then be destroyed.
Although Warm Zones v Thurley & anr [2014] IRLR 791 (Warm Zones) is authority for the availability of an interlocutory order for inspection and imaging of a defendant’s devices, counsel could not produce any authority for the destruction of documents being granted as interim relief.
Slade J observed that, whilst it was not the court’s role to decide the merits of the case on an interim application she felt a high degree of assurance that the claimants would establish at trial that the defendants had taken and used their confidential information and therefore that the relief being sought (destruction of that confidential information on the defendants’ devices) would be granted.
Despite the defendants’ co-operation in the proceedings, the evidence revealed “a high degree of subterfuge in the use of the claimants’ confidential material”. Slade J did not trust the defendants to identify and delete the claimants’ confidential information from their devices themselves.
Applying the American Cyanamid principles, Slade J was satisfied that:
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the claimants had shown a strong case that their claim would succeed at trial and they would obtain the relief sought;
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that damages would be an inadequate remedy were interim relief not granted; and
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that the claimants would be able to meet their cross-undertaking in damages (ie if it turned out at trial that it had been wrong to grant the interim relief).
Slade J was also satisfied that an order requiring the defendants to deliver up their devices to a computer expert of their choosing, who could seek out and delete the claimants’ confidential information from those devices, but who would retain an image of the device pre-deletion in case it became apparent that any documents should be restored, would involve the least risk of injustice if it turned out to be the wrong decision.
COMMENT
Prior to this decision there was no direct authority on the question of whether, and if so, when, a mandatory interim injunction should be granted to require the destruction of a claimant’s confidential information. Slade J was obviously aware that her judgment would become that authority (or at least the first in the line of authority which may develop) and took care to clearly set out her reasoning and the principles to be applied in future cases.
This judgment recognises that the harm which can be done to a claimant from the misuse of its confidential information often cannot be adequately compensated by damages at the conclusion of a trial. Instead, claimants in that situation require immediate relief and this decision sets out the circumstances in which that relief may be granted.
The decision gives employers and other claimants who have had their confidential information misappropriated a very powerful tool to quickly stem the potential for that misappropriation to harm their business.
