UK: Insurance Broker Granted Interim Injunctive Relief Preventing A Competitor From Taking Steps To Poach Its Remaining Staff

Last Updated: 29 April 2015
Article by Susannah Wakefield and Anna McCaffrey

(1) Willis Limited (2) Willis Group Limited v (1) Jardine Lloyd Thompson Group plc (2) JLT Speciality Limited (3) David Gordon [2015] AC 9301548

English Court of Appeal, 22 April 2015

The Court of Appeal was asked to review a refusal to grant interim injunctive relief to a broker who had lost a large number of senior employees to a competitor. 

Background

The proceedings arose following the departure of almost all of Willis' senior management team within its fine art, jewellery and special risk division London, who had all left to join JLT Speciality Limited (referred to collectively as "JLT" in this note). Willis considered JLT to be a direct competitor in the sector, and lost 30 of its senior employees over a short period to JLT, including its former divisional global manager. 

JLT denied any wrongdoing and claimed that it had individually recruited all of Willis' senior employees without inducing anyone else to breach any obligations owed to Willis.

Following the departure of Willis' senior employees, Willis was left with 30 junior employees in its fine art, jewellery and special risk division. Given the sudden departure of a significant proportion of its staff, Willis considered that there was serious risk that it would also lose its junior employees to JLT. Willis applied to the court for an interim injunction preventing JLT taking steps to recruit any more of its staff.

Refusal to grant interim injunction at first instance

At first instance, it was held that there was a serious issue to be tried (based on prima facie evidence) as to whether there had been a relevant breach of contract. However, the first instance Court concluded that, pending full determination of the issues at trial, there was no point in granting an interim injunction in the meantime. The Judge's reasoning centred on the fact that he had concluded that "the heart had been torn out of [Willis'] business", or, in other words, the damage had already been done and an interim injunction could not remedy this. It was also considered that there was no obvious attraction of the remaining junior employees to JLT.  Finally, as Willis' US employees were employed by other subsidiaries of Willis (rather than the Willis UK companies involved in the proceedings) that those subsidiaries would have to seek protection in their own right.

It is notable that the Judge does not appear to have considered the balance of convenience in determining the initial application. The balance of convenience test is relevant to all restrictive covenants cases in which interim injunctive relief is sought. The balance of convenience test involves the court considering which party would be most prejudiced if the court decided to grant an interim injunction order (or decided not to grant one) pending the determination of the issues at trial, having regard to all the circumstances of the case. This generally involves weighing the potential damage to the party who considers there has been a breach of contract of such alleged breaches being permitted to continue until trial (i.e. the potential damage to Willis of JLT taking steps to seek to recruit its remaining employees) against the prejudice to the other party who claims there has been no unlawful action being prevented from taking certain actions pending outcome of the trial (i.e. the prejudice to JLT of not being able to recruit Willis employees in the meantime).

Court of Appeal

A Judge determining an interim injunction application at first instance has a generous ambit of discretion in deciding whether or not to grant the application and successful appeals against the decision are therefore relatively unusual, as the Court of Appeal should only interfere where the Judge has exceeded the wide ambit of this discretion. 

However, in this case the Court of Appeal concluded that the inference that had been drawn by the Judge that there was no real risk to Willis of not granting the injunction was incorrect. As Willis had argued, it was important from its viewpoint that it retained its remaining staff in order to allow it an opportunity to repair its business, given the damage and destruction caused by the departure of its senior staff. There had in fact been a pattern of some of its remaining junior staff leaving to follow the senior employees and that there was therefore a realistic risk of this happening again. 

The first instance Judge had also been incorrect to conclude that Willis' US employees were not of interest to JLT, as there was evidence that both employees in London and in the US were of interest to JLT and should be protected. The Court had also failed to deal with the question of whether or not JLT would continue to receive a benefit from any alleged wrongdoing pending the final outcome at trial (i.e. whether or not if they were allowed to continue to recruit Willis' employees, whether they would continue to receive a commercial advantage from their alleged wrongdoing in the meantime).

The Court of Appeal agreed with JLT's position that there should generally be evidence of serious wrongdoing to justify imposing an interim injunction which could have a prejudicial impact on a respondent party who maintained that there had been no breach of any obligation. However, this would be a more crucial point for a respondent party if a long period of injunction had been requested, whereas in this case the period of injunction was relatively short and would only be in place until the return date for the next stage of proceedings.

Overall, the Court of Appeal was satisfied that the balance of convenience decisively favoured Willis and that an interim injunction should be granted. The case is a useful example of the protection that may be available to former employers who have been the victim of team moves, even prior to final determination as to whether there has been any wrongdoing on the part of the new employer. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.