UK: Destruction Of Confidential Information With A "Nudge And A Wink"

Last Updated: 6 July 2016
Article by Michael Bronstein, Ryan Carthew, Gilla Harris and Sarah Beeby

In the ground-breaking case of Arthur J Gallagher Services UK Limited and others v. Skriptchenko [2016] EWHC 603, the High Court has granted a mandatory injunction for interim relief purposes, including an order that confidential information on the defendants' computers belonging to Arthur J Gallagher (Gallagher) be deleted.

The facts

Mr Skriptchenko worked for Gallagher until July 2014. In February 2015, he started work for Portsoken Limited, a competitor of Gallagher. Gallagher suspected that Mr Skriptchenko had wrongfully used its confidential information and brought a claim against him and Portsoken. It was admitted that Mr Skriptchenko had taken a client list from Gallagher and that Portsoken had used that information to approach over 300 of Gallagher's clients.

Following a successful application for a mandatory injunction ordering Mr Skriptchenko to deliver up all his electronic devices for inspection, and Portsoken to permit Gallagher's forensic IT experts to access all of its computer systems to search for information belonging to Gallagher, 4,000 documents were disclosed, which showed that other directors and employees of Portsoken were misusing Gallagher's confidential information.

The documents included a particularly notable email from the chairman of Portsoken to one of its directors, which said:

"As I mentioned to Andrew, I don't think you can formally put these 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."

As such, Gallagher amended its claim to add another five individuals as defendants, and applied for a further mandatory injunction to allow them to:

  • inspect and take images from all of the defendants' computers and electronic devices; and
  • delete any confidential information belonging to Gallagher which was found on them.

The court's decision

Whilst the court could find no previous authority for ordering the destruction of relevant material, it felt justified in doing so because the defendants had admitted using Gallagher's confidential information and the court found that the evidence showed that they could not be trusted to seek out and delete the material themselves. The court was fairly scathing of the defendants in its judgment, noting that the material disclosed by the defendants showed a "high degree of subterfuge" in using Gallagher's confidential material.

Comment

This case demonstrates how far the courts may be willing to go when it comes to breaches of confidence. However, it should be noted that the order was made subject to a number of assurances, including one that copies of the imaging of the devices would be preserved so that, if material might subsequently be found to have been wrongly removed, it could be preserved.

Each application for an injunction will of course turn on its facts, and this was a very severe case of misuse of confidential information, where it appears there was a high degree of collusion at the most senior levels of the second defendant. However, where an employer does wish to make an application for a mandatory injunction for the destruction of confidential information, it should consider whether the defendant's employment contract contains any provisions dealing with the deletion of information, as this could potentially influence a court in favour of granting the application.

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