When Mr Bennett and six colleagues left the financial advisory
business Towry to join a competitor, they were sued for breach of
covenant. Towry alleged that they had broken the non-solicitation
and confidentiality clauses of their contracts and had unlawfully
conspired with their new employer by planning to poach Towry's
The High Court dismissed Towry's claims, ordering it to pay
costs. While the non-solicitation and confidentiality clauses were
enforceable, the judge found that solicitation hadn't actually
been proved. Towry had assumed that solicitation must have happened
because of the level of business transferred to the new employer.
But there had to be an element of directly or indirectly
requesting, persuading or encouraging clients to move.
Here it was understandable that clients wanted to stick with
their personal financial advisor. The burden of proving otherwise
– that the clients hadn't exercised free will - was
on the employer. Solicitation couldn't simply be inferred from
the "tidal wave" of clients switching firms.
Time for a review of your contracts? Towry's didn't
contain non-dealing clauses, which are stronger than
non-solicitation clauses. Had they done, the company would have
been better protected or would at least have had a better shot at
winning in court.
Thomas Eggar LLP is a limited liability partnership
registered in England and Wales under registered number OC326278
whose registered office is at The Corn Exchange, Baffin's Lane,
Chichester, West Sussex, PO19 1GE (VAT number 991259583). The word
'partner' refers to a member of the LLP, or an employee or
consultant with equivalent standing and qualifications. A list of
the members of the LLP is displayed at the above address, together
with a list of those non-members who are designated as partners.
Regulated by the Solicitors Regulation Authority. Lexcel and
Investors in People accredited.
Thomas Eggar LLP is not authorised by the Financial
Services Authority. However, we are included on the register
maintained by the Financial Services Authority so that we can carry
on insurance mediation activity which is broadly the advising on,
selling and administering of insurance contracts. This part of our
business, including arrangements for complaints and redress if
something goes wrong, is regulated by the Solicitors Regulation
Authority. The register can be accessed via the Financial Services
Authority website. We can also provide certain further limited
investment services to clients if those services are incidental to
the professional services we have been engaged to provide as
Thesis Asset Management plc, our associated financial
services company, provides a comprehensive range of investment
services and advice. Thesis is owned by members of Thomas Eggar LLP
but is independent of and separate to it. No lawyer connected with
Thomas Eggar LLP provides services through Thesis as a practicing
lawyer regulated by the Solicitors Regulation Authority. Thesis is
authorised and regulated by the Financial Services Authority.
Thesis has its own framework of investor protection and
professional indemnity cover but Thesis clients do not enjoy the
statutory protection of solicitors' clients.
The contents of this article are intended as guidelines for
clients and other readers. It is not a substitute for considered
advice on specific issues. Consequently, we cannot accept any
responsibility for this information or for any errors or
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In October 2012, the Court of Appeal confirmed that a Service Provision Change ("SPC") TUPE transfer can only occur where the client who receives the service, before and after the change, remains the same (Hunter v McCarrick  EWCA Civ 1399).
Following much debate, on 24 April 2013 the House of Lords finally gave its approval to employee shareholder status which will now take effect from Autumn 2013.
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