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Defendants’ computer systems were to be searched for confidential information belonging to the claimants

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

Related Member(s):
Paul Nicholls QC
Related Practice Area(s):
Media and Information Law, Commercial Law
Court:

The claimants were companies providing insurance brokerage services within the Arthur J Gallagher group of companies. The second defendant, Portsoken Ltd, was a company engaged in insurance brokerage. The other defendants were all individuals who had previously been employed by companies within the Arthur J Gallagher group, before becoming involved in Portsoken Ltd.

The claimants had previously been granted interim relief in proceedings brought against two of the defendants arising out of their misuse of confidential information for business purposes. Those defendants had been required to deliver up electronic devices and to permit access to computer systems for inspection by the claimants’ experts, and as a result of this, it became apparent that the further claimants and defendants should be parties to be the proceedings, as the wrongful use of confidential information was wider than previously anticipated and involved other areas of business from that originally identified.

In the present proceedings, the claimants sought a mandatory injunction for the search of devices and deletion of materials on an interlocutory basis. It proposed that copies of all materials deleted would be retained, so that it could be restored to the defendants if it later emerged that it was wrongly deleted. Any disputes as to whether materials was confidential material belonging to the claimants could be referred to a judge, ensuring that both parties’ interests could be safeguarded. In addition, the claimants agreed that the inspection and deletion could be carried out by experts appointed by the defendant, working in line with agreed searched terms.

The defendants challenged the application, arguing that such an order was inappropriate other than at trial. They argued that they had previously consented to the delivery of many documents and devices for inspection, and that there was no precedent for mandatory interim deletion orders. In addition, they argued that the costs of expert assessment and the resolution of any disputes before a court would be disproportionate to any loss the claimants actually suffered.

The court found that the claimants had established their claim for breach of confidence to the necessary extent at this stage, and it was accepted that a deletion order could be made. The court was not satisfied that the defendants could be trusted to seek out and delete the materials themselves. The mandatory relief would achieve the least risk of injustice, and the balance of convenience favoured the grant of the order. The order had been deliberately designed to eliminate the risk that the claimants would gain access to the defendants’ confidential information, and any disputes the defendants had with its experts’ assessments could be referred to the court or an agreed arbitrator.

Paul Nicholls QC was involved in this case.