Linklaters LLP Linklaters Business Services Intended Claimants v Frank Mellish [2019] EWHC 177 (QB): breach of confidence, injunctions
March 4, 2019 |
Mr Justice Warby in Linklaters LLP Linklaters Business Services Intended Claimants v Frank Mellish [2019] EWHC 177 (QB) considered an application for injunctive relief regarding a breach of confidence action. The information was sensitive but not commercially sensitive in the strict sense of the word. The decision does demonstrate the relative flexibility of the principles applied to more unusual fact situations.
FACTS
The claimants are:
- the multi-national law firm Linklaters; and
- the company through which Linklaters employed its UK-based employees (“LBS”).
The defendant was:
- an Australian national,
- aged in his late 50s,
- a person who previously worked for Deloittes.
- not a lawyer.
- employed by LBS to work as Linklaters’ Director of Business Development and Marketing From 27 March 2017 [5].
Clause 10 of the defendant’s contract of employment, dated 8 March 2017, included an express obligation of confidentiality relevantly stating:
“Confidential Information
…
You must not at any time, other than for the proper performance of your work:
- disclose to a third party (unless required to do so by law, regulation or an order of the court); or
- make use of
- Confidential Information (as defined below) relating to a client, LBS, the Firm, or its or their partners or employees which you acquire in the course of your work and you shall use your best endeavours to prevent the use or disclosure of the same. This obligation continues for so long as such information remains confidential, including after you have ceased to work for LBS. The obligation shall cease to apply to information which comes into the public domain other than by reason of your default.”
Confidential information was defined as, at [7]:
“Confidential Information” shall include (without limitation) client lists of the Firm, information regarding existing or prospective clients, partners and employees of LBS and/or the Firm, information concerning the marketing and promotional plans of the Firm and financial information relating to the performance of the Firm.”
The claimants submitted that the Defendant in his capacity as Linklaters’ Director of Business Development and Marketing:
- the defendant acquired a substantial amount of information about Linklaters, its partners and employees, that falls within the scope of the restriction.
- was a member of Linklaters’ Executive Committee which handled matters of particular importance and sensitivity [9].
In June 2018, the defendant was given six months’ notice his contract would be terminated [10]. He left on terms that:
- he would be paid his contractual entitlements and a substantial additional sum, which was characterised as ex gratia.
- expressly stated that this of confidentiality obligation was to persist after his employment came to an end [10].
On 11 January 2019, the defendant received his final termination payment [11].
On 23 January the Defendant emailed Linklaters’ senior partner and the firm wide managing partner:
- expressing dissatisfaction with the termination of his employment which, given his age, he suggested was effectively the end of his career.
- acknowledging that the terms on which his employment had been ended were in accordance with the law.
- stating that he intended to “share my impressions of the current culture at Linklaters” with particular reference to what he called “the ongoing struggle Linklaters has with women in the workplace”.
- saying that, to that end, he would be giving “interviews” in the first two weeks of February [11].
- identifying three “specific examples” which the defendant said “I will be using to demonstrate the Linklaters culture” [12].
- saying that the motive was to allow Linklaters to prepare for the questions from the media.
The information related to “three examples”, described as:
(1) the Munich Incident,
(2) the NY Settlement and
(3) the London Settlement
were the focus of the application. They are all matters that involve what the claimants say is confidential information relating to partners and/or employees of the firm, falling within the scope of clause 10 [12].
The claimants’ applied for an injunction to restrain disclosure of
(1) one specific item of information relating to the Munich Incident – the identity of the female complainant involved;
(2) the identity of a a Linklaters’ staff member who has been given the pseudonym “CP1” and those about whose conduct CP1 complained, along with two other categories of information about the NY Settlement;
(3) the identity of another Linklaters staff member described as “CP3” and those about whom complaint was made by CP3, including a former Linklaters partner described as “CP2”;
(4) any detail as to the internal discussions within Linklaters as to their public response to any third party interest or questions in relation to any of the above matters [13].
The claimants did not seek to restrain the defendant from publicising in general terms his “impressions of the current culture at Linklaters”.
The evidence was that neither CP1 and CP3 wished information about their cases to be made public and that it was assumed that the complainant in the Munich Incident out of sensitivity would not wish their identity as the victim of a sexual assault to be revealed [14].
The defendant:
- was not present or represented at the hearing and did not instruct any lawyer, or send anyone else to represent his interests.
- did not submit any evidence or written representations.
DECISION
The court noted that when deciding to proceed on short notice an absent defendant has three important safeguards:
- a claimant seeking an injunction against a defendant owes the Court a duty to make full and frank disclosure of any matter of fact or law that is material to the decision the Court is being asked to make and that the duty includes drawing the court’s attention to any relevant public domain material, and to any facts which might be said to support a public interest defence.
- the requirement that the applicant’s lawyers make a note of the hearing, and provide it to the respondent.
- there should always be a judgment explaining the Court’s reasoning [22].
The Court referred to the Court of Appeal in ABC v Telegraph Media Group Ltd [2018] EWCA Civ 2329 [2019] EMLR 5 as being the most recent authority considering breach of confidence [26].
The court set out the matters that have to be proved to establish a claim for an injunction in breach of confidence as being:
(1) That the information has the necessary quality of confidence;
(2) That the information has been imparted to or acquired by the defendant in circumstances importing an obligation of confidence; and
(3) That the defendant threatens or intends to misuse the information [26].
The defences or justifications in a breach of confidence claim include:
- loss of confidentiality due to prior disclosure in the public domain, and
- a compelling public interest in the disclosure of the information in question, which requires the duty of confidence to be overridden [26].
The court framed the issue as being a process of:
- whenever a person threatens or intends to publish information, the Convention right to freedom of expression must be considered by the Court.
- an injunction which restrains publication is an interference with that right, which can only be justified if it pursues one of the legitimate aims identified in Article 10(2) of the Convention, and is necessary to and proportionate for the pursuit of such aim(s).
- the Court strikes the balance between competing considerations being:
- obligations of confidence which are assumed under a contract, freely entered into, for good consideration.
- an important public interest in upholding contractual bargains which cannot be impeached for fraud, undue influence or any other vitiating factor; and
- public interest considerations
and to ask itself not just whether the information is matter of public interest but “whether in all the circumstances it is in the public interest that the duty of confidence should be breached”: HRH Prince of Wales v Associated Newspapers Ltd [2006] EWCA Civ 1776 [2008] Ch 57 [27].
- the Court has to take account of the Convention rights of third parties involved, and in particular those of ex-employees with complaints and grievances, which they take to their employer for resolution [28]
The applicant must meet the threshold conditions of:
- first, and fundamentally, it must satisfy the Court that there is a threat or risk that, if not restrained, the respondent will publish
- that the threat or risk is sufficient to justify the intervention of the Court, assuming the other threshold conditions are met.
- it is it is “likely to establish that publication should not be allowed”, “Likely” being “more likely than not”, though a lesser prospect of success may suffice where the Court needs a short time to consider evidence/argument, or where the adverse consequences of publication might be extremely serious [29]
The Court stated that it must also:
- be persuaded that there is no defence or justification for breach of confidence, which would be likely to succeed at trial[30].
- have regard to the extent to which the information at issue is already in the public domain,
- the extent to which its publication would be in the public interest [30]
The Court retains a discretion and may refuse an injunction if:
- damages would be an adequate remedy,
- the defendant could not be adequately compensated if the Court eventually concluded that the injunction was wrongly granted.
- it concluded that the nub of the claim was defamation, and the claimant was abusing the Court’s process by relying on another cause of action in order to circumvent the restrictions on interim relief against alleged libel
- it is not effective in practice such as where the information which is the subject of an injunction application is or may be of worldwide interest, and publication has taken place or is imminent abroad [31]
The court was satisfied that:
- the likelihood that the claimants would succeed at a trial was sufficient to justify the relief
- there was clear evidence of a threat or intention to give interviews for publication about matters that came to the attention of the defendant in the course of his employment.
- there was clear evidence of a risk.
- the defendant he wanted to illustrate his points by reference to the three areas which related to present or former employees or partners of Linklaters which information was of an inherently sensitive and confidential nature.
- these matters all came firmly within the scope of clause 10 of the defendant’s contract of employment.
- none of the information in the draft Order was, on the evidence, in the public domain [32].
The court found that the rights of the third parties involved, the individual complainants, bolstered the case in favour of granting an injunction [33] as:
- those interviewed as part of such a process are entitled to expect that what they say will be kept confidential.
- there are strong policy reasons for upholding those legitimate expectations so as to encourage genuine complainants to come forward rather than risk having sensitive material of the kind in issue here made public by a third party, against their wishes and (on the evidence) without consultation [33].
- while there is, in general terms, a legitimate public interest in the due performance by large firms such as Linklaters of their social and moral duties towards their staff that does not justify indiscriminate disclosure of otherwise sensitive confidential information which others have a legitimate interest in keeping confidential [34].
- a general desire to talk publicly about the “culture” of a large firm is not enough to justify the disclosure of such details [34]
The court noted that:
- the claim is partly motivated by concern for the reputational harm disclosure might cause,
- damages would not be an adequate remedy.
- there was no reason to doubt that the injunction, if granted, would be effective against the defendant.
- the effect of the injunction on third parties will depend on where they are, what they know, and the local laws [35].
The orders made was:
- for the disclosure by the defendant of the identity of any journalists, press or media organisations, agents or publicists or third party to whom the defendant has disclosed all or any part of the Information with a view to publication in the press or media.
- restricting access to the Court file and the use of the hearing papers [36].
ISSUE
Justice Warby succinctly set out the process a Court will follow when considering injunctive relief regarding a breach of confidence action. The law in the United Kingdom is informed by Articles 8 and 10 of the Human Rights, which does not apply in Australia nor is there an equivalent here, but the principles remain broadly applicable. The nature of the personal information is reflective of our times, information relating to internal complaints and investigations. Traditionally breach of confidence actions related to financial information or intellectual property.