In the case of Arthur J Gallagher Services (UK) Ltd and others v Skriptchenko and others [2016] EWHC 603, the High Court considered an application for an interim injunction requiring the defendants to permit inspection of their electronic devices and computers and the deletion of any confidential information belonging to the former employer found on them. In the absence of any previous authority for ordering the destruction of confidential information, the High Court granted the application.

Facts

Arthur J Gallagher Services (UK) Ltd and its group of companies (Gallagher) provide insurance brokerage services. Mr Skriptchenko worked for Gallagher until his employment terminated in July 2014. He started work for Portsoken Ltd in or around February 2015. Portsoken Ltd provide insurance brokerage services for property professionals and recruitment consultants.

Gallagher suspected misuse of confidential information and in July 2015 discovered that Mr Skriptchenko had taken confidential information and was using it to contact its clients on behalf of his new employer. Gallagher brought a claim against Mr Skriptchenko and Portsoken Ltd.  Gallagher applied to the High Court for interim relief in the form of a mandatory injunction that Mr Skriptchenko was to allow inspection of his electronic devices and it was ordered that Portsoken must permit Gallagher's forensic IT expert access to all of its computer systems to enable them to search for confidential information belonging to Gallagher.

The order was complied with by Mr Skriptchenko and Portsoken Ltd, as a result of which around 4,000 documents were disclosed, which showed that other employees and directors of Portsoken Ltd were also misusing Gallagher's confidential information. The document disclosure contained an email from the chairman of Portsoken Ltd to one of its directors which said "As I mentioned to Andrew, I don't think that 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".

Further named defendants were added to the proceedings following that disclosure. Gallagher also applied for a further mandatory injunction to allow them to inspect and take images from all of the defendants' computers and electronic devices and to delete any confidential information belonging to Gallagher.

In support of its application for deletion of information, Gallagher gave several assurances that the computers and other electronic devices should be delivered to the defendants' IT expert and not to Gallagher, that if there was a dispute about whether the material contained Gallagher's confidential information that the material need not be shown to Gallagher if the defendants maintained that it contained their own confidential information and that copies of the images would be preserved so that if it was subsequently found that the material had been wrongly removed, it could be restored to the defendants.

High Court decision

The High Court granted the order, having taken into consideration:

  • the defendants had admitted taking and knowingly misusing Gallagher's confidential information;
  • the material disclosed by the defendants showed a "high degree of subterfuge" in using the claimants' confidential information; and
  • the evidence showed that the defendants could not be trusted to seek out and delete the relevant material themselves.

The High Court further ordered that the IT experts should search against search terms agreed between the parties and that any disputes would be referred to a judge or other agreed arbitrator to safeguard the confidentiality of both parties.

Comment

This High Court decision is not binding but it is notable that the injunction ordered the deletion of confidential information in the absence of any authority for granting such an injunction. The granting of the mandatory injunction involved the least risk of injustice and damages would not be an adequate remedy. The admissions by Mr Skriptchenko and Portsoken Ltd that they were in possession of and using Gallagher's confidential information did not serve as a mitigating factor in their defence and if anything had the opposite effect. It undermined the trust in them, as the evidence showed that not only had they used the information but they were aware that they were breaching confidentiality obligations in doing so.

It is standard practice for an employer to include a term in a senior employee's contract that on termination of employment confidential information and documentation in the employee's possession - whether originals, copies or extracts, electronic or otherwise - will be returned and will not be retained or used by the employee. This decision gives employers an extra weapon to use if an employee breaches such a term.