In Brandeaux Advisers (UK) Ltd and others v Chadwick the High Court has held that an employee was in fundamental breach of contract when she sent large amounts of her employer's confidential information to her private e-mail address.

The employee argued that it was an implied term of her contract that she was entitled to use or disclose confidential information "as a matter of law and/or as a matter of reasonable necessity" where it was:

  • Fairly required for her legitimate interests or to protect her legal rights or to defend herself.
  • In the public interest, including use or disclosure in relation to financial regulators.
  • Relevant to threatened or actual legal or disciplinary proceedings between her and the Group.

The court doubted that the possibility of litigation with an employer could ever justify an employee in transferring or copying confidential documents. It also considered that, in the absence of a specific issue, an employee would not be entitled to transfer confidential documents to protect their own position in the event of a regulatory dispute.

This case demonstrates what can happen as a result of an employee taking measures that they perceive will protect them in the event of a dispute with their employer.

When a dispute appears likely (in which case an employee may doubt that their employer will comply with disclosure obligations), preserving evidence or potential evidence by copying or transferring documents may strike the employee as an easy and prudent step to take. However, the High Court has now suggested that possible litigation with an employer is unlikely ever to justify an employee in copying or transferring confidential documents. The employee must rely on the court's disclosure process (including, where applicable, its ability to ensure that a reluctant employer complies with its disclosure obligations).