In an interesting development the English High Court recently granted a permanent injunction to prevent the disclosure or use of confidential information illegally obtained from a company's IT systems1 in a situation where the identity of those who took the information and have it is not known. The court considered that the damage to the company pending identifying the individuals outweighs the burden of the order, the purpose of which is to prevent the Defendant(s) from communicating, using or disclosing the stolen information to any third party or using it in any other way.
The Claimant, Clarkson Plc, is a substantial public company operating in the shipping business, with its headquarters in the City of London. The Defendant(s) are person(s) unknown who gained unauthorised access to the Claimant's IT systems and obtained a considerable quantity of information regarding the Claimant and its business activities. The Defendant(s) threatened to publicise this information unless a very substantial sum was paid.
The Claimant sought and obtained an interim injunction in November 2017 prohibiting the Defendant(s) from communicating or disclosing certain confidential information to any third party or using it in any other way. This interim injunction was extended by Warby J on 14 December 2017 who gave directions as to how the matter should proceed to trial. The Claimant was permitted to serve the Particulars of Claim on the Defendant(s) via the email address used to make the blackmail demands. Unsurprisingly, the Defendant(s) did not engage with the claim and accordingly the Claimant applied for default judgment and a permanent injunction against the unknown Defendant(s).
Warby J granted final judgment and a permanent injunction against the unknown Defendant(s) in light of the fact that "The claimant’s case, as set out in the particulars of claim, shows a clear need to restrain the defendant(s) from carrying out the threatened disclosures, and I therefore grant the principal injunctions sought, which are in the same terms as my interim order" 2.
Warby J held that it was appropriate to determine this matter on paper under CPR 23.8(c) as the Defendant(s) had not engaged with the claim. There was nobody defending the claim that could benefit from the advantages that an open hearing brings. A hearing would have added to the expense of the claim without serving any useful purpose. Consideration was also given to the fact that the case had not proceeded in secret as there had already been two hearings, at each of which a public judgment was given and recorded.
In Brett Wilson LLP v Person(s) Unknown3, Warby J considered the jurisdiction and approach the Courts should take in such applications. A similar approach was adopted here and in granting the order to enter into default judgment and final injunctive relief restraining publication against Person(s) Unknown, Warby J was satisfied that:
- The Claimant had taken all reasonable steps to notify the defendant;
- The reason the Defendant(s) have not appeared to respond to the claim and application was, most likely, that they have no wish to identify themselves as the perpetrators of the apparent blackmail;
- The conditions for obtaining a judgment in default (CPR 12.3(1)) were met; and
- Substantive relief should be granted on the basis of the Claimant's unchallenged particulars of claim, without the need to consider evidence.
The open justice principle was properly respected by handing down the judgment that publicised the fact that the order had been made and the basis for making it.
What this means for you?
Companies are increasingly at the risk of being subject to different forms of attack, whether that be in the form of a cyber attack shutting down or disrupting their systems or, as in this case, the theft of valuable confidential information. Injunctions have always been a useful weapon to prevent the dissemination of trade secrets, but here the Court has made an order to prevent dissemination of the stolen information where the individuals are unknown and have not engaged with the legal process. It will be hoped by the Claimant that using an injunction in this way will act as a weapon to prevent the Defendant(s) from profiting from the theft of the information, protect that information from publication or distribution to their competitors and act as a warning to other hackers in the future.