Confidential information has huge value and the potential for significant damage for companies of any size. How do you effectively recover a client list from an employee? A springboard injunction offers employers vital breathing space and a temporary moratorium on the misuse of its confidential information by that employee.

If you are considering an application for a springboard injunction before the client list has been used, there is scope to include prohibitive measures typically found in a standard confidentiality injunction. More typically, a springboard injunction is sought where the employee has copied the employer’s client list and used it to gain an unfair competitive advantage. In such circumstances, a standard injunction will not be adequate as by this stage the confidential information has already been used.

The court has historically been unwilling to grant broad-spectrum injunctions. So what is the appropriate scope for a springboard injunction against employees who have misused confidential information? A number of recent cases have considered this issue.

The most recent Court of Appeal judgment in this area is Forse v Secarma Ltd [2019] EWCA Civ 215. The court considered the first question in determining whether a springboard injunction would be appropriate at all is whether the employer would be adequately compensated in damages for any loss sustained, bearing in mind the object of an interim springboard injunction is to preserve the status quo, not to punish the employee. The court reiterated that the balance of convenience threshold established in the American Cyanamid principles (which the court made clear continues to be the general authority for interlocutory injunctions) must still be met to show that a springboard injunction is the appropriate interim remedy in the circumstances.

It is clear from Universal Thermosensors v Hibben [1992] 1 WLR 840 that the court does not look favourably on blanket injunctions. Where an employee has set up a competing business but unrelated in itself to any competitive advantage gained from misuse of confidential information, can that be included in the restrictions of the injunction? The court in Forse v Secarma considered that an injunction that prevented any existing business activities of the employee that are outside of the advantage gained from misusing confidential information to be too wide.

This extends further – if, even by misuse of a client list, an employee has already contacted and received an order from a customer, an injunction to restrain the fulfilment of that order will generally be considered too broad. The Court of Appeal in PSM International plc and another v Whitehouse and another [1992] IRLR 279 (CA) considered that whilst it may be equitable in appropriate cases, the court should be wary of granting remedies that have the effect of interfering with the contractual rights of innocent third parties. The court will therefore be wary of preventing former employees from fulfilling existing orders.

These cases suggest a general trend of narrowing the parameters for the scope of a former employee’s commercial activity that can be successfully limited by a springboard injunction.

Recent case law is clear on one factor that must always be present: an employer must show an advantage is continuing and will continue to be enjoyed by the employee at the time the injunction is sought. Aquinas Education Ltd v Miller [2018] EWHC 404 (QB) confirms that this continues to be one of the key criteria that must be shown for a successful springboard injunction.

And finally – don’t delete any documents…

With the introduction of the Disclosure Pilot this year, contrary to much of the recent data protection law, potential parties to business litigation now have a positive obligation to preserve documents in accordance with the new rules.

This means businesses will need to review any data protection document retention/deletion policy. Where businesses have automatic destruction of documents (for example after 60 days), these policies need to be suspended as soon as they may be potential parties in litigation. The employer will also need to send written notification to all relevant employees who may hold documents to inform them not to destroy – this includes former employees. All parties must also take reasonable steps to ensure that third parties who hold documents on their behalf do not destroy them.

Legal representatives are also under various new duties in relation to disclosure, including the obligation to notify their clients of these new rules and the need to preserve documents. Failure to comply with these obligations under the new Practice Direction 51U may result in an adverse costs order, adjournment or conditional disclosure. The court also has the power to deal with the failure as contempt of court.