Key Facts
- •Mr. Ludley, a recruitment agent, misappropriated confidential client data from his employer, Cosmopolitan Recruitment.
- •He used this data to send an email to over 500 clients misrepresenting his new company, Greenscape, as Cosmopolitan Recruitment.
- •Cosmopolitan Recruitment claimed passing off and breach of confidence.
- •Mr. Ludley destroyed evidence after being contacted by Cosmopolitan Recruitment's solicitors.
- •Cosmopolitan Recruitment experienced a significant downturn in business following Mr. Ludley's actions.
Legal Principles
Passing off requires proof of goodwill, misrepresentation, and damage.
McGregor on Damages 21st edition, Chapter 48
In passing off, damage is presumed if goodwill is interfered with; more than nominal damages require proof of specific losses.
Draper v Trist [1939] 3 All E.R. 513 CA
Breach of confidence in employer-employee relationships is determined by contract terms and implied duties of good faith and fidelity.
Faccenda Chicken v Fowler [1987] Ch 117
Confidential information includes trade secrets and information with a sufficiently high degree of confidentiality; customer lists can be protectable.
Lansing Linde Ltd v Kerr [1991] 1 WLR 251; Marathon Asset Management LLP v Seddon [2017] 2 CLC 182
An equitable duty of confidence arises where information is used inconsistently with its confidential nature and the recipient ought to have appreciated its confidentiality.
Coco v A.N. Clark (Engineers) Ltd [1968] FSR 415; Vestergaard Frandsen A/S v Bestnet Europe Ltd [2013] UKSC 31; Trailfinders Limited v Travel Counsellors Limited and Ors [2020] EWHC 591 (IPEC)
Outcomes
Claimant (Cosmopolitan Recruitment) succeeded in its passing off claim.
The court found that the defendant's misrepresentation caused damage, including loss of profits and reputation, despite the defendant's destruction of evidence.
Claimant succeeded in its breach of confidence claim.
The court held that the client list was confidential information, and the defendant's actions breached both express and implied contractual obligations, as well as the equitable duty of confidence.