Key Facts
- •Kieran Corrigan & Co Limited (Claimant) sued OneE Group Limited, Bashir Timol, Dominic Slattery, and Timothy Johnson (Defendants) for misuse of confidential information and unlawful means conspiracy.
- •The Defendants used the Claimant's confidential information relating to a tax planning structure based on R&D relief under the Corporation Tax Act 2009 to develop their own structure ('Nemaura Structure').
- •The liability of the First, Third, and Fourth Defendants was established in a previous judgment.
- •The Second Defendant was found not liable but undertook to submit to any finding made at the inquiry.
- •The inquiry concerned the quantum of damages.
- •The Claimant's confidential information included draft instructions to counsel detailing the tax planning structure.
- •The Judge found that the key insight in the Confidential Information was the use of R&D sub-contractor relief, particularly using unconnected sub-contractors, and using it in an LLP structure.
Legal Principles
Damages are recoverable for breach of the equitable duty of confidentiality and are compensatory, aiming to put the claimant in the position they would have been in without the breach.
Various cases including Dowson & Mason Ltd v Potter [1986] 1 WLR 1419, Indata Equipment Supplies Ltd v ACL Ltd [1998] BCLC 412, Force India v 1 Malaysia Racing Team [2012] EWHC 616 (Ch), and One Step (Support) Ltd v Morris-Garner [2018] UKSC 20.
Damages for misuse of confidential information can be assessed in various ways, including loss of profit, loss of licence revenue, loss of information value, and negotiating damages.
Force India v 1 Malaysia Racing Team [2012] EWHC 616 (Ch)
Negotiating damages are appropriate where the breach resulted in the loss of a valuable opportunity to exercise the right to control the use of the information; the loss is the economic value of the right; the imaginary negotiation is a tool for arriving at that value.
One Step (Support) Ltd v Morris-Garner [2018] UKSC 20
The assessment of damages in cases requiring conjecture uses a 'broad axe approach,' not the strict balance of probability test.
Watson, Laidlaw & Co Ltd v Pott, Cassels & Williamson 1914 SC (HL) 18 and One Step (Support) v Morris-Garner [2018] UKSC 20
Outcomes
Damages awarded to the Claimant.
The court found that OneE would have entered into a contract with the Claimant for the use of the confidential information and that a 40% share of gross receipts (less third-party commissions) would have been agreed.
Damages quantified at £3,480,000.
This represents 40% of the £8.7 million net receipts from the Nemaura Structure (after deducting introducer fees).
Simple interest awarded at 2% over Bank of England base rate.
This was deemed a reasonable commercial rate, considering the principles outlined in Sempra Metals v Inland Revenue Commissioners [2007] UKHL 3.