A company has been awarded £176,000 damages after an employee leaked sensitive information to rival firms. It has also been given permission by the Court of Appeal to pursue further compensation.

The case involved Vanden Recycling Ltd, one of its employees and two rival businesses, Kras and Bolton.

Vanden alleged that the employee had been providing commercially sensitive information to Kras and Bolton, and that all three had conspired to use that information to set up a rival business.

It claimed that the employee had breached her contract of employment and her duty of confidentiality, and that Kras and Bolton had induced her breaches, conspired with her to breach her contract of employment, and breached their own duties of confidentiality to the company.

It sought damages against all three. Following legal proceedings, two consent orders were made. The first recorded Bolton’s agreement to pay £176,000 in damages in full and final settlement of the claims against it.

The second recorded the employee’s admissions to all the allegations of misconduct and left damages to be assessed.

Kras then applied for the case against it to be dismissed on the basis that there was no claim left to bring because the consent order involving Bolton had settled the matter.

The judge agreed, holding that the consent order was a judgment by consent and ended all Vanden’s causes of action.

The Court of Appeal has overturned that decision.

It held that some of Vanden’s claims were not covered by the conspiracy claim. There were other issues including claims for damages for breach of confidence and for inducing breach of contract, which were potentially distinct from the damages claimed for conspiracy.

The company’s evidence suggested losses of over £300,000. Moreover, there was also a claim for damages based on a hypothetical licensing of the use of the confidential information. That was directed at the breach of confidence and inducing breach of contract claims, and the company had a real prospect of establishing that such damages were not available on a conspiracy claim.

Vanden was therefore entitled to continue its claim against Kras.

Please contact us if you would like more information about the issues raised in this article or any aspect of litigation to protect your business on dispute@berysmith.com or 02920 345511.