Summary

An ex-employee had acted in breach of the terms of a confidentiality clause in his service contract when he disclosed sensitive commercial information to a third party.

Facts

The first claimant company (R1) and second claimant company (R2) claimed damages for breach of confidence and breach of contract against the defendant ex-employee (S).

R1 was a company through which racecourse owners could exploit their media rights and R2 operated a racing television channel. S was previously employed by R2 as a senior executive and was bound by a confidentiality clause in his service contract. R1 had commissioned independent economic consultants to report on R2's strategic options for future development, including recommendations relating to pricing, and the consultants produced a confidential report and a summary for distribution to R2's executives, which included S, at a strategy review meeting. R1 and R2 alleged that after S had left R2's employment and signed a compromise agreement, he disclosed the summary to a CEO (B) of a betting company at a lunch meeting and B had allegedly used it to create an online newsletter. B maintained that he had obtained the material for his newsletter from S. R1 and R2 maintained that the disclosure of information was potentially damaging to its commercial interests.

S denied that he had disclosed the summary to B and submitted that B could have obtained the information from another source or that the article could have been written from rumour alone.

Held

There was no realistic possibility that the source of the information in B's article could have been a leaked copy of a draft of the report. The suggestion that the article was written without at least information as to the existence of the summary and its contents was fanciful. The strong balance of probabilities was that B wrote the article having either seen or been informed of the existence of the report and its contents, and had not done so from rumour or speculation alone. B's evidence was to be preferred. B had had either had sight of, or been supplied with information as to the contents of the summary when he wrote his draft article. The clear purpose of the lunch was for S to supply information to B which would enable B to write a piece unfavourable to R2's TV channel. Consequently, S had acted in breach of the terms of his service contract of employment and of the compromise agreement (see paras 67, 83, 135 of judgment).

Judgment for claimants