England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		30 July 1999

This is an action brought by a company of insurance brokers, SBJ Stephenson Ltd ("SBJ"), against a former employee, Keith Mandy. SBJ seeks the continuation of interim injunctions to enforce the terms of restrictive covenants contained in Mr Mandy's service agreement dated 2 June 1990, and damages for alleged breaches of the agreement. It seeks the same remedies for alleged breaches of implied terms of fidelity and the same remedies for alleged breaches of implied terms of fidelity and confidentiality. Mr Mandy denies any breach of the agreement or of any obligation towards SBJ.

SBJ is part of a group of insurance brokers and consultancies. It arranges commercial all risks insurance cover, normally designing and implementing a complete insurance programme tailored to the client's specific needs. The necessary policies for one client are usually arranged to be renewable on the same day each year. SBJ produces its income by either charging the client a fee or receiving a commission or brokerage from the insurer. It was common ground that insurance broking is a very competitive business. It is difficult to obtain completely new clients, and commensurately important to keep existing clients.

Mr Mandy worked for SBJ from April 1987 at its Gravesend offices where the managing director is Mr Brian Wyeth. Mr Mandy started as a Technical Assistant and Account Broker with some previous insurance experience. In 1989 he took over the Commercial Department which looked after small business clients. He was effective and in June 1994 he was promoted to the position of Divisional Director. "Divisional Director" is a title of status; he was not a director of the company.

It was not disputed that at some stage during his employment he would have received a copy of SBJ's Employee Handbook which, at paragraph 2 of Page Number 7.2, stressed that it was important that all employees were aware of the need for sensible security precautions at our offices, "particularly to protect ...... confidential information". Employees were enjoined to "be wary about disclosing confidential information about the company, its activities or its clients to a stranger."

On 2 June 1994, Mr Mandy signed the service agreement. Its relevant provisions for the purposes of the issues in the action are as follows ("the Company" is SBJ, and "the Executive" is Mr Mandy):

"APPOINTMENT AND PERIOD OF EMPLOYMENT

2. The Company hereby appoints the Executive and the Executive hereby agrees to act as an employee and a divisional director of the Company from the Effective Date (subject to Termination as hereinafter provided) and continuing thereafter unless and until the employment of the Executive hereunder shall be terminated by either party giving to the other not less than six months prior written notice of termination.

DUTIES AND POWERS

3(A) The Executive shall during the continuance of his employment hereunder (unless otherwise prevented by ill-health or accident or as otherwise agreed by the Board in writing) devote the whole of his working time attention and abilities to the duties of his office and shall use his best endeavours to promote the general interests and welfare of the Company and any other Group Company with which he is required to be concerned hereunder.

(B) The Executive shall exercise such powers perform such duties (if any) and comply with such directions being consistent with his appointment hereunder .......

....... as the Board may from time to time confer upon or assign or give to him. The Executive may be required in pursuance of his duties hereunder to be engaged or concerned not only on behalf of the Company but also on behalf of any other Group Company.

SICKNESS AND INCAPACITY

8(A) In the event that the Executive shall be unable to perform his duties hereunder satisfactorily by reason of any injury illness or other reason satisfactory to the Company he shall be entitled to receive his full salary during the first consecutive twenty-six weeks. ......

CONFIDENTIAL INFORMATION

12(A) The Executive shall not either before or after the termination of his employment hereunder disclose to any person or persons any information in relation to the affairs of the Company any other Group Company or any client thereof of which he has become or may have become possessed whilst in the service of the Company except in the proper course of his duties hereunder or as authorised by the Board or as ordered by a Court of competent jurisdiction.

NON-SOLICITATION

14. The Executive shall not during the continuance of his employment by the Company nor at any time during the period of twelve months from the date of termination of the employment (for whatever reason and howsoever effected):

i) either directly or indirectly solicit broke advise in respect of or handle either on his own behalf or on behalf of any other person any of the business of any client of the Company with whom the Executive shall have had dealings in the course of his employment at any time in the period of twelve months preceding the date of termination of employment;

ii) either directly or indirectly solicit broke advise in respect of or handle either on his own behalf or on behalf of any other person any of the business of any client of any other Group Company with whom and in relation to which business the Executive shall have had dealings in the course of his employment at any time in the period of twelve months preceding the date of termination of employment;

iii) without the written permission of the board of the Company (such permission not to be unreasonably withheld or delayed and in particular such permission will not be withheld if the Company considers that the employee concerned has neither a personal influence with clients nor is in possession of confidential information) solicit or employ directly or indirectly, on his own behalf or on behalf of any other person, the services of any individual who was an employee or director of the Company or any other Group Company during the period of twelve months preceding the date of termination of employment and with whom the Executive had dealings whether or not such person would commit any breach of his contract of employment with the relevant company by reason of his leaving service.

For the purpose of this Clause "business" includes the restructuring of any insurance or reinsurance programmes concerning the same or similar subject-matter or risk or the extension replacement or continuation thereof.

TERMINATION

15. This Agreement shall be subject to termination by the Company by summary notice in writing and without making any further payment beyond the amount of any remuneration payable under Clause 6 accrued due to the date of termination if the Executive:-

(i) shall have committed any material breach of obligations hereunder

....

INTERPRETATION

21(A) Unless the context otherwise requires in this Agreement the following words and phrases have the meaning given below:-

(ii) "the Board" means the board of directors of the Company or the directors present at a meeting of directors at which a quorum is present;

(B) Clause headings are inserted for convenience only and shall not affect the construction of this Agreement."

By letter dated 19 October 1998, Mr Robert Elkins, a partner in Amilcroft Insurance Brokers ("Amilcroft") offered Mr Mandy a job as Commercial Account Executive for a probationary period of six months, terminable by one month's notice on either side. The letter said that during that period Mr Mandy would be "subject to the normal confidentiality rules applying to a contract of employment". It said that during that period Mr Mandy's efforts "must be to obtain new business to Amilcroft Insurance Brokers and secure renewals. I am hopeful that you should generate between £30,000 and £50,000 of brokerage/fee income during this period. Perhaps a further meeting may be appropriate to review how this may be achieved." The letter spoke of promotion to Commercial Department Manager at an increased salary following satisfactory completion of the six month probationary period, working towards becoming a partner or director in any incorporated business with the ultimate aim of an equity stake in the business.

By letter dated 31 October 1998, Mr Mandy formally accepted the job offer and spoke of keeping in touch to agree the exact timing for commencing employment, which would ultimately be governed by the period of notice which he would be required to give SBJ, which could be as much as six months.

Mr Mandy did not tell SBJ or any colleague at Gravesend of the offer of another job. By that time he was personally responsible for 40 clients out of a base of 648.

On Friday 11 December 1998 Mr Mandy handed Mr Wyeth a letter which stated:

"I am writing to advise that I wish to give notice to terminate my employment with SBJ Stephenson Ltd with immediate effect.

I have enjoyed my time with the Company, but now feel it is the right time in my Career to explore new opportunities, I trust you will respect this."

Mr Mandy also handed Mr Wyeth his alarm keyholders pack and office keys, but not the keys to his company car. There was a discussion about Mr Mandy's period of notice and how much of the period he should work. Mr Wyeth and Mr Mandy agreed to meet again on Monday, 14 December.

Mr Mandy and Mr Wyeth met again on 14 December. Mr Mandy declined to tell Mr Wyeth who his new employer was. Mr Mandy was clearly determined to leave and Mr Wyeth told him that SBJ was willing to accept less than six months notice provided that Mr Mandy and his new employer confirmed their willingness to abide by the non-solicitation provisions in his contract of service. Mr Wyeth's evidence was that it was agreed that they would meet again on Wednesday, 16 December, and that in the meantime Mr Mandy would not come into work, but take the time as holiday. Mr Mandy's evidence was that Mr Wyeth said that it would take some time to put together the relevant paperwork reconfirming the non-solicitation provisions and that it would be best if he took the next two days off. The proposal that he leave the office was presented as non-negotiable, so he agreed to spend the next two days at home.

On 15 December 1998, Mr Wyeth wrote Mr Mandy a letter which began by acknowledging Mr Mandy's letter of 11 December "tendering your resignation with effect from that date". It went on to say, among other matters:

"Our initial reaction is to strictly enforce the terms of your Contract, including the necessity for you to give us six months notice from 11th December. We reserve the right to ask you to attend the office as may be required for the smooth handing over of your work, or to insist that you take gardening leave during the notice period.

In the event that you are not required to attend the office you will of course continue all the normal conditions of employment, including the use of your Company car. During the time you are not required to attend the office you are not to contact any of our clients or staff."

The letter ended by saying that the automatic salary payment into Mr Mandy's bank account before Christmas would be stopped because adjustments would have to be made, but he would receive his December salary by cheque before the end of the month.

Mr Mandy received that letter before the meeting with Mr Wyeth on 16 December. At that meeting, Mr Wyeth presented Mr Mandy with two draft letters. One, to be signed by Mr Mandy's as yet unidentified, new employer, set out proposed terms to facilitate the release of Mr Mandy from his employment. The other, to be signed by Mr Mandy, was a draft agreement to be bound by certain undertakings not to solicit business of SBJ or to disclose confidential information, in consideration for which SBJ would agree termination of Mr Mandy's employment from 21 December, changed to 31 December 1998 at Mr Mandy's request. Mr Wyeth's evidence was that Mr Mandy said that he wished to take legal advice on those proposals and that it was agreed that he would not come into the office for a few days while he did so. Mr Mandy's evidence was that he understood from Mr Wyeth's general manner that he did not want to have him in the office and his understanding was that SBJ had placed him in his garden. Mr Mandy said that he regarded non-payment of his salary as a breach of contract. Mr Wyeth assured him that there was no intention to break his contract.

On 17 December, Mr Wyeth wrote to Mr Mandy referring to the 16 December meeting and saying that he looked forward to Mr Mandy's early response so that they could agree a final termination date of his employment with SBJ "to the mutual satisfaction of everyone concerned." The letter confirmed that Mr Mandy's salary cheque would be available by 24 December. Mr Mandy received his salary cheque on 22 December, via his wife who also worked, and still works for SBJ.

Mr Mandy did take legal advice and by letter dated 24 December he wrote to My Wyeth as follows:

"I refer to the resignation of my employment with SBJ by letter dated 11th December 1998.

Following my decision to terminate my employment with SBJ you requested that I do not report to work and have therefore placed me on garden leave. You have prevented me from carrying out my duties as Divisional Director.

As a result of your decision I have taken legal advice and have been informed that because there is no express clause in my service agreement dated 2nd June 1994 which allows SBJ to put me in my garden you have, following a recent court decision, breached the terms of my contract of employment.

I have therefore decided to accept the company's breach and please therefore accept this letter as my resignation with effect from the date of this letter. Because the Company are in breach of my service agreement I am also not bound by the restrictions that are set out in that service agreement though I have of course to acknowledge that I remain bound by my duty of confidentiality."

Mr Wyeth did not receive that letter until 29 December. On the 30 December Mr Wyeth wrote to Mr Mandy saying that SBJ had not "breached" his contract of employment, and giving Mr Wyeth's account of recent events. The letter requested Mr Mandy to return to work on 4 January 1999 and said that if he did not do so SBJ would treat his failure as a repudiatory breach of his contract of employment with effect from 4 January. The letter reminded Mr Mandy of his obligations under clauses 12 and 14 of his contract of employment and said that if SBJ suffered loss as a result of Mr Mandy's failure to abide by the terms of his contract of employment, it would not hesitate to take legal action and make a claim of damages against him.

Also on 30 December Mr Mandy wrote to Mr Elkins of Amilcroft about recent events. He ended the letter by saying:

"the mention of legal action is obviously a threat to me and I want to take comfort from confirmation that Amilcroft will provide an indemnity should it become necessary.

I look forward to hearing from you tomorrow."

Mr Mandy did not go back to work for SBJ on 4 January 1999. He started work with Amilcroft that day. On 5 January 1999, Mr Wyeth wrote to Mr Mandy accepting this as repudiatory breach of his contract of employment terminating his contract of employment.

SBJ had reason to believe that Mr Mandy had solicited his clients in December 1998, before the end of his employment by SBJ. Mr Mandy denies that, but there is no doubt that he approached clients of SBJ in January and February 1999, and on 19 March SBJ started these proceedings. On 30 March 1999 the court made an interim injunction restraining Mr Mandy from doing any of the things forbidden by clause 12(A) and 14(i), (ii) and (iii) of his contract with SBJ. The court also ordered Mr Mandy to swear and serve an affidavit informing SBJ's solicitors of any soliciting of SBJ clients and of any confidential information which was divulged to Amilcroft or any other third party. Confidential information was defined as:

Name of clients.

Details of renewal dates.

Cover provided and claims made.

Premiums charged.

Fee rates or rates of brokerage earned.

Construction of insurance programmes.

Markets used and the manner in which policies are arranged or formulated.

This list accorded with the information alleged to be confidential by the Statement of Claim.

On 1 April Mr Mandy disclosed by affidavit that in January and February 1999 he had approached twenty-seven clients of SBJ and one client of another company in the same group, and that eight of the SBJ clients had appointed Amilcroft as their brokers in place of SBJ. Those eight clients were:

W.H. Humphreys & Sons,

Lifting Equipment Specialists Ltd,

Universal Supplies Ltd,

Line packaging & Display Ltd,

RE Group Ltd,

Andsty Ltd/CMCC Rentals,

Coin Street Community Builders and

FAD (UK) Ltd.

Mr Mandy's affidavit said he had discussed or met with those eight clients, with other employees of Amilcroft. He accepts that the total of commissions or brokerage fees which SBJ would have earned on the renewal of those client's policies in the first year after the termination of his employment was £47,353.

Mr Mandy's affidavit said that the only items of SBJ property which he had retained were some business cards, some draft unheaded letters of appointment and some draft unheaded Reporting Mandates, all of which he had destroyed on 27 March.

At the very beginning of the trial before me Mr Andrew Stafford, counsel for Mr Mandy, told me that Mr Mandy had made a copy of a letter dated 5 November 1998 from SBJ to Mr G. Humphreys of W.H. Humphreys & Sons Ltd, which SBJ had disclosed in discovery in these proceedings. The letter contained information on the renewal terms of W.H. Humphreys policies. Mr Mandy swore an affidavit saying that at the end of April or beginning of May 1999 he had copied the letter to the new W.H. Humphreys account handler at Amilcroft without meaning to break the Court's order against disclosing confidential information. I held that Mr Mandy had succumbed to the temptation to use the information in the letter for the benefit of his new employers, but made no order in respect of his contempt of court.

Against that background, Mr Simon Browne-Wilkinson Q.C. for SBJ alleged that Mr Mandy had acted in clear breach of valid covenants of his contract of employment by SBJ and of implied terms of fidelity and confidentiality; that it was clear that unless restrained by orders of the court, he would continue to do so; and that his breaches have caused loss to SBJ, so that an award of damages as well as continuing injunctions should be made against him.

Mr Stafford contended that certain of the post-termination of contract restraints contained in express covenants of his contract of employment were void as unreasonable restraints of trade; that by reason of repudiatory breach of the contract of employment by SBJ in December 1998 Mr Mandy was discharged from further performance of his obligation under any valid covenants; and that Mr Mandy had accordingly been perfectly entitled to solicit SBJ's clients for his new employers. Mr Stafford disagreed with Mr Browne-Wilkinson about the information which was subject to any express or implied term of confidentiality. Mr Stafford did not argue that injunctions were inappropriate if Mr Mandy had been in breach of valid obligations after leaving SBJ, but he contested the amount of the claim for damages.

So Mr Browne-Wilkinson and Mr Stafford argued the following primary issues, in the following order.

1. Are the covenants which purported to impose post-termination restraints enforceable, or are they wider than was necessary to protect any legitimate interest of SBJ?

2. Was SBJ guilty of repudiatory breach of Mr Mandy's contract of employment which Mr Mandy was entitled to accept as termination of his contract. If so, was Mr Mandy discharged from further performance of otherwise valid obligations in his contract?

3. Is there sufficient evidence of breach of valid obligations by Mr Mandy, to justify the making of continuing injunctions?

4. Is SBJ entitled to damages for breach of contract by Mr Mandy and, if so, what is the amount of those damages?

So far as the first of those issues is concerned, Mr Stafford accepted that on the evidence SBJ had a legitimate interest in protecting its customer base by an appropriately worded non-solicitation covenant, and that the non-solicitation covenants in clauses 14(i) and 14(ii) of the contract were not drafted so widely as to be invalid on their face, covering as they did only the first year, and therefore the clients' first insurance renewals, after termination. This led him to concede that the covenants in those two clauses were valid as drawn in the circumstances of this case. He accepted that Mr Mandy was bound by an implied duty of fidelity not to use confidential information which was akin to trade secrets, against the interests of SBJ while still employed by SBJ. But he argued that clause 12 A) which purported to restrict the disclosure of information both before and after termination of his employment, and clause 14(iii) which purported to restrain Mr Mandy from soliciting employees of SBJ after the termination of his employment, were far too wide to be valid; they went much further than was necessary to protect any legitimate interest of SBJ.

Mr Stafford argued, firstly, that interpretation clause 21(B) meant that one had to ignore the heading "CONFIDENTIAL INFORMATION" when construing clause 12A). The draughtsman had elected to omit the word "confidential" before "information" in the body of clause 12A) whereas he inserted it to limit the word "information" in clause 14(iii). "Information" included trade secrets, information which was equivalent to trade secrets, confidential information and other (non-confidential) information. Mr Stafford contended that only trade secrets or confidential information akin to trade secrets could be protected by an implied or express covenant: see Faccenda Chicken Ltd v. Fowler [1987] 1 Ch. 117, per Neill L.J. at pages 135F to 138H.

Secondly, Mr Stafford argued that clause 12A) elided the position of the employee after termination of his contract with his position before termination. That was over-ambitious. Compare the Employee Handbook which only restricted the use of confidential information before termination. The law made a distinction between information which could legitimately be protected before termination, and information which could legitimately be protected after termination. Clause 12A) made no such distinction.

Thirdly, Mr Stafford argued that the information which clause 12A) purported to restrict was not restricted to information which was exclusively in the possession of SBJ, and it took no account of information which, once learned, was in Mandy's head. He submitted that Faccenda Chicken had rejected the proposition that such information could be protected unless, at least, it had been deliberately memorised. There was nothing in law, Mr Stafford said, to stop Mr Mandy going to a client whose names he remembered through long acquaintance, after termination of his contract, and obtaining the consent of the client to obtain information about it, but clause 12A) purported to stop him using it, which was unreasonable.

I can not accept these arguments. Although interpretation clause 21(B) of the agreement provides that clause headings are inserted for convenience only and shall not affect the construction of the agreement, it seems to me that the convenience which they provide is to tell the reader at a glance what the clause is about. As Mr Browne-Wilkinson pointed out, no clause could be so long or detailed that it specifically and expressly provided for every item of information which could legitimately be protected. Even if the word "confidential" was inserted before "information" one would have to go to the authorities like Lansing Linde Ltd v. Kerr [1991] 1 W.L.R. 251 and FSS Travel & Leisure Systems Ltd v. Johnson [1999] Fleet Street Reports 505, which came after Faccenda Chicken, to find what was legitimately protected. What was necessary was that SBJ should be able to identify what information was legitimately protected, when called upon to do so. The ordinary sensible person reading clause 12A) would read it as applying to information which could justify a restriction. That as Staughton L.J. said in Lansing Linde at page 260B-D meant information which its owner used in a trade or business; dissemination of which he limited or at least did not encourage or permit on a widespread basis; and which, if disclosed to a competitor, would be liable to cause real or significant harm to the owner. The class of such information was wider than trade secrets, strictly so called, but was narrower than confidential information, generally so called. The bounds of the class can only be decided by examination of each case: see Mummery L.J. in FSS Travel, at pages 515-513, where he approved what Staughton L.J. had said in Lansing Linde.

In my judgment Mr Browne-Wilkinson's argument is sound.

Of course the ordinary reader of clause 12A would not be familiar with the judgments in Lansing Linde and FSS Travel, but in my view he would be quite clear in his own mind that its purpose was to protect the sort of information which a man of ordinary honesty and intelligence would recognise to be the property of his old employer and not his own to do as he likes with: see Cross J. in Printers and Finishers Ltd v. Holloway [1965] 1 W.L.R. at 5 A-C, and quoted with approval by Mummery L.J. in FSS Travel as follows:

"If the information in question can fairly be regarded as a separate part of the employee's stock of knowledge which a man of ordinary honesty and intelligence would recognise to be the property of his old employer and not his own to do as he likes with, then the court, if it thinks that there is a danger in the information being used or disclosed by the ex-employee to the detriment of the old employer, will do what it can to prevent that result by granting an injunction."

I do not accept that SBJ was being overambitious or unreasonable in protecting information after termination, and I can not accept that it was unreasonable because it could cover client information which Mr Mandy could use with the client's consent once he had approached the client, simply remembering who he was, after termination of his contract with SBJ. SBJ would still have its own interest in such information as was protectable, whatever view the client took, and I do not see Faccenda Chicken as authority for the proposition that information learned without deliberate intent to misuse it is not capable of legitimate protection, even though parts of Neill L.J.'s judgment at page 136A and H may appear to suggest that, at least in respect of the identity of clients of the employer. In my view, the distinction between information deliberately learned and that which is innocently carried in the employee's head, can not be definitive as a matter of principle of what information can be legitimately protected and what can not, after the termination of employment, and I do not believe that what Neill L.J. said in the particular circumstances of that case was meant to define such a principle. Many true and vital trade secrets in the strict sense, including such things as the ingredients of chemical compounds and other sophisticated products must rest firmly in the minds of those who have worked with them and been interested in them, ready for recall. I do not consider that the other cases to which Mr Stafford referred support a principle that an employee can not be expressly restrained from using the names of customers which he can innocently remember. I agree with Mr Browne-Wilkinson's submission that the true distinction appears from the speech of Lord Shaw in Herbert Morris Ltd v. Saxelby [1916] 1 A.C. 688 at page 714, as follows:

"Trade secrets, the names of customers, all such things which in sound philosophical language are denominated objective knowledge - these may not be given away by a servant; they are his master's property, and there is no rule of public interest which prevents a transfer of them against the master's will being restrained. On the other hand, a man's aptitudes, his skill, his dexterity, his manual or mental ability - all those things which in sound philosophical language are not objective, but subjective - they may and they ought not to be relinquished by a servant; they are not his master's property; they are his own property; they are himself. There is no public interest which compels the rendering of those things dormant or sterile or unavailing; on the contrary, the right to use and expand his powers is advantageous to every citizen, and may be highly so for the country at large. This distinction, which was also questioned in argument, is just as plain as the other.

An excellent concrete example of the latter point may be found in the present case. The second head of the injunction claimed is "from divulging or communicating .... information as to the customers or affairs of the plaintiff company and from otherwise divulging or using such information." This [is] purely objective, and it was with exact correctness made the subject of a separate claim. As it turns out there is no ground for it in fact; it was entirely given up at your lordships' bar".

Mummery L.J. clearly had that distinction between objective knowledge and subjective knowledge in mind in FSS Travel. What an employee innocently remembers may be objective knowledge or subjective knowledge, and whether the recollected identity of customers is capable of legitimate protection in this case has to be decided on the evidence of this case. I must return to that question later, but the fact that Mr Mandy could remember the customers and go to them to obtain information which clause 12A) purported to protect can not in itself make the clause too wide and invalid, in my view.

For all these reasons I judge clause 12A) to be a valid covenant restricting the disclosure of such information as could validly be protected. I am given some comfort in this by the fact that a very similar clause appeared to be judged valid by Lord Shaw in Morris v. Saxelby, although the Appellants gave up the claim based upon it.

Mr Stafford challenged what he called the "non-poaching" clause 14(iii), on the basis that SBJ had not established a legitimate interest in protecting staff stability. Moreover, he argued, it was apparent from the terms of the clause that its real purpose was not to protect staff stability but to prevent employees going to work for competitors. This was the only sensible interpretation of the provision that the board of SBJ would not withhold permission to solicit or employ its employees if it considered that the employee concerned had neither a personal influence with clients nor was in possession of confidential information. The clause covered all employees, whatever their value to SBJ. Moreover on a proper construction of the clause it prevented approaches to an individual who had been an employee of SBJ or another company in the group during the period of twelve months preceding the date of termination of Mr Mandy's employment, even if the individual had left SBJ or the group and gone to work for someone else before the end of Mr Mandy's employment. So it was wider than was necessary to protect any legitimate interest of SBJ, and invalid.

Again, I can not accept these contentions. Mr Wyeth gave evidence that the prime assets of SBJ were its staff. Not only did SBJ recognise this it had invested a great deal in the training of its staff. It supported those employees who wished to obtain further qualifications in insurance by day release and meeting the cost of courses attended. Insurance broking was a business which developed and flourished through the efforts of staff and the relationships they built up with clients, but it was not just the stability of broking staff which was important to SBJ. Its support staff had been trained and became experienced in its procedures and computer systems. All this seems good sense and, indeed, obvious to me. I do not consider that clause 12A) is indiscriminate in its range in these circumstances quite apart from any limiting effect of the words in parenthesis in the clause. I have no hesitation in finding that the stability of SBJ's workforce as a whole was a legitimate interest of SBJ which it was entitled to protect.

The reference to employees who have no personal influence with clients nor are in possession of confidential information may have the appearance of imputing an "anti-competition" motive, but it can readily carry the innocent indication that the stability of employment of such employees is less vital than the stability of employment of those who do have personal influence with clients or are in possession of confidential information. It was clear that all the thirty or forty staff at Gravesend worked as a close and no doubt friendly team, and I would expect that all of them who have been there any time would be in possession of some confidential information.

Finally, the reference to the poached individual leaving his service, at the end of clause 14 iii) makes it clear that the clause relates only to individuals who are still employed by SBJ.

In my judgment clause 14 iii) goes no further than is necessary to protect legitimate interest of SBJ in the stability of its workforce, and it is valid.

It follows that in my judgment the pre-termination and post-termination restraints contained in clauses 12A) and 14i), ii) and iii) of Mr Mandy's contract of employment were no wider than was necessary to protect SBJ's legitimate interests. There were valid and enforceable during his employment by SBJ, and subject to the question of repudiatory breach of Mr Mandy's contract of employment they are valid and enforceable after the termination of his employment.

Having referred to various of the authorities as to what "confidential" information can legitimately be protected, it is convenient to decide next what information was validly protected by SBJ so far as Mr Mandy was concerned, in the circumstances of this case.

In my judgment, the names of SBJ's clients, the details of renewal dates, the cover provided and claims made, premiums charged, fee rates or rates of brokerage earned, construction of insurance programmes, markets used and the manner in which policies were arranged or formulated, was all information which was protected by the terms of Clause 12A) of Mr Mandy's employment agreement and by his implied term of fidelity, while he was still employed by SBJ, and (subject to the argument on repudiatory breach by SBJ) by clause 12A) after the termination of his employment.

After stating that he thought that information was not confidential if he retained it in his head, as opposed to it being in documentary form, Mr Mandy accepted that he would probably keep the information which I have listed to himself if someone unconnected with SBJ or the relevant client asked for it, and he went on to accept that it was confidential and the property of SBJ and the client.

The information was used by SBJ in its business. Mr Mandy accepted that he knew from the terms of his contract and the Employees Handbook that it was the type of information that was not to be disclosed by him, or for him to deal with, as he liked. It is clear from those provisions that SBJ meant to restrict its dissemination. Mr Mandy accepted that it was information which could be of value to a competitor of SBJ, which is tantamount to saying that its disclosure to a competitor would be liable to cause real or significant harm to SBJ. These concessions accorded with good sense in the competitive world of insurance broking, where retaining clients was so important, because new ones were hard to gain, and where the information in question gave SBJ a head start over competition in its relations with its clients.

It follows that the information passes the test of Staughton L.J. in Lansing Linde of information, wider than trade secrets so called but narrower than confidential information, which could justify restriction. In my view it also passes the test of Mummery L.J. in FSS Travel and of Cross J. in Printers and Finishers Ltd, and of objective knowledge as explained by Lord Shaw. If this conclusion appears to run contrary to what Neill L.J. said in Faccenda Chicken, so far as the names of SBJ's clients are concerned, then I would take comfort in the later statements of principle in Lansing Linde and FSS Travel and in any event distinguish the present case on its facts. In the present case the identity of clients of SBJ was the gateway to use of the other information for the benefit of a competitor and to harm SBJ. Moreover, I consider it unreal to suggest that Mr Mandy could have used his knowledge of the identity of clients to approach them on behalf of a competitor like Amilcroft without them using some, at least, of the protectable information. It is unreal to suggest that Mr Mandy could have used his knowledge of a client's name (argued to be non-protectable) to approach that client and obtain protectable information which he already had, without in fact having used that protectable information in the first place.

My decision on the first part of the second primary issue, whether SBJ was guilty of repudiatory breach of Mr Mandy's contract of employment, depends on my findings of fact as to events and the parties' intentions, in addition to the common ground of which I set out at the beginning of this judgment. In so far as those findings depend upon reliability of the evidence of Mr Wyeth and Mr Mandy, I have no hesitation in preferring the evidence of Mr Wyeth. I found him to be an impressive witness. He was mild in demeanour and thoughtful about the questions which were put to him and the answers which he gave. His evidence was generally consistent with the contemporary documents, and with that of other apparently reliable witnesses and with what I see as the inherent probabilities. Mr Mandy was not an impressive witness. Some of his answers were evasive, taking time before he got round to the obvious thrust of the questions, for instance the early questions about his duty of confidentiality to SBJ. Some of his answers conflicted with his own contemporary notes and letters. I found some of his explanations of what he wrote, and in particular of one of the things that he said to a fellow employee on 11 December 1998, and do his fairwells to colleagues on 14 December, and of his refusal to tell Mr Wyeth who he was going to work for, unacceptable.

My particular findings of fact are as follows.

An important factor in Mr Mandy's acceptance of Amilcroft's October 1998 offer was, as Mr Mandy accepted, the prospect of a share in the business in the future. But his position was precarious unless he satisfied Mr Elkins during his probationary period, as Amilcroft's ability to bring his employment to an end on relatively short notice made clear. Although Mr Elkins expressed hope only, in his 19 October offer letter, of Mr Mandy generating between £30,000 and £50,000 of brokerage/fee income in the first six months probationary period, both he and Mr Mandy must have had some ground for believing that those figures could be achieved. Although the letter refers to brokerage/fee income generally and to efforts to obtain new business to Amilcroft and to "secure renewals", Mr Mandy's evidence was, at first, that that target of £30,000 to £50,000 was the target for "new, new business" for Amilcroft. Shortly afterwards he told me that "renewals" included existing clients of Amilcroft and was not a reference to securing renewals of SBJ clients. In my view Mr Mandy was candid in his first answer and trying to regain lost ground in his second. Yet Mr Mandy only achieved £18,000 of new business for SBJ in the whole of 1998 and his target was no more than £30,000 for the whole year. Even taking account of his explanation that Amilcroft was prepared to take a wider range of business than SBJ, this is a big discrepancy, and Mr Mandy could only have hoped to reach the target of £30,000 to £50,000 in six months by soliciting clients of SBJ with whom he had a good relationship and whose terms of insurance he knew. In fact he achieved his target by obtaining for Amilcroft the custom of eight companies who had been clients of SBJ and whose annual renewals for 1999 were worth about £47,000 in commissions or brokerage fees if Amilcroft took the same rates as SBJ.

I accept Mr Mandy's evidence that he told Mr Elkins of restrictive covenants in his contract of employment by SBJ. This is supported by Mr Elkins' file note of his interview of Mr Mandy on 24 September 1998. But the same file note refers to Mr Mandy being not loath to concentrate on new business (as opposed to maintain servicing clients), and to Amilcroft being keen to concentrate on new business with a bare minimum to cover Mr Mandy's costs in the first year. Since Mr Mandy's salary was to be £30,000 p.a. rising to £35,000 after six months and there must have been other costs associated with his work, Amilcroft was by any account expecting Mr Mandy to have significantly more success in obtaining new, new business than he had at SBJ. In my judgment both Mr Mandy and Mr Elkins must have hoped and had some expectation that the restrictive covenants would prove no bar to soliciting SBJ's clients for Amilcroft.

Next, I have no doubt that by early December 1998, Mr Mandy had decided that, come what may, he would leave for SBJ for Amilcroft at the turn of the year. He denied this, but the evidence is overwhelming in my view. I have no reason to doubt Mr Mandy's evidence that after October 1998 he took some time to decide whether he would actually leave SBJ where a management buyout which might work to his advantage was mooted. But by December that possible attraction to stay at SBJ had gone and there appeared to be no prospect of a change of job description of a kind which Mr Mandy wanted. Moreover on 7 December 1998 Mr Elkins met Mr Taylor, the Group Finance Director of KE group Ltd ("KEG"), a client of SBJ who Mr Mandy later solicited to Amilcroft. Whether that meeting was set up by Mr Mandy or, as Mr Mandy told me and as may well be true, it came about because Mr Taylor and Mr Elkins met by chance at a dinner, it is clear from a letter which Mr Elkins wrote to Mr Taylor on 11 December that Mr Mandy was to join Amilcroft shortly. The letter was headed "STRICTLY PRIVATE & CONFIDENTIAL - ADDRESSEE ONLY". It read:

"Just a short line to confirm that following our brief chat on Monday 7 December at the Great Danes Hotel, I will make contact with you early in January with a view of making a mutually convenient appointment to call and see you.

As you know, Keith is joining us shortly and no doubt he will be in touch with you in any case."

So by 11 December Mr Mandy, or Mr Elkins with Mr Mandy's agreement, must have told Mr Taylor that Mr Mandy was leaving SBJ for Amilcroft and that he would be with Amilcroft by early January, on my view of the letter. It was the same day that Mr Mandy gave his letter of giving notice to terminate his employment with SBJ with immediate effect and handed over his alarm keyholder's pack and office keys. I accept that there was discussion between Mr Mandy and Mr Wyeth about the period of notice required by Mr Mandy's contract but I can not accept Mr Mandy's evidence that he handed over the keys so that there would be no misunderstanding of any visit by Mr Mandy to SBJ's offices out of hours during his period of notice. Why should there by such suspicion if there was still a possibility of him working on in SBJ's interest for several months notice?

I accept the evidence of Mr Richard Dyer, a Director of SBJ, working at Gravesend, that on Monday 14 December Mr Mandy told him that he would be back in the office on Wednesday (16 December), but it would be late in the afternoon so he would say goodbye to Mr Dyer then, on 14 December, and that he said goodbye to others in the office before reaching Mr Dyer, but refused to tell those who asked where he was going. He gave Mr Dyer the impression that 16 December would be his last day in the office. Mr Mandy told me that he went to see Mr Dyer at his desk on 14 December because Mr Dyer asked him to, and that he told colleagues that he had been asked by Mr Wyeth to leave the office, that he did not know what was happening and that he might not see them again. But I prefer Mr Dyer's account of uncomplicated farewells by Mr Mandy. It is consistent with what Mr Elkins had written, the Friday before, to Mr Taylor.

Next, I am satisfied that at about this time, Mr Mandy was approaching clients of SBJ of his own initiative to say that he was leaving SBJ for another broker. This conclusion is supported by Mr Elkins' letter to Mr Taylor and by a number of letters which Mr Mandy wrote to SBJ clients early in 1999, confirming telephone conversations which he had just made to make appointments and saying that he was "most grateful for your support recently". In respect of such a letter dated 6 January 1999 to Mr Taylor of KEG, Mr Mandy said that those words were a reference to the nice things which Mr Taylor had said about him to Mr Elkins at their 7 December meeting. But that could not explain words with the same phrase of thanks to other clients of SBJ. Mr Mandy then said that thanking clients for their support recently was just a standard phrase. Mr Stafford described it as an "end of letter salutation". This was a change of explanation and I do not believe either explanation. The thanks were clearly clearly provoked by earlier indications of support in the form of business when Mr Mandy came to move to Amilcroft, in my view.

Such offers of support could only have been forthcoming if Mr Mandy had unilaterally told the clients that he was leaving SBJ for another broker, when Mr Mandy must have appreciated that SBJ would want to announce his departure in its own way in order to reassure the clients that they would be well cared for after his departure, as Mr Wyeth said in evidence. Such unilateral approaches were the first step in solicitation of the clients in question. They could only, sensibly, be a preamble to later solicitation even if direct solicitation did not take place on the first approach.

At the office party on 11 December Mr Mandy spoke with Mrs Pamela Lister, a close colleague. According to Mrs Lister he told her: "I have resigned this afternoon." She asked him whether he had got a new job and he said that he was moving into a smaller broker. As Mrs Lister was largely responsible for broking in respect of the clients for whom Mr Mandy was responsible, she asked him if he was going to poach her clients. He replied: "Don't ask me questions like that." She believed that this meant that he intended to approach SBJ clients in an attempt to get their business, and she raised her concern with Mr Wyeth, Mr Dyer and another SBJ Director, Mr Wood early the following week, although she did not think that she mentioned the conversation at the party.

Mr Mandy accepted that he had given the answer which Mrs Lister attributed to him, but he said that he had done so because she had asked him an inappropriate question and he had shot her down with that reply. I reject that explanation. He and Mrs Lister were friendly colleagues. Her enquiry was understandable and he could have given her a friendly denial of any intention to solicit SBJ's clients. In my judgment the truth was that he intended shortly to solicit SBJ clients and had already approached Mr Taylor of KEG, and possibly others, and he did not want to lie to Mrs Lister. He accepted that before Christmas he told Mr White, a neighbour, of Lifting Equipment, that he was leaving SBJ.

In my view Mr Mandy's refusal to tell Mr Wyeth where he was going was only consistent with an intention to solicit SBJ clients for Amilcroft before SBJ could interfere. I can not accept Mr Mandy's evidence that it was "just a personal thing" that he did not want to tell Mr Wyeth or other colleagues at SBJ. This makes no sense in a situation where his relationship with Mr Wyeth and the other colleagues had been perfectly friendly. Moreover, Mr Mandy's wish to keep the identity of his new employer from SBJ for commercial reasons was demonstrated in some of the letters which he sent to clients of SBJ on behalf of Amilcroft in early 1999, saying that SBJ was not at present aware of his new company and therefore he would be most grateful for the addressee's discretion in that respect.

Next, and against that background, I find that at his meeting with Mr Wyeth on Monday 14 December Mr Mandy readily agreed not to come to the office, but to take two days holiday, until they met again on Wednesday 16 December. Mr Mandy told me that he did not agree to take a holiday, or "leave" as Mr Wyeth described it, and that Mr Wyeth decided he wanted him not to be in the office and that he had no choice but to leave the office. But in the notes or aide memoire which Mr Mandy took to the 16 December meeting, he wrote: ".....Monday's action in office - NO explicit instructions to leave premises there and then - allowed to go to desk - sort work out etc. NO instructions to not talk to staff. Agreement was to take leave - pending Wed - Meeting may resolve to release from Contract at that time ......." In my judgment Mr Mandy had everything to gain from agreeing, as he clearly did, to take leave until the Wednesday meeting which might result in release from the terms of his contract at that time.

On Wednesday 16 December, in my judgment, Mr Mandy agreed that he would not come into the office for a few days while he took the legal advice which he wanted on the two draft letters which Mr Wyeth produced. Mr Mandy's case that he had no choice and that he was put on garden leave depended on his evidence that it was clear from Mr Wyeth's body language and from the documents which he had that Mr Wyeth did not want him to be at work. I do not think that Mr Wyeth did want Mr Mandy at work. He had reason to believe that he had contacted clients of SBJ and intended to try to take SBJ clients to another broker. Mr Wyeth told me that he did not really envisage Mr Mandy doing work for SBJ thereafter, save in so far as it involved handing over clients, and I doubt that he even envisaged asking Mr Mandy to do this. Mr Mandy's clients were reallocated from 18 or 22 December, but in my view that was because Mr Wyeth saw that Mr Mandy was inevitably going to leave in the immediate future and feared for the consequences of delay in tending to the relevant clients. Mr Mandy never saw the relevant SBJ memoranda, and the letter of 15 December which Mr Mandy did see before the 16 December meeting spoke of the right to insist that Mr Mandy take gardening leave; it did not exercise the right. The only alleged breach of contract which Mr Mandy's notes cum aide memoire spoke of was the late payment of his salary. In evidence Mr Mandy said that he interpreted Mr Wyeth's 15 December letter as meaning that he was still employed and that after he had agreed the reinstatement of his pay he left the 16 December meeting feeling that he was still fully employed - for however long that might be.

In all these circumstances I have no hesitation in accepting that it was as much Mr Mandy's wish to take time off work from 16 December, as it was Mr Wyeth's that he should do so. As on 14 December it was in Mr Mandy's interest, as he must have appreciated, to take time away from the office: this time to see his solicitor and his new employer. "The few days off", as Mr Wyeth accurately in my view described Mr Mandy's absences from SBJ's offices after the 14 and 16 December meetings were, in my judgment, consensual fully and willingly agreed by both Mr Mandy and Mr Wyeth to ease Mr Mandy's inevitable departure from SBJ.

Mr Mandy took legal advice and on that advice he wrote the letter of 24 December 1998. Mr Mandy denied that the true object of the letter was to bring his contract to an end in a way which avoided the restraint of its covenants. In my judgment, in the light of the history from October 1998, as I have found it to be, that was its object, but it was ill-founded in alleging that SBJ had broken Mr Mandy's contract.

I heard interesting argument, firstly, on whether on a proper construction of Mr Mandy's particular contract of service the contract put SBJ under an obligation to permit him to do his work so that an express provision was needed to entitle SBJ to send him on garden leave if it was to be absolved from what would otherwise be a breach of contract; or whether SBJ's obligation was confined to the payment of his agreed remuneration so that it was entitled to send him home on garden leave during a period of notice notwithstanding the absence of an express or implied power to do so, because there was no contractual provision to prevent it: see Morritt L.J. in William Hill Organisation Ltd v. Tucker [1999] 1 C.R. 291 at 301.

I heard interesting argument, secondly, on whether SBJ would have been in fundamental breach of contract, which Mr Mandy would have been entitled to accept as wrongful repudiation, if it genuinely understood his contract to entitle it to send him on garden leave, and on whether it was relevant to consider whether Mr Mandy left SBJ by reason of any breach of contract by SBJ, or for his own unrelated reasons.

I heard interesting argument, thirdly, on whether, if SBJ did put Mr Mandy of garden leave and was in repudiatory breach of contract, which he accepted, in doing so, the restrictive covenants still survived, a topic recently considered in Rock Refrigeration Ltd v. Jones [1997] 1 All ER 1.

My construction of Mr Mandy's contract of employment is that clause 3 of Mr Mandy's contract merely defined his duties and obligations in office and that the words "if any" in parentheses in clause 3 (B) made it clear that there might not be any duties to perform. I regard as strained Mr Stafford's argument that if Mr Mandy was given no duties he could not be in a position of being unable to perform them by reason of injury or illness so as to take advantage of clause 8(A). I would conclude that there was no obligation to permit Mr Mandy to do his work, but only to pay his remuneration, so that SBJ was entitled to send him on garden leave during a period of notice.

However, this conclusion is not essential to my decision on the second primary issue, and it is unnecessary to express a view on the other, more difficult arguments, because I have no hesitation in deciding that SBJ did not, through Mr Wyeth, send Mr Mandy home on garden leave. It simply agreed to him remaining away from work while he took legal advice with a view to resolving the basis upon which he would inevitably leave. That agreement suited SBJ. It was suggested by Mr Wyeth. But the agreement suited Mr Mandy too, and he went off without a though that SBJ which had promised to pay his salary by Christmas, was in breach of contract.

For all these reasons I find that SBJ was not guilty of repudiatory breach of Mr Mandy's contract of employment, and that he was not discharged from further performance of otherwise valid obligations in his contract by the circumstances of the termination of his employment with SBJ. Clauses 12A), 14(i), 14(ii) and 14(iii) of his contract of employment remained valid and binding after the termination of his employment.

Moving on to the third primary issue, there was really no dispute that if the covenants contained in clauses 12A), 14(i), and 14(ii) of Mr Mandy's contract of employment remained valid and binding after the termination of his employment, there was sufficient evidence of breaches of those covenants to justify the making of continuing injunctions. Mr Mandy admitted that he had solicited for Amilcroft clients of SBJ or a group company, in relation to whose business he had had dealings in the course of the last twelve months of his employment by SBJ. There was no dispute that he had used information which was defined as "confidential information" in the interim order, and which I have found to be legitimately protected by clause 12A). The only argument was whether Mr Mandy had acted in breach of his implied duty of fidelity or the express covenants by using information which was a trade secret as akin to a trade secret, or by soliciting clients of SBJ, before the termination of his employment, if the express covenants were ruled invalid during his employment. The potential importance of the distinction between pre and post termination use of protected information or soliciting of clients falls away, now with my decision that the covenants remained valid and binding on Mr Mandy.

In the light of Mr Mandy's conduct, as I have found it to be, SBJ is justified in fearing that if the interim injunctions are not continued he will act further in breach of clauses 12A), 14(i) and 14(ii).

Moreover, although SBJ did not allege that Mr Mandy had solicited other employees in breach of clause 14(iii), I take the view that Mr Mandy's calculated use of his influence to advance Amilcroft at the expense of SBJ, gives it sufficient cause to apprehend that he may act in breach of clause 14(iii) if the interim injunctions based on that clause are not continued.

I therefore propose to make the injunctions sought in paragraphs (2)(a), (b), (c) and (d) of the prayer of the Statement of Claim, which has the effect of extending the interim order made by His Honour Judge Conningsby Q.C. until 4 January 2000, twelve months after the termination of his employment. In fact the covenant in respect of disclosure of information contained in clause 12A), runs indefinitely. Only the non-solicitation clause 14 is limited, in effect, to 4 January 2000. I will therefore make the injunction to enforce clause 12A) to run indefinitely, unless addressed to the contrary by counsel for either party, although the prayer of the Statement of Claim seeks all forms of injunction to 4 January 2000 only.

The final question is the proper amount of any damages to be awarded to SBJ in compensation for the effects of Mr Mandy's breaches of contract.

There can be no doubt that Mr Mandy's soliciting of clients in breach of clauses 14(i) and (ii) caused the eight clients of SBJ, whom I listed earlier in this judgment to move their insurance business from SBJ to Amilcroft. That in turn caused or will cause loss of commission or fee income of £47,353 to SBJ in the calendar year 1999 which essentially coincides with the one year first renewal after termination period which clauses 14(i) and (ii) were legitimately designed to protect. In my judgment Mr Mandy was assisted in his solicitation of those clients by his possession of protected information with regard to the clients' and SBJ's business, but it is not necessary to go into any detail so far as use and therefore disclosure of information is concerned. I have no doubt that the major causative factor in the loss of the clients was their solicitation by Mr Mandy with whom they had a good working and personal relationship.

The active issues on the amount of damages properly to be awarded to SBJ in the light of the findings which I have already made were, firstly, the amount to be deducted from SBJ's gross loss of 1999 commission and brokerage fees in respect of the eight clients in order to reach its net, claimable loss; secondly, the amount, if any, to be awarded for future loss of commission and fees in respect of renewal business in respect of the eight clients which is likely to be or may be lost by reason of the breaches of contract committed by Mr Mandy; thirdly, the amount of damages, if any, to be awarded for the possible loss of other clients of SBJ through Mr Mandy's breach of contract; and finally, the amount of any damages for lost management time, and loss of good-will or reputation, and lost business due to reallocation of staff.

So far as the first issue is concerned, it was Mr Wyeth's evidence that notwithstanding the fact that SBJ had lost at least eight clients to date it had not been able to reduce its fixed costs and overheads, such as rent and staff costs. The fact that Keith Mandy's desk was unused did not mean that the office rent was reduced. The loss of eight clients' income was insufficient to enable SBJ to make direct savings. For example, SBJ had not had to make staff redundant as a consequence of losing Keith Mandy and some of its clients. There were some savings which Mr Wyeth described as "variable expenses". These included representations, communications, petrol and oil, bad debt provisions and errors and omissions provisions. Mr Wyeth had calculated them as a percentage of the total income. He produced a calculation which demonstrated what sums SBJ had been able to save as a consequence of the business that it had lost. Of the total expenses projected for 1999 (£1,832,994) Mr Wyeth calculated that £132,600 related to variable expenses. The total income which had been estimated and budgeted for SBJ for 1999 was £2,144,106. Variable expenses as a percentage of that total income equated to 6.18%. 6.18% of the income of £47,353 which SBJ had lost as a consequence of Keith Mandy's actions is £2,928.50. All that resulted in a calculation of net loss to SBJ of £44,424.50.

Mr Stafford argued that from the gross loss of £47,353 should be deducted a pro rata proportion of all the costs of running SBJ's operation. There was no evidence of what those costs amounted to, but I should make some sort of assessment or make necessary findings in relation to the proper approach to the assessment of damages and then order an enquiry as to damages.

However, Mr Wyeth's approach seems reasonable and fair to me, and it was not challenged or tested in cross-examination. I therefore start by assessing SBJ's loss for 1999, as a result of Mr Mandy's breach of contract, at £44,424.50. Since the award comes more or less in the middle of the year I make no deduction for acceleration of receipt in respect of commission or fees yet to be earned and there will be no interest on losses already suffered. No doubt there is a reasonable balance between the two.

The assessment of future losses after 1999 in respect of the eight lost clients is more difficult. They have been lost as a result of Mr Mandy's breaches of contract. It seems to me unlikely that SBJ will win them back, unless the result of this case drives Mr Mandy out of Amilcroft and broking in the area, which it would be speculative to propose. All the eight had been clients of SBJ for some years; many years - up to seventeen - in some cases. So they no doubt had a loyalty to SBJ. On the other hand their departure to Amilcroft demonstrated a stronger tie to Mr Mandy personally. That would have been weakened by his year on the touchline had he not broken his covenants. But it is unlikely that it would have disappeared by 4 January 2000 when he would be free to solicit custom for the second year's renewals and it would be more difficult to prove that he was using protected information when so doing. Mr Mandy's neighbour, Mr White of Lifting Equipment, would probably have followed Mr Mandy as soon as he could. But even that is impossible to judge with certainty, and it is impossible to judge with any confidence whether the others would have stayed with SBJ or moved to Amilcroft, or wherever else Mr Mandy was by the year 2000. The clients might have left SBJ for some other reason altogether, although that is unlikely. A detailed examination of each case would be unrewarding of the effort involved, in my view.

In these circumstances it was agreed that I could only judge the question of damages for loss of income from the eight clients, after 1999, as a loss of chance case, applying the guidance given in Allied Maples Group Ltd v. Simmons & Simmons [1995] 1 WLR 1602. Performing that exercise, I take the view that Mr Mandy's overtures in 2000 would probably have drawn most of the eight clients away from SBJ, but that there was a real or substantial, rather than a speculative, chance that a significant minority would have stayed with SBJ, and then stayed for many more years, had Mr Mandy not drawn them away at the first opportunity in breach of his contract.

Painting with a very broad brush, I value the loss of that chance, caused by Mr Mandy's breach of contract, at £45,000, which is an approximation to one third of the lost net commission and fees for a multiplier of three years, and only coincidentally to one year's loss of the whole commission and fees from all the lost clients. That figure is calculated to take account of any acceleration in receipt of the award compared with loss of commission and fees.

I am not persuaded that SBJ's prospects of retaining other clients than the eight who have already been lost, have been significantly damaged by Mr Mandy's breaches of contract. I am not persuaded that those breaches have caused lost management time, loss of goodwill or reputation or lost business due to reallocation of staff, in a way which his quantifiable as damages suffered by a large, busy concern like SBJ. I make no award of damages under those heads.

It follows that there will be judgment for SBJ against Mr Mandy in the sum of £89,424.50, and the continuation of the injunctions.

I will hear counsel as to the form of the order, including the question of the extent in time of the injunction not to disclose information, and on consequential matters such as costs, when this judgment is handed down.

During cross-examination of Mr Mandy and submissions, Mr Browne-Wilkinson contended that the defence to this action had been conducted at the expense and with the encouragement of Amilcroft in a way which amounted to the grant of indemnity which Mr Mandy requested from Mr Elkins in his letter of 30 December 1998. Mr Browne-Wilkinson said that the grant of any such indemnity supported SBJ's case that Mr Mandy and Mr Elkins and, therefore, Amilcroft had collaborated to solicit SBJ's clients both before and after the termination of Mr Mandy's employment with SBJ.

It has not been necessary for me to decide if Mr Browne-Wilkinson's contentions are well founded, and I do not therefore propose to do so in circumstances where I can foresee that the matter may be raised in the context of an application for SBJ's costs to be paid by Amilcroft, and where I have not heard counsel acting for Amilcroft on Amilcroft's express instructions, and where I may hear further evidence if such an application is made.