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

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		21 September 2016

Mr Chamberlain QC :

Introduction

1. The Claimants (respectively "Affinity" and "Affinity Connect") are wholly owned subsidiaries of the Farleigh Group Ltd ("Farleigh"). Farleigh offers two services to public sector employees: first, through Affinity Connect, it delivers educational seminars to those nearing retirement; secondly, if after attending a seminar an attendee wishes to speak to a financial adviser, he or she is introduced to Affinity, which can provide investment advice.
2. Until recently, Affinity's advice has been provided through self-employed advisers operating under consultancy agreements. On 11 May 2016, however, Farleigh was purchased by Wealth at Work Midco Ltd, part of the Wealth at Work Group ("WAW"), which offered similar services to private sector employees. Its advice was delivered through employees, rather than self-employed advisers. It decided that Farleigh's advice should also be delivered through employees. It offered contracts of employment to some of Farleigh's advisers, but not others. The Defendants either were not offered or (in the case of the First Defendant) declined to accept a contract of employment. Their consultancy agreements were terminated with effect from 31 July 2016.
3. There are some differences between the consultancy agreements entered into by the Defendants, but each of them contained restrictive covenants in the following terms:

"6.2 The representative shall not without the prior written consent of the Board (such consent not to be unreasonably withheld) for a period of 12 months after the termination of this Agreement, directly or indirectly on his own behalf or on behalf of any person, firm or company in connection with any business which is or is intended or about to be competitive with the Restricted Business (as defined below):

6.2.1 solicit or canvass the custom of any Customer or Affinity Connection (as defined below);

6.2.2 solicit or canvass the custom of any Potential Customer or Potential Affinity Connection (as defined below);

6.2.3 deal with any customer of Affinity Connection;

6.2.4 deal with any Potential Customer or Potential Affinity Connection;

6.2.5 solicit or entice away, or attempt to entice away form the Firm any Restricted Representative (as defined below);

6.2.6 employ, offer to employ or enter into partnership with any Restricted Representative with a view to using the knowledge or skills of any such person in connection with any business or activity which is or is intended to be competitive with the Restricted Business."

4. The capitalised terms were defined. The definition of "Customer" in the 2007 version of the agreement (relevant to the First and Fourth Defendants) differed from that in the 2009 version (relevant to the Second, Third and Fifth Defendants). The parties are not agreed whether the omission from the former of the qualification "introduced by the Firm directly or indirectly" was an oversight; or whether those words should be read in. The definition in the later agreements (which should be taken as applicable to all agreements) is:

"any person, firm or company introduced by the Firm [sc. Affinity and/or Affinity Connect] directly or indirectly who at the date of termination of this Agreement or at any time during the 12 months immediately prior to such termination was a customer of the Firm and from whom the Representative had obtained business on behalf of the Firm or to whom the Representative had provided or arranged the provision of goods or services on behalf of the Firm or for whom the Representative had management responsibility in any case at any time during the period of 12 months immediately prior to the date of termination of this Agreement."

5. By a claim issued on 31 August 2016, the Claimants seek damages and injunctive relief arising out of alleged breaches by the Defendants of the restrictive covenants. On the next day, 1 September 2016, before filing Particulars of Claim, they issued an application for interim relief, which came before me for hearing on 9 September 2016. It is this application that I now have to determine.

The issues

6. At the hearing, it became clear that the parties agreed on a number of points. In particular:

i) The parties agreed that the enforceability of the covenants and the adequacy of damages as a remedy should be determined at a speedy trial. The Claimants said that the question of breach ought to be decided at the same time.

ii) The parties agreed (after some discussion) that the speedy trial ought to be set down with a time estimate of 7 days starting on 14 November 2016. That has now been done. Directions establishing a timetable for pleadings, disclosure and other preparatory steps have also been agreed and made.

iii) The Defendants agreed that, pending the speedy trial, they would need to give undertakings. There was disagreement as to their precise form. (The court cannot, obviously, require anyone to give an undertaking in any particular form. But it was agreed between the parties that I would consider what orders would be made if no undertakings had been offered and that the Defendants would give undertakings in that form.)

iv) The Defendants also agreed that, pending my judgment on the disputed issues, they would give somewhat broader undertakings. These were recorded in an order that I approved immediately after the hearing.

7. The issues in dispute were as follows:

i) Should the Court accede to an application on the part of the Defendants and 22 other advisers not presently parties to the claim to add these 22 as additional defendants?

ii) Should the undertakings apply to the "excluded customers" listed at Schedule 3 to the Defendants' draft order?

iii) Are the Claimants entitled to prevent disclosure and require delivery up of its customer lists and any information contained in and derived from them?

iv) Should the Defendants be required to provide witness statements setting out specified details of their conduct since 31 July 2016?

v) Should the issues for determination at the speedy trial include not only the enforceability of the covenants and the adequacy of damages as a remedy but also whether the Defendants have breached the covenants?

8. Much of the argument on both sides was directed towards establishing whose fault it was that this hearing was necessary. Reference was made to the pre-action correspondence. As I made clear at the hearing, the only possible relevance of that was as to costs. The costs of a hearing such as this would usually be reserved to the judge hearing the speedy trial and, having seen this judgment in draft, both sides agreed that this is the proper approach. My present task is simply to resolve the five issues in dispute. I propose to do so without setting out any more of the background to this case than absolutely necessary.

(1) The application to add additional defendants

9. Mr Chris Quinn pressed his application to join 22 additional defendants on behalf of the five existing Defendants and also the 22. In his skeleton argument he said this at paragraphs 19-20:

"The court should exercise its power under CPR r. 19.2(2)(a) and (4) to add the 22 proposed additional defendants to the proceedings. Each of them wants to secure a finding that the restrictive covenants are unenforceable. Each wants to be in a position to influence the course of these proceedings by being in a position to instruct solicitors and counsel who are acting for the 5 defendants. Some may even have a far greater financial interest in the outcome of the proceedings than those 5. Further all but 1 of the 22 are now having monies due to them withheld by C as well. In respect of the 5, presumably the Particulars of Claim will seek a set off in respect of these withheld sums. The right to that set-off will raise exactly the same issue for determination as will exist in respect of the 22. The 22 should not have to bring fresh proceedings to recover monies due to them."

10. Mr Quinn made clear at the hearing that he was not suggesting that the Claimants should give undertakings in damages to the 22 if there was no application for injunctive relief against them. He submitted, however, that it made sense for all issues between the Claimants and those advisers with whom they were in dispute to be determined together.
11. Mr de Marco opposed the joinder of the 22. The Claimants, he said, did not wish to sue them. There was insufficient evidence that they had breached their covenants, although they had indicated through their solicitor that they would do so. If they wished to seek declaratory relief or an order for payment of the sums retained, they should issue claims against the Claimants, who would consent to those claims being determined with the Claimants' claims against the five existing Defendants.
12. In my judgment, it is not appropriate to order that the 22 be joined as additional defendants.
13. First, there is no general obligation on a claimant in private law proceedings to join as a defendant every person who is or may be affected by the issues determined by the claim. A claimant seeking to enforce a contract to which several individuals are party may decide, for his own reasons – tactical, evidential or otherwise – to bring a claim against some of those individuals and not others. He does not have to justify his decision. If the claimant decides not to bring a claim against particular individuals, those individuals will not be bound by the judgment (although another court may choose to follow any legal ruling contained in it).
14. Secondly, although (as I have said) a claimant does not have to justify his decision not to bring a claim against a particular individual, there is in this case an obviously compelling reason: the Claimants do not have sufficient evidence that the 22 have breached their contracts. It is difficult to see how it could be appropriate to add the 22 as defendants in those circumstances.
15. Thirdly, Mr de Marco made clear at the hearing, that: (i) if at the speedy trial the court finds the covenants unenforceable, the Claimants will treat themselves as bound by that as against the 22 (as well as the five Defendants) and pay back any money retained; but (ii) if the court finds the covenants enforceable against the Defendants, the Claimants will not seek to argue that that finding binds the 22. This makes it impossible to suggest that it is unfair to the 22 for them to be left out of the present litigation.
16. Fourthly, and in any event, there is – as Mr de Marco submitted – nothing to stop any of the 22 from issuing his own claim against the Claimant. If such claims were issued, they could be determined with the present proceedings (though consideration would have to be given to which issues were suitable for determination at the speedy trial). The 22 are in the enviable position of being able to decide whether to issue such claims now or simply sit back and await the result of the speedy trial. They can then take the benefit of any ruling in their favour whilst not being bound by any ruling against them.
17. The application to join the 22 as additional defendants will therefore be dismissed.

(2) The "excluded customers"

18. The First and Fourth Defendants seek to exclude from the undertakings certain individual clients, whose names are set out in the evidence. There is no need for their names to appear in a public judgment. Their details, and the reasons why it is said that they should be excluded from the scope of the undertakings, are set out in paragraphs 64-70 of the witness statement of Susan Hopcraft, filed on behalf of the Defendants.
19. The First Defendant's list extends to one couple who require advice on unrestricted market products. The Fourth Defendant's list consists of: (i) an individual whose husband died recently and requires independent advice; (ii) an individual who requires a review of his pension regarding the level of income and tax efficiency; (iii) an individual who has money to invest and only wishes to deal with the Fourth Defendant; (iv) a vulnerable client who is in need of help and regular contact; and (v) a couple who need pensions advice, one of whom is selling his business.
20. Mr de Marco said at paragraph 60 of his skeleton argument that the justification given by Ms Hopcraft is "wholly inadequate and hopelessly vague" and that, in respect of each of the individuals mentioned, the services the Defendant says the client needs are ones that could be provided by the Affinity.
21. In my judgment, the evidence filed on behalf of the Defendants on this issue (and I include in this the Defendants' solicitors' letter of 26 August 2016) does not justify excluding from the scope of the undertakings the individuals set out in Schedule 3 to the Defendants' draft order.
22. It is accepted by the Defendants that they must give undertakings pending the speedy trial. That being so, it is for them to show that the application of the balance of convenience leads to the exclusion of any particular client from the scope of those undertakings.
23. The Defendants say that the terms of their authorisation to give advice on regulated investments means that they can advise on a wider range of products than WAW. For the Claimants, Mr Hutchison, who is a director of Affinity and Affinity Connect and also a solicitor with experience in the life assurance, pensions and wealth management industry, says at paragraph 13 of his second witness statement that WAW "is no more restricted than Affinity ever was in taking advantage of investment opportunities for customers". There is clearly a dispute here, which may or may not have to be resolved at trial. If I had to reach a view at this stage about whether any of the individuals identified in Schedule 3 to the Defendants' draft order required advice that Affinity was not now (following its acquisition by WAW) in a position to give, I would need much fuller details of the products on which it is said these individual require advice and a much fuller explanation of why the Defendants say that Affinity cannot now advise on those products. In the absence of those details, I agree with Mr de Marco that the Defendants have not shown that the need for advice on particular products makes it inappropriate for any undertakings to apply to them.
24. As to the other reasons given by the Defendants, I accept in principle that – if it could be shown that a particular vulnerable client had developed a close and trusting relationship with a particular adviser and would be unwilling to accept advice from anyone else – that could constitute a reason for the exclusion of that client from the scope of the undertakings. But the mere fact that a client is "vulnerable" does not, on its own, supply a reason to exclude that client from the scope of the undertakings. There is no evidence that Affinity is unable, after its acquisition by WAW, to provide advice to vulnerable clients. Ms Hopcraft says at paragraph 70.3.3 of her witness statement that the third client identified by the Fourth Defendant "only wishes to deal with" him. No further details are given. That is not enough, on its own, to justify excluding this client from the scope of the undertakings. The covenants would be deprived of much of their effect if the client's desire to continue to deal with his or her existing adviser were, in and of itself, enough to render them unenforceable pending trial.
25. The individuals identified at Schedule 3 to the Defendants' draft order will not, therefore, be excluded from the scope of the undertakings.

(3) Are the Claimants entitled to prevent disclosure and require delivery up of its Confidential Customer Lists and any information derived from them?

26. The Claimants, at paragraphs 3 and 4 of their draft order, sought the following relief (which Mr Quinn pointed out had not been sought in the same form in pre-action correspondence):

"3. The Defendants shall not disclose to any third party or use any of the Claimants' Confidential Customer Lists.

Delivery-up

4. The Defendants shall, by 4pm on Friday 9^th September 2016, deliver up to the Claimants any of its Confidential Customer Lists in their possession or control and shall delete or destroy any copy of the same."

27. "Confidential Customer Lists" was defined in Schedule 2 to the Claimants' draft order as:

"The highly confidential customer lists which are stored on the Claimants' Quickbase database and in relation to which the Defendants had access whilst engaged to work for the Claimants, including any information contained within and derived from those lists."

28. The Defendants' position, as explained to me during the hearing, was that the principal cause of dispute – and the reason it had been necessary to argue about this aspect of the Claimant's draft order – was the inclusion in the definition of the words "including any information contained within and derived from those lists", which they considered vague, indeterminate and liable to give rise to difficulties in interpretation. The Defendants also submitted that, because the consultancy agreements contained no express post-termination confidentiality clause, the customer lists could be the subject of interim relief if and only if they were entitled to protection as "trade secrets" as that term was explained by the Court of Appeal in Faccenda Chicken Ltd v Fowler [1987] 1 Ch 117; and the lists did not on any view satisfy the definition there.
29. I take this latter point first. In Faccenda Chicken, Goulding J at first instance identified three categories of information. These are set out in an extract from his judgment quoted by the Court of Appeal at 133E-134C:

"First there is information which, because of its trivial character or its easy accessibility from public sources of information, cannot be regarded by reasonable persons or by the law as confidential at all. The servant is at liberty to impart it during his service or afterwards to anyone he pleases, even his master's competitor. An example might be a published patent specification well known to people in the industry concerned... Secondly, there is information which the servant must treat as confidential (either because he is expressly told it is confidential, or because from its character it obviously is so) but which once learned necessarily remains in the servant's head and becomes part of his own skill and knowledge applied in the course of his master's business. So long as the employment continues, he cannot otherwise use or disclose such information without infidelity and therefore breach of contract. But when he is no longer in the same service, the law allows him to use his full skill and knowledge for his own benefit in competition with his former master; and... there seems to be no established distinction between the use of such information where its possessor trades as a principal, and where he enters the employment of a new master, even though the latter case involves disclosure and not mere personal use of the information… Thirdly, however, there are, to my mind, specific trade secrets so confidential that, even though they may necessarily have been learned by heart and even though the servant may have left the service, they cannot lawfully be used for anyone's benefit but the master's…"

30. The Court of Appeal held that the implied term that imposes an obligation on the employee after termination protects only material in this third category: see at 136B. In order to tell whether information fell into the second or third category, "it is necessary to consider all the circumstances of the case", including (see at 137C-D):

"(a) The nature of the employment. Thus employment in a capacity where 'confidential' material is habitually handled may impose a high obligation of confidentiality because the employee can be expected to realise its sensitive nature to a greater extent than if he were employed in a capacity where such material reaches him only occasionally or incidentally.

(b) The nature of the information itself. In our judgment the information will only be protected if it can properly be classed as a trade secret or as material which, while not properly to be described as a trade secret, is in all the circumstances of such a highly confidential nature as to require the same protection as a trade secret eo nomine."

31. These passages were considered again by the Court of Appeal in Lansing Linde Ltd v Kerr [1991] 1 WLR 251. Staughton LJ (with whom Butler-Sloss LJ agreed) held at 260B-C as follows:

"[Counsel for the defendant] suggested that a trade secret is information which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret. I would add first, that it must be information used in a trade or business, and secondly that the owner must limit the dissemination of it or at least not encourage or permit widespread publication.

That is my preferred view of the meaning of trade secret in this context. It can thus include not only secret formulae for the manufacture of products but also, in an appropriate case, the names of customers and the goods which they buy. But some may say that not all such information is a trade secret in ordinary parlance. If that view be adopted, the class of information which can justify a restriction is wider, and extends to some confidential information which would not ordinarily be called a trade secret."

32. In Norbrook Laboratories (GB) Ltd v Adair [2008] EWHC 978 (QB), Elizabeth Slade QC (sitting as a Deputy High Court Judge) applied Lansing Linde to reach a finding that customer lists were entitled to protection after termination of employment: see at [42]-[50] and [63].
33. These authorities make clear that customer lists can, in an appropriate case, be entitled to protection as (or as analogous to) "trade secrets". Whether the customer lists in this case fall into that category is a question for trial. At this stage, for the purposes of interim relief, all that is required is "a serious question to be tried": see American Cyanamid v Ethicon Ltd [1975] AC 396, per Lord Diplock at 407G.
34. In the course of argument (and without objection from Mr Quinn), Mr de Marco showed me a copy of an extract from the Quickbase database on which Affinity kept details of its customers. Mr de Marco submitted that Affinity's customers were "its capital"; that Affinity maintained the confidentiality of the database by ensuring that access to the database was restricted, so that advisers could only access the details of their own clients; that no access was permitted to any adviser after termination of his contract; and that the information in the database would be very useful to any competitor.
35. It is possible that Mr Quinn may succeed at trial in persuading the court that, notwithstanding these points, the information in the database did not fall into the third category identified in Faccenda Chicken. But on the authorities (as set out above), Mr de Marco's points seem to me to reflect factors of the kind that would be (or would arguably be) relevant to the question whether it fell into that category. On any view, there is in my judgment a serious question to be tried.
36. Mr Quinn's complaint about the vagueness or indeterminacy of the words "including any information contained within and derived from those lists" raises a separate issue. He illustrated the supposed difficulty with an example. Suppose that an adviser contacted a client who was also a relative or friend. Would he then be in breach of the undertaking? Would it matter whether he had used the customer list to remind himself of the friend or relative's contact details?
37. In my judgment, there is an air of unreality about this objection. No concrete example was given of any actual customer in respect of whom the undertakings sought by the Claimants would give rise to any difficulty. If there is a concern about whether the undertaking would cover information that is contained in the customer lists, but which a particular Defendant also has from a separate source, that can be adequately addressed by varying the wording of the undertaking so as to make clear that it is to apply only to information that is both (i) contained in and (ii) derived from the customer lists. An undertaking in those terms would cover (for example) screen shots of the customer lists or an address book in which details from those lists had been recorded. But it would not prevent an adviser from calling his friend or relative just because that friend or relative also happened to be a customer. In that case, the contact details for the friend or relative would not be "derived from" (even though they would be "contained in") the customer list.
38. An undertaking in these terms would be sufficiently clear to be capable of enforcement. In the unlikely event that a problem were to arise for a Defendant in relation to any customer during the period between the date of this judgment and the start of the trial (under 2 months from now), it would be open to the Defendant to invite the Claimants to consent to a limited discharge of the undertaking; a consent order could then be made. If it were really necessary to revert to the court to determine the issue, that could be done. I do not encourage that course.
39. Finally, Mr Quinn disputed that there was sufficient evidence of breach to justify interim relief. I have considered carefully paragraphs 77 to 87 of Mr Hutchinson's first witness statement, headed "Evidence of breach". In those paragraphs, Mr Hutchinson details a series of conversations with Affinity clients from which he invites the inference that the Defendants have breached their covenants. Mr de Marco says that these instances also show that the Defendants have used the confidential customer lists, or information derived from them, after termination. In some cases, it is unclear from this evidence whether the Defendant spoke to the client before or after termination. But I am satisfied that the evidence, combined with the Defendants' response to pre-action correspondence, shows that there is at least a "serious question to be tried" as to whether the Defendants have used this information after termination.
40. The undertakings should, therefore, be in the form proposed by the Claimants, with the amendment set out in paragraph 37 above.

(4) Should the Defendants be required to provide witness statements setting out specified details of their conduct since 31 July 2016?

41. Paragraph 5 of the draft order sought by the Claimants is as follows:

"By 4pm on Tuesday 23 September 2016 each of the Defendants shall provide an Affidavit setting out details of:

(a) Each and every Customer he has solicited or canvassed the custom of, or dealt with, including details of the date of such activity, how the contact came about, any commissions earned as a result of the same, and full disclosure of all relevant documents and communications;

(b) Each and every Restricted Representative he has solicited or attempted to entice away from the Firm, or employed or offered to employ or enter into partnership with, including details of the date of such activity, how the contact came about and full disclosure of all relevant documents and communications;

(c) Each and every disclosure or other use of the Claimants' Confidential Customer Lists he has made including to whom the disclosure was made and/or what use was made of the Lists and full disclosure of all relevant documents and communications;

(d) An undertaking that he has returned and destroyed all copies of the Claimants' Confidential Customer Lists in his possession or control."

42. Mr de Marco accepted during the course of the hearing that the details sought could be restricted to any soliciting, canvassing, disclosing etc. occurring after 31 July 2016. He also accepted that it would be sufficient for the details to be given in witness statements rather than affidavits.
43. Mr Quinn resists this provision, relying on the decision of Mackay J in Aon v JCT Reinsurance Brokers Ltd [2009] EWHC 3448 (QB). At paragraph 5 of his skeleton argument, he said this:

"Either WAW has evidence of breach or it does not. It is not for the 5 Ds to present WAW with evidence of breach at this stage, although it is readily accepted that should WAW succeed at the speedy trial in establishing that the restrictive covenants are enforceable then Ds would be bound to disclose evidence as to the same."

44. In the Aon case, an insurance broking company brought proceedings against former and current employees and directors who had gone to a competitor. Aon alleged breach of various contractual and fiduciary duties and misuse of confidential information. Interim relief had been granted. The question before Mackay J was whether to grant a wide-ranging order requiring the defendants to file and serve affidavits setting out what they had done in terms of soliciting clients and staff and disclosing confidential information. Mackay J noted at [18] that applications for orders of this kind are fact sensitive. Having reviewed the authorities at [18]-[23], he went on at [24] to observe that a disclosure order of the kind sought was "on any view an exceptional and not a routine order, one which should not be made as a matter of course where prohibitory injunctions of the type found elsewhere in this order are to be found".
45. At [26], Mackay J set out a number of factors relevant to the exercise of his discretion. The first was the "inability of the claimant to plead his case without this relief". As to that, he noted that substantial evidence had already been filed. This and the other documents before him suggested that the case could be pleaded now. This meant that there was no reason to subvert the normal order of adversarial proceedings, i.e. that the cases should be pleaded first, and disclosure given later. This was so even though the claimant had shown a good arguable case sufficient to obtain injunctive relief. The second factor was the width of the order sought. The judge concluded that it amounted to "standard disclosure in full in a non-pleaded case". It was, he held, "the very antithesis of the focussed and proportionate approach that might have made such an application more palatable". The third factor was the saving of costs. There would be no saving, the judge found, because the provision of the information sought was likely to increase interlocutory activity rather than decrease it. Fourth, it was necessary to consider the adequacy of damages as a remedy. Fifth, it was relevant to consider the need to take pragmatic steps to protect the business from future loss. The judge held that the business could already take such steps without the disclosure sought. Sixth was the need to police the order. On this, the judge held that the current protection afforded by the order was sufficient. Having considered these matters, the judge refused to exercise his discretion to grant the order sought.
46. I have applied Mackay J's six factors to this case. My conclusions are as follows.
47. First, as in Aon, it cannot be said that the Claimants need this order to allow them to plead their case. As Mr Quinn submitted, they agreed to file Particulars of Claim before the date on which the Defendants would have been required to file witness statements if the order were granted. This is not, as it seems to me, a mere forensic point. It reflects that fact that they have an arguable case of breach, set out in Mr Hutchinson's witness statement in support of their claim for interim injunctive relief. So I accept Mr Quinn's submission that the application of the first Aon factor militates against the grant of this order. It is an important factor, though not – as Mr Quinn was inclined at one stage to suggest – determinative.
48. The second factor is the width of the relief sought. The order sought is not particularly wide or onerous, at least if limited (as Mr de Marco conceded it should be) to conduct post-dating 31 July 2016. Having said that, it would plainly involve some additional effort in the context of a procedural timetable leading to a speedy trial that is already very tight.
49. The third factor is saving of cost. As in Aon, I do not consider that the grant of the order would be likely to save costs in any significant way. As noted above, the statements would on any view have to be filed after the Particulars of Claim, so if the statements disclosed further breaches of which the Claimants were unaware, the Particulars would have to be amended anyway. Furthermore, the current timetable provides for standard disclosure by list by 12 October 2016. So, any documentary evidence relevant to the matters on which disclosure is sought will have to be disclosed in about a month. I doubt that there is any particular procedural advantage to be gained from the Claimants having this material now.
50. The fourth factor – the adequacy of damages as a remedy – seems to me to be neutral. It is, as both parties agree, one of the issues that will have to be resolved at the speedy trial. I am in no position to reach any clear view about it.
51. The fifth factor – the need to protect the business from further damage – was strongly relied upon by Mr de Marco. He submitted that the Claimants needed to know which customers had been solicited so that steps could be taken to contact them to repair the damage caused by the alleged breaches. For my part, I do not accept that the Claimants need the information sought in order to take "pragmatic steps" to protect their business. The Claimants have chosen to bring proceedings against only five Defendants. They have the contact details of each of the Defendants' clients. There is nothing to stop them from contacting these clients. Indeed, it may be suggested that this would be a sensible precautionary step. It may be noted that, in the Aon case, the judge thought that there were "steps of a commercial nature" that the claimant could take to bind clients. In that case, there were up to 250 companies for whose business the claimant and defendant would be in competition. There is no reason why the same approach should not apply here.
52. Sixth, as in Aon, there is no reason to suppose that the undertakings given will offer insufficient protection to the Claimants. There is no evidence that the Defendants intend or are likely to breach their undertakings.
53. For these reasons, I do not consider it appropriate in the exercise of my discretion to require the Defendants at this stage to provide the information sought in paragraph 5 of the Claimants' draft order.

(5) Should the issues for determination at the speedy trial include not only the enforceability of the covenants and the adequacy of damages as a remedy but also whether the Defendants have breached the covenants?

54. As I have indicated, the speedy trial has now been set down to start on 14 November 2016. The time estimate is 7 days. Both parties agreed that this would be sufficient to determine (i) the enforceability of the covenants; (ii) whether the covenants were breached; and (iii) the adequacy of damages as a remedy.
55. Nonetheless, Mr Quinn submits that the speedy trial should be limited to issues (i) and (iii) because the resolution of issue (ii) will involve a lengthy and fact-specific exercise, which would be unnecessary if the Claimants do not establish that the restrictive covenants are unenforceable. This was a course that he said had been followed in other cases involving similar allegations.
56. Whatever may have been done in other cases, given that it is now common ground that all three issues can be dealt with in 7 days in November 2016, the arguments for resolving all these issues together are overwhelming. It is of course true that issue (ii) does not strictly arise if issue (i) is determined in the Defendants' favour. But the same is true of issue (iii), which the Defendants accept should be dealt with together with issue (i). If the judge resolves issue (i) in the Defendants' favour, he or she could (conceivably) regard that issue as so clear that it is not necessary to resolve the other issues. On the other hand, he or she might decide it appropriate to resolve issues (ii) and (iii) anyway, in case another court took a different view. At this stage, there is an obvious advantage in setting directions that allow maximum flexibility, so that issue (ii) can be determined if the judge considers it necessary or appropriate to do so.
57. I also have a real doubt about how, on the facts of this case, it would be possible to resolve issue (iii) without first resolving issue (ii). There may be some cases where the adequacy of damages can be determined in principle before the question of breach. But in this case, the number and nature of the breaches (if any) that the Defendants are found to have committed is likely to be material to the question whether damages would be an adequate remedy.
58. The speedy trial will, therefore, deal with all three of the issues set out in paragraph 54 above.

Other matters

59. There were other matters (in particular as to the Claimant's undertaking in damages and the cross-undertakings as to non-disparagement) on which the parties joined issue on paper. But by the time of the hearing they had reached agreement on these matters, so there is no need for me to say anything about them.