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High Court Orders Destruction Of Confidential Information On Ex-Employees' Computers

The High Court has granted an interim injunction to an insurance broker, ordering the destruction of any confidential information belonging to the insurance broker on the computers of some of its ex-employees and their new employer.

Arthur J. Gallagher Services (UK) Limited (Gallagher) provide insurance brokerage services. Mr Skriptchenko worked for Gallagher until his employment was terminated in July 2014. In or around February 2015, he started work for Portsoken Limited, another insurance broker.

Gallagher suspected that Mr Skriptchenko and/or his new employer, Portsoken, were making use of Gallagher’s confidential information. It transpired that Mr Skriptchenko had taken a client list from Gallagher and that Portsoken had used that information to approach over 300 of Gallagher's clients.

Gallagher applied to the High Court for an interim injunction to order Mr Skriptchenko to hand over all of his electronic devices for inspection. Gallagher also requested that Portsoken permit Gallagher's forensic IT expert to access to all of Portsoken’s computer systems to search for confidential information belonging to Gallagher. The interim injunction was granted.

Upon inspection of the defendants’ computer systems, it was discovered that the Mr Skriptchenko, along with directors and employees of Portsoken, were making use of Gallagher's confidential information and were aware that they were breaching confidentiality obligations in doing so.

Gallagher applied for a further interim injunction to allow it to delete all of its confidential information which was found on the defendants’ computer systems. The defendants argued that it was unprecedented and invasive for an interim injunction to be granted allowing destruction of information on the defendants’ computers. The injunction was granted.

It is notoriously difficult to successfully apply for an interim injunction, because of the draconian nature of the order. The Court in this case could find no previous legal authority for ordering the destruction of relevant material, but the injunction was granted because the defendants had admitted to taking and using Gallagher’s confidential information and the Court found that they had showed a "high degree of subterfuge".

This case will be of note to businesses which risk suffering substantial losses when employees join a new company and take confidential information with them. Such businesses can help to protect themselves by ensuring that they have appropriate and carefully-worded restrictive covenants contained within their employees’ contracts of employment. 

This bulletin is for general guidance purposes only and should not be used for any other purpose.

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