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Wrongful diversion of business and the availability of springboard injunctions

Jin Ooi

In breach of express confidentiality obligations in their employment contracts, the defendants in Aquinas v Miller wrongfully diverted business from Aquinas, their former employer, to their newly set up competing business. Was Aquinas entitled to a springboard injunction?

The typical purpose of springboard relief is to deprive a defendant of any head start of having, earlier, acted unlawfully through the improper use of the claimant’s information (c.f. to restrain an act which is itself unlawful).

In considering the availability of springboard relief, the Judge recited the guidelines in QBE v Dymoke:

  • The advantage which the defendants have built up because of their unlawful acts must still be being enjoyed.
  • Those unlawful acts extend to breaches of contractual and fiduciary duties, as well as breaches of confidence.
  • The purpose is to restore the parties to the competitive position they would have been in but for the misconduct.
  • Springboard relief will not be granted where a monetary award would have provided an adequate remedy.
  • The effect of the unlawful activity on the claimant and the extent of the illegitimate advantage obtained by the defendants are to be considered, but the egregiousness of the breaches is irrelevant.

In the particular circumstances of this case, the defendants did obtain an unfair advantage, but it was modest and the breaches had stopped since the grant of an earlier interim injunction which restrained further use or disclosure of Aquinas’ confidential information. The earlier order had in fact already effectively restrained the defendants from what would otherwise have been lawful trading. The Judge was satisfied that any head start they had illegitimately obtained (in the region of 6 weeks) had now gone, and the future course of the defendants’ business will not be materially different to the course it would have taken had they acted lawfully throughout. As such no springboard relief was granted.

Comments published on Compact Contract do not necessarily reflect the views of Allen & Overy or its clients.

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