The defendant employee had been the Logistics Centre Manager for the applicant and worked on a significant customer service agreement for an automotive parts firm who used the applicant for its distribution. She applied, and was offered, a job at this customer, who had recently been acquired and were attempting to renegotiate their agreement.  Following her resignation, the applicant initiated proceedings seeking to restrain  breach of confidential information and trade secrets and an order preventing the defendant from playing any part in the agreement. In the High Court the claim for an interim injunction was dismissed, as the judge felt that the defendant should not be oppressed by the litigation and that it was unlikely that the applicant would establish that the relationship between themselves and the defendant was one in which it would "be equitable to cast upon the defendant the burden of showing that [the defendant and her new employers] have taken effective measures to ensure that no disclosure will occur. No court has ever made such a finding in a case of an employer against an employee." However an application for permission to appeal was granted as in theory claimant could argue for Bolkiah relief.

In this appeal, Stanley Burnton LJ concentrates principally on the claim that the employee was a fiduciary and therefore Bolkiah relief was available against her to prevent her using confidential information. He notes that there was nothing in the Bolkiah judgment to justify extending such relief to the ordinary relationship of employer and employee and that although the respondent did owe certain fiduciary duties "that did not make her a fiduciary in the sense that a trustee, or a solicitor, is to his beneficiary or client". He then observes that the claimant had not required a covenant to prevent the respondent from working for a customer or competitor though they had requested a confidentiality agreement. He then rejects the judge's decision that the confidentiality agreement should not be enforced because it was of indeterminate duration but instead rejects it because the claimant had not established an arguable case that the respondent had broken, or intended to break, the confidentiality agreement. Finally he notes that the conduct if the claimant

"in deciding to bring proceedings against the respondent, without any prior complaint or attempt to see whether there was the basis of an amicable solution to its concerns, as wholly inappropriate."
_________________

Neutral Citation Number: [2012] EWCA Civ 156

Case No: A2/2011/3123

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

MR JUSTICE TUGENDHAT

[2011] EWHC 3154 (QB)

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 21/02/2012

Before :

LORD JUSTICE MAURICE KAY, LORD JUSTICE STANLEY BURNTON, and LORD JUSTICE LEWISON

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Between :

CATERPILLAR LOGISTICS SERVICES (UK) LIMITED (Appellant)

- and -

PAULA HUESCA de CREAN (Respondent)

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Selwyn Bloch QC and Gavin Mansfield (instructed by Walker Morris Solicitors) for the Appellant

Edward Pepperall (instructed by Keelys) for the Respondent

Hearing date: 31 January 2012

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Judgment

Lord Justice Stanley Burnton :

Introduction

1. This is an appeal by Caterpillar Logistics Services (UK) Limited against the order made by Tugendhat J dated 2 December 2011 dismissing its claim for injunctions and damages against Mrs Paula Huesca de Crean, its former employee, pursuant to CPR rule 3.4(2)(a) and (b). The appellant's claim is for injunctive relief to prevent the respondent, its former employee, from misusing its confidential information. I shall refer to the relief sought in detail below.

1. The judge's order was made after he had handed down judgment on the appellant's application for interim injunctions refusing relief. He held that it followed from his judgment refusing interim relief that the claim had no real prospect of success, and he therefore dismissed it.

1. On this appeal, the appellant seeks to set aside the judge's order, and orders for interim injunctions and a speedy trial.

The facts

1. My account of the essential facts is largely based on the judgment of Tugendhat J.

1. The appellant ("CLS") is a company incorporated in the UK. It is a part of the Caterpillar group of companies, best known for the manufacture of heavy earth moving equipment. CLS provides logistics services to other divisions or companies in the same group, and to third parties. It is by itself a very substantial business. The financial statements for the year ending 31 December 2009 record that it employed over 1300 employees (507 of them salaried) and had a turnover of just under £170m.

1. Quinton Hazell Automotive Limited ("QH") is a supplier of automotive parts and an important customer of CLS, in particular at the Hinckley site. There is a ten-year agreement in writing between CLS and QH dated 5 May 2006, known as the Logistics Services Agreement ("the LSA"). It is for the provision by CLS to QH of logistics services at the Hinckley site. QH has premises of its own at the same site. Its parent company is Klarius Group Ltd ("Klarius"), which also carries on business in the supply of automotive parts.

1. The respondent, Mrs Huesca de Crean, was one of CLS's 507 salaried employees until the expiry of the one month's notice she gave to CLS on 10 August 2011. She has worked for over 16 years in the automotive industry. She worked for the importer of Rover and Land Rover in Buenos Aires. She was then offered, and took up, a position with Rover International in this country. In 2005, she joined CLS for the Xpart division, managing MG Rover parts. She is an accountant and it was in that capacity that she was employed in 2005 to work with the then Business Manager of CLS. She then became the Account Manager in CLS's Land Rover commercial team.

1. In about late April or early May 2011 the respondent was promoted to the position of Logistics Centre Manager ("LCM") at the site operated by CLS in Hinckley, Leicestershire. The terms of her employment were set out in a letter dated 15 July 2011. She had been paid just over £50,000 in her previous position, and was due to receive a pay rise of about 10 per cent in her new position with CLS. She was a middle manager.

1. Marianne Brown, the commercial director of CLS, states that as LCM the respondent was responsible for the management of all aspects of operations to ensure service levels and financial targets were achieved; for all employee-related activities at the facility; preparation of budget and maintenance objectives and developing the facility in accordance with CLS's objectives. In practice these were all operational aspects of the LSA. This involved day to day management of 124 employees engaged in providing services to QH. The inventory has a value of some $15m and by September 2011 there were over 1.6m outbound lines for QH. The manager to whom the respondent reported was Dean Ellis, the General Operations Manager. In addition to her usual operational role, the respondent was involved with strategic commercial issues relating to the LSA.

1. The respondent's competency assessments throughout her employment with CLS were at the highest level, such that only about 5 per cent of the employees of Caterpillar Inc achieve the rating she achieved. Her manager's assessment while she was a commercial manager included that she "interacts openly and honestly in challenging situations. [She] consistently acts as a role model for Caterpillar Values in Action based on Integrity, Teamwork, Excellence and Commitment… [She] models openness and honesty, generates trust by showing personal humility". The respondent states that her integrity is a matter of great importance to her. She also states that the knowledge of the automotive and afterparts trade she has gained over 16 years is part of her set of skills and know-how which she uses to earn her living.

1. There is no restrictive covenant in the respondent's contract of employment. The only agreement relating to confidential information is a document headed "Confidentiality Agreement" which was signed by her on 31 May 2005. By it she agreed to the following:

"As a result of my employment by [CLS], I may develop obtain or learn about trade secrets or confidential information which is the property of [CLS] or others that [CLS] has contact with. I will not use any of such trade secrets of [sic] confidential information for myself or others, or divulge them to others, either during or after my employment. The terms 'trade secrets' and 'confidential information' include processes, methods, techniques, systems, formulae, drawings, photographs, machine readable records, patterns, models, devices, compilations, customer and dealer data, internal financial information or any information of whatever nature which gives [CLS] an opportunity to gain an advantage over its competitors who do not know or use it; but I understand the terms do not include knowledge, skills, or information common to my trade or profession."

1. The LSA was originally made between CLS on the one part and QH and its then parent company Affinia Group Inc on the other. On 24 November 2009, when Klarius was considering acquiring CLS, a meeting was held between Klarius and CLS to discuss what might happen following the takeover which in fact occurred. It is evident from the minutes of the meeting that Klarius was intent on reducing its costs under the agreement. The options that Klarius said it would consider included CLS offering a cost reduction, Klarius allowing QH to become insolvent, and Klarius pushing additional volumes through CLS until it "came creeping for a new contract". At a meeting in March 2010, Klarius and CLS discussed so-called joint optimisation projects, the object of which was to improve the efficiency and reduce the costs of the service. Klarius asked for CLS's profit and loss account. CLS refused to provide it.

1. Exhibit G to the LSA sets out what are referred to as Assumptions. They are daily and yearly quantities of lines to be handled by CLS, a figure for annual UK parts revenue for products to be shipped by CLS, and the areas of storage space and office space to be provided by it and charged to QH. Clause 15.9 of the LSA is an unusual provision for the possible amendment of the agreement if the Assumptions become materially incorrect, with arbitration under the LCIA rules if the parties do not agree on the amendments necessary "to enable [CLS] to continue to provide the Services under no more onerous circumstances than would have applied if such Assumptions were correct".

1. Parenthetically, I find it difficult to see how the parties to the LSA could negotiate a possible amendment to its terms so that the Services are provided by CLS "under no more onerous circumstances than would have applied if such Assumptions were correct" without disclosure by CLS of what would otherwise be confidential information as to its costs, and even more difficult to see how the arbitration provided for by the agreement could be conducted without such disclosure. I note also that in January 2009, Brad Chambers, described as EAME Vice President of Commercial, indicated that he would work with QH to find cost reductions if it was possible to do so, although CLS's evidence is that "This statement was merely intended as a statement of commercial goodwill."

1. On 23 December 2010, Klarius wrote to CLS formally invoking the machinery in clause 15.9. The letter set out what Klarius said to be the actual quantities that differed from those in Appendix G to the LSA. The review under clause 15.9 was deferred while QH and CLS worked together to identify efficiencies, and in a letter of 18 March 2011 CLS stated that £300,000 of savings had already been targeted. In April 2011, CLS stated that it would proceed with its review of the Assumptions. On 23 June 2011 the respondent participated in a meeting between CLS and Klarius/QH to discuss possible efficiencies and cost savings. The formal review of the Assumptions and any modifications to the terms of the LSA has not been completed. For the purposes of this appeal, I assume that relations between CLS and Klarius/QH remain contentious.

1. On 4 August 2011 the respondent was interviewed for a position with QH which had been publicly advertised. She was interviewed again on 9 August and late in the evening of 10 August she was offered the position of General Manager Hinckley. She accepted the offer.

1. The respondent last attended for work with the appellant on 10 August 2011. By letter of that date she gave notice of her resignation. She told Mr Ellis, her line manager, that she would be joining QH. It is not suggested that he or anyone else expressed any objection to her doing so prior to CLS's solicitors' letter of 30 August 2011 to which I refer below. The respondent offered to work out her period of one month's notice in accordance with her contract. She was not required to so. She left for a holiday in Malta on the night of 10 August. On 12 August Mr Ellis telephoned her and told her that CLS had decided that it was best for her not to return to work for it after her holiday.

These proceedings

1. On 30 August 2011, CLS's solicitors wrote to the respondent a seven page letter notifying her that CLS would commence legal proceedings against her. They contended that:

"14 As you must realise, your appointment by Klarius appears to be an attempt by it to secure the same confidential information which CLS has refused to grant Klarius voluntarily…

21 … In effect you will be carrying out a 'mirror image' role in relation to the LSA and or Klarius/CLS relationship and will have put yourself on the opposite side of many of the issues you have previously been dealing with for CLS, presumably even in relation to commercial negotiations…

22 By accepting this role you have already put yourself in a position which directly conflicts with your fiduciary duties to CLS, in that there is an extremely strong likelihood (if not an inevitability) that you will use (even if not disclose) CLS's confidential information to Klarius/[QH]."

1. As the judge pointed out, the letter contains serious allegations of wrongdoing amounting to dishonesty against Klarius/QH (who are not parties to these proceedings). The witness statements served for CLS contain similar allegations, both against Klarius/QH and against Mrs Huesca de Crean herself.

1. The letter set out the confidential information in five paragraphs. There was no reference to any document or other source in which it is said the information is set out. Instead, there are descriptions of the information, including:

"19.1 full and detailed understanding of all current and historic costs for CLS under the LSA including details of revenue and margin, warehouse lease/utilities rates, indirect material rates, transport rates, salary headcount information/systems information…

19.3 privileged legal advice received from CLS' in house legal team and external legal counsel in relation to the LSA and disputes arising out of it, having attended a legal review meeting as recently as June 2011…"

1. The letter did not allege that the respondent had committed any breach of contract or other misconduct. Paragraphs 22 and 23 were as follows:

"22. By accepting this role, you have already put yourself in a position which directly conflicts with your fiduciary duties to CLS, in that there is an extremely strong likelihood (if not an inevitability) that you will use (even if not disclose) CLS confidential information to Klarius/Quinton Hazell, in particular in relation to the categories referred to at paragraph 15 above

1. Any breach by you of your confidentiality obligation may be inadvertent rather than deliberate but regardless of intent it seems inevitable that, in dealing with issues relating to CLS for Klarius, you will have in mind and use confidential information acquired during your employment with CLS. For example CLS cannot conceive of credible situation in which you could have any role in relation to the assumptions review for Klarius/Quinton Hazell without using CLS' confidential information. In saying this, we have regard to the fact that you were not only aware of, but prepared CLS' response to Klarius' demand for an assumption review."

1. Paragraphs 28 to 31 were as follows:

"28. CLS intends to issue legal proceedings against you and apply for an interim injunction restraining you from (mis) using and/or disclosing its confidential information. Any such injunction would be effective until trial of CLS' claim or any further order made by the Court

1. In the event that you wish to avoid the time and costs of the hearing of an interim injunction application then CLS will accept your undertakings given by you to the Court in the form set out at paragraphs 5-6 of the enclosed draft order. In summary, such undertakings require you to agree that you will not:

29.1 Use any confidential information (as defined in the undertakings) belonging to CLS;

29.2 Disclose any confidential information (as defined in the undertakings) belonging to CLS to any other party, including Klarius/Quinton Hazell; and

29.3 Undertake any tasks for Klarius/Quinton Hazell (or any associated company) in which you are directly dealing with CLS or the LSA including certain defined prohibited tasks (as defined in the undertakings)

1. In you are willing to give undertakings to the Court in these terms then you should let us know by 4pm on Friday 2nd September 2011. In order for the court to accept your undertakings it will be necessary for you to obtain independent legal advice. If by this deadline you have not confirmed your willingness to give undertakings to the court in the terms attached then we are instructed to arrange the earliest hearing date thereafter (subject to giving you at least three business days notice) for our client's injunction application.

1. In the alternative, CLS would be prepared to grant you until 4pm on the 7th September 2011 to consider the draft undertakings and take legal advice regarding your position on the basis that you undertake to us in writing within 48 hours of service of this letter that you will not commence employment with Klarius/Quinton Hazell until 19 September 2011."

1. On 7 September the respondent sent a five-page letter in response. The letter began with a justified complaint of inexcusable, and extremely distressing behaviour on the part of the process server. He had served CLS's solicitors' letter upon her personally at her own home in the presence of her two children (aged 8 and 11). He had said: "You could be sent to prison if the order was disobeyed." As the judge said, this was false: there was no order at that stage. The respondent's letter then set out in detail points on which she agreed with CLS and other points which she did not accept. She wrote:

"I absolutely refute the suggestion that my appointment with [QH] is an attempt to obtain confidential information and my appointment has followed a competitive selection process and I have been appointed on the merits of my experience and capability. As I have said, the role of General Manager is much wider than the Logistics Centre Manager and represents a real promotion for me. The idea that I took the job to enable [QH]/Klarius to obtain financial information is utterly ludicrous."

1. The respondent accepted that some information might be confidential to CLS, "including the contents of internal and external legal advice". She accepted that she had been exposed to "some of the details referred to in paras 19.1 to 19.5". She stated that she had no intention of disclosing such information and undertook not to do so. She did not agree that that much of the data referred to by CLS would be easily or unavoidably retained (that is memorised) by her, particularly given her very limited time in the role with CLS. She added:

"The General Manager role I will be undertaking with [QH] is wide ranging and includes the management of customers and over 200 suppliers, CLS being just one of these. I entirely refute that even if I had any fiduciary duty to CLS, I have breached such duty … my role … will not involve me carrying out a 'mirror image' role. Dealing with the LSA is something that is only a minor part of the role and there is not a strong likelihood, never mind an inevitability, that I will use or disclose confidential information in the role."

1. The respondent remarked on the aggressive tone of CLS's letter, and that it had been written nearly three weeks after she had handed in her notice, and without any discussion before hand. She referred to the uncertainty of her position while she was with CLS "in the light of the pending sale of the company to owners as yet unknown". She stated that the undertakings sought were so wide-ranging that they would prejudice the job she had accepted with QH and that "the consequences for my career and more so the financial interests of my family are unthinkable". She wrote that she did not agree that court proceedings were necessary, because she is "a wholly trustworthy person and … CLS should accept my written undertakings". She set these out as follows:

"1. I will not breach the terms of the Confidentiality Agreement.

1. I will not be involved (directly or indirectly) on behalf of Klarius or [QH] with agreeing the current ongoing assumptions review pursuant to the LSA; and

1. I will not be involved within the next 12 months (directly or indirectly) in any formal dispute resolution (including any litigation or arbitration) on behalf of Klarius or [QH] against CLS."

1. CLS's solicitors' letter included a request for the return of the respondent's company laptop. She duly returned it, together with an external hard disk drive that she had bought, and for which no demand had been made, on 9 September 2011. On 21 September CLS's solicitors requested permission for KPMG to examine the external drive. The respondent gave her consent on the following day.

1. On 12 September CLS issued and served the claim form, together with an application notice, and two witness statements, one from Marianne Brown, and one from William Reynolds (the latter relevant only to the ability of CLS to meet any cross undertaking in damages). By the application notice CLS sought relief in four parts, until trial or further order:

(1) an injunction restraining Mrs Huesca de Crean from using or disclosing confidential information;

(2) an order that Mrs Huesca de Crean be prohibited, during the course of her employment with QH from undertaking any task or having any dealing in relation to the LSA or the commercial relationship between CLS, on the one hand, and QH and Klarius, on the other;

(3) delivery up of all documents in whatever form in Mrs Huesca de Crean's possession which belong to CLS or contain confidential information belonging to CLS;

(4) ancillary relief, most notably in the form of an affidavit verifying compliance with the delivery up order and requiring Mrs Huesca de Crean to give certain information as to any use or disclosure of the Confidential Information which she had made, and as to any documents belonging to CLS which she retained.

An injunction of the kind referred to in subparagraph (2) has been referred to as barring-out relief, and I shall so refer to it.

1. On 16 September 2011 the matter came before Eder J. He made a consent order on paper, without hearing argument. It contained undertakings by the respondent to run until the return date. The respondent undertook:

"not in the course of her employment with Klarius/[QH] to undertake any tasks or have any dealings (or supervise others in carrying out such task or dealings) on behalf of Klarius/[QH] in relation to the [LSA] or the commercial relationship between Klarius/[QH] including but not limited to the Prohibited Tasks."

1. The undertakings (and the draft of the order sought before Tugendhat J) contained a definition of Confidential Information in generic terms, but no list of documents or other sources which could be consulted to ascertain precisely what was or was not included. The definition of Confidential Information in the order of 16 September and in the order sought before to make reads:

"Confidential information means (without limitation) all and any confidential information required by the Respondent during her employment with [CLS] in whatever format (whether hard copy or digital) and including but not limited to processes, methods, techniques, systems, formulae, drawings, photographs, machine readable records, patterns, models, devices, compilations, customer and dealer data, internal financial information, legal opinions or advice, performance data, financial information regarding [CLS]'s costs or profit and loss, strategic corporate date, management reports or any information of whatever nature which gives [CLS] an opportunity to obtain an advantage over its competitors who do not know or use it".

1. The definition of Prohibited Tasks is:

"Prohibited Tasks – means any tasks carried out by the Defendant for or on behalf of Klarius or Quinton Hazell whether as employee, consultant, agent or otherwise howsoever relating to the management of the [LSA] or the commercial relationship between Klarius/Quinton Hazell and the Claimant and including (but not limited to) dealing with matters relating to the performance of the Claimant under the [LSA], the legal position in relation to any dispute between the Claimant and Klarius/Quinton Hazell regarding the [LSA], any negotiation relating to an assumptions review between the Applicant and Klarius/Quinton Hazell pursuant to the [LSA], any claim for breach of contract by Klarius/ Quinton Hazell against the Clamant, the review and/or approval of any invoices submitted by CLS pursuant to the [LSA] and any negotiations regarding the payment of CLS's charges, the negotiation of revised commercial terms between the parties and/or the commercial strategy for Klarius/Quinton Hazell in relation to its dealings with the Claimant."

1. Tugendhat J referred to what he regarded as three notable features of the form of order that CLS was seeking:

(1) it did not specify the information that was alleged to be confidential;

(2) the order would prevent the respondent from carrying out the work for her new employer referred to as the Prohibited Tasks (what Mr Bloch referred to as a "barring-out order") without a contractual basis for doing so.

(3) there was no time limit specified for either prohibition.

1. The order sought by CLS on this appeal is in the same form as that considered by Tugendhat J. However, during the hearing before him, CLS produced particulars of the Confidential Information, as follows:

"1. Information concerning the current and historic costs for the CLS under the LSA including, details of, a) warehouse/lease utilities rates and space costs; b) indirect material rates; c) transport rates; d) salary headcount information\systems information.

1. Information concerning CLS's current and historic revenue, pricing and profit margins the LSA.

1. Information regarding the financial and operational performance of CLS under the LSA.

1. Privileged legal advice received from CLS in house legal team and external legal counsel in relation to the LSA and disputes arising out of it .

1. Details of CLS's position in commercial and legal strategy in relation to the Assumptions review carried out in 2011.

1. Details of costs revenue and margin for CLS in relation to the ongoing additional or strategic projects posed by CLS to Klarius in relation to its logistics services including in relation to the proposal for integration of Klarius\QH's European network and the potential combination of Cheadle\Hinckley under the LSA.

1. Information concerning inventory density detail.

1. Information as to operational impact of inventory changes and the impact of inventory changes on CLS's profit margin.

1. The contents of the following documents belonging to CLS:

a) the Defendant's Smart Goals document;

b) Multi Bertqh LSA ASSUMP 20110725;

c) Bertrom Klarius B3 (Cheadle to Desford NBV (V1);

d) PIA Quinton Hazell 2011 0511;

e) Soft Close acct JUL 11 day 3- DE;

f) Klarius Delivery Data Costed file (exhaust);

g) All board packs of CLS;

h) All documents which were saved onto the Defendant's laptop and\or Hard Disk Drive and are listed in Project Tiger Final Appendix 1."

1. This was the first occasion on which these particulars were collected in one place. Mr Pepperall, counsel for the respondent, saw this document for the first time at the end of his submissions to the judge. After a momentary look at the document he stated that the respondent objected to items 7 and 8, but accepted that the other items referred to information which she still recognises, and that she accepts they include confidential information.

1. KPMG's report on their forensic examination of the laptop and external drive showed that there had been considerable copying and deletion of files between 5 August and 9 September 2011. Their findings are summarised in the agreed chronology as follows:

1. CLS regard the respondent's actions with her computer as suspicious. Clearly, if she had copied confidential financial information on to her laptop, and then on to another computer, or had printed it off, their suspicions might well be justified. The respondent has given an explanation for KPMG's findings. To the extent that she mentions verifiable facts, such as an internal CLS email of late July 2011 and a telephone call to a named employee of Land Rover, her account has not been controverted. To my mind, what is significant is the following:

(1) The respondent delivered up the external drive the existence of which was unknown to CLS until she did so.

(2) The vast bulk of the files she accessed related to Xpart and Land Rover, and not to QH. It is not suggested that their contents are relevant to the relationship between QH and CLS.

(3) There is no evidence of any files being copied on to a computer or external drive other than that delivered up to CLS.

(4) There is no evidence of any files being printed off.

1. It seems, therefore, that on the evidence before the Court, the only confidential information that the respondent has is in her head. It is difficult to believe that she has retained in her head spreadsheets and the like containing detailed financial information.

CLS's Particulars of Claim

1. CLS served its Particulars of Claim belatedly on 23 November 2011. Tugendhat J commented adversely on its delay, and I shall refer to it at the end of my judgment. Paragraph 16 is as follows:

"16. The Claimant alleges and avers that the Defendant's employment by QHAL as General Manager at the Hinckley Site will result in the inevitable misuse by the Defendant of the Claimant's confidential information (whether deliberate or inadvertent). Further or in the alternative, it will put the Defendant in an inevitable position of conflict between the duty of fidelity to her new employer and her ongoing duty of confidence to the Claimant."

1. The particulars of the matters relied upon in support of these allegations allege that the respondent has confidential information of use to QH, but there is no allegation of misconduct on her part. The allegation that there may be a deliberate misuse of CLS's confidential information is wholly unsupported by these particulars, and in my judgment should not have been made.

1. Paragraph 17 of the Particulars of Claim pleads the findings of KPMG in relation to the laptop computer and external disk drive and contends that the respondent acted in a manner inconsistent with her duties of fidelity and confidence to CLS and evinced an intention to take and misuse its confidential information. It does not allege that she copied any confidential information on to any other computer or that she has or has retained paper or other copies of computer files containing such information.

1. Thus, CLS has not pleaded any misuse by the respondent of any of its confidential information. It is common ground that the relief it seeks is quia timet relief.

The judgment below

1. For CLS, Mr Bloch QC distinguished before the judge as before this Court between the wider form of relief sought, which would prevent the respondent from being involved in any way with the LSA, which is referred to as barring-out relief, and the narrower more conventional order prohibiting her use of CLS's confidential information.

1. In summary, the judge held:

(1) Barring-out relief had never been given in a case of an employer against an employee, and there was no basis for such relief in the instant case.

(2) The absence of any time limit in the confidentiality agreement precluded its enforcement. In addition, it was too wide, and did not sufficiently specify the information that was entitled to protection.

The submissions of the parties before us

1. Before this Court, Mr Bloch submitted that there is a triable issue (i.e., one in which CLS has a real prospect of succeeding) as to whether the respondent is a fiduciary who is amenable to barring-out relief. He submitted that the court has jurisdiction, under section 37 of the Senior Courts Act 1981, to grant such relief, so that the question for the court is whether the discretion conferred by statute should be exercised. He contended that her extensive responsibilities in her position within CLS, in the course of which it is common ground that she came into possession of its confidential information, rendered it appropriate for such relief to be granted, requiring the respondent to show that she or Klarius/QH have taken effective steps to prevent such information being misused. In addition and in the alternative, he submitted that the risk of inadvertent, if not deliberate, misuse of confidential information in the absence of injunctive relief required such relief to be granted. The judge had been wrong in law in refusing such relief on the ground that the confidentiality agreement lacked any time limit.

1. Mr Pepperall, in his crisp submissions for the respondent, disputed that barring-out relief could be available in the circumstances of the present case. He did not seek to support the first ground on which the judge had refused an injunction restraining the misuse of confidential material, namely the lack of a time limit in the confidentiality agreement, but he contended that the judge had been right to refuse relief for the other reasons he gave.

Discussion

(a) Barring-out relief

1. Mr Bloch based his submission that the Court should grant barring-out relief on the contention that the respondent was, or at trial, may be held to have been, a fiduciary of CLS.

1. The principal English authority on barring-out relief is the decision of the House of Lords in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222. The leading speech, with which the other members of the Appellate Committee agreed, was given by Lord Millett, who at 228 formulated the question before the Committee as follows:

"My Lords, the question in this appeal is whether, and if so in what circumstances, a firm of accountants which has provided litigation support services to a former client and in consequence has in its possession information which is confidential to him can undertake work for another client with an adverse interest."

1. Lord Millett referred to the decision of the Court of Appeal in Rakusen v Ellis, Munday & Clarke [1912] 1 Ch 831, and said, at 234:

"The case is authority for two propositions: (i) that there is no absolute rule of law in England that a solicitor may not act in litigation against a former client; and (ii) that the solicitor may be restrained from acting if such a restriction is necessary to avoid a significant risk of the disclosure or misuse of confidential information belonging to the former client. Like most of the later authorities, the case was concerned with the duties of a solicitor. The duties of an accountant cannot be greater than those of a solicitor, and may be less, for information relating to his client's affairs which is in the possession of a solicitor is usually privileged as well as confidential. In the present case, however, some of the information obtained by KPMG is likely to have attracted litigation privilege, though not solicitor-client privilege, and it is conceded by KPMG that an accountant who provides litigation support services of the kind which they provided to Prince Jefri must be treated for present purposes in the same way as a solicitor."

1. Lord Millett was concerned with the duties of a solicitor, and of professionals such as KPMG in a like position. At 235, under the heading "The extent of the solicitor's duty", he said:

"Whether founded on contract or equity, the duty to preserve confidentiality is unqualified. It is a duty to keep the information confidential, not merely to take all reasonable steps to do so. Moreover, it is not merely a duty not to communicate the information to a third party. It is a duty not to misuse it, that is to say, without the consent of the former client to make any use of it or to cause any use to be made of it by others otherwise than for his benefit. The former client cannot be protected completely from accidental or inadvertent disclosure. But he is entitled to prevent his former solicitor from exposing him to any avoidable risk; and this includes the increased risk of the use of the information to his prejudice arising from the acceptance of instructions to act for another client with an adverse interest in a matter to which the information is or may be relevant."

Lord Millett continued, at 236-7:

"It is in any case difficult to discern any justification in principle for a rule which exposes a former client without his consent to any avoidable risk, however slight, that information which he has imparted in confidence in the course of a fiduciary relationship may come into the possession of a third party and be used to his disadvantage. Where in addition the information in question is not only confidential but also privileged, the case for a strict approach is unanswerable. Anything less fails to give effect to the policy on which legal professional privilege is based. It is of overriding importance for the proper administration of justice that a client should be able to have complete confidence that what he tells his lawyer will remain secret. This is a matter of perception as well as substance. It is of the highest importance to the administration of justice that a solicitor or other person in possession of confidential and privileged information should not act in any way that might appear to put that information at risk of coming into the hands of someone with an adverse interest.

….

Once the former client has established that the defendant firm is in possession of information which was imparted in confidence and that the firm is proposing to act for another party with an interest adverse to his in a matter to which the information is or may be relevant, the evidential burden shifts to the defendant firm to show that even so there is no risk that the information will come into the possession of those now acting for the other party."

The italics are mine.

1. In my judgment, there is nothing in Lord Millett's speech to justify the extension of the relief granted in that case, which prohibited KPMG from acting against their former client in connection with a matter in which they had previously acted for him, to the ordinary relationship of employer and employee. That the principle for which it is authority is confined to solicitors and the like is confirmed by the speech of Lord Hope, who said, at 226:

"I consider that the nature of the work which a firm of accountants undertakes in the provision of litigation support services requires the court to exercise the same jurisdiction to intervene on behalf of a former client of the firm as it exercises in the case of a solicitor. The basis of that jurisdiction is to be found in the principles which apply to all forms of employment where the relationship between the client and the person with whom he does business is a confidential one. A solicitor is under a duty not to communicate to others any information in his possession which is confidential to the former client. But the duty extends well beyond that of refraining from deliberate disclosure. It is the solicitor's duty to ensure that the former client is not put at risk that confidential information which the solicitor has obtained from that relationship may be used against him in any circumstances.

Particular care is needed if the solicitor agrees to act for a new client who has, or who may have, an interest which is in conflict with that of the former client. In that situation the former client is entitled to the protection of the court if he can show that his solicitor was in receipt of confidential information which is relevant to a matter for which the solicitor is acting, against the former client's interest, for a new client. He is entitled to insist that measures be taken by the solicitor which will ensure that he is not exposed to the risk of careless, inadvertent or negligent disclosure of the information to the new client by the solicitor, his partners in the firm, its employees or anyone else for whose acts the solicitor is responsible."

1. In Koch Shipping Inc v. Richards Butler [2002] EWCA Civ 1280, [2003] PNLR 11 p255 at paragraph 61 Ward LJ cited the italicised passage from the speech of Lord Millett in Bolkiah as "at least part of the rationale of the rule".

1. In Meat Corporation of Namibia Ltd v. Dawn Meats (UK) Limited [2011] EWHC 474 Ch Mann J said, at para 31:

"... what the House of Lords was protecting was a quasi-solicitor/client relationship and all the disclosure that went with it. It is that relationship which is so serious and significant as to attract the disabilities identified in Prince Jefri nd to require the heavy burden which the Committee held to apply."

Mann J therefore refused to grant barring out relief to prohibit an expert witness from acting for an adverse party. Bolkiah was applied by Floyd J to a patent attorney in Generics (UK) Ltd v. Yeda Research & Development Co. Ltd [2011] EWHC 3200 (Pat). Patent attorneys share many of the characteristics of a litigation solicitor.

1. Although there is no English case in which a claimant has sought a Bolkiah injunction against a former employee, such a claim has been considered and decisively rejected by the Court of Final Appeal of Hong Kong. In PCCW – HKT Telephone Limited v David Aitken [2009] HKCFA 11 Mr Justice Ribeiro PJ formulated the question before the Court as follows:

"3. … Can an employer obtain an injunction against a former employee who acquired confidential and privileged information during his employment, to restrain him not merely from misusing or disclosing such information, but from being employed on matters to which such information may be relevant in his new job with an enterprise having interests adverse to those of the employer?"

1. The facts of the HKT Telephone case might have been thought to favour the grant of a Bolkiah injunction. Mr Aitken was an Australian solicitor who had been employed by the claimant, and the judge at first instance found that there was a triable issue as to his involvement and knowledge derived from confidential and privileged discussions in which he had participated. The claimant sought an injunction restraining him from acting in relation to regulatory proceedings in which they were involved.

1. In his judgment Justice Ribeiro referred solely to English authorities, and it is clear that he saw no difference between the law of Hong Kong and that of this jurisdiction. Having reviewed these authorities, he said:

"28. The considerations bearing on the relationship of solicitor and client are quite different [from those bearing on the relationship of the employer and employee]. It is a fiduciary relationship in which all the confidences are those of the client. The confidential information received by the solicitor and the advice tendered by him are received and given solely for the client's purposes. Only the client, and not the solicitor, can waive such confidentiality (and, where the communications are privileged, waive such privilege). The solicitor has no claim to use for his own purposes any of the confidential information imparted within the fiduciary relationship. Thus, the policies of protecting an employee's freedom to deploy his personal skill and knowledge for his own benefit and of securing the free availability of employees in the labour market do not extend to a solicitor who wishes to accept instructions from a new client whose interests are adverse to those of the former client, on a matter to which his former client's confidences are relevant."

1. The whole of the judgment of Lord Hoffmann NPJ repays study, but for present purposes it is sufficient to cite paragraphs 61 to 63:

"61. The principle applied in the Rakusen and Prince Jefri cases is a branch of the law of confidence, not the law of privilege. It is a special remedy against solicitors and the like which the courts have devised to protect the confidentiality of communications between solicitor and client, or between either of them and third parties, for the purpose of enabling the solicitor to advise or otherwise act for the client. As Lord Millett said at p.234, the basis of the court's jurisdiction is the protection of confidential information. It is true that one of the reasons why the law of confidence provides this special remedy against solicitors is the reason which justifies LPP, namely, the policy of encouraging free communication between client and solicitor in the interests of justice. But that does not enable one to transfer features of the law of privilege into the law of confidence.

1. There is a very considerable difference between the position of a solicitor and an employee, even though the confidential information which they have obtained may be the same. The solicitor will normally have many clients and will not be dependent upon one for his livelihood. Even if the new client is important to him, he does not have to act for him in a matter in which he previously acted for the other side. The employee can have only one employer at a time and, in the nature of things, his new employer is likely to be in the same line of business and therefore in competition with the previous one. I therefore see no reason of logic or policy which requires the special remedy against solicitors to be extended to employees who have information which would be protected by LPP.

1. As for authority, there appears to be none to support [the claimant's] submission. The statement of principle by Fletcher Moulton LJ in Rakusen's case is perfectly clear. In the absence of an enforceable covenant, the courts do not interfere with the new activities of former employees. There is no case in which they have done so. Former solicitors (or forensic accountants) are different."

1. None of the leading English textbooks supports the extension of Bolkiah relief to a former employee. Brearley & Bloch on Employment Covenants & Confidential Information (3rd Ed, 2009) state, at para 15.46:

"Further English law has never countenanced barring out relief (e.g. preventing an (ex-)employee from joining a rival of the (ex-)employer as a means of providing protection against future misuse of confidential information, absent a reasonable restrictive covenant. The proper means of obtaining protection against misuse of confidential information is for the employer to bargain for an appropriate restrictive covenant. One of the justifications for such a barring out covenant is the difficulty of policing misuse of confidential information – but it is not the basis of obtaining such protection without a covenant."

1. Toulson & Phipps on Confidentiality (2nd Ed, 2006) only deal with Bolkiah in their discussion of lawyers' continuing duty after the termination of a retainer (at para 16-006). Barring-out relief is not mentioned in the chapter on employees. Hollander & Salzedo on Conflicts of Interest (4th Ed, 2011) do not suggest that a conflict of interest can be the foundation for a Bolkiah type injunction against a former employee.

1. Before us, Mr Bloch contended that at trial CLS may establish that the respondent is, or was when in their employment, a fiduciary, and if so Bolkiah relief may be available against her. The word "fiduciary" was brandished as a cure for all ills. Certainly, as an employee the respondent owed certain fiduciary duties. But that did not make her a fiduciary in the sense that a trustee, or a solicitor, is to his beneficiary or client. In the passage from his speech in Bolkiah cited above, Lord Millett referred to "information imparted in confidence in the course of a fiduciary relationship". The relationship between an employer and employee is not such a relationship. Lord Hope similarly referred to "all forms of employment where the relationship between the client and the person with whom he does business is a confidential one". The relationship between an employer and an employee is not such a relationship.

1. In Nottingham University v Fishel [2000] ICR 1462, Elias J (as he then was) said, at 1490:

"It is important to recognise that the mere fact that Dr. Fishel is an employee does not mean that he owes the range of fiduciary duties referred to above. It is true that in Attorney-General v Blake [1998] Ch 439 Lord Woolf, giving judgment for the Court of Appeal said that the employer-employee relationship is a fiduciary one. But plainly the Court was not thereby intending to indicate that the whole range of fiduciary obligations was engaged in every employment relationship. This would be revolutionary indeed, transforming the contract of employment beyond all recognition and transmuting contractual duties into fiduciary ones. In my opinion the Court was merely indicating that circumstances may arise in the context of an employment relationship, or arising out of it, which, when they occur, will place the employee in the position of a fiduciary. In Blake itself, as I have indicated, it was the receipt of confidential information. There are other examples. Thus every employee is subject to the principle that he should not accept a bribe and he will have to account for it (and possibly any profits derived from it) to his employer. Again, as Fletcher-Moulton L.J. observed in Coomber v Coomber [1911]1 Ch.723 at 728, even an errand boy is obliged to bring back my change, and is in fiduciary relations with me. But his fiduciary obligations are limited and arise out of the particular circumstances, namely that he is put in a position where he is obliged to account to me for the change he has received. In that case the obligation arises out of the employment relationship but it is not inherent in the nature of the relationship itself.

As these examples all illustrate, simply labelling the relationship as fiduciary tell us nothing about which particular fiduciary duties will arise. As Lord Browne-Wilkinson has recently observed:

'...the phrase "fiduciary duties" is a dangerous one, giving rise to a mistaken assumption that all fiduciaries owe the same duties in all circumstances. This is not the case.' ([Henderson v Merrett Syndicates Ltd [1995]2 A.C.145 at 206.)

This is particularly true in the employment context.

The employment relationship is obviously not a fiduciary relationship in the classic sense. It is to be contrasted with a number of other relationships which can readily and universally be recognised as 'fiduciary relationships' because the very essence of the relationship is that one party must exercise his powers for the benefit of another. Trustees, company directors and liquidators classically fall into this category which Dr. Finn, in his seminal work on fiduciaries, has termed "fiduciary offices". (See P.D Finn, Fiduciary Obligations (1977)). As he has pointed out, typically there are two characteristics of these relationships, apart from duty on the office holder to act in the interests of another. The first is that the powers are conferred by someone other than the beneficiaries in whose interests the fiduciary must act; and the second is that these fiduciaries have considerable autonomy over decision making and are not subject to the control of those beneficiaries.

By contrast, the essence of the employment relationship is not typically fiduciary at all. Its purpose is not to place the employee in a position where he is obliged to pursue his employer's interests at the expense of his own. The relationship is a contractual one and the powers imposed on the employee are conferred by the employer himself. The employee's freedom of action is regulated by the contract, the scope of his powers is determined by the terms (express or implied) of the contract, and as a consequence the employer can exercise (or at least he can place himself in a position where he has the opportunity to exercise) considerable control over the employee's decision making powers."

1. I would reject CLS's claim for a barring-out injunction for a number of interrelated reasons. The first is that as an employee she was not a fiduciary such as to be amenable to the jurisdiction to grant such relief. Clearly, the Court has power to grant such relief, but if it could ever be granted to an employer against an employee it could only be in the most exceptional circumstances, if at all. There is nothing exceptional in this case.

1. The second reason is that this was not the relief for which CLS contracted. It could have required the respondent to enter into an express covenant not to enter the employment of a customer (or a competitor). Any such covenant would have had to be limited in time and reasonable as between the parties and in the public interest: it would have been a covenant in restraint of trade. It did not seek such a covenant, but instead obtained from the respondent her agreement in respect of its confidential information. Mr Pepperall reminded us of the long-standing authority of Fletcher Moulton LJ in Rakusen v. Ellis [1912] 1 Ch 831, 839:

"In almost all businesses there must be persons in such a confidential relation to the employers … that the knowledge which they acquire … consists substantially of the secrets of their employer. Such employments come to an end … and thereupon difficulties necessarily arise, because the person who is no longer in employment still has in his breast secrets which are the property of his past employer. The view that the law takes of the rights of the parties in that position is too clear to be disputed. The employee is quite free to go into the service of people who may be the rivals or the opponents of his former master. The law does not say that the possession of those secrets shall cripple his work, or sterilize it. He may go into employment quite inconsistent with the employment which he had in the past. All that the law says is: you shall not disclose or put at the service of your new employer the secrets that belong to your old employer."

1. In Printers & Finishers Ltd v. Holloway [1965] 1 WLR 1, Cross J said at 6F (in a passage cited with approval by the Court of Appeal on four occasions, including in Faccenda Chicken Ltd v. Fowler [1987] 1 Ch 117 by Neill LJ at 137H, and in Littlewoods Organisation Ltd v. Harris [1977] 1 WLR 1472 at 1479C by Lord Denning MR, and by Megaw LJ at 1485C):

"If the managing director is right in thinking that there are features in the plaintiff's process which can fairly be regarded as trade secrets and which their employees will inevitably carry away with them in their heads, then the proper way for the plaintiffs to protect themselves would be by exacting covenants from their employees restricting their field of activity after they have left their employment, not by asking the Court to extend the general equitable doctrine to prevent breaking confidence beyond all reasonable bounds."

1. Similarly in Balston Ltd v. Headline Filters Ltd [1987] FSR 330, Scott J said at 351:

"Employers who want to impose fetters of this sort on their employees ought in my view to be expected to do so by express covenant. The reasonableness of the covenant can then be subjected to the rigorous attention to which all employee covenants in restraint of trade are subject."

1. In my judgment, it is no answer to say, as Mr Bloch did when the point was put to him, that it is not the practice for employers to contract for express covenants to prevent employees going to work for their customers. It seems that CLS was sufficiently concerned to protect its confidential information to require the respondent to enter into the confidentiality agreement, and it presumably designed that agreement to provide it with appropriate protection. Mr Bloch's answer is particularly inapt on the facts of the present case, where the respondent had left the employment of one of CLS's customers in order to work for it. Clearly, there was a possibility that she might return to work for that or some other customer.

1. To my mind, it is not surprising that barring-out relief is unavailable in the present case. Mr Bloch accepted, as he had to, that the barring-out injunction sought by CLS would preclude the respondent from carrying out tasks in relation to the LSA that could not possibly involve the use of any of its confidential information. Placing an order, and raising a query as to delivery of spare parts to a customer of QH, are only two obvious examples. Mr Bloch submitted that if some of the work carried out by the respondent was innocent in this sense, but other work carried the risk of the misuse of CLS's confidential information, the respondent should be injuncted from both. In my judgment, this is the wrong way round. As between an employer and an employee, it is the former who is in the position of power, and who is able to protect its interests by requiring a suitable restrictive covenant. The law is concerned to protect the freedom of a former employee to use her knowledge and skills to her and the public's best advantage, unless it is shown that she has infringed, or has threatened to infringe, an enforceable right of her former employer. In other words, where the employee is innocent, in the absence of an express covenant, the former employer is not entitled to surround his rights with a penumbra of forbidden but innocent acts.

(b) The narrower form of relief: an injunction to restrain the misuse of CLS's confidential information

1. I would not uphold the judge's decision on this part of the claim on the ground that the confidentiality agreement was of indeterminate duration. As mentioned above, Mr Pepperall did not seek to support this reason for the judge's decision. A requirement that the duration of such an agreement be of defined duration is not supported by authority. Agreements restricting the misuse of an employer's trade secrets are commonly of indeterminate length, and are enforced: see, for an example, SBJ Stephenson v Mandy [2000] IRLR 233.

1. I would uphold the judge's decision to refuse to grant an interim injunction restraining the respondent from misusing CLS's confidential information on the simple ground that CLS has not established any arguable case that she has broken or intends to break or even that there is a real risk that she will break the terms of the confidentiality agreement. In her letter of 7 September 2011 she was willing to give an appropriate consensual undertaking. An employer is not entitled to injunctive relief simply because he seeks it.

1. I add that the form of interim relief sought by CLS is hopelessly wide and vague. It does not specify the confidential information to be the subject of restriction with any certainty, but simply describes it as "all or any confidential information acquired by the respondent during her employment with [CLS] in whatever form". Paragraph 10 of CLS's Particulars of Claim does attempt to identify some of the confidential information it seeks to protect. I say some, because the allegation is that the respondent had access to the identified information "in particular, but not limited to" the listed information. It is I think significant that there is no evidence that the respondent has a copy of any of the documents referred to in that paragraph.

1. For these reasons, I would dismiss the appeal of CLS against the judge's refusal of interim relief.

(c) The strike out of the claim

1. It is clear that when CLS issued these proceedings it had no reasonable grounds for bringing its claim. It had no evidence of any breach of contract or threatened breach of contract on the part of the respondent, and it had no entitlement to barring-out relief as a matter of law. All that has changed since then is that CLS has obtained the report of KPMG on the respondent's use of the laptop computer and her external disk drive. For the reasons I have given, in my judgment that evidence does not assist CLS. It follows, in my judgment, that the judge was entitled, and indeed right, to exercise his power under CPR 3.4 and to strike out the claim.

Procedural matters

1. I regard the conduct of CLS in deciding to bring proceedings against the respondent, without any prior complaint or attempt to see whether there was the basis of an amicable solution to its concerns, as wholly inappropriate. It is particularly appropriate for the possibilities of such a solution to be explored where there is on one side a large corporation and on the other a former employee whose annual salary would be a small fraction of the costs of litigation. Many defendants, faced with such a claim, would simply concede rather than risk bankruptcy. When CLS made its decision to bring proceedings, there could have been no assurance that QH would stand behind the respondent. The very short time given to her to respond to CLS's solicitors' letter of 30 August 2011, which must have taken much longer to prepare, and the manner of its service on her, were similarly inappropriate. Furthermore, CLS had not properly verified the only serious allegation of impropriety made by it against the respondent, namely that she had surreptitiously invited managers from Klarius/QH to a rugby match at Twickenham sponsored by CLS, thus demonstrating the closeness of her relationship with Klarius/QH even while she was an employee of CLS. Before the judge, it was common ground that the evidence of CLS was false, having been demonstrated to be so by the respondent.

1. Secondly, I would endorse Tugendhat J's criticism of CLS's delay in its service of its Particulars of Claim. He pointed out that the time for their service under the CPR expired on 28 September 2011, but that they were not served until 23 November 2011. He said:

"58. If the timetable provided by the CPR had been followed by CLS in this action these proceedings could have been ready for trial on the date which was ultimately fixed for the return date namely 9 November 2011, or so nearly ready that a speedy trial could have been ordered within the next few weeks.

1. If Particulars of Claim had been served, the attention of those representing CLS would have had to be directed to defining the Confidential Information in a list such as was provided to me on the second day of the hearing. Their attention would also have had to be directed to the precise allegations of impropriety that are being advanced against Mrs Huesca de Crean, and for that matter Klarius/QH. The allegations appear to me to amount to procuring a breach of confidence or contract on the part of Klarius/QH and (and as Edmund Davies LJ suggested in John Zink Co Ltd v Wilkinson [1973] FSR1 at p12) to criminal conspiracy on the part of Klarius/QH and Mrs Huesca de Crean, although these are not words actually used by CLS or Ms Brown.

1. It has long been established that it may be an oppression and harassment of the former employee, and an abuse of the process of the court, in a claim against a former employee, if an employer does not specify in a statement of claim allegations such as these, and do so as soon as possible upon the issue or proceedings: see John Zink Co Ltd v Wilkinson [1973] FSR1 pp10-12 and [1974] FSR 401, 409-410. I note that in United Pan-Europe the particulars of claim were served on 11 November 1999 and the defence in January 2000 (see para 2 of the judgments of Jacob J and Morritt LJ).

1. The position is much clearer under the CPR 7.4, because it is mandatory (see the word 'must' and paragraph 55 above), although the CPR Part 3.1(2(a) permits the court to grant an extension of the time specified in Part 7.4(2)…."

1. As it happened, CLS's delay was saved by the respondent's agreement to the extension of its time for service of its Particulars of Claim. Mr Bloch told the judge that it was normal practice in claims for confidentiality injunctions for the service of Particulars of Claim to be deferred until after the application for an interim injunction has been dealt with. If that is the normal practice, I consider that it should be discontinued. Like Tugendhat J, I consider that it is in the interests of justice and the efficient and fair conduct of proceedings that the claimant's case be defined and pleaded as soon as possible, so that the defendant knows precisely what is the case against her, and so does the judge. That is particularly the case where, as here, allegations of misconduct are made against a defendant.

Conclusion

1. For the reasons I have given, I would dismiss the appeal.

Lord Justice Lewison:

1. I agree.

Lord Justice Maurice Kay:

1. I am in total agreement with the judgment of Stanley Burnton LJ on the barring-out issue. However, I have come to a different conclusion about the narrower form of relief. Whilst it is not unusual for an employee in a managerial position and with possession of confidential information to move to the employment of a customer, there are features in this case which sound warning bells. CLS is in the midst of a long-term contractual relationship with QH and it is plain that the relationship has become contentious, particularly since Klarius acquired QH. Until her departure, the respondent had been quite deeply involved on behalf of CLS. She had confidential information including information relating to costings, legal advice and negotiating tactics. It is common ground that she owes CLS a continuing duty of confidentiality. There is no evidence that she has breached that duty. For most of the time she has been subject to undertakings given to the court. On the other hand, this is essentially a quia timet case. Whilst she has not threatened to breach her duty (indeed, she insists that she is an honest person who never would), it seems to me that the evidence about the laptop, the external hard drive and the transfer of data to another computer (by inference, her own) is such as to cause CLS legitimate concern to the extent that it merits a degree of injunctive relief.

1. Although the respondent has provided an innocent explanation and expert examination of the laptop and the external hard drive has not undermined that explanation, the chronology of events causes me concern such that I consider it to raise triable issues. The copying on to the external hard drive took place after the respondent had been first interviewed at QH on 4 August. The external hard drive was first connected to the respondent's personal computer on 10 August, after her second interview. 10 August was the respondent's last working day before her holiday. It was the day on which she later accepted the offer of employment at QH. Whilst still on holiday, the respondent continued to access transferred files and after her return she was involved in file deletion and connection of the external hard drive to her personal computer. Although her innocent explanation has not been shown to be untrue, it does raise questions about timing and motive. As to the latter, her explanation that transfers to the hard drive were the result of security considerations has to be seen in the context that, whilst the laptop from which the transfers were made was encrypted, the hard drive was not. Whilst none of this proves the untruthfulness of the respondent's explanations, in my view it merits cross-examination. The explanations may well be credible, coming from a person of good repute, but they are not demonstrably true.

1. For these reasons, I would have granted limited and tightly drawn injunctive relief to protect CLS's confidential information, although I would readily have accepted equivalent undertakings in lieu. I do not consider it a sufficient answer that CLS will remain in a position to enforce the respondent's continuing obligations of confidentiality, even absent protection. Nor do I consider that its admittedly heavy-handed initial approach to this litigation disentitles it to the modest relief which I would favour. It follows that I would also have allowed the appeal against the strike out.