Dass Solicitors v Southcott

For an urgent interim injunction, the court applies the three-stage test in American Cyanamid v Ethicon: serious question to be tried, adequacy of damages, and balance of convenience. Springboard relief is not confined to misuse of confidential information. It may restrain future or further serious economic loss caused by a former employee’s continuing unfair advantage arising from serious contractual breaches. The advantage must exist when relief is sought and be likely to continue without restraint. The injunction protects against future loss rather than punishing past breaches. A short injunction during a contractual notice period may be just and convenient where damages are inadequate and competing public interests are sufficiently protected.

The claimant solicitors sought an urgent injunction against a former associate solicitor who had left without contractual notice and had allegedly solicited clients while still employed. The application was made without notice, but the defendant had notice and was represented at the hearing.

The claimant relied on breach of the express notice term, breach of the implied duty of fidelity, and springboard relief. The defendant accepted that serious questions arose but disputed the contractual basis for an injunction, the adequacy of damages, and the balance of convenience. The central issues were whether interim relief was justified and whether springboard relief extended beyond misuse of confidential information.

1. The application was granted and an injunction was ordered, essentially in the terms sought, until 27 June 2009. Costs were reserved.
2. The court applied the established three-stage approach in American Cyanamid v Ethicon [1975] AC 396: whether there was a serious question to be tried, whether damages would be an adequate remedy, and where the balance of convenience lay.
3. There were serious questions concerning breaches of the employment contract, the implied duty of fidelity, and the failure to give notice. The court considered that there was force in the submission that contractual secondary rights, including damages or an injunction, might remain available even if repudiatory conduct had been accepted.
4. Although the value of the solicitors’ fees might be identifiable, the evidence showed a real risk of wider loss, including redundancies or closure of the fraud department. Damages alone were therefore not an adequate remedy.
5. The clients’ freedom to choose representation and possible tension with Crown Court decisions were relevant. The risk was limited because the injunction would expire before the anticipated trials.
6. Adopting the approach in UBS Wealth Management & Or v Vestra Wealth LLP [2008] EWHC 1974, the court held for this application that springboard relief was not confined to misuse of confidential information. It could prevent future or further serious economic loss caused by a former employee taking an unfair advantage or unfair start from serious contractual breaches. The advantage had to continue when relief was sought, and the injunction had to address future loss rather than punish past breaches.
7. The alleged failure of full and frank disclosure had not been established at that stage.

This was a first-instance application for an urgent interim injunction. Permission to appeal on the scope of springboard relief was refused at that stage, although the judge recognised that the point might appropriately be considered by the Court of Appeal on a renewed application.