Jones v IOS (RUK) Ltd & Anor

A contractual confidentiality obligation may protect information which the claimant has sufficiently contributed to creating for its own commercial interests. It is unnecessary to establish ownership or property in the information. A severable restraint against contact may fall away while the confidentiality provisions remain enforceable.

Where damages depend on the hypothetical conduct of a third party, the loss-of-chance assessment is not barred by the minimum-performance principle. Wrotham Park damages remain compensatory and require a just assessment of the price for the particular use made of the information. No award is appropriate where the disclosure caused no loss and conferred no valuable advantage.

The claimant, as assignee of CMP Group Limited’s causes of action, sued the defendants for breach of a contractual Confidentiality Agreement and, alternatively, breach of confidence. The claims concerned alleged disclosure and misuse of information relating to Bombardier tenders in 2003 and 2007, and the replacement of CMP/Ricoh devices in 2008.

Roth J had previously held the agreement’s no-contact restriction void under article 101 of the Treaty on the Functioning of the European Union, but had declined to grant summary judgment on the remaining claims: [2010] EWHC 1743 (Ch). The issues at trial included the meaning and severability of the confidentiality provisions, the nature of the claimant’s interest in the information, loss-of-chance damages, and Wrotham Park damages.

1. Meaning and enforceability. The Confidentiality Agreement was construed in its commercial context. The permitted use of confidential information was limited to evaluating purchasing terms and supplying, installing, servicing and billing devices under the parties’ Trading Agreement. Clause 5 was subject to an implied temporal limitation so that delivery up could not be demanded while information was legitimately required for continuing performance.
2. Interest in confidential information. A claimant need not establish ownership or property. It must show a sufficient interest in the information to justify a recognised duty of confidence. That requirement was satisfied where CMP had generated or materially contributed to information through its skill, audits and customer relationship, including recommended devices, locations and customer-specific pricing. Information which merely enabled Ricoh UK to perform its own contractual obligations, such as meter readings, did not satisfy the test.
3. Severability. The no-contact restriction in clause 7 was separate from the provisions protecting confidential information. Its invalidity did not fundamentally alter the character or purpose of the remaining agreement, which therefore remained enforceable.
4. Alleged breaches. Disclosure of the Hoskins spreadsheet and the Davenport and Wilson spreadsheets technically breached the agreement, but the relevant information was either not misused, not CMP’s confidential information, or caused no actual loss. The court rejected the allegations concerning misuse of the Hoskins spreadsheet in the 2003 tender and the relevant 2007 service-pricing information.
5. Loss of chance. The minimum-performance principle in Lavarack v Woods of Colchester Ltd [1967] 1 QB 278 did not apply because the hypothetical conduct in question was that of RIA, a third party, rather than the contract-breaker. The claim was legally permissible, but there was no real or substantial chance of a joint CMP/RIA bid because the parties would not have agreed terms.
6. Wrotham Park damages. The award is compensatory and reflects the reasonable price for permission to make the particular use of the information. It is not a gain-based award and must avoid a windfall. No award was justified for any of the assumed breaches. The claim was dismissed in its entirety.

This was a first-instance trial in the High Court. The earlier summary judgment decision of Roth J, [2010] EWHC 1743 (Ch), was not appealed. The present claim was dismissed in its entirety.