IG Index Ltd v Cloete

A claim may be struck out under CPR 3.4(2)(b) where continuing it to trial would consume disproportionate court and party resources for no useful practical benefit. The court must assess the value of the relief realistically available, including any injunction, and consider whether there is a threat or real risk of repetition. Proof of a past breach does not itself justify an injunction. Where confidential material has been deleted or delivered up, remaining copies are subject to the implied undertaking and no realistic means of obtaining further copies exists, a permanent injunction may add no meaningful protection. The action may therefore be stopped before trial, even though it is not an abuse of process retrospectively and an issue might remain technically triable.

IG Index Ltd claimed delivery up, destruction, injunctive relief and damages against its former employee, Johannes Hendrik Cloete, alleging misuse of confidential client information. The information had been sent to Cloete by the Information Commissioner’s Office and later disclosed by him in Employment Tribunal proceedings. An interim order required delivery up and deletion of copies.

The claim was initially struck out by Tugendhat J, but the Court of Appeal allowed IG Index’s appeal, holding that retrospective permission to use the disclosed documents should have been granted and that a useful purpose in continuing the claim could not then be excluded. The defendant renewed the application on proportionality and Jameel grounds, relying on subsequent deletion of the information, destruction of the ICO’s records, the absence of any evidence of further misuse, and the costs of a trial. The central issue was whether a trial could provide any proportionate and practical benefit.

1. The application was granted. The action would not be struck out ab initio, but would not proceed to trial. Costs were to be addressed after further submissions.

2. The court applied the proportionality principle recognised in Schellenberg v BBC, endorsed in Wallis v Valentine and Jameel v Dow Jones & Co, and applied outside defamation in Sullivan v Bristol Film Studios Ltd, Citation plc v Ellis Whittam Ltd and Lilley v DMG Events Ltd. The question was whether the likely benefit of the proceedings justified the expenditure of court time and party resources.

3. There was a triable issue as to whether Cloete knew, between January and August 2013, that the ICO had sent him IG Index’s confidential information. A finding against him could affect costs and establish a past breach. That issue did not, however, establish a present threat or real risk of repetition.

4. The court accepted that Cloete’s evidence of deletion was uncontradicted by positive evidence. The copy held by his solicitors was restricted by CPR 31.22. The ICO had destroyed its relevant records, so there was no available channel through which further copies could be obtained.

5. An injunction is discretionary. A past legal wrong is insufficient unless the interference is continuing or likely to be repeated. The evidence established neither continuing misuse nor a realistic threat of repetition. A permanent injunction would therefore add no substantial protection, while the proposed trial would involve disproportionate expenditure for little or no benefit.

• High Court (Queen’s Bench Division): Tugendhat J granted the defendant’s application under CPR r.31.22(2) and refused permission to use the disclosed material, striking out the claim: [2013] EWHC 3789 (QB).
• Court of Appeal: The claimant’s appeal was allowed. The court held that retrospective permission to use the documents should have been granted and that continuation of the action could not then be regarded as pointless: [2014] EWCA Civ 1128.
• High Court (Queen’s Bench Division): On the renewed proportionality application, the claim was stopped before trial.