Affinity Financial Awareness Ltd & Anor v Ferguson & Ors

In an application for interim relief concerning restrictive covenants, the court may protect customer information where there is a serious question to be tried, even though the ultimate classification of the information as a trade secret remains for trial. An undertaking concerning information contained in and derived from customer lists must be sufficiently precise to be enforceable, but it need not prevent contact based on information obtained independently. Disclosure orders requiring former representatives to explain their conduct are exceptional. The court should consider whether the claimant can plead its case without the order, the order’s width, costs, the adequacy of damages, practical protection of the business, and the need to police the injunction. Where enforceability, breach and adequacy of damages can all be tried within the allotted time, they should ordinarily be listed together.

The claimants sought damages and injunctive relief against five former self-employed advisers following the termination of their consultancy agreements and the introduction of restrictive covenants after the acquisition of their group by Wealth at Work. Before trial, the claimants sought interim undertakings concerning customers, confidential customer lists and alleged solicitation, together with witness statements detailing the defendants’ conduct. The defendants opposed joinder of 22 other advisers, sought exclusions for specified customers, resisted relief concerning customer information, and argued that breach should be excluded from the speedy trial. The court determined five interlocutory issues and gave directions for a seven-day trial addressing enforceability, breach and adequacy of damages.

1. Joinder. The application to add 22 further advisers as defendants was dismissed. A claimant in private law proceedings need not join every person affected by the issues. The proposed defendants had not themselves been sued, there was insufficient evidence that they had breached their agreements, and they could bring separate claims capable of being tried with the existing proceedings.
2. Excluded customers. The defendants failed to show that the balance of convenience justified excluding the listed customers from their undertakings. Vulnerability, a preference for an existing adviser, or a claimed need for products unavailable from the claimant was insufficient without fuller evidence. A close and trusting relationship with an adviser might justify exclusion in an appropriate case, but no such case was established.
3. Customer information. Customer lists may qualify as trade secrets, or as confidential information deserving equivalent protection, depending on all the circumstances. The question remained for trial, but the evidence established a serious question to be tried. The undertaking was amended so that it covered information both contained in and derived from the lists. That wording was sufficiently clear and did not prevent contact where the relevant information came from an independent source.
4. Disclosure. The court declined to order witness statements detailing the defendants’ post-termination conduct. Applying the six factors identified in Aon v JCT Reinsurance Brokers Ltd [2009] EWHC 3448 (QB), the claimants could plead their case without the order, it would not materially save costs, and the existing undertakings and available commercial steps provided adequate protection.
5. Speedy trial. Enforceability, breach and adequacy of damages were directed to be tried together. Although breach might become unnecessary if enforceability failed, resolving all issues together preserved flexibility and the nature and number of any breaches could affect whether damages were adequate.

First-instance interim decision. A seven-day speedy trial was directed to determine enforceability, breach and adequacy of damages.