Forse & Ors v Secarma Ltd & Ors

An interim springboard injunction may restrain business activity which exploits an allegedly unlawful competitive advantage. Except where the interval before trial is insignificant, the court must assess the strength of each party’s case on liability and the likely duration of the advantage.

The relief must extend no further in scope or time than is reasonably necessary to remove that advantage. The judge must estimate its duration, explain the conclusion and limit relief where the advantage is likely to expire before trial. The injunction may freeze a new competing activity, but it must not restrain an existing lawful activity or impose unnecessary personal restrictions.

Secarma alleged that former directors and employees had conspired with Xcina and related parties to recruit a substantial part of Secarma’s cybersecurity workforce. The alleged purpose was to establish an in-house penetration-testing and red-teaming business which would compete with Secarma.

Murray J granted an interim springboard injunction pending an expedited trial: [2018] EWHC 3434 (QB). The appellants challenged the applicable threshold, the adequacy of damages and undertakings, the duration of any advantage and the injunction’s scope. The central issues were how an interim springboard injunction should be assessed and whether the relief granted went beyond what was reasonably necessary to remove the alleged unlawful advantage.

1. The appeal was dismissed except insofar as the injunction was too wide. The evidence disclosed a strong case that the appellants had participated in an unlawful-means conspiracy to recruit Secarma employees and establish a competing in-house business.

2. An interim springboard injunction ordinarily gives a claimant some or all of the substantive protection sought at trial while restraining the defendant’s freedom to trade, conduct business or deploy skills. Unless the interval before trial is insignificant, the court should therefore apply the approach in Lansing Linde Ltd v Kerr [1991] 1 WLR 251. It must fairly evaluate the strength of each side’s case on liability and the probable duration of the unfair advantage, without conducting a mini-trial on incomplete and untested evidence.

3. Damages were not an adequate remedy for Secarma. Loss attributable to Xcina’s advantage, including lost opportunities to obtain business, would be exceptionally difficult to calculate. An account of profits was an alternative remedy and might neither equal Secarma’s loss nor be readily quantified.

4. The purpose of interim springboard relief is to freeze the defendant’s relevant business activity until trial so that no further unfair competitive advantage is obtained. It can protect the claimant against competition for new clients and provide time to recruit replacement staff or secure other resources. This is protective rather than punitive.

5. A springboard injunction, whether interim or final, must be no wider and last no longer than is reasonable to remove the unfair advantage. The judge must estimate the necessary period and state the reasons. If the advantage is likely to expire before trial, the order must end earlier. The time taken unlawfully to secure the advantage may be a starting point, but the appropriate period depends on how the advantage can reasonably be removed.

6. Although Murray J’s reasoning about duration was compressed, the evidence justified relief until the expedited trial. The recruitment plan had operated over several months, and skilled penetration testers were scarce and difficult to replace. The offered undertakings would not have prevented Xcina from exploiting the employees already recruited to build a competing in-house business.

7. The injunction properly restrained the corporate appellants’ new in-house penetration-testing and red-teaming activity. It was varied because it also restrained their existing outsourcing business, imposed personal restraints on Mr Forse and Mr Child despite the absence of relevant covenants or duties, and restricted former Secarma employees beyond participation in the new in-house activity. Underhill and Nicola Davies LJJ agreed.

1. Court of Appeal (Civil Division): By [2019] EWCA Civ 215, dismissed the appeal on the grant and duration of interim springboard relief but varied the injunction because parts of it were too wide.
2. High Court, Queen’s Bench Division: Murray J granted an interim springboard injunction pending an expedited trial by an order dated 30 November 2018: [2018] EWHC 3434 (QB).