Forse v Secarma Ltd

The Court of Appeal dismissed the appellants' challenge to an interim springboard injunction granted by Murray J, which restrained the appellants from using an alleged unlawful competitive advantage obtained by the recruitment of Secarma employees. The court applied the American Cyanamid principles for interlocutory injunctions together with the approach in Lansing Linde for springboard relief: where an interim injunction effectively delivers substantive relief prior to trial the judge must assess the strength of the parties' cases and estimate the likely period during which the unfair advantage will continue. The court held there was strong prima facie evidence of a conspiracy to injure by unlawful means based on WhatsApp messages and other material, that damages would not be an adequate remedy, and that the balance of convenience favoured interim relief. The appeal was dismissed save that the injunction was narrowed where it went beyond what was necessary (it should not prevent outsourcing pen testing or prohibit individual defendants who were under no restrictive covenants from all activity).

Background and parties:

• Secarma is a cybersecurity company providing in-house penetration testing and red‑teaming. Xcina (and related corporate groups) historically outsourced such work and were not competitors until they sought to build an in‑house capability by recruiting Secarma personnel.
• The respondents alleged that certain Secarma directors and employees conspired with Xcina and others to procure resignations and recruit Secarma staff, using knowledge of Secarma employment terms, thereby obtaining an unlawful commercial "springboard" advantage.

Procedural posture and relief sought:

• The claim form was issued on 14 November 2018 and Secarma and UKFast.net immediately applied for an interim springboard injunction. Murray J granted a complex interim order on 30 November 2018 restraining a range of activities by the appellants pending an expedited trial.

Issues before the Court of Appeal:

1. Whether the judge applied the correct legal test for springboard relief and adequately assessed the merits and the likely duration of the unfair advantage (accounting for Lansing Linde and American Cyanamid);
2. whether damages would be an adequate remedy or undertakings would sufficiently protect the defendants;
3. whether the form, scope and duration of the injunction were appropriate and proportionate.

Court’s reasoning and findings:

• The court reiterated that American Cyanamid governs interlocutory injunctions and that where an injunction would in effect grant all or part of the substantive relief before trial (as a springboard injunction will do) the judge must, consistent with Lansing Linde, carry out a fair and reasonable evaluation of the strength of the claimant’s case and estimate how long any unfair advantage will endure.
• The evidence before the judge, including detailed WhatsApp group and bilateral messages, provided a strong prima facie case of an unlawful means conspiracy involving directors and employees of Secarma and Xcina. Disclosure supplied shortly before the appeal made the case stronger.
• Damages were held to be an inadequate remedy because the loss caused by the unlawful competitive advantage would be difficult to quantify (loss of chance and account of profits issues) and the judge was entitled to conclude that an interim injunction was necessary to preserve the status quo pending trial.
• The judge should, and did to an extent, consider the likely period required to remove the unfair advantage. His stated time limit (until the start of an expedited trial provided it began by end April 2019) was brief; the Court of Appeal considered the judge should have given a clearer rationale but concluded his overall assessment was supportable on the evidence.
• The court accepted that certain parts of the injunction were too wide: the corporate appellants should not be prevented from carrying on their existing outsourcing business, and individual defendants who had no post‑employment restrictions (Forse and Child in their personal capacities) should not be restrained from all activity.

Disposition: The appeal was dismissed except to the limited extent the injunction's scope was reduced as indicated above.

The appeal was dismissed save to the extent that parts of the interim injunction were too wide. The Court of Appeal upheld the grant of springboard relief in principle because there was strong prima facie evidence of an unlawful means conspiracy, damages would be an inadequate remedy and the balance of convenience favoured interim relief; however the injunction was trimmed so it did not prevent lawful outsourcing activity or restrain individuals who were not subject to restrictive covenants beyond what was necessary to remove the unfair advantage.

This is an appeal from Murray J's order of 30 November 2018 in the High Court, Queen's Bench Division: Murray J [2018] EWHC 3434 (QB). The appeal was heard in the Court of Appeal and the judgment was delivered on 13 March 2019 ([2019] EWCA Civ 215).