Celebrity Speakers Limited v David Daniel & Ors

A judgment on liability following strike-out does not ordinarily determine the causation or quantification of every pleaded head of loss. The defendant may challenge causation and quantum at the remedies hearing, provided the challenge is consistent with the established liability case. A statement of value in a claim form does not cap the judgment where CPR 16.3(7) applies. Negotiating damages may compensate for the economic value of a wrongfully used contractual or proprietary right where that value is the loss for which compensation is due. Such damages do not prevent an injunction restraining continuing misuse, where the injunction protects a distinct right and does not unreasonably restrain trade.

The claimant, a speaker bureau, sued a former director, a former sub-agent and their competing company for breach of contract, breach of duty, misuse of confidential information and diversion of business. After repeated procedural defaults, the defendants’ statement of case was struck out under CPR 3.4(2)(c) and judgment was entered for the claimant on liability. The defendants retained limited rights to participate in the remedies hearing.

The court therefore determined the factual basis on which remedies should be assessed, causation and loss relating to diverted bookings, the effect of the claim-form valuation, negotiating damages for misuse of a confidential database, injunctive relief and interest.

1. Basis of assessment. The pleaded facts establishing liability stood as a proxy for the liability judgment. The defendants could not go behind those facts, but remained entitled to contest causation and quantum. A default or equivalent liability judgment established that some damage had been caused, not that every pleaded head of loss was recoverable.
2. Claim-form valuation. The statement of value did not cap the award. Under CPR 16.3(7), the court could give judgment for the sum to which the claimant was entitled, particularly where the stated value was provisional.
3. Restrictive covenant. The definition of a restricted client covered a client or prospective client of the claimant during the relevant 12-month period with whom the employee had contact, or of whom he first became aware or was informed, in the course of employment. The pleaded fact that the former director contacted the relevant speaker on returning to work was binding for the remedies hearing. The speaker was therefore a restricted client.
4. Causation and loss. The established duties owed by the former sub-agent, together with the pleaded agreement and conduct diverting business, were sufficient to establish the relevant liability framework. The evidence showed that breaches caused the loss of the speaker’s bookings. The court awarded £160,383 for lost commission, accepting that the sum represented lost profit after deducting commission, bonuses and other avoided expenses. A further claim for £50,000 concerning other diverted business failed because the evidence of loss was insufficient.
5. Negotiating damages. The confidential database was a valuable business asset. Negotiating damages represented the hypothetical fee which the defendants would have paid to obtain permission to use or share it. The court awarded £50,000, applying the principle that the court must assess substantial loss as best it can where precise quantification is difficult.
6. Injunctions and interest. Injunctions restraining use or disclosure of information taken from the database were appropriate. They did not duplicate the lost-business award or unreasonably restrain trade, since they prevented continuing misuse while leaving the defendants free to build their own database and conduct their own business. Interest was awarded at 1% over base rate, producing total interest of £10,042.22.
7. Disposition. Injunctions were granted subject to a modification removing an unnecessary affidavit requirement. Damages of £210,383 and interest of £10,042.22 were awarded, making £220,453.22, together with provision for an additional court fee and further costs submissions if required.

This was a first-instance remedies judgment following an earlier order striking out the defendants’ statement of case and entering judgment for the claimant on liability.