Kieran Corrigan & Co Limited v Onee Group Limited & Ors

Damages for misuse of confidential information are compensatory and aim to restore the claimant to the position it would have occupied absent the wrongdoing. The court may select the method that best captures the loss, including lost profits, lost licence revenue, the value of the information, or a reasonable release fee. A notional negotiation is a tool for valuing loss, not a restitutionary remedy. It may be used where the claimant lost a valuable opportunity to control the use of confidential information. The assessment is objective, ordinarily made at the date of breach, and may take account of the commercial context, the parties’ bargaining positions, available alternatives and subsequent events. Where precise quantification is impossible, the court may use a broad-axe approach rather than require proof on the balance of probabilities.

The claimant established liability against the first, third and fourth defendants for misuse of confidential information and unlawful means conspiracy arising from the use and commercialisation of a tax-planning structure based on research and development relief. The court directed an inquiry as to damages. The second defendant was not liable at the liability stage but undertook to participate in the inquiry pending an appeal.

The inquiry concerned whether the claimant and OneE would have contracted for use of the confidential information, the appropriate measure of loss, the likely contractual terms, the availability of negotiating damages, and interest.

1. Measure of loss. Damages for breach of confidence and conspiracy were compensatory. The claimant had to prove loss, but the court could choose the method that best reflected the loss suffered. The available approaches included lost profit, lost licence revenue, the value of the information, and a reasonable licence fee or release fee.
2. Negotiating damages. A notional release fee was available where the claimant had lost a valuable opportunity to control the use of confidential information. The imaginary negotiation was merely a tool for valuing the economic loss. The assessment was objective, ordinarily as at the date of breach, and assumed reasonable bargaining in the commercial context. The parties’ actual unwillingness to contract was irrelevant. Delay and alternative routes available to the defendant could be relevant.
3. Assessment. The confidential information had economic value and was central to the Nemaura structure. The parties would have made a deal involving a form of joint venture and a share of gross receipts after introducers’ fees. The likely agreed share was 40%, reflecting the defendants’ greater implementation costs. Applying that percentage to £8.7 million produced damages of £3.48 million. No ascertainable award could be made for back-end profits or success fees.
4. Alternative basis. The same sum would have been awarded as negotiating damages. The information had given the claimant a valuable first-mover opportunity, and the defendants’ wrongdoing had deprived it of that opportunity.
5. Interest. Compound interest was not established. Simple interest was awarded at 2% above Bank of England base rate, with the precise calculation and commencement date subject to agreement or further submissions.

The judgment concerned the quantum inquiry following the liability judgment of Jonathan Hilliard KC dated 23 March 2023. The claimant had permission to appeal the finding that the second defendant was not liable; that appeal was pending and did not prevent the inquiry proceeding.