Henderson & Jones Limited v Salica Investments Limited & Ors

Confidential information may exist in a collection of material even though some individual elements are public, commonplace or non-confidential. The relevant question is whether the collection, viewed as a whole, embodies sufficient skill, effort, originality or ingenuity to possess the necessary quality of confidence.

Information received in confidence must not be used as a springboard for developing a competing product, even if the later product operates in a different market or differs in design. A claimant may recover negotiating damages where misuse deprives it of a valuable opportunity to control the use of confidential information. The award reflects the economic value of that right, assessed by a hypothetical negotiation at the date of breach.

The claimant, an assignee of Mr Gifford, sued Salica Investments Limited, Mr Dominic Perks and two associated companies for misuse of confidential information disclosed during two investment meetings concerning the TVC care-technology platform.

The defendants used information from the meetings in developing WeCare, later branded CareAngels and Vida. The second and third defendants were in liquidation or administration and were not represented. The issues included whether the information was confidential, whether it had been misused, whether the defendants were jointly liable, and the appropriate measure of loss.

1. Breach of confidence. The court applied the three requirements stated in Coco v AN Clark (Engineers) Ltd: the information must have the necessary quality of confidence; it must have been imparted in circumstances importing an obligation of confidence; and it must have been used without authorisation to the detriment of the claimant. The TVC information satisfied all three requirements.
2. The 11 documents and oral disclosures were confidential when considered as a collection. Some individual features could be found in the public domain, but the combination of task-based and time-based care planning, care matching, monitoring, alerts, the Relative Portal, the Care Plan Tracker and the technical documentation reflected Mr Gifford’s skill, effort and ingenuity. The defendants knew the information was confidential.
3. The defendants used the information as a springboard for WeCare and Vida. Differences between TVC and Vida, including the use of the information in domiciliary care rather than a care-home setting, did not prevent misuse. Information is still used where it serves as the starting point for an improved or modified design.
4. Mr Perks and Salica were personally liable for breach of confidence. The corporate attribution principles did not immunise the individual who actually carried out the relevant acts. Mr Perks also shared a common design with DHV and DHVT. The requirements of accessory liability identified in Fish & Fish v Sea Shepherd UK were satisfied, and the defendants knew the information was being misused.
5. The claim for unlawful means conspiracy failed. Although breach of confidence could constitute unlawful means, the claimant had not adequately pleaded or articulated the combination, the time at which it was formed, or the necessary intention to injure.
6. The court drew adverse inferences from the destruction of relevant emails, the failure to preserve the Vida source code and the failure to call central witnesses. Those matters supported findings that the TVC information had been shared and used in developing WeCare and Vida, although the court would have reached those findings from the other evidence alone.
7. Damages. Negotiating damages were available because the claimant had been deprived of a valuable asset: the right to control the use of the confidential information. The award was compensatory. The appropriate measure was the sum which reasonable parties would have negotiated for lawful use of the information at the date of breach, assessed objectively and without regard to whether either party would actually have made the deal.
8. The court awarded £2,154,285, together with interest, as the fair value of the TVC business concept. Salica and Mr Perks were jointly and severally liable for that sum.