Sensitive information and breaches of confidence need to be treated… sensitively!

Social Share
Share this post on

In the latest UK200Group blog post, Liz Ward Principal, Virtuoso Legal discusses the need to think carefully about the risks associated with confidential data

Liz Ward
It’s been a big year for Virtuoso Legal (and we’re only 1/3rd of the way through!) A big theme in this relatively short amount of time has been use or rather misuse of confidential information.

GDPR put everyone in a real panic last year and its true significance remains to be seen at this stage. What’s more; over the past two decades our work and personal lives have become unavoidably digital. Smartphones, home assistants (like Alexa) and the rest only scratch the surface of the world we’ll soon be living in. Indeed Artificial Intelligence will soon be everywhere and it is driven by big data sets.

Whilst arguments are raging about whether or not “data is the new oil” – it certainly is important and increasingly so in our lives.

But as the significance of data and its hinterland of confidential information ramps up – so do the risks associated with it. Whether you’re a business or an individual it’s time to start thinking really carefully about it.

In 2019, “one does not simply leave a business”
The ubiquity of personal data and the overlap of home life and work life makes leaving any business nowadays in a digitally hygienic fashion quite challenging.

Unless robust systems are put in place (and followed!) it can be incredibly difficult to ensure that valuable data does not leave with an exiting employee.

In many cases, damages from this will be minor and the damage that flows fairly limited.

Maybe the employee will be tempted to contact a previous supplier, or worse, client! But it might not be the end of the world. However, if they contact dozens of your best customers with information about price, margin and quantities, they may well have take some of your most valuable information.

In many types of business, however information is very valuable – and perhaps the one of the main intangible assest held. In such cases a lackadaisical approach to protecting data can be catastrophic – as the crown jewels simply can walk out of the door without any recourse in place.

Of course, to do so you need to be familiar with the law; and any contracts or agreements need to be watertight and not overly onerous or unworkable.

Whether you’re a business; or an exiting employee – there has never been a more important time to get familiar with correct procedures for looking after your data and trade secrets.

Case in point…
A recent case springs to mind from our recent caseload that shed light upon the current environment in digital information – and how it can and should be correctly enforced when breaches arise.

Freshasia Foods Ltd v Lu [2019] EWHC 638 (Ch) (20 March 2019)
Mr. Jing Lu was the marketing manager of Freshasia Foods Ltd. (“Freshasia”), a large-scale producer of Asian foods in the UK and Europe, for several years before leaving in October 2018. He would then begin work for a competing company shortly afterwards.

At this point Mr. Lu received notice that Freshasia had sought an interim injunction, seeking to stop him from working in his new role. They alleged a breach of confidence and breach of other restrictive covenants from his contract and staff handbook had occurred.

Freshasia’s claim was that Mr. Lu took important Freshasia information to the new business and that this would harm Freshasia – to the extent that he should be stopped from working at a competitor straight away to limit the damage he would have enacted on their business.

The interim injunction was not successful – and Mr. Lu was allowed to work until the trial.

Then, Mr. Lu was relieved at trial; with no substantial amount of information taken (nor damage) identified as a result of him leaving the company. Further to this, the restrictions that his previous company sought to impose on him after leaving the company were found to be unlawful.

A full copy of this judgment can be read here.

However, the process demonstrates the importance of understanding what and what does not constitute an injunctable breach of contract and confidence.

What can be learned
In this instance, the case brought leave an unfavourable taste in both parties’ mouths.

Whether it’s Defendants whose lives have been turned upside down by the potential outcomes of the trial, or the Claimants who falling foul of the judgment.

For the latter, not only do they find that their the claim falls apart (and they end up footing the bill) but what’s more they have to take a *very* close look at their contracts and handbooks to make sure they’re genuinely enforceable.

Ultimately, breach of confidence cases are an increasingly complex and thorny area – and should be approached with a very high degree of care.

Tags: UK200

Back to Blogs
Facebook Twitter LinkedIn YouTube