(1) Benfield Holdings Ltd (2) Benfield Group Ltd (3) Benfield Ltd v (1) Elliot Richardson (2) Aon Ltd (3) Aon Corporation
| Jurisdiction | England & Wales |
| Judge | THE HONORABLE MR JUSTICE LANGLEY |
| Judgment Date | 21 February 2007 |
| Neutral Citation | [2007] EWHC 171 (QB) |
| Date | 21 February 2007 |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ06X03638 |
[2007] EWHC 171 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
The Honorable Mr Justice Langley
Case No: HQ06X03638
Mr G. Mansfield (instructed by LeBoeuf Lamb) for the Claimants
Mr T. Lord (instructed by Simons & Simmons) for the Defendants
Hearing date: 23 rd January 2007
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The Hon. Mr Justice Langley:
The order sought
The Second and Third Defendants (“AON”) sought, at a without notice hearing on 16 January 2007, before Wyn Williams J, an interim order restraining the second-named Claimant (“Benfield”) from deposing certain witnesses for the purposes of proceedings brought by another company in the Benfield Group against other Aon Group companies in the United States District Court for the Southern District of New York pending the trial in this jurisdiction of liability issues in these proceedings. That trial is estimated to last 10 days and fixed to commence on 5 March this year and so some 7 weeks after the date of the hearing before Wyn Williams J. The order made entitled Benfield to apply to set it aside. Benfield did so and the application came before me on 23 January when both parties were represented by solicitors and counsel. At the end of the hearing, I said I had reached the conclusion that Benfield's application to set aside the order of Wyn Williams J should be dismissed with the consequence that the injunction would remain in force in its then form until further order. The application raised what I think are important issues and I said I would put my reasons for the decision in writing. They are set out in what follows.
The Dispute
The Benfield Group and the Aon Group are major and competing insurance and reinsurance groups each operating on a global basis. In the autumn of 2006, a number of members of Benfield's specialist facultative reinsurance group (“the Fac group”) resigned from Benfield in order to work for Aon. The head of the Fac group was Mr Richardson (the first defendant). Benfield alleges that there was a conspiracy by which Aon and Richardson orchestrated and co-ordinated the poaching of the Fac group. Mr Richardson was employed by the first-named Claimant and was based in and worked out of London.
The English Proceedings
These proceedings were begun by the first Claimant on 29 November 2006. Benfield and the third Claimant were added on 20 December. Benfield is incorporated in Bermuda. It is the parent company of the Benfield Group. Aon Corporation has its headquarters and principal place of business in Chicago, Illinois. It is the parent company of the Aon Group. The other claimant and defendant companies are English companies. The claimants allege breach of contract, fiduciary duty and confidence against Mr Richardson and that he induced other senior Benfield employees to breach their contracts and fiduciary duties. Inducement of breach of contract and breach of a non-solicitation agreement are alleged against Aon and conspiracy to injure and wrongful interference with business are alleged against Aon and Mr Richardson. Damages and injunctive relief are claimed. The claims concern inducement of employees and clients in Europe, the USA, Australia, New Zealand and South Africa as well as the UK.
Aon's defence was served on 15 January 2007. Essentially it alleges that the movement of the Fac group was at their own initiative and was part of a normal hiring process by Aon.
On 20 December 2006, a Consent Order was made whereby the claim was certified to be fit for a speedy trial of liability issues to be heard as soon as possible on or after 5 March and directions were given to ensure such a trial would be ready and effective. Those directions included standard disclosure of documents to be made by 31 January and witness statements to be exchanged by 14 February. Thus, and by agreement between them, all documentary and witness evidence on which any party relies in the liability issues are and will be fully available shortly.
The Consent Order also recorded undertakings given by Mr Richardson until trial or further order, including an undertaking not to be engaged in any business other than the business of Benfield, and undertakings by Aon, including an undertaking not directly or indirectly to solicit Benfield employees to breach their contractual or fiduciary obligations to Benfield and not to disclose any trade secrets of Benfield or Benfield Group companies.
The New York proceedings
The New York proceedings were issued on 20 October 2006, a month or so before the English proceedings. The Plaintiff is a Benfield company incorporated in Delaware and with its principal place of business in Minneapolis, Minnesota. The defendants are two employees of the Fac group resident in New York (Mr Talbott and Mr Garner), Mr Richardson, and two Aon subsidiaries within the court's jurisdiction.
The basis of the New York proceedings is the same dispute as is the basis of the English proceedings. Claims are made against Mr Talbott (former head of the Fac Group in the USA) and Mr Garner (a broker in the Fac Group) for breach of fiduciary duty and contract and against Mr Richardson for breach of fiduciary duty. Claims for “unfair competition” and “misappropriation of trade secrets” are made against all the defendants.
Overlap
Mr Lord, for Aon, submitted that it was apparent that “while the US proceedings overlap with the English proceedings, they are much narrower in scope and relate only to the US aspects of the conspiracy alleged in the English proceedings (and which is alleged to have been orchestrated in England)”. I agree. The Particulars of Claim (paragraphs 45 and 46) in these proceedings allege that Richardson “instructed and encouraged Talbott” to induce members of the Fac Group in the USA to leave Benfield and join Aon and that Talbott induced and encouraged them to do so. The principal movers in the conspiracy are alleged to be Mr Richardson and Derek Mahoney, an employee of Aon Limited in London. The substantive trial of liability issues will take place here on 5 March. It is difficult to imagine why Benfield should need to pursue such issues in New York, should they succeed in the English proceedings, and should they lose in England, pursuit of the New York proceedings on those issues is likely to be problematic. Be that as it may, there is no room to dispute that, despite the timing of their commencement, the English proceedings are the lead action. The Consent Order itself demonstrates as much. There is no trial date in New York and no one has sought one. The evidence is that it is highly unlikely that any trial would take place before at least some months after the trial here.
Depositions in New York
At the time the New York proceedings were commenced, Benfield also applied for expedited discovery. On 1 November 2006, District Judge Deborah A. Batts granted the application against all the Defendants with the proviso that Mr Richardson be discovered as a non-party as jurisdiction had not then been established in his case. Mr Garner was deposed on 28 November. Mr Talbott was deposed on 30 November. On 6 December, William Kasbeer, CEO of one of the Aon Defendant companies was deposed, and on 12 January 2007 another Aon executive, Mr O'Halleran was also deposed.
On 12 December, Benfield requested the New York court to depose Mr Mahoney and Toby Sisson. Mr Sisson is the HR Manager, Global Specialisms and Reinsurance of Aon Limited, based in and working out of the London office. The request to depose them was founded on the claim that they were “managing agents” of the American Defendant Aon companies. The request was refused by Magistrate Judge Ellis on 22 December without prejudice to the submission of further evidence by Benfield on the agent...
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