Alesco Risk Management Services Ltd v Bishopsgate Insurance Brokers Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 25 October 2019 |
| Neutral Citation | [2019] EWHC 2839 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: TLQ18/0226 |
| Date | 25 October 2019 |
[2019] EWHC 2839 (QB)
Mr Justice Freedman
Case No: TLQ18/0226
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice Strand, London, WC2A 2LL
Mr Gavin Mansfield QC, Mr Craig Rajgopaul and Mr Grahame Anderson (instructed by Clyde & Co) for the Claimant
Mr David Craig QC, Ms Amy Rogers and Mr Jamie Susskind (instructed by Lewis Silkin) for the 1 st, 2 nd and 3 rd Defendants
Mr Richard Leiper QC and Mr Michael Lee (instructed by Mishcon de Reya) for the 4 th Defendant
Ms Jane McCafferty QC and Mr Simon Forshaw (instructed by Doyle Clayton) for the 5 th Defendant
Hearing dates: 12 th–15 th, 18 th–22 nd and 25 th–29 th of March 2019, 8 th–10 th of May 2019
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.
I Table of Contents
| SUBJECT | PARAGRAPH NUMBER |
| I Table of Contents | Ta |
| II Introduction | 1 |
| III The parties | |
| (i) The Claimants | 3 |
| (ii) The Corporate Defendants | 4 |
| (iii) Mr Hasan and other employees in MENA business | 5 |
| (iv) Mr Burton and other employees in US business/Land Rig Facility | 7 |
| IV Sequence of resignations | 8 |
| V The approach to evidence | 10 |
| VI The witnesses | 18 |
| VII The probabilities | 37 |
| VIII The Departing Employees | |
| (i) Closeness or otherwise prior to terminations | 39 |
| (ii) The Departing Employees were looking for other employment before contact with the Corporate Defendants | 45 |
| (iii) Mr Burton | 57 |
| (iv) Mr Hasan | 79 |
| (v) Mr Brewins | 110 |
| (vi) Mr Maginn | 128 |
| IX The various matters relied upon by the Claimants | 140 |
| (i) The departure of the Departing Employees all at or about the same time | 141 |
| (ii) The significance of the attempt to recruit Messrs Sambrook and Baker | 156 |
| (iii) Resignations in September 2017 including Messrs Game and Cohen | 160 |
| (iv) Attempts to recruit further individuals | 170 |
| (v) Timing of the approaches to the Departing Employees | 173 |
| (vi) Hiring did not depend on the acquisition of a team | 179 |
| X The significance of the Burton loan | |
| (i) The facts | 191 |
| (ii) A quid pro quo for the loan? | 197 |
| (iii) Mr Burton did not solicit business or employees | 207 |
| (iv) Timing of resignation not unlawful | 211 |
| (v) Failure to disclose the loan at the time of exit | 216 |
| (vi) Mr Burton was not a fiduciary and the loan not inherently unlawful | 218 |
| (vii) Why a written offer was not made to Mr Burton at the time of the Burton loan | 245 |
| XI The Bishopsgate Business Plan | 248 |
| XII Meetings in late May 2017 of Mr Hasan | 264 |
| XIII 3 June 2017 meeting of Mr Matson with Mr Ross at Mr Ross's home | 266 |
| (i) Timing of the notice of resignations | 275 |
| XIV Resigning without having committed to join Bishopsgate | 277 |
| XV Withholding information and telling untruths about their employment intentions | 281 |
| XVI Recruitment made individually not to a team | 300 |
| XVII Destruction of evidence | 307 |
| XVIII Consideration of other points alleged to found inferences about conspiracy | 308 |
| XIX Legal framework | |
| (i) Express obligations | 314 |
| (ii) Express obligations: disclosure of offers | 315 |
| (iii) Express obligations: confidential information | 325 |
| (iv) Implied obligations | 327 |
| (v) Incidental obligations | 336 343 |
| (vi) Fiduciary duties | 356 |
| (vii) The contractual and equitable duty of confidence | 358 |
| (viii) Post-termination restrictions | 360 |
| (ix) Torts: lawful means conspiracy | 367 |
| (x) Torts: unlawful means conspiracy | 377 |
| (xi) Torts: inducing / procuring breach of contract | 379 |
| (xii) Attribution | 385 |
| (xiii) Accessory liability in equity: dishonest assistance in breach of fiduciary duty | 386 |
| (xiv) Financial remedies — general legal principles | |
| XX Applying the law to the facts | |
| (i) Lawful means conspiracy | 390 |
| (ii) Unlawful means conspiracy | 402 |
| (iii) Breach of contract: solicitation of clients | 438 |
| (a) OPC | 439 |
| (b) E-Styrenics | 455 |
| (c) KDC | 456 |
| (d) STEG | 457 |
| (e) Other business – Doha Insurance | 458 |
| (iv) Inducement to breach of contract | 463 |
| (v) Other breaches of contract: Mr Burton | 466 |
| (vi) Other breaches of contract: Mr Hasan | 474 |
| (vii) Other breaches of contract: Mr Brewins | 477 |
| (viii) Other breaches of contract: Mr Maginn | 478 |
| (ix) Inducement to breaches of contract: the Corporate Defendants | 479 |
| (x) Losses | 480 |
| (xi) Loss of OPC renewal | 486 |
| (xii) Breach of fiduciary duty/dishonest assistance | 490 |
| (xiii) Breach of confidence | 491 |
| XXI Conclusions | 492 |
II Introduction
The claim concerns an alleged unlawful team move of employees between rival firms of insurance brokers. The Claimants and the Corporate Defendants form part of large groups of companies in the insurance broking and risk management industry. This dispute concerns the employment of specialist energy insurance brokers in the London market.
The Claimants and the Corporate Defendants are commercial rivals with a particular history. Ardonagh's CEO, Mr Ross, worked for Gallagher for 25 years, latterly as CEO of its international business. In 2015, Mr Ross moved to Towergate, along with a number of other Gallagher employees. Mr Ross (and two others) were sued by Gallagher, alleging an unlawful team move. Those proceedings (“the 2015 Proceedings”) were compromised with a payment of £20,000,000 to Gallagher and no admission of liability.
III The parties
(i) The Claimants
The Claimants are all subsidiaries of the Arthur J Gallagher (“Gallagher”) group. The First Claimant (“Alesco”) is a wholly owned subsidiary of the Third Claimant (“AJG UK”). The Second Claimant (“AJG Services”) is a service company that employs individuals engaged in Alesco's business (and others in the group). Alesco was founded in 2008 by the AJG group of companies (referred to as “AJ Gallagher” or simply “AJG”). AJG owned 65% of the shares of Alesco with the remaining 35% divided among its employees: see Burton 1 [10–12]. It commenced its activities in the energy sector, but subsequently diversified its activities including construction by the recruitment of Mr Thompson and people who worked with him, and casualty by the recruitment of Mr Payne and people who worked with him: see ( T2/74/23 – T2/76/4). In 2014, AJG bought the entirety of the shareholding in Alesco, and the employees ceased to share in Alesco's ownership.
(ii) The Corporate Defendants
The Third Defendant (“Ardonagh” (formerly “KIRS”)) is the holding company for a variety of insurance businesses, notably Towergate which became known as Bishopsgate. The First Defendant (“Bishopsgate”) was launched in 2016, and the Second Defendant (“Price Forbes”) joined the Ardonagh group in June 2017. Price Forbes has for long had a substantial energy business with a significant presence: see Ross 1 [32–36]. Bishopsgate and Price Forbes now form the “Ardonagh Specialty” segment of Ardonagh. From at least April/May 2017, Bishopsgate has been involved in the energy insurance market.
(iii) Mr Hasan and other employees in MENA business
Mr Nawaf Hasan (“Mr Hasan”) led and developed energy insurance business in the Middle East and North Africa (“MENA”) for Alesco. Mr Hasan's employment contract with AJG UK is dated 9 August 2013.
Throughout his time at Alesco, Mr Hasan worked with Mr Gerard Maginn. Mr Maginn led and developed energy insurance business in Asia, including India and the Far East. Mr Maginn's contract of employment with Alesco is dated 12 November 2013. As with Mr Hasan, the Corporate Defendants initially intended that Mr Maginn would work for Bishopsgate, but ultimately, he joined Price Forbes on 1 February 2018 as an Executive Director, working alongside Mr Hasan in Price Forbes' Energy Division. Messrs Hasan and Maginn were supported in much of their work at Alesco by Mr Tarrent Cohen. Mr Cohen's employment contract with the First Claimant is dated 28 May 2014. In addition, Mr Nicholas Game, a claims handler for Alesco, provided particular support for the clients worked on by Messrs Hasan and Maginn. Mr Game's employment contract with the First Claimant is dated 24 November 2014. Another individual, Hussain Hussein, also worked at Alesco during 2017, including in respect of MENA business. Mr Hussein is the son of the Group Managing Director of Doha Insurance, a client that Mr Hasan worked closely with as part of his duties at Alesco. The term “Departing Employees' will be used to refer to the key 4 employees who left Alesco, namely Messrs Burton, Hasan, Brewins and Maginn.
(iv) Mr Burton and other employees in US business/Land Rig Facility
Mr Peter Burton (“Mr Burton”) developed and managed Alesco's US onshore contractor facility, known as the ‘Land Rig Facility’. Mr Burton's employment with Alesco commenced on 1 February 2010; his latest contract of employment with Alesco is dated 24 March 2016. Mr Burton worked with Mr Brewins in respect of the Land Rig Facility. Mr Brewins' contract of employment with the First Claimant is dated 10 May 2010. Mr Burton did not have supervisory responsibility...
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