Alesco Risk Management Services Ltd v Bishopsgate Insurance Brokers Ltd

JurisdictionEngland & Wales
CourtQueen's Bench Division
JudgeMr Justice Freedman
Judgment Date25 October 2019
Neutral Citation[2019] EWHC 2839 (QB)
Docket NumberCase No: TLQ18/0226

[2019] EWHC 2839 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice Strand, London, WC2A 2LL

Before:

Mr Justice Freedman

Case No: TLQ18/0226

Between:
(1) Alesco Risk Management Services Limited
(2) Arthur J Gallagher Services (UK) Limited
(3) Arthur. J. Gallagher (UK) Limited
Claimants
and
(1) Bishopsgate Insurance Brokers Limited
(2) Prices Forbes and Partners Limited
(3) The Ardonagh Group Limited
(4) Nawaf Hasan
(5) Peter Burton
Defendants

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.

Mr Justice Freedman

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

1

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.

2

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

3

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

4

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

5

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.

6

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

7

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...

To continue reading

Request your trial
2 cases
  • Quilter Private Client Advisers Ltd v Emma Falconer
    • United Kingdom
    • Queen's Bench Division
    • 4 Diciembre 2020
    ...International Ltd v Wilson [2010] EWHC 2032 Ch, [163] and Alesco Risk Management Services Ltd v Bishopsgate Insurance Brokers Ltd [2019] EWHC 2839 QB, the ingredients of the tort are: a) There must be a contract; b) There must be a breach of contract: OBG [44] per Lord Hoffman, [172] per ......
  • Ms Madeline Luckham v HSBC Bank plc and Robert Clegg: 3202146/2018
    • United Kingdom
    • Employment Tribunal
    • 22 Junio 2020
    ...We considered the warning in Alesco Risk Management Services Ltd and other companies v Bishopsgate Insurance Brokers Ltd and others [2019] EWHC 2839 (QB) the passage from Gestmin cited therein in respect of carefully crafted witness statements 192 While the term ‘behaviours’ or behavioural ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT