BCG Brokers LP v Tradition (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 25 October 2019 |
| Neutral Citation | [2019] EWHC 2845 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB-2017-000090 and QB-2017-000089 |
| Date | 25 October 2019 |
[2019] EWHC 2845 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM MASTER DAVISON
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Freedman
Case No: QB-2017-000090 and QB-2017-000089
Mr Neil Kitchener QC and Mr Matthew Cook (instructed by Mischon de Reya) for the Appellant
Mr Max Mallin QC and Mr Bobby Friedman (instructed by BCLP) for the Respondent
Hearing dates: 10 th of October, 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 INTRODUCTION
This is an appeal against a decision of Master Davison (“the Master”). On 21 and 22 May 2019, the Master heard a large number of specific disclosure applications by the Claimants and the Tradition Defendants. “The Tradition Defendants” is a reference to the First, Second and Fifth Defendants in “the Vowell Claim” and to the Second Defendant in “the Bell Claim” as the claims are defined in paragraph 2 below. One of a number of applications, which took little time relative to the others, comprised an application to un-redact the names of any individuals mentioned in the Recruitment Reports (as defined in paragraph 2 below) who worked for any of the Claimants and certain companies associated with the Claimants. The redactions were on the ground of irrelevance.
By paragraph 3 of his order dated 21, 22 and 24 May 2019, the Master required the Tradition Defendants to un-redact the names of any individuals mentioned in the Recruitment Reports who worked for any of the Claimants and certain companies associated with the Claimants. The Recruitment Reports were made by a recruiter, Mr Ian Stoppani, who identified brokers for potential recruitment by “Tradition”, the First Defendant in claim number QB-2017-000090 (“the Vowell Claim”) and the Second Defendant in claim number QB-2017-000089 (“the Bell Claim”).
II THE NATURE OF THE ACTION
The three Claimants in the Vowell Claim are entities in the BGC Group. One of them, Martin Brokers Group Limited, commonly referred to as RP Martin (“RPM”) is also the Claimant in the Bell Claim. Tradition (UK) Limited (“Tradition”) is a defendant to both Claims. BGC and Tradition are competitor inter-dealer brokers.
Mr Vowell and Mr Anderson (both of whom are Defendants in the Vowell Claim) are employees of Tradition. Settlements have been reached with the other two defendants in the Vowell Claim, Mr Cuddihy and Mr Goan (who were not employees of Tradition).
The Bell Claim is in summary as follows:
i) Mr Paul Bell (the First Defendant in the Bell Claim, who does not appear on the Appeal) was the joint head of the Forward Cable Desk for RPM (the “FC Desk”). There were six members of the FC Desk (“RPM 6”) who resigned to join Tradition.
ii) It is common ground that Mr Bell owed contractual duties to RPM, for example not to assist competitors; to inform RPM if approached or solicited by a competitor; and not to disclose confidential information; and that he owed implied contractual duties of fidelity: Bell Re-Amended Particulars of Claim (“RAPOC”) [5–6], Tradition Amended Defence [12–13].. It is also alleged that Mr Bell owed fiduciary duties to RPM: Bell RAPOC [7]. Tradition began approaching Mr Bell in October 2016.. The case is that Mr Bell failed properly to report to his senior management the approaches made to him by Tradition, or the approaches that his colleagues informed him — as their head of desk – had been made to them. He also failed to inform RPM of key information given to him by other members of the RPM 6 as to what they wanted in order for RPM to retain them. It is alleged that Mr Bell acted as a recruiting sergeant, disrupting RPM's attempts to retain the other brokers and orchestrating a team move: Bell RAPOC [32–35], [38–40].
iii) Mr Bell then received a £1 million payment from Tradition: Bell RAPOC [26], Bell Defence [38]. On his final day working for RPM, he took a photograph of the part of the BGC's BR08 spreadsheet (as explained further below) to which he had access, on his mobile phone: Bell RAPOC [29A].
iv) On the day that the RPM 6 resigned, it is alleged that Mr Anderson committed acts of spoliation by deleting his WhatsApp messages, telling Mr Stoppani, “ PB resigned this morning I am deleting all my whatsapps”.
v) It is alleged that Mr Bell – or another source within BGC or RPM — also passed confidential information to Tradition. The allegation is also that Mr Stoppani received confidential information about the RPM 6 from others within RPM or BGC (who would include his other recruitment targets).
vi) It is alleged that Tradition and Mr Bell also conspired to cause damage to RPM by unlawful means: Bell RAPOC [29A].
vii) RPM therefore claims for the loss and damage caused. Mr Bell also holds his £1 million payment on trust for RPM; and RPM claims that it is entitled to an account of profits against Mr Bell and/or Tradition for their breaches of confidence: Bell RAPOC [50–54].
The Vowell Claim concerns the passing of confidential information from BGC to Tradition.
i) It is common ground that various financial information was passed by Mr Cuddihy – who worked for BGC – to Mr Vowell, who worked for Tradition. The information came at least in part from copies of BGC's “BR08” spreadsheets, which set out the revenues generated by individual brokers and desks working for BGC in the highly valuable Interest Rate Swaps (“IRS”) Business (the “BR08 Information”). Mr Cuddihy's junior colleague, Mr Goan, improperly had access to the BR08 spreadsheets: Vowell RAPOC [11–12]. BGC's case is that, in addition to Mr Vowell — himself a senior manager — (whose receipt of the BR08 Information from BGC is admitted by the Tradition Defendants), the confidential information was requested, received, used and/or transmitted by Tradition's other senior management, and/or by Mr Anderson, Tradition's joint CEO.
ii) In addition, BGC's case is that Mr Anderson attempted to, and successfully did, obtain confidential information as to BGC's IRS business revenues, which allowed him to prepare and distribute two spreadsheets setting out the revenues of BGC's IRS business (the “Anderson Information”). This information was highly accurate and could not have been obtained legitimately. It was repeatedly described by Mr Anderson as “ confidential”: RAPOC [16(5A)].
iii) BGC also pleads a case that there was further misuse of confidential information derived from the BR08, through Mr Stoppani, as Tradition's effective in-house recruiter. The BR08 contained figures as to the performance of individual desks within BGC. One of those desks, the Turkey foreign exchange desk (the “Turkey FX Desk”) was erroneously described on the BR08, for historical reasons, as the “EGB — Turkey” or “European Govt Bond – Turkey” desk. This was a misnomer: the desk was not a bond desk. However, Mr Stoppani contacted one of BGC's recently departed brokers and sought information about the brokers who worked on the “Turkey Bond Desk”. Mr Stoppani could only have believed that there was such a desk based on information provided to him by someone who had seen the BR08 or who had had access to information derived from the BR08 (the “Turkey Bonds Allegations: RAPOC [16(9)]).
iv) BGC further pleads spoliation against Tradition, namely that Mr Anderson deliberately destroyed evidence despite having given a written internal briefing that litigation was likely: Vowell RAPOC [18A–18C].
The appeal relates to a small part of the argument before the Court below. In BGC's skeleton argument of 18 pages, it formed barely half a page. It is worth setting it out in full:
“25. The Recruitment Reports contain the names of the brokers Mr Stoppani was targeting for recruitment, but they have been entirely redacted, save for references to the RPM 6 and the brokers at [9A] of the Bell RAPOC as having been specifically targeted by Mr Stoppani. These redactions should be removed insofar as they relate to others who worked for the Claimants or their associated companies since 1 October 2016.
25.1 BGC's case in the Vowell Claim is that the conduct pleaded is an example of the widespread wrongdoing of Tradition misusing BGC's confidential information for recruitment purposes: see [16(9)(k) Vowell RAPOC].
25.2 In relation to the Bell Claim, it is RPM's case that Tradition was accurately targeting its key revenue producers: [9A Bell RAPOC].
26. The identity of the brokers is therefore relevant to both pleaded cases.”
The quoted paragraphs read as follows:
i) Paragraph 16(9)(k) of the Vowell RAPOC reads as follows:
“When taken together with the facts and matters relied on in the Bell Proceedings and the facts and matters pleaded above, the inference is that this conduct on the part of Tradition was not limited to the examples that BGC has been able to uncover so far, but was widespread, such that the full extent of the wrong-doing of Mr Anderson, Mr Vowell and/or Tradition will only be apparent following full disclosure herein”.
ii) Paragraph 9A of the Bell RAPOC reads as follows:
“Tradition's approaches to members of the Desk were consistent with a wider pattern of approaches made by Tradition to RPM Brokers between late 2016 and early 2017 by which Tradition was accurately targeting RPM's key revenue producers, including Mark Kelly (head of Basis Swaps) and Ryan Morley (head of Swiss). Such approaches represented a new recruitment strategy from Tradition,...
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