IG Index Ltd v Cloete
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Richard Parkes |
| Judgment Date | 16 September 2016 |
| Neutral Citation | [2016] EWHC 2297 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ13X03979 |
| Date | 16 September 2016 |
[2016] EWHC 2297 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge Richard Parkes QC
Sitting as a Judge of the High Court
Case No: HQ13X03979
David Mayall, instructed by Morton Law, for the Claimant
David Hirst, instructed by Pinder Reaux & Associates, for the Defendant
Hearing date: 8 th June 2016
His Honour Judge Richard Parkes QC:
On 21 December 2015, on the defendant's application, I ordered that this action should not go to trial, because it would have been disproportionate to allow the time of the court to be taken up, and substantial expenditure to be incurred, to so little purpose: see [2015] EWHC 3698 (QB).
However, the action was not struck out ab initio, nor was there any suggestion that it should be struck out as having no real prospect of success. The success of the defendant's application does not necessarily carry with it an entitlement to the costs of the action: see for instance Cammish v Hughes [2012] EWCA Civ 1655; [2013] EMLR 13 at [60]. I invited submissions on the terms that should apply, particularly as to costs. I have now heard that argument. I set out the background only to the extent necessary to make sense of my conclusions. Otherwise, the facts and the opposing contentions can be found in the earlier judgment.
The starting point is that the claim was an entirely proper one, brought against the defendant because it was discovered by the claimant, which carries on the business of online spread betting, that the defendant was in possession of highly confidential information about the claimant's spread betting clients. That information had originally been sent by him to the Office of the Information Commissioner (ICO) in hard copy form when he was an employee of the claimant, working as a network service engineer. He had alleged that the information was evidence of data security breaches. That disclosure to the ICO was not complained of in these proceedings.
After the defendant's dismissal, he began proceedings against the claimant in the Employment Tribunal (ET). In the course of those proceedings he asked the ICO for any personal information which it held about him, and in particular for correspondence with the ICO sent from his email address and by post. The ICO seems to have treated this as a subject access request, and on 16 January 2013 it sent him an email which contained scanned electronic copies of the confidential documents which he had sent to the ICO in hard copy form while he was still an employee. The defendant disclosed this material to the claimant in the course of disclosure in the ET proceedings, upon which these proceedings were issued.
The claimant was understandably concerned to discover that its dismissed former employee was in possession of such highly confidential material, so applied for and was granted interim relief on 15 August 2013. In the course of that hearing, the defendant told the judge, Singh J, that even if an order was made, he could renew his request to the ICO for the information, and that the information was in the public domain. There was plainly a serious issue to be tried; damages would not have been an adequate remedy for the claimant; and the balance of convenience lay in favour of making the order sought. The judge made (inter alia) an order for delivery up of all documents and confidential information belonging to the claimant that were in the defendant's possession or under his control, an order for the immediate deletion of material held on electronic storage media, an order that he should retain no copies, and an injunction restraining him until trial from making any use or disclosure of any confidential information concerning the claimant's business, subject only to a proviso enabling the fair conduct of the ET proceedings. The defendant was ordered to pay the costs of the hearing in front of Singh J, in the sum of £2500. The defendant obtained legal representation, but no attempt was made to appeal or set aside the judgment of Singh J. There is no suggestion, as far as I am aware, that the defendant failed to comply with the orders of the judge.
The defendant put in evidence about the circumstances in which he came into possession of the confidential information. He insisted that he had not realised that he had been sent confidential material, as opposed to the letters and cover sheets which he had originally sent to the ICO with the hard copy documents. There was a live issue as to whether he had received the confidential information with or without knowledge of what it was that he had been sent, and a related issue as to what exactly he had done with the information in terms of copying or moving the files. These issues involved technical evidence obtained from a jointly instructed expert, Navigant, which did not report until November 2015. Plainly, the defendant should not have been sent the information and was not entitled to have it, although he would have been entitled to (and did receive) disclosure of a redacted version for the purposes of the ET proceedings.
The defendant then took the point that the claimant's use of the disclosed material for the purposes of these proceedings was a breach of the implied undertaking not to use disclosed documents except for the purpose of the proceedings in which they were disclosed: CPR r.31.22. He applied for an order prohibiting the claimant from suing on the material obtained on disclosure and striking out the claim. The application was granted by Tugendhat J on 11 December 2013, but the claimant's appeal was allowed by the Court of Appeal on 31 July 2014. It had been necessary for the claimant to obtain leave to make use of the disclosed documents, but retrospective permission should have been granted. The court was of course unable to reach a concluded view on the merits but felt it wrong to suppose, on the then present material, that there was no issue to be tried, that there was no useful purpose in the continuance of the proceedings, or that the claim for a permanent injunction was of no utility.
The defendant was ordered to pay 75% of the costs of the appeal and of the costs of the application. The claimant's solicitors estimated those costs at £40,604 (letter 10 March 2015). Mr Mayall suggested in argument, without dissent from Mr Hirst, that in broad terms the effect of the costs order was that the defendant would be ordered after detailed assessment to pay the claimant around £25,000. Whether or not that is correct, it will certainly be a very substantial sum.
Thereafter, there was a case management conference on 12 March 2015, at which directions were given for the instruction of a joint IT forensic expert (Navigant), for disclosure and for exchange of witness statements, and at which a trial window was set between 5 October and 21 December 2015. The trial would have taken place in mid to late December 2015, with a three day estimate. The Master ordered the defendant to pay the costs of an application by the claimant dated 26 November 2014 for default judgment (a matter that I need not go into), and to serve a defence by 16 January 2015. A Reply was served on 20 April 2015.
On 5 October 2015, the claimant issued an application notice which was to be heard on 4 December 2015, the date when I heard the defendant's...
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