Willis Ltd and Another v Jardine Lloyd Thompson Group Plc & Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Elias,Lord Justice Lewison,Sir Colin Rimer |
| Judgment Date | 22 April 2015 |
| Neutral Citation | [2015] EWCA Civ 450 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2015/1244 |
| Date | 22 April 2015 |
[2015] EWCA Civ 450
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
HIGH COURT OF JUSTICE (QUEEN'S BENCH DIVISON)
(HIS HONOUR JUDGE SEYMOUR QC)
Royal Courts of Justice
Strand
London, WC2A 2LL
Lord Justice Elias
Lord Justice Lewison
Sir Colin Rimer
Case No: A2/2015/1244
Mr Gavin Mansfield QC and Miss Amy Rogers (instructed by Clyde & Co LLP) appeared on behalf of the Applicant
Mr Paul Golding QC and Mr Edward Brown (instructed by Fasken Martineau LLP) appeared on behalf of the Respondent
(As Approved)
This is an appeal against the refusal by His Honour Judge Seymour to grant an interim injunction pending the return date. The application was made before him on short informal notice to the respondents. The judge accepted that there was a serious issue to be tried, but refused relief on the grounds that there was no purpose in granting an injunction in the circumstances of the case; that makes it a highly unusual case.
The background to the application was set out in the witness statement of David Thomas. Until October 14, he was the Chief Executive Officer of the Market Services and Solutions Division of the first applicant and its subsidiary companies. He has, since that date, been responsible for negotiating a sale of part of the business and in fact it involves the sale of the part which is the subject of these proceedings.
Willis is a global insurance and reinsurance broker which provides, apart from insurance and reinsurance, risk management and financial services to clients. The application relates to one part of its business, namely the Fine Art, Jewellery and Specie Risks Division (FAJS). According to Mr Thomas, it makes tens of millions of US Dollars annually and he says it is the worldwide market leader involved in this type of insurance. The third respondent is the global managing director of that division, Mr Gordon. He is a longstanding Willis employee. The first and second respondents (whom I will call JLT) are direct competitors of the Willis Group; the second respondent being a subsidiary of the first.
The witness statement was made on 13 April. It stated that in the preceding ten days some thirty employees of Willis had resigned the FAJS division in order to join JLT. Twenty two resigned on Maundy Thursday, these included Mr Gordon; he left first and then the others followed during the course of the day. He, in fact, was subsequently placed on garden leave in April. Four then left on 9 April; three on the tenth and two more on the thirteenth. The staff, according to the statement, included almost all the senior management team and all the key revenue producers in the UK. Many of them had had long service with Willis in the FAJS division and were extremely experienced. There were, however, around thirty staff left in more junior ranks, but still individuals who would have an important role to play in the business.
Mr Thomas said that it was Willis' belief, based in fact upon statements from Mr Gordon and other evidence, that there would be a second wave or phase of recruitment, part of what he describes as a coordinated attack which would be directed at further employees in the London office and also employees from the North American offices. There are 35 employees in the US. They are employed by subsidiary companies, not by the claimants themselves. The evidence is that the New York operations provide to London much of the business which is placed by Willis with Lloyds and other London brokers. The three senior US team members report to Mr Gordon. Mr Goulding QC, counsel for the respondents before us today, submitted that there was very little evidence that the US operation was of any great significance to the UK operation. However, that is not the tenor of the evidence which has been produced at court.
Willis had been investigating the circumstances of these resignations. The sequence seemed to be as follows. On Wednesday 1 April, JLT's CEO, Mr Dominique Burke, told Willis' Deputy Chief Executive Office that JLT had taken over twenty employees from the division and he said he wished to offer Willis the opportunity to sell the division at what Willis believed to be a substantially discounted price. The respondents have, at all times, denied that they have done anything unlawful, as alleged by the claimants. They say that the employers were recruited individually by a head hunter using information from Willis' own website. Mr Burke sent a text message on 2 April saying that he needed a response to the offer to buy the business. It was indicated that the claimants would not sell and that, it is believed, led to the resignation of the employees on that date.
Willis considered that, at least for the purposes of an interim injunction, it was legitimate to infer that the resignations had been choreographed by Mr Gordon acting, essentially, in cahoots with the respondents who had been coordinating the departure of the staff. Willis alleged that he was acting in breach of both his contractual and fiduciary duties and that JLT were the coordinating arm. This was supported, they claimed, by the fact that some of the staff were contacted on telephone numbers which were not to be found on the website and must have been obtained by some other means. The injunction was sought in the usual way only until the inter parties return date.
The case for the appellants essentially is that this sudden drain of staff created an urgent situation. There was a serious risk that further staff would leave and that would be very damaging to the claimants. They sought relief in two main parts. The first was to prevent the respondents from approaching employees in order to persuade them to leave or to encourage others to leave. That would have been unlawful (as Mr Goulding accepts). The second, in relation to the first two respondents in particular, was designed to prevent them from seeking to recruit employees from Willis or to negotiate with them or accept them into employment in any way. This would not of itself involve any illegal activity by the respondents in the normal way, but the relief was sought on the basis of the well-known Springboard Principle i.e. it was alleged that the respondents had benefitted from their unlawful activities and that it was necessary, in order to prevent them from taking advantage of those activities, to prevent any employees, either from the US or the UK operations, from being able to join them. The appellants undertook to give cross undertakings in damages in the usual way.
We do not have an official transcript of the judge's decision, but there are notes of what he said before the court. The judge considered that the appropriate test was the well-known American Cyanamid test laid down by Diplock LJ; on the assumption that damages are not an adequate remedy, the judge has to ask whether there was a serious issue to be tried, and if so, where does the balance of convenience lie? That,...
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