Nominal Damages Awarded in Breach of Confidentiality Claim

This was considered in the case of Marathon Asset Management LLP and another v Seddon and another [2017].

In this case, 2 employees worked for an asset management firm, Marathon Asset Management LLP. In the months before they left, a number of files were copied containing confidential information belonging to their employer, which were placed on USB drives and later removed from the employer’s premises.

Shortly after leaving, it was found that both employees had, in fact, set up a competing investment management business along with a number of their former colleagues.

Marathon Asset Management LLP brought a claim on the grounds that the exiting employees had breached their contractual duty of confidentiality and sought to claim £15 million of “Wrotham Park damages” (otherwise known as negotiation damages i.e. what the employees would have had to pay in a negotiation to release them from their contractual obligations).

Whilst the fact of the removal of these files was not disputed, evidence showed that whilst the files had been removed from the premises, very few of the files could be accessed. Moreover, Marathon Asset Management LLP were unable to show that they had suffered any financial loss as a result of the removal of such information.

As a result, the Court rejected the claim and instead awarded nominal damages of £1 per employee on the grounds that the exiting employees had not used the confidential files for any benefit.

This case serves as an important reminder that whilst it is imperative that the duty of confidentiality is not breached, before considering whether to commence proceedings, it would be sensible for an employer to consider what losses have incurred as a result of the usage of such information.

If you require any further advice on this, or any other Employment law matter, please contact the Chattertons Employment law team.