Court reminds us that compensation requires more than just a risk of damage to a business - but actual damage

Wednesday 10th May 2017

In a recent High Court decision, the Court has awarded an investment management business compensation of just £2.00. Yes that’s two pounds sterling!

The case of Marathon Asset Management LLP & Others v Seddon & Others saw the business claim £15 million in compensation from the defendants, who were two former employees of the business and had copied numerous files belonging to the business, prior to leaving their employment.

Even though the former employees had breached their duties of confidence (one defendant admitted such breaches and one was found to be liable) for them, the Court ruled that as Marathon had not suffered any financial loss and as the employees had not made any financial gain as a result of their breach, Marathon was only entitled to nominal damages of £1.00 from each defendant.

The case is interesting as it reminds us, as stated by the court, that “The law does not compensate people for being exposed to a risk of injury” and that there must be a loss in order to be compensated. Mr Justice Leggatt used the following analogy:

“If a man drives at high speed the wrong way round a roundabout putting the lives and safety of other people at risk, but by good fortune avoids an accident, he may be prosecuted and punished for dangerous driving; but the people whose safety he endangered cannot claim damages for having been exposed to a risk of injury.”

At Marsden Rawsthorn, we are currently acting for a company who has suffered from an actual financial loss, as a result of a similar breach to this case, whereby a former employee has allegedly passed on our client’s intellectual property (uniquely designed computer software) to a competitor. If your business is in a similar situation and you need advice, contact our Dispute Resolution team for assistance.

Author: Administrator

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