Time to use the nuclear option?
Published: 06 August 2008
I often hear from our recruitment sector clients, whether they be billion-pound multinationals or single-office businesses, that “our candidate and client database is our most valuable asset”.
Yet, by its very nature, the database is frighteningly vulnerable to theft and misuse. There are, of course, a number of ways to deal with this threat before the risk is realised. I cannot deal with each of those options here due to the confines of space. However, if these preventive measures do not work and you do find that the databases have been misappropriated, what are your options?
One can always, of course, do nothing. This invariably leads to serious problems arising for the business within months.
It is therefore best to ‘go hard and go early’ so that the misuse of your database has not reached a stage where the loss to your company is significant.
This generally allows for faster,‘cleaner’ and cheaper legal proceedings (to which I will turn shortly). The plan is to protect your existing business before it moves elsewhere, and avoid having to make a large damages claimafter significant harm is done.
Further, if one makes a decision to take injunctive relief (see below), the courts are more inclined to grant such powerful orders if the claimant acts quickly.
The ‘search order’
If the evidence of misappropriation and misuse of the database is adequately strong, it is likely to besufficient to make an application for an injunction in the High Court. There are a number of court orders that could be used. However, the order which is often referred to in legal circles as one of the ‘nuclear weapons’ available to an aggrieved party is the‘search order’.
In essence, it is an order that allows for the physical search of the business premises and/or home of the individuals or companies thathave misappropriated and misused the confidential information. The court application for the search order takes place without notice to the defendant(s).
The main reason for seekingsuch an order is that, given the dishonest conduct of the defendant(s) in misappropriating the databases, it is likely that if normal proceedings were started, the defendants would destroy, conceal oralter the evidence so as to avoid liability.
The search order allows you to preserve the evidence of wrongdoing by turning up at the relevant premises and searching for those documents. The categoriesof documents entitled to be taken away are listed in the search order, as agreed by the judge.
It is almost standard now tohave, as part of the search order, an imaging order that requires the defendant company and/or individual to effectively take a copy of all their computer systems so as to ‘preserve’ any evidence of wrong doing that may be held on those systems.
More often than not, the key evidence is found on the computers rather than hard copy, although this is not always the case.
Invariably, the evidence of the unlawful conduct in misappropriating the databases and (often) breaching restrictive covenants retrieved from the search is overwhelmingly strong.
Quick settlement
This, therefore , often leads to a quick and favourable settlement of the matter for the aggrieved party, including payment of that party’s legal costs.
Depending on the factual matrix and the number of sites searched, obtaining and executing a search order can cost five figures or more, but in the right factual, legal and commercial circumstances, it represents the most powerful legal weapon available.
It is not without risk, and the courts do not grant them lightly, but when used properly they can provide the ultimate protection to your business.
Of course, there are a number of cheaper and less intrusive legal options available, but none has the impact of a search order.
Robert Wynn Jones is a solicitor in the litigation department at Mishcon de Reya
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