Evidence is crucial in claims involving breaches of restrictive covenants but often challenging to obtain. The parties will have suspicions about their opponent’s activities but these might not readily be proved, particularly if third parties are unwilling to get involved. A potential solution can be found in an application for specific disclosure, which if successful results in the order for disclosure of particular documents.
Such applications would typically be brought by a Claimant in restrictive covenant actions, to seek to prove the Defendant’s wrongdoing. However, the ongoing litigation between ICAP and BGC (two inter-dealer brokerage groups) gives an interesting example of a specific disclosure application being successfully deployed by a Defendant.
Mr Berry was CEO of ICAP’s global ecommerce team. He resigned and was put on garden leave, after indicating that he intended to join BGC. ICAP subsequently merged with another company, which Mr Berry argued resulted in the termination of his employment and the release from various restrictive covenants. He joined BGC but ICAP immediately successfully applied for an interim injunction stopping him working for BGC.
Part of Mr Berry’s defence to ICAP’s claim is that other ICAP employees had relationships with key ICAP clients and, accordingly, the consequences of Mr Berry’s departure were not as serious as alleged. Mr Berry applied for specific disclosure of documents relating to ICAP’s entertaining of clients, which he argued would prove the existence of these other relationships.
The Court agreed and made the order sought - the documents were relevant to the dispute and the class of documents was limited. This decision is a helpful reminder that disclosure is a two-way street and applications for specific disclosure can be deployed to help defend as well as pursue a claim.