The High Court has committed a former employee to prison for six weeks for breach of a court order aimed at preserving evidence pending trial. The employee over time had emailed confidential information belonging to the employer to his own personal email account. He then transferred under TUPE to a competitor of the employer, following a service provision change. The employer brought a claim against the employee and the competitor for misuse of confidential information. It obtained an interim injunction prohibiting the employee from disclosing the information, and requiring him to preserve all hard copy and electronic documents pending the return date. It also prohibited him from informing anyone else about the order or tipping them off about any future legal action.
Immediately on receiving the order, the employee immediately telephoned his former manager (who now worked for the competitor) to tell him about it, before deleting several emails from his personal email account, and a further 8,000 emails the next day. He also informed various family members. He then sought legal advice, following which he made a full admission to the court, and cooperated with the employer in attempts to retrieve the emails (which were unsuccessful). The court, having regard to the deliberate nature of the breaches, but also to the employee's subsequent remorse and cooperation, imposed four sentences of six weeks' imprisonment, to be served concurrently.
It is not often that we see these powers being used in an employment context, and the case serves as a strong reminder of the importance of complying strictly with interim injunctions aimed at preserving evidence pending trial. (OCS Group UK Ltd v Dadi and others [2017]EWHC 1727 (Ch).)
BACKGROUND:
The law relating to contempt of court has developed as a means for the courts to act to prevent conduct that tends to obstruct, prejudice or abuse the administration of justice, either in relation to a particular case or generally.
An intentional act in breach of a court order by a party to proceedings who is bound by that order constitutes a civil contempt. The court may impose a sentence of up to two years' imprisonment (which be suspended if appropriate), or an unlimited fine, or a sequestration of assets. For further information on contempt in civil proceedings, see Practice note, Contempt of court: overview and Practice note, Contempt of court: committal proceedings under CPR 81.
"Sanctions litigation" (in other words, applying to the court for your opponent in litigation to be fined or sent to prison for breach of a court order) has become more common in recent years (see Article, The use of contempt and other sanctions in modern commercial fraud cases). However, it is relatively uncommon in the employment context. The case reported below is one such example.
Facts
The defendant in this case, Mr Dadi, was employed by the claimant, OCS. When OCS lost an aircraft cleaning contract to one of its competitors, Omniserv, Mr Dadi transferred to OmniServ under TUPE.
Shortly before the TUPE transfer, OCS brought a claim in the High Court against Mr Dadi, Omniserv and others. It claimed that Mr Dadi had conspired with one of the other defendants, Mr Ahitan, to breach his employment contract, and had emailed confidential information belonging to OCS to his AOL personal email account over a period of time. Mr Ahitan worked for OmniServ but had previously worked for OCS as Mr Dadi's manager.
OCS also obtained, without notice, an order for an interim injunction against Mr Dadi, which:
prohibited him from disclosing or making use of any OCS's confidential information.
required him to provide information to the court about what disclosures he had hitherto made of that information.
required him to preserve hard copy and electronic documents pending the return date.
prohibited him from disclosing to anyone else, save his legal advisers, the existence of the order or the possibility of proceedings being commenced.
The order contained the usual penal notice on the front page explaining that breach of the order would be a contempt of court that could result in imprisonment.
The order and the claim form were served on Mr Dadi personally by OCS's in-house lawyer, who explained the importance of the order and read out the penal notice to him. She explained that he should take legal advice.
Immediately following that meeting, Mr Dadi telephoned Mr Ahitan to inform him of the injunction. He also deleted several emails from his AOL account. The next day he did a mass deletion of around 8,000 further emails. He also told various family members about the injunction.
Mr Dadi took legal advice and decided to make a "clean breast" by telling the court what he had done at the return date hearing. He also agreed to cooperate with OCS in attempting to recover the deleted emails. However, this was unsuccessful due to the passage of time, and it was thought "unlikely" that any further action could be taken to recover them.
OCS applied for Mr Dadi to be committed to prison for contempt of court.
Decision
The High Court (Mrs Justice Rose) sentenced Mr Dadi to six weeks in prison for contempt.
Mr Dadi argued that he was of good character and had been "naïve" in complying with Mr Ahitan's requests for documents. He claimed he had unwittingly become involved in a dispute between "two large commercial organisations fighting over profit". When he was served with the court order, he said he had "panicked", did not read the order properly, and only realised the seriousness of what he had done after he had taken legal advice. Thereafter he had done everything he could to assist OCS and the court, including handing over his computer hardware and giving OCS authority to access his AOL account.
He furthermore argued that prison would be "disastrous", making it difficult to find work, and bringing terrible shame on him and his family in the Sikh community. He also said he had responsibility for his aging mother who suffered a variety of medical conditions, backed up by letters from her GP.
The court held that imprisonment was always a punishment of last resort. However, a short sentence of imprisonment of six weeks had to be imposed on Mr Dadi to mark the court's strong disapproval of his conduct and to act as a deterrent, both in respect of his further compliance with orders and as a warning to others who might be tempted to flout the court's orders (following Crystal Mews Ltd v Metterick [2006] EWHC 3087 (Ch)). The court took account of the fact that these were "deliberate and contumacious breaches", and that Mr Dadi must have realised that the prohibition on tipping off must have been intended to refer specifically to Mr Ahitan, the very person who he had immediately informed. The assertion that Mr Dadi had panicked would have been more credible if there had just been a single breach. However, it was undermined by the fact that he carried out a much more extensive deletion of emails the following day.
The breaches had significantly prejudiced OCS and put them to considerable cost in forensic examination to salvage information that should have been left intact.
Mr Dadi was entitled to considerable credit for his co-operation. Although there had been four separate breaches they had not been committed over an extended period but over a period of 48 hours before taking legal advice. The court accepted that his apology was sincere, and took into account his good character and the effect on his family.
The sentences for the four acts of contempt were six weeks' imprisonment to run concurrently.
The court noted that, under section 258 of the Criminal Justice Act 2003, Mr Dadi would be entitled to be released unconditionally after serving half his sentence.
Comment
Although this case is unexceptional as far as the sentence is concerned, it is not often that we see these powers being used in an employment context. The case serves as a strong reminder of the importance of complying strictly with interim injunctions aimed at preserving evidence pending trial, and the court will have little truck with pleas about naïvete, especially where it is clear that an employee has gone to considerable lengths to cover their tracks. The penal notice on the front of the order is there for a reason: as the court noted,
"The system will not work if people think they can ignore court orders and destroy evidence. Those who do so can expect terms of imprisonment".
