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“Merely because the parties label matters as being confidential does not necessarily make it so. The principles of confidentiality are more restrictive than that.”

In the case of Sports Direct International Plc v Rangers International Football Club Plc & Anor [2016] EWHC 85 (Ch) the matter of a duty of confidence was considered ie. what is confidentiality all about? In that case Mr Justice Peter Smith as he then was referred to the explanation of Hildyard J in CF Partners (UK) LLP v Barclays Bank Plc [2014] EWHC 3049 (Ch) at paragraphs 119-134:

Duty of confidence: law and equity

119 The legal principles defining the duty of confidence are well established and there was a large measure of common ground both as to their content and as to their application.

120 Even in the absence of a contractual relationship and stipulation, and in the absence too of an initial confidential relationship, the law imposes a “duty of confidence” whenever a person receives information he knows or ought to know is fairly and reasonably to be regarded as confidential: see per Lord Nicholls (dissenting on the result, but not on this issue) in Campbell v MGN Ltd [2004] UKHL 22; [2004] 2 AC 457 at [14].

121 The subject matter must be “information”, and that information must be clear and identifiable: see Amway Corp v Eurway International Ltd (1974) RPC 82 at 86-87.

122 To warrant equitable protection, the information must have the “”necessary quality of confidence about it””: per Lord Greene MR in Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 at 215.

123 Confidentiality does not attach to trivial or useless information: but the measure is not its commercial value; it is whether the preservation of its confidentiality is of substantial concern to the claimant, and the threshold in this regard is not a high one: Force India Formula One Team Limited [2012] ROC 29 at [223] in Arnold J”s judgment at first instance.

124 The basic attribute or quality which must be shown to attach to the information for it to be treated as confidential is inaccessibility: the information cannot be treated as confidential if it is common knowledge or generally accessible and in the public domain. Whether the information is so generally accessible is a question of degree depending on the particular case. It is not necessary for a claimant to show that no one else knew of or had access to the information.

125 A special collation and presentation of information, the individual components of which are not of themselves or individually confidential, may have the quality of confidence: for example, a customer list may be composed of particular names all of which are publicly available, but the list will nevertheless be confidential. In the Saltman case (supra) Lord Greene MR said:

“…it is perfectly possible to have a confidential document, be it a formula, a plan, a sketch, or something of that kind, which is the result of work done by the maker on materials which may be available for the use of anybody; but what makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same process.”

Or as it is put in Gurry on Breach of Confidence (2nd ed., 2012) para 5.16:

“”Something that has been constructed solely from materials in the public domain may possess the necessary quality of confidentiality: for something new and confidential may have been brought into being by the skill and ingenuity of the human brain. Novelty depends on the thing itself, and not upon the quality of its constituent parts. Indeed, often the more striking the novelty, the more commonplace its components…””

126 Further, and of particular potential relevance in this case, pieces of information which individually might appear to have limited value and marginal secrecy, in combination in particular hands, might have special composite value and confer on the recipient a considerable advantage: as was noted by the New Zealand Court of Appeal in the Arklow case when at that stage (see [1998] 3 NZLR 680 at 700 in the judgment of the majority which was affirmed by the Privy Council).

127 The parties may by contract agree and identify specified information that is, or is as between the parties to be treated as, confidential, or protected under the terms of their agreement; or they may simply agree that information may not be used whether or not otherwise it would have the quality of confidentiality.

128 Thus, in Ministry of Defence v Griffin [2008] EWHC 1542 Eady J observed:

“A contract may embrace categories of information within the protection of confidentiality even if, without a contract, equity would not recognise such a duty.”

129 However, that case concerned obligations to Government of a sensitive nature: and an attempt to restrain the use of information that is not confidential (e.g. because in the public domain) may risk being unenforceable on grounds of public policy as being in restraint of trade. Further, loss and damage might be impossible to establish.

130 Contractual obligations and equitable duties may co-exist: the one does not necessarily trump, exclude or extinguish the other: see Robb v Green [1895] 2 QB 315 and Nichrotherm Electrical Company Ltd and others v Percy [1957] RPC 207 (both in the Court of Appeal).

131 However, where the parties have specified the information to be treated as confidential and/or the extent and duration of the obligations in respect of it, the court will not ordinarily superimpose additional or more extensive equitable obligations: and see per Sales J in Vercoe and Pratt v Rutland Fund Management Ltd [2010] EWHC 424 (Ch), who found in that case that the duty of confidence was confirmed and defined by the contract, and observed (at [329]):

“Where parties to a contract have negotiated and agreed the terms governing how confidential information may be used, their respective rights and obligations are then governed by the contract and in the ordinary case there is no wider set of obligations imposed by the general law of confidence: see e.g. Coco v Clark at 419.”

132 Nevertheless, that does not preclude wider equitable duties of confidence in circumstances that are not ordinary. For example, as it seems to me, a circumstance could arise where the obligations of the parties in respect of information with the quality of confidentiality are not clearly prescribed or governed by the contractual terms but where the use of certain information would plainly excite and offend a reasonable man’s conscience. In such circumstances, as it seems to me, an equitable duty not to use the information having that quality would be recognised, even if that went further than the definition, duration or restraint prescribed by the contract.

133 Put another way, whilst it will not usually be unconscionable to use information in conformity with, or in a manner that does not offend, the terms consensually agreed, and the contract will shape the commitment, contract does not necessarily assuage conscience, and equity may yet give force to conscience: see per Simon Brown LJ (as he then was) in R v Department of Health, Ex p Source Informatics Ltd [2001] QB 424 at [31]; see also the emphasis on conscience as being the basis of both the duty and any action for its enforcement or vindication per Lord Neuberger of Abbotsbury PSC in Vestergaard Fraudsen A/S v Bestnet Europe Ltd and others [2013] UKSC 31; [2013] 1 WLR 1556.

Furthermore, and again by reference to the roots of the equitable duty in conscience, it seems to me that there may be equitable reasons for declining to regard the equitable obligation as confined by a contractual restriction. An example might be if it is shown that the restriction relied on by one party as confining its equitable obligations was agreed by the other party in ignorance of a fact which, had it been disclosed, would either have caused that other party to withdraw altogether or insist upon the removal, or at least fundamental recasting, of the restriction. (I return to this aspect when considering whether in this case Barclays was in a position of conflict which it failed to disclose when the IVC/Barclays Confidentiality Agreement was made: see especially paragraphs 417 to 467 below.)

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