In a case which put the spotlight on the often tense relationship between corporate boardrooms and the press, a company is taking legal action against one of its former non-executive directors, claiming that he was the source of damaging media leaks.
The eminent businessman came under suspicion after a number of well-informed articles about the company appeared in the press. There had been boardroom tensions as the company was probed by the Serious Fraud Office (SFO) and directors had been reminded of their duties and the importance of maintaining confidentiality.
The businessman was accused of breaching his contractual and fiduciary duties, in particular his duty of confidentiality, in speaking to a ‘journalist’. However, he retorted that the man was not ‘a bona fide journalist’ at all, but a plant commissioned by the company in an attempt to entrap him. Although he was intent on exposing alleged wrongdoing, he said that he was aware of the ruse and knew that nothing he said would be published and that no harm would be caused to the company.
Following termination of the businessman’s appointment, the company launched legal proceedings against him. Although it subsequently abandoned its claim for damages, it persisted in seeking an injunction against him and an order that he hand back any confidential documents relating to the company which had come into his possession.
In striking out the latter claim, the High Court found that there were no grounds for arguing that the businessman was subject to an implied term in his contract that he would, following termination of his appointment, deliver up confidential material which had come into his hands in his role as a director.
He also argued that an injunction was unnecessary in that he had given repeated assurances that he would abide by his duty of confidentiality. However, in allowing the company to proceed with that part of its claim, the Court found that it was entitled to protect its position and, in particular, to guard against the risk of privileged documents being disclosed to the SFO.