An investment management business which claimed £15m in damages for stolen data from departing staff has ended up with just £2 compensation after a High Court judge ruled that no injury had been sustained.
The Honourable Mr Justice Leggatt said Marathon Asset Management had ‘missed the jackpot’ and was entitled only to nominal damages of £1 from each of the defendants.
The award followed a protracted case which included a nine-day hearing and a judgment running to 283 pages.
The company had sued James Seddon and Luke Bridgeman after files were copied prior to their departure from the business. Marathon’s case was not that the files were used or any loss was suffered, but that the defendants should pay the value of what they had taken.
Bridgeman admitted liability and a breach of the duty of fidelity and Seddon was found to be liable for breaches of duties of confidence, but Leggatt said Marathon’s argument ‘fails to match the remedy to the wrong’.
In Marathon Asset Management LLP & Ors v Seddon & Ors, the judge said there was a ‘vast gulf’ between the extent of the use which Marathon said could potentially have been made of the files, and the very limited used which was made of them.
‘It is axiomatic that the general object of an award of damages for a civil wrong is to compensate the claimant for injury caused by the defendant’s wrongful act,’ said the judge. ‘It follows on the face of it that no injury has been sustained for which Marathon is entitled to be compensated in damages.
‘In circumstances where the misuse of confidential information by the defendants has neither caused Marathon to suffer any financial loss nor resulted in the defendants makes any financial gain, it is hard to see how Marathon could be entitled to any remedy other than an award of nominal damages.’
Marathon had sought to argue for the principle of law that if you take something, the law requires you to pay for it. It also argued the company was exposed to a risk of loss and the two former employees acquired an opportunity for financial gain.
Leggatt described this second argument as ‘even more threadbare than the first’. He made the analogy that a motorist driving at high speed may be putting lives and safety at risk, but the people in danger cannot claim for damages.
‘The law does not compensate people for being exposed to a risk of injury,’ he added.
Bridgeman, who worked as an analyst, was estimated by Marathon to have copied more than 40,000 documents on 19 dates before he left the business in 2012. Fund manager Seddon, who left the same year, was found to have systematically selected documents which he intended Bridgeman to save for potential future use. In total he copied 33 files to a common drive shortly before his departure.
Leggatt said Marathon had advanced no case based on time, trouble and expense incurred, and instead went ‘all out’ for the maximum damages, which he found were not suitable.
A spokesperson for City firm Withers, which represented Bridgeman, said: ‘This judgment serves as a warning to anyone attempting to assert significant losses for the removal of company documents. Marathon's £15m claim and £2 payout show how widely perception of value can differ from the actual amount that can be reasonably claimed in damages, and how hard it can be to establish a realistic usage value for commercial documents.
'This question will be examined again this year when the Supreme Court considers the case of One Step v Morris Garner, and the Marathon judgment will no doubt be a useful resource in the judges' deliberations.’