SafetyNet Security Limited v Coppage [2012] EWHC B11: how we won an intriguing restraint clauses dispute

 We represented the successful claimant, SafetyNet Security Limited, whose dispute with Leonard Coppage and his company Freedom Security Solutions Limited came to trial in August 2012 in the Birmingham Mercantile Court before HHJ Simon Brown QC. Yasmin Yasseri of No 5 Chambers, Birmingham, was briefed on SafetyNet’s behalf.

The dispute involved alleged breaches of both a 6 month non-solicitation covenant and directors’ duties, in response to which the Claimant sought an injunction.

The decision was taken to the Court of Appeal in March of this year and the Defendants’ appeal was dismissed. Pending the full judgment, we revisit the trial decision (BAILII link to SafetyNet Security Limited v (1) Leonard Coppage (2) Freedom Security Solutions Limited [2012] EWHC B11 here) and some ancillary matters.

1.         The judge rejected the Defendants’ argument that the restraint clause was invalid because it extended to historical customers rather than only customers with whom Mr Coppage had dealt during the last 12 months of his employment. It was considered particularly important that SafetyNet was a relatively small business and that Mr Coppage, a senior individual with a large role, had been “the face” of the company.

2.         Mr Coppage was in any event bound, as a director, by duties prescribed in the Companies Act 2006, specifically the duty to avoid conflicts of interest regarding the exploitation of business opportunities.

3.            SafetyNet had decided to cap its damages claim at £50,000. Having presented material to the court satisfying the judge that its losses were at least that high, this sum was awarded without the need for detailed assessment at a later date. A useful practical illustration of Mercantile Court expertise.

4.         Costs budgeting, a cornerstone of the Jackson reforms, may be perceived as something to fear. But it had its positive effects here, reflecting successful local piloting. Because actual costs had fallen within the budget, the judge made a final costs order straight away, deciding that detailed costs assessment in the traditional manner would be expensive and futile. Quite a precedent.

5.         The action began with an application for an interim injunction at a time when the six month restraint clause had five months left to run. With undertakings in place pending a full trial, the judge fixed an accelerated timetable, thereby ensuring that there was a decision on the merits before the clause had expired. Local Mercantile Court knowledge to the forefront again.

For assistance with restraint clause disputes, please contact David Cooper.

Employment Law Update, Summer 2013

We have just published our Summer 2013 newsletter (click on the leaf for the link), covering: -

The admissibility of an employee’s covert tape recordings in tribunal proceedings;

The reasons for a non-competition restraint clause failing to be upheld;

How fair TUPE will protect employees when an insolvent business is partly sold and partly closed;

Whether a voluntary redundancy scheme can justify age related differences.

If you are in need of any advice specific to your own circumstances, please contact us.