Breach of contract and database rights in telecoms case

Introduction

The High Court of Justice, Queen's Bench Division, Mercantile Court, Birmingham District Registry, presided over by His Honour Judge Simon Brown QC, delivered a significant judgment in the case involving Intercity Telecom Limited, Modern Operations Limited, and Mr Sanjay Solanki. The case centred around allegations of breach of contract and database rights, alongside the misuse of confidential information by Mr Solanki, a former employee of the claimants.

The Parties

Intercity Telecom Limited, established in 1985, is a prominent independent communications service provider in the UK, offering tailored communication packages to businesses. Modern Operations Limited, associated with Intercity, employs sales executives for Intercity's sales division. The defendant, Mr Sanjay Solanki, was employed by Modern Operations from May 2000 until February 2014, rising to a senior sales position responsible for significant revenue-generating contracts.

Allegations and Contractual Obligations

The claimants alleged that Mr Solanki breached his employment contract and database rights by downloading confidential customer information onto memory sticks and using this data to solicit customers. His contract included clauses on confidentiality, dedication of working hours, restrictive covenants, and obligations to return company materials upon termination. Additionally, Mr Solanki owed fiduciary duties due to his seniority and customer relationships.

Database Rights

The case also involved the infringement of database rights under the Copyright, Designs and Patents Act 1988 and the Database Regulations 1997. The claimants argued that Mr Solanki extracted and utilised substantial parts of their database without consent, breaching statutory rights.

Procedural History

The claim was issued on 13th May 2014, followed by an application for injunctive relief. Mr Solanki provided undertakings, but subsequent evidence revealed multiple breaches, including the use of additional memory sticks to store and manipulate confidential data. The trial proceeded in Mr Solanki's absence, leading to the striking out of his defence.

Evidence and Findings

Evidence showed Mr Solanki's unauthorised access and use of customer information, including preparing competing proposals during his employment and after his resignation. The court found his actions deliberate and calculated, leading to adverse inferences regarding his credibility.

Judgment and Remedies

The court ruled in favour of the claimants, granting declarations of breach, compensatory damages of £290,009, and injunctions to prevent further breaches. The judgment emphasised the seriousness of the database rights infringement and the need for deterrent legal protection for businesses.

Costs

The court awarded indemnity costs to the claimants, summarily assessed at £68,959.25, due to the defendant's unreasonable conduct throughout the litigation process.

Learn More

For more information on data protection, see BeCivil's guide to English Data Protection Law.