Use of confidential information is essential for a breach of confidence claim
The appellant (A), an accountancy and tax advisory firm, appealed against the dismissal of its claims for breach of confidence against the respondent (R), a director of a company (C). The claims arose from the alleged misuse of A’s confidential information concerning a tax planning structure that A had developed and was subsequently marketed by C.
A argued that R was personally liable for breach of confidence due to his approval of the marketing of the tax planning scheme, despite his lack of knowledge that the scheme had been developed using A’s confidential information. The judge at first instance found that R was not liable, as he had not been involved in the development of the scheme and had made his approval decision based solely on its commercial viability, without reference to the confidential information.
A pleaded that the mere act of authorizing the marketing of a product, while knowing that confidential information had been received, should impose strict liability for breach of confidence, irrespective of the individual's knowledge regarding the misuse of that information.
The Court of Appeal upheld the High Court ruling that R was not personally liable for breach of confidence. While R had received the information in confidence, he had not on the facts used that information in signing off a scheme developed by others using that confidential information. Therefore, use of confidential information is essential for a breach of confidence claim.
Comments