Case - Croesus Financial Services Ltd v. Bradshaw

LTL 2/12/2013 / 2013 EWHC 3685 QB, Queen's Bench Division -
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In a rare example of a restrictive covenant case reaching trial, on 25th November 2013, in the Queen's Bench Division, the Honourable Mrs Justice Simler DBE, found in favour of Jonathan Davies' Claimant client, Croesus Financial Services. Defendants, father and son David and Matthew Bradshaw, were found to have broken restrictive covenants following their departure from their former employer, Croesus Financial Services, as well as engaging in a conspiracy to divert business before their departure. Success is unusual in cases of conspiracy allegations according to Jonathan Davies who considers the case may have positive implications for employers in similar circumstances.

Jonathan Davies said; "This case demonstrates that a claim of conspiracy can, and will, succeed on the basis of inferences to be drawn from the surrounding facts. It can be used, in appropriate cases, as means of bringing a defendant into the action who is likely to be good for the damages. However, those advising need to take a wide view of those facts to ensure that every fact, however insignificant it may seem on its own, can be used to support the inference the former employer is asking to be drawn."

Croesus provides advice and products in the financial services sector including life assurance, pensions, investments and saving products and relies on a receiving a recurring income for servicing and advising many long-standing clients. Co-defendant David Bradshaw joined Croesus as an adviser in 2002 and, in anticipation of his retirement entered into an agreement with Croesus whereby he would be provided with a pension in return for allowing Croesus to inherit his client base on his eventual retirement. A few years’ later, he persuaded Croesus to allow him to bring his son Matthew Bradshaw into the business in 2010 to act as his successor. The Bradshaws became concerned about the deal Mr Bradshaw senior had done to allow Croesus to inherit his clients when it became apparent at a meeting in April 2012 that Croesus had put measures in place to ensure that Mr Bradshaw’s client base did not inadvertently seep to his son following his retirement.

Following the meeting, Mr Bradshaw senior hatched a plot with his son to transfer the client base he had agreed would be inherited by Croesus to a new business, Attain Wealth Management Ltd, to which his son would move after the father's planned retirement in December 2012. He introduced his son to his contacts in Attain and arranged for them to offer him employment with the assurance that he would persuade his client bank to transfer while pretending to be too ill to get involved.

David Bradshaw subsequently retired and Matthew Bradshaw resigned out of the blue in December 2012 when, as planned, he joined a competitor firm, Attain Wealth Management Limited, and continued to advice and solicit Croesus clients with the clandestine help of his father. There was no direct evidence of the conspiracy - both Defendants vehemently denied it. However, Simler J found based upon the inferences to be drawn by the surrounding facts and the unreliable witness box testimony of both Defendants that they both had indeed engaged in an unlawful means conspiracy. She further found that both Defendants had breached post termination restrictive covenants in their contracts of employment.

For further information please call Jonathan Davies on 0207 269 0339.

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