Defend an injunction application

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Defend an injunction application

Recently, we defended an injunction application. This would have prevented our client joining a competitor and introducing key clients to her new employer. We also defended allegations of misappropriation and undertakings.

How we resisted the injunction

We were instructed by the employee, and:

Advice on leaving employment

Our client was preparing to leave her professional services firm and was aware that she was possibly subject to restrictive covenants which might prevent her from competing with the firm and taking clients with her. She wanted to be as sure as possible of her position before taking the irrevocable step of resigning.

Addressing issues with restrictive covenants

We advised her on the legal enforceability of the covenants and of the risks that she might be taking. We pointed out that while we were of the view that the firm would not succeed in getting an injunction against her to stop her, that can never be guaranteed. We also advised on the possible costs consequences, so that she could take an informed decision based on the risks she was taking.

Preparation for a possible injunction application

When an interim injunction pending a full trial is sought, it is usually an emergency procedure brought at very short notice to the defendant, who is then scrambling to try to catch up.

Pre-empting a litigation application

Because we were aware of the likelihood of an injunction application being made, we were able to do a significant amount of preparation in advance. When the application was made after our client resigned and left the firm, we were able to prepare to defend the application in much more detail and more fully than the employer had expected.

NB It is possible in some circumstances to seek an indemnity from a prospective employer to cover the risk of defending injunction proceedings, and any damages claim. Sometimes this is counterproductive because it may encourage the former employer to bring a claim when it would not otherwise do so as it has a better prospect of recovering damages or costs from the prospective employer.

Defending the injunction application

Owing to the legal analysis we had done, we had been able to ask our client to gather the necessary evidence we would need to argue against the injunction. We instructed a barrister and were able to give him all of the information that he needed to respond fully to the application on the first hearing.  (Often the defendant is not ready at the first hearing and the injunction is then granted for a short period, enabling the defendant to prepare.  This makes the defendant weaker tactically though, as he is on the back foot with an injunction already being made.)

Refusal of the injunction application

The case that we put together was successful and the injunction was refused. Our client was able to join her new firm and continue to work for her clients.

After the injunction

That was not the end of the matter. Even though the interim injunction had been refused, the firm still had a claim against our client which could go to a full trial, and it could seek damages or possibly an injunction at that stage. However, having beaten off the interim injunction application, our client had secured a costs award in her favour. We used this and our client’s superior tactical position – having defeated the injunction once already – to negotiate an end to the case on terms that were very satisfactory to our client.

Key points about defending an injunction

Injunctions move very fast and preparation is essential.  The more time that we have to prepare, the better the outcome is likely to be.

Alex Kleanthous runs the dispute resolution team at Gannons. Alex acts for those bringing or defending injunctions. Working on both sides of the table, Alex is able to digest the issues in dispute and narrow to the key points that will work in your favour.