Chester 01244 405555

Grosvenor Court
Foregate Street Chester
Cheshire CH1 1HG
DX: 19990 Chester

Shrewsbury 01743 443 043

Lakeside House
Oxon Business Park
Shrewsbury SY3 5HJ
DX: 148563 Shrewsbury 14

Manchester 0844 800 8346

Pall Mall Court
61-67 King Street
Manchester M2 4PD

Send us a message
Our Offices

Court of Appeal overturns decision of High Court

5th August, 2014

We recently reported on the case of Prophet plc v Huggett [2014] EWHC 615 (Ch), in which the High Court considered the intentions of the parties to find that a restrictive covenant was enforceable, despite a drafting error.

The restriction sought to prevent Huggett (“H”) from competing with, or working for a competitor of, Prophet plc (“P”). However, the wording of the restriction instead provided that H would not work for a competitor of P who sold software systems produced by P. P was the only company selling the software products that it had produced. It was clear, therefore, on a literal reading that the covenant offered no protection whatsoever to P.

The High Court used its discretion to rewrite the covenant and insert three words “[produced by] or similar thereto” which gave effect to the intentions of P and thereby offered P the intended protection. The High Court then allowed the injunction against H. H appealed.

The Court of Appeal has overturned the decision and held that although leading to a very undesirable outcome for P, the language of the covenant was unambiguously clear and the High Court erred in inserting the words to give effect to P’s intentions. The covenant was therefore unenforceable to prevent H from working for a competitor of P.

This decision has further emphasised the necessity of instructing specialist employment lawyers to draft enforceable restrictive covenants, which will properly protect legitimate business interests.

For further information and advice in relation to restrictive covenants, please contact Claire Brook on 01244 405575 or send an email to [email protected]

You might also be interested in...

Solicitors’ Professional Indemnity Insurance: Run-off and alternative regulators

18th July, 2018

Special Focus: Solicitors’ Professional Indemnity Insurance Run-off – it dominates the thoughts of sole practitioners and partners in smaller law firms in my experience and restricts the ambitions of firms. The SRA could help law firms by relaxing their rules on run-off cover on their Solicitors’ Professional Indemnity Insurance to help firms merge or close more easily. This would protect... Read More »

Senior employment lawyer joins Theatr Clwyd board

17th July, 2018

Helen Watson, Head of Employment Law at Aaron & Partners LLP, has taken up an invitation to become a Trustee of both the Trust Board and the Main Board Theatr Clwyd has bolstered its senior leadership team with the appointment of an experienced employment law solicitor to support its vision of being at the forefront of theatre making... Read More »

Why there is more to CSR than just boosting a company’s ego

6th July, 2018

When a business invests in its community it deserves praise – but it must go beyond that, writes Helen Watson, a trustee at Claire House and partner at Aaron and Partners Solicitors. Corporate social responsibility (CSR) is the link between a company and the community in which it operates. As a trustee on charity boards including Claire House... Read More »

Contact Us