Calver: Adverse influences over destruction of evidence
A litigation funder that took assignment of an inventor’s claim that his idea was ripped off by early stage investors has been awarded £2.15m in damages by the High Court.
The terms of Tony Gifford’s deal with Henderson & Jones are not known but it is rare to see funders in court having taken on assignments of cases outside of insolvency matters.
However, it provides them with greater control of the litigation than when they are pure funders and Henderson & Jones says it makes both sides commercially aligned as it is only paid if the assignor is as well.
It sued Salica Investments, formerly Hambro Perks, and Dominic Perks for breach of confidence.
The claim arose out of two meetings in early 2016, in which Mr Gifford sought to obtain investment funding from Salica to further develop and take to market his original cloud-based software application and associated business opportunity, a care technology platform for the elderly.
It said Salica and Mr Perks misused the confidential information to develop their own business and software, thereby also blocking his ability to get funding elsewhere because his product now had competition.
In his ruling, Mr Justice Calver drew various adverse inferences because in 2018 Mr Perks destroyed relevant documents and failed to take any steps to preserve his product’s source code, despite knowing he was under a duty to preserve them for the purposes of litigation.
“I also consider that Mr Perks has been less than candid about the destruction exercise,” he added.
Calver J held that the information was confidential, Mr Perks knew it was, and that it was put to unauthorised use to the detriment of Mr Gifford.
“In short, it is clear that Mr Perks stood to benefit personally financially from the misuse of the confidential information,” he held.
In deciding on quantum, the court only heard from the claimant’s expert witnesses, because the defendants missed the deadline to exchange expert reports and at the pre-trial review were refused relief from sanctions or an extension to serve the evidence out of time.
This put them “at a distinct disadvantage in this respect for which they have only themselves to blame”, the judge observed.
There were two possible bases for calculating Mr Gifford’s loss: that he would have gone on to take his idea to market – which his expert valued at £11.7m – or that he would have found a willing buyer to pay for a licence to use his business concept, valued at £2.9m.
Calver J held that there were “too many speculative elements” to the former and found £2.15m a “fair valuation” of the business concept at the time of the meetings.
Piers Elliott, managing director of Henderson & Jones, commented: “We’re very happy with the outcome and are delighted to have been able to assist Mr Gifford, who has been fighting for justice for many years.”
