Need For Reasonable Enquiries Upon Receipt Of Potentially Confidential Information

The Court of Appeal recently held that a recipient of information will be bound by a duty of confidentiality if it was reasonable for them to have made enquiries as to the confidential nature of the information and they failed to do so (Travel Counsellors Ltd v Trailfinders Ltd [2021] EWCA Civ 38).

Background

Travel Counsellors Limited (TCL) appealed against a High Court decision that found it had acted in breach of its equitable obligation of confidence by obtaining and misusing a rival company's client information.

In 2016, a group of sales consultants left Trailfinders to join a competitor, TCL, which operates as a franchise. Trailfinders claimed that some of its former employees had taken clients' names and contact details from its computer system and disclosed them to TCL, in breach of implied terms in their contracts of employment and in breach of equitable obligations of confidence owed to Trailfinders. Trailfinders also argued that TCL acted in breach of