Andrew Clarke QC and David Lascelles acted alongside Hodge Malek QC and James Potts for leading FTSE housebuilder, Berkeley, in a series of recent pre-trial applications by its former Group Finance Director: – Simpkin v The Berkeley Group Holdings PLC  EWHC 1472 (QB);  4 W.L.R. 116.
In the underlying proceedings, Mr Simpkin brought very high-value breach of contract claims under Berkeley’s share option scheme. He alleged procedural defects in the Remuneration Committee’s refusal to exercise its discretion to treat him as a good leaver. Mr Simpkin claimed such defects rendered the decision unlawful. He sought a declaration that he be treated as a good leaver and receive the substantial benefits available to such leavers.
One of the issues for trial was whether – as Mr Simpkin claimed – just prior to dismissal he had a reasonable expectation that the share options would vest.
Through the disclosure exercise, Berkeley discovered a document on its computer system which Mr Simpkin had produced just prior to his dismissal setting out a synopsis of the share option scheme including his expectations thereunder. Mr Simpkin had saved the document on his work computer system and emailed it from his work to his personal email account.
As Garnham J was subsequently to find, there was “a stark conflict…between the account put forward in [Mr Simpkin’s] witness statements [for trial] and that set out in [his contemporaneous synopsis]”.
Berkeley disclosed the document and made plain its intention to rely upon it at trial.
Mr Simpkin then informed Berkeley that the synopsis had been prepared by him in order to seek legal advice in his ongoing divorce proceedings. Mr Simpkin claimed that the synopsis was covered by legal advice and litigation privilege. He sought an injunction to restrain Berkeley from using it.
Garnham J dismissed Mr Simpkin’s application. In doing so, the judge accepted Berkeley’s submissions that one of the essential elements of privilege – confidentiality – was lacking.
In particular, the judge held that the document was not confidential vis-à-vis Berkeley where (a) Mr Simpkin had signed a copy of Berkeley’s IT policy which made it clear that e-mails sent and received on Berkeley’s IT system were its property; (b) the IT department had access to all Berkeley’s computers and e-mail accounts and did not need authorisation before accessing them; (c) Mr Simpkin’s employment contract made clear that his e-mails were subject to monitoring by Berkeley without his consent; (d) Mr Simpkin had prepared the documents in the course of his employment, using Berkeley’s financial information, and creating and transmitting them through Berkeley’s IT systems while he was at its offices; (e) the documents were saved on Berkeley’s central servers, were not password protected and were not segregated from Mr Simpkin’s work-related documents; and (f) the contents of Mr Simpkin’s e-mail account would also have appeared in the e-mail account of his PA, who had direct access to his e-mail folder. Mr Simpkin was aware of these matters and so could have had no reasonable expectation of privacy as against Berkeley.
This is the first time that the High Court has addressed head-on the question of whether an IT policy can result in an employee being denied privilege against an employer in respect of a document produced and emailed from his employer’s computer system.
Finally, it is notable that Garnham J held that he would also have dismissed Mr Simpkin’s injunction application even if (contrary to his view) the synopsis had been privileged as against Berkeley. The judge agreed with Berkeley’s submission that by making the application, Mr Simpkin was seeking to avoid the stark inconsistencies between his contemporaneous account and his witness statement being revealed to the court at trial. Accordingly, the judge held, Mr Simpkin lacked clean hands in a manner directly connected with the equitable remedy he sought such that as a matter of discretion his application for an injunction would have been refused in any event.