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High Court confidential theft cases on rise

High Court disputes over the ‘theft’ of confidential information from businesses have jumped 58 per cent to a record high in the last year according to a law firm.

There were 167 cases focusing on the ‘theft’ of confidential information in the High Court in 2012, up from 106 in 2011 and 45 in 2010.

Most of these cases says EMW were businesses launching civil claims against former employees to prevent them from using confidential data obtained from company databases. Mark Finn, Principal at EMW, says: “Companies dependent on vital databases are increasingly seeing disgruntled employees copying company databases and other business-critical information. Whether this is to help competitors or to set up in business on their own, it’s as unlawful as any other high-value breach of confidential information. The boom in cloud computing and the widespread use of services like Dropbox have made copying a large database something that can be accomplished by virtually anyone in seconds. With the employment market starting to recover from recession, and businesses beginning to poach staff from rivals again, companies must remain as vigilant as ever to ensure staff don’t take crucial data with them as they leave.”

This increase in employers bringing civil claims against ex-employees for confidential information ‘theft’ includes significant numbers of financial services firms, estate agents and recruitment businesses, who may have regarded confidential information breach as an unfortunate cost of doing business, the law firm adds.

Mark Finn says: “A lot of firms in the financial and professional services sectors are heavily reliant on their comprehensive databases of contacts. These may have been built up over several years, and employees can give a new employer a huge jump start by taking a copy of it as they leave. As the economy improves and businesses increasingly see employees leave to join rivals, they will have no choice but to undertake potentially lengthy and costly legal action to protect their interests.”

“Employment contracts are generally very clear on this issue – all know how, databases and other forms of intellectual property developed by staff during their work time is the property of the employer. Occasionally, disgruntled staff may misguidedly feel they have a ‘moral right’ to take data they have developed. This simply is not the case.”


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