In Kieran Corrigan & Co Ltd v. OneE Group Ltd, Bashir Timol and others[1],a company’s director was held personally liable for breach of confidentiality for signing off on the company’s marketing of a tax mitigation structure that was heavily based on information provided to it by the claimant.
Background
Kieran Corrigan, the managing director and shareholder of the claimant, had (together with expert tax counsel) developed a tax mitigation structure involving the use of research and development (R&D) relief. While R&D relief is widely used, the structure Corrigan developed provided for significantly enhanced relief and allowed companies that would not otherwise involve themselves with R&D being able to take advantage of the relief.
In February 2014, Corrigan shared information regarding the structure at a meeting with three directors of OneE: Bashir Timol, Dominic Slattery and Timothy Johnson. A nondisclosure agreement was signed by Corrigan on behalf of the claimant and Slattery on behalf of OneE before the meeting.
OneE subsequently developed and promoted a tax mitigation structure that shared its fundamental features with Corrigan’s proposed structure. Slattery and Johnson, both tax experts, were personally involved in the development and promotion of that structure. Timol, who was a commercial man and had no tax expertise, signed off on that development and promotion but was not personally involved in it.
Following a trial on liability in 2023, the High Court found OneE, Slattery and Johnson both individually and jointly liable for breach of confidence. The High Court found that Timol was not liable, as he had not misused confidential information. The court made this finding on the basis that Timol, when signing off on the marketing of the structure, was only concerned with its commercial viability and not its technical features, and that he had therefore given his approval without reference to the claimant’s confidential information. The court found that, given Timol’s role was on the commercial side, he was entitled to simply rely (and had) on the tax expertise of others and was under no obligation to probe the details of the tax treatment.
In subsequent proceedings on quantum, a number of documents were disclosed that demonstrated that Timol was, in fact, much more familiar with the specifics of the structure than had been apparent at the liability trial. The claimant accordingly appealed the judgment, and a retrial as to Timol’s liability was ordered.
The High Court’s decision
Following the retrial, the High Court held that Timol was personally and jointly liable for breach of confidence. The judge concluded on the facts that Timol had been aware that the structure being marketed by OneE shared fundamental elements with Corrigan’s proposal, but clarified that this was not a necessary finding for personal liability. In this regard, the following aspects of the judgment are of particular note.
Timol would have been personally liable for breach of confidence even if he had not known that the structure to be marketed was based on Corrigan’s proposal. Once an obligation in confidence is imposed on a recipient by reason of their receipt of confidential information in circumstances importing such an obligation, they are a under a personal duty not to misuse it. An individual can later breach that obligation – even though they are not conscious that they are using the confidential information of another.
As long as Timol knew the key features of the structure OneE was developing and marketing, his sign-off would constitute misuse of confidential information if he had those key features in mind when deciding whether to sign off, or he was signing off on the marketing of a structure with those features (rather than just signing off on a structure that he had simply been told was robust from a tax perspective).
There is no requirement for the confidential information to be disseminated for it to be misused. All that is required is that the information is dealt with to the prejudice of the provider. This includes both the development of a product that is based on the information and the signing off on moving forward with it.
Once confidential information has been received, the recipient’s state of mind in deploying it is irrelevant to whether they had misused it. There is no requirement that the recipient should appreciate that what they are doing is misusing the information or that it amounts to a legal wrong.
Key takeaways
The judgment demonstrates the broad scope of the obligation on any recipient of confidential information. Once an individual is in receipt of confidential information, the burden on them to retain confidentiality is a heavy one and one that may be surprising to some.
Organisations would be well advised to take steps to ensure the obligation is understood and that appropriate steps are taken to identify and protect any confidential information received.
[1] [2025] EWHC 2759 (Ch).
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