2020-08-14
Legal Articles

Remedy for breach of confidentiality agreement with no financial loss

Home / Knowledge base / Remedy for breach of confidentiality agreement with no financial loss

Posted by Christine Jackson on 17 January 2010

Christine Jackson - Commercial Contracts Solicitor
Christine Jackson Partner

It may be tempting to think it safe to go ahead and breach a confidentiality agreement if it would not lead to the other party suffering any financial loss and the likelihood of their getting an injunction is slim.

However, a recent case heard by the Privy Council suggests damages may be available even though no actual financial loss has been suffered. Instead, damages may be awarded on the so-called ‘Wrotham Park’ basis.

What is the essence of ‘Wrotham Park’ damages?  

  • Damages are assessed based on the sum of money that might reasonably have been demanded by the innocent party in return for acquiescing to that breach. 
  • The approach requires a hypothetical negotiation between the parties to reach agreement on the price for ‘buying out’ such rights.
  • Each party is to make reasonable use of their respective bargaining positions, but without seeking a ransom.  

As such, while the actual sum for such damages may be difficult to guess at the outset, it could well be a significant amount.  

The impact of this decision may come as a welcome comfort to those considering using confidentiality agreements to protect their valuable and confidential business data and information in all types of commercial negotiations, including also in the context of corporate sales and acquisitions (asset or share sale/purchase), new partnering deals, and in many other circumstances.  

About the author

Christine helps clients manage risk and financial exposure in their day to day business dealings.

Christine Jackson

Christine helps clients manage risk and financial exposure in their day to day business dealings.

Recent articles

29 October 2020 Wright Hassall lands royal recognition

A Midlands law firm has landed royal recognition for its support to the wider community throughout the Coronavirus pandemic.

Read article
29 October 2020 A new way of approaching biodiversity offsetting

A Warwick-based property development company is supporting a project aimed at boosting wild-life levels in Warwickshire.

Read article
28 October 2020 The new model shared ownership lease

Government plans to introduce a new form of shared ownership lease from April 2021 will apply to all schemes funded by the 2021-26 Affordable Homes Programme. The intention is that it will be more consumer friendly, easier to access and allow shared owners to increase the stake in their home in a more manageable and affordable way.

Read article
Contact
How can we help?
01926 732512
CALL BACK