What are your rights

This month a statement was issued by Lloyd’s of London that two employees of Ark Syndicate appeared before its Enforcement Board for discreditable conduct after transferring sensitive information from their former employer, Travelers, to Ark Syndicate Management.

Lloyd’s said underwriter Mark Mellis and assistant underwriter Ksenya Mazalova were charged with discreditible conduct and suspended for six and three months respectively. They were also ordered to each pay £10,000 in costs.

Charles Wynn-Evans, head of employment at international law firm Dechert LLP says this case now gives more power to employers who have find themselves in situations where former employees have transferred information over to their new employer illegally.

Prior to this case there was little employers could do he said. “You can get a court order to get it back or write to the new employer to give up the documents. But if the ex-employee and new employer give the documents back it’s hard to go after them for compensation because you got the confidential information back.”

Only if the information has been used, and to the detriment to the former employer, can more be done says Wynn-Evans. “You could get springboard injunctions where you can get orders to stop people dealing with clients. If they use info that would cause the old employer loss then the old employer could in theory claim for financial compensation. But it’s so much more difficult to prove that this has caused financial loss.”

Rules outlining what can and can’t be taken are generally set out in an employer’s contract. Wynn-Evans says the usual things that are protected are client names, renewal dates, renewal rates and who the brokers are. Wynn-Evans is of the opinion that the Ark case will prompt insurers to enforce covenants and make them clearer about what can and can’t be removed.

But ultimately the Ark case has empowered employers more reckons Wynn-Evans. “This decision demonstrates that there may be regulatory consequences which those contemplating removal of their employers' information would do well to heed and which give employers encouragement that greater sanctions may be available through the Lloyd's Enforcement Board than through the courts.”