Clyde & Co Legal Director, Charles Urquhart, looks at the Court of Appeal's decision to dismiss BGC's appeal in its long running battle with fellow interdealer broker Tullett Prebon.
Three Lord Justices sitting in the Court of Appeal have this week unanimously dismissed BGC's appeal in its long running battle with fellow interdealer broker Tullett Prebon.
At the original High Court trial, Mr Justice Jack upheld Tullett Prebon's claims in conspiracy, breach of contract and inducing breach of contract following BGC's large scale raid of Tullett Prebon's brokers. He also enforced a period of garden leave/ post termination relief and upheld the interim injunction prohibiting all BGC's recruitment of Tullett Prebon employees for a period of 1 year from 2 April 2009. Finally, he also dismissed the departing brokers' claims for constructive dismissal and BGC's counterclaim that Tullett Prebon had induced breaches of BGC's forward contracts.
BGC appealed the High Court's rejection of both the departing brokers' claims for constructive dismissal and BGC's counterclaim. Various other appeals were not permitted.
In dismissing BGC's appeal, Lord Justice Maurice Kay described Mr Justice Jack's original judgment in the High Court as "meticulous". In particular, the Court decided that Mr Justice Jack had followed the proper test to determine whether there has been a repudiatory breach of contract which involves an objective view of whether the contract breaker has clearly shown an intention to abandon and altogether refuse to perform the contract. The Court of Appeal agreed that Tullett Prebon had tried to strengthen its relationship with its brokers, quite the reverse of the abandonment or refusal to perform the contract that is necessary to support a successful claim for constructive dismissal.
The Court of Appeal also agreed that those Tullett Prebon brokers who signed "forward contracts" with BGC were entitled to rip them up and remain with Tullett Prebon because BGC's recruitment methods destroyed trust and confidence before the employment relationship had even started.
In light of the glowing endorsement of the High Court's judgment and the fact that the appeal was limited to a small number of points, today's decision simply serves to reinforce the lessons of Mr Justice Jack's original judgment, namely that: