Breach of Confidence Claims: Explained
In the business world, information stands as one of the most valuable assets. Every company relies on information to drive profitability. Information becomes “confidential” when it remains undisclosed to the public yet plays a pivotal role in a business’s daily operations and future growth.
Confidential information spans a wide spectrum, encompassing financial records, client lists, supplier details, internal processes, proprietary methods, architectural designs, and more.
A breach of confidence occurs when someone, typically an employee, mishandles or divulges a company’s confidential data to its detriment. Consequently, businesses often resort to legal action, suing their employees for breaching confidentiality by sharing sensitive information with external parties.
If you find yourself facing a breach of confidence lawsuit, your response can take various forms:
- Challenging the plaintiff’s adherence to litigation timelines.
- Contesting the plaintiff’s allegations.
- Demonstrating that the disclosed information lacks commercial value.
- Establishing that the information was already publicly accessible.
- Proving that the information was disclosed in the public interest.
In the article below, we will delve into each of these defense strategies against breach of confidence claims. Additionally, we’ll shed light on the pivotal role a commercial litigation lawyer can play in guiding you through the entire process. This article equips you with the knowledge and resources needed to safeguard your business’s confidential information effectively.
Demonstrate the Plaintiff Failed to Meet the Litigation Timelines
The Ontario Limitations Act, 2002 prescribes a two-year limitation period for filing corporate and commercial claims. The party bringing the claim must file it within two years from when the claim was discovered or reasonably should have been discovered.
If the aggrieved party files its breach of confidence claim too late, the defending party can ask the Court to dismiss the case for failure to file the lawsuit within the limitation period.
The claimant must then show they had a good reason for not filing the lawsuit within the prescribed limitation period. If they fail, the Court can dismiss their claim without hearing it on the merits.
Refute the Plaintiff’s Allegations
A typical corporate and commercial claim commences when a party files, issues, and serves a statement of claim. The statement of claim sets out the facts, allegations and damages claimed by the party filing the lawsuit.
The defending party may respond to a breach of confidence lawsuit by countering the allegations raised in the statement of claim. The party bringing a breach of confidence claim must prove the following:
- The information conveyed was confidential in nature;
- The information was communicated to the defending party in confidence; and
- The information was misused by the party to whom it was conveyed.
The defending party can defend the breach of confidence claim by disproving any of the elements mentioned above. For instance, if the defending party can show the Court the information disclosed was not confidential or that the plaintiff did not communicate the information in confidence, the claim for breach of confidence may fail.
Further, the owner of the confidential information must take reasonable steps to maintain its secrecy. If they don’t, the information may not be considered confidential. The confidential information revealed with the consent of the information’s owner cannot be the basis of a breach of confidence lawsuit.
For example, a director who reveals the company’s business model in front of a large audience cannot claim the information is confidential.
Prove The Information Had No Commercial Value
In breach of confidence claims, the Courts calculate damages based on the losses the plaintiff suffered due to the unauthorized disclosure of information.
A plaintiff suffers no loss due to the disclosure of information that does not have a commercial value. Therefore, if the defending party demonstrates that the disclosed information had no commercial value, the plaintiff’s claim may fail.
Demonstrate the Information Was Already in the Public Domain
A company can only be successful in its claim for breach of confidence if the subject matter of the claim is original enough to be considered private. Information already available in the public domain is not considered confidential, subject to limited exceptions.
The defendant can defend against the allegations of breach of confidence by demonstrating the information was already in the public domain. However, one must be careful while raising this defence.
If the defending party uses confidential information to get a head start in a business, they can be held liable for breach of confidence even though the information was publicly available. This is known as the springboard principle.
Prove There was a Public Interest in Disclosing the Information
The defending party can defend the breach of confidence lawsuit by convincing the Court that legitimate public interest warrants disclosure of the information.
For example, a company that uses lead in its secret sauce recipe cannot sue its employee for breach of confidence for revealing such information. In this case, the public interest – protecting people from lead poisoning – justifies the disclosure.
How a Commercial Litigation Lawyer Can Help
A commercial litigation lawyer has unique experience in pursuing and defending commercial litigation. The steps involved in a typical commercial lawsuit are:
- the exchange of pleadings
- mandatory mediation
- discovery process
- pre-trial conference, and
- trial
A commercial litigation lawyer can provide a wide range of legal services at each stage of the litigation, including but not limited to the following:
- Providing legal counsel after conducting an initial assessment of your case;
- Developing a legal strategy based on the facts and circumstances of your case;
- Responding to the demand letter sent by the plaintiff company’s lawyer and negotiating on your behalf;
- Drafting, filing, and serving a statement of defence in accordance with the Ontario Rules of Civil Procedure (Rules);
- Preparing you for Alternative Dispute Resolution processes such as mediation, arbitration, and advising regarding the settlement of the claim;
- Engaging in the discovery process by asking questions from the other side to extract relevant information;
- Participating in the pre-trial conference to resolve some outstanding issues or settle the case, if possible; and
- Appearing before the trial judge, raising legal arguments, and producing relevant evidence and witnesses.
In this way, a commercial litigation lawyer can provide you with the guidance you need to get the results you want.
Conclusion
Defending a breach of confidence claim is crucial as the Courts calculate damages based on the plaintiff’s losses. If the party filing the lawsuit proves you misused the information conveyed in confidence, you might be liable to pay hefty damages.
A simple consultation can give you an idea of what should be done and how the lawyer can help with your case moving forward. A commercial litigation lawyer can assist you in negotiating with the other side. They can help you navigate the litigation process using their knowledge of the law and legal procedures.
Are You Concerned About Potential Breaches of Confidentiality?
In today’s fast-paced and interconnected world, safeguarding your confidential information has never been more crucial. Whether it’s protecting trade secrets, personal data, or sensitive business strategies, the importance of robust Non-Disclosure Agreements (NDAs) cannot be overstated. Similarly, if you suspect a breach of confidentiality, taking immediate and informed action is key to preserving your rights and preventing further damage.
Contact Achkar Law
At Achkar Law, we understand the complexities surrounding confidentiality in both corporate and personal contexts. Our team is equipped to provide comprehensive legal support, from drafting ironclad NDAs that protect your interests to offering strategic advice on how to address and remedy potential breaches of confidence effectively.
Don’t let concerns about confidentiality undermine your peace of mind or business integrity. Reach out to Achkar Law today to schedule a consultation. Let us help you secure your information and ensure your agreements are enforceable, providing you with the confidence to focus on what you do best.
Contact Achkar Law now to ensure your confidential matters are protected with the utmost care and legal excellence.
Phone toll-free: 1 (800) 771-7882 | Email: [email protected]
Facing a Breach of Confidence Issue?
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