Breach of non disclosure agreement (or NDA) - damages or loss of profit?
The claimants had approached the defendants with regard to the acquisition by the defendant of a potential target. The parties entered into a non-disclosure agreement (NDA). The defendants breached the NDA and, without involving the claimants, proceeded to buy the target, which they then floated on AIM, at considerable profit.
The CA held that the claimants would not be entitled to choose between these remedies, or to an account of profits. An account of profits would be more suitable where there was a breach of fiduciary duty or the obligation of confidence was analogous to intellectual property rights protections. In the current case, the obligation of confidence was more analogous to a restrictive covenant and so the damages (known as Wrotham Park damages) would be equivalent to those for a release from such a covenant.
Case: Vercoe v Rutland Fund Management Ltd