A decision of the English High Court in the autumn of 2014 (CF Partners (UK) LLP v Barclays Bank PLC) has resulted in the Bank being ordered to pay €10million of damages to CF Partners for breach of equitable duty of confidence. The court decision held that the Bank had misused confidential information which had been supplied to it by CF Partners in the context of an application by CF Partners for a bank loan to finance a takeover bid of a Swedish business, Tricorna AB. In the course of negotiating the bank loan CF Partners supplied Barclays with documentation relating to the Swedish target company including technical information about the target company, its business operation and proposed means of enhancing the value of the target acquisition. The takeover deal ultimately foundered; but subsequently Barclays itself proceeded to buy Tricorna. Two years after acquiring the business Barclays sold Tricorna at a large profit. CF Partners began legal proceedings against the Bank for breach of confidence in relation to the information on Tricorna which CF Partners had disclosed to the Bank for the purpose of its application for bank finance.
The court held that the Bank had indeed breached an equitable duty of confidence to CF Partners and awarded damages against the Bank.
This was not a case of a breach of a contractual duty of confidentiality as the Bank and CF Partners never reached the point of entering into contractual relations for a bank loan.
The case highlights that even in the absence of a contractual relationship, the law imposes a duty of confidence wherever a person receives information which they know or ought to know is fairly and reasonably to be regarded as confidential in nature; and that information cannot be used other than for the purpose for which it was supplied without the consent of the party who is the owner of that confidential information.