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HSF client Marathon refused appeal to end long-running document misuse dispute

After a four-year battle, a High Court judge has refused Herbert Smith Freehills (HSF) client Marathon Asset Management an appeal, ending a dispute against two former employees accused of unlawfully copying and retaining confidential information.

In February the duo – James Seddon and Luke Bridgeman – were ordered to pay just £1 each in damages for taking documents from their former employer.

Orrick, Herrington & Sutcliffe represented Seddon in the case and is claiming a victory because as well as refusing the appeal, Justice Leggatt ruled that Marathon must pay half of Seddon’s costs up until 24 February 2016 and all of his costs after that date.

Orrick’s team was led by London partner Maria Frangeskides. Withers head of civil fraud Stephen Ross acted for Bridgeman, with Herbert Smith Freehills partners Chris Bushell and Peter Frost acting for Marathon.

Ross said: ‘The case neatly illustrates the importance of making a realistic claim. Marathon has spent up to £10 million on its own legal fees to recover £1 from our client and now faces paying millions more in costs to the defendants.’

A previous judgment on February 22 this year found that Seddon and Bridgeman, who now work together at newly-formed investment fund Hosking Partners, were liable for unlawfully taking the information when they left company but said the action had not caused Marathon any loss or the defendants any gain.

Marathon’s position throughout the proceedings was that the negative impact of the action was irrelevant and that the potential harm was significant enough to pursue damages.

But Leggatt ruled: ‘I do not think that Marathon can reasonably seek to justify its pursuit of the misuse claim on the basis that such an inquiry was necessary when, as recorded in the main judgment, Marathon consistently maintained throughout the proceedings that the extent of any actual use of information by the defendants was irrelevant to its claim.’

Leggatt describes Marathon’s claim as pursuing ‘jackpot damages’ and says the decision not to accept £1.5m in damages ‘makes it fair to treat Marathon as litigating thereafter entirely at its own risk and potential cost.’

Frangeskides (pictured) said: ‘The views expressed by the judge today show that he’s not impressed by the way this has been run by Marathon.

‘It’s a relief for everybody that finally the judge made the right decision. None of the documents were used, and Marathon knew that.’

A spokesperson for Marathon said: ‘They stole documents belonging to Marathon and when asked by Marathon’s solicitors to confirm whether they had removed any documents, they lied and falsely claimed that they had not done so.’