Since then, Ann Minogue has written about the general principles of clients' confidential information in construction contracts (19 September, page 57).
Although these principles also apply to consultants' confidential information, this article looks at how consultants can protect their ideas and concepts where this has not been covered in their appointment, or indeed where no formal contract yet exists.
A consultant may provide information to clients or others when tendering for a contract. They may put forward an idea for an alternative design or assist a contractor with an alternative tender. They may be required to demonstrate their ability to be innovative or to solve technical problems or release drawings, that could make competitors aware of unique ideas or techniques. But what happens if this material is used without the consultant's consent or further involvement in the project – or any form of compensation?
The material may be protected by confidentiality, but not necessarily – especially if no steps have been taken to make sure that it is confidential. In order for a person to have a valid claim for misuse of confidential information the information must have the "necessary quality of confidence" about it – for example, sensitive business or financial information – such that the release of it could be advantageous to a rival or injurious to the consultant; the information must have been imparted in circumstances where the client ought reasonably to have known that the information had been imparted in confidence; and there must be an unauthorised use or disclosure of that information to the detriment of the consultant.
It may be difficult for a consultant to demonstrate that all these factors, especially the second, apply, unless more is done at the time that the information (or whatever it is) is imparted. Marking a document "confidential" may be sufficient to make its contents confidential and is certainly better than nothing, but it may not always impose an obligation of confidentiality where none has been agreed.
The material may be confidential, but not necessarily – especially if no steps have been taken to make sure
It is better to have a written confidentiality agreement that covers such matters as: who can use the material in question; for what purpose the material can be used (which needs particularly careful thought); whether it can be disclosed to third parties and, if so, whom; whether or when there is an obligation to pay to use it; whether it can be reproduced; and the steps the other party must take to prevent its unauthorised disclosure to, or use by, other parties.
What are the remedies if a consultant finds that another party (which may be the consultant's client) is in breach of confidentiality? These consist of injunctions, damages, accounts of profits and return or destruction of the information. An injunction (to prohibit any use being made of the confidential material) is a discretionary remedy.
The damages payable will be based on the value of the confidential material. If it is the sort of information that could have been obtained by engaging any competent consultant, the damages could be the cost of doing so. If the material in question was unique and could not have been produced through the research of another consultant, then damages may be calculated on for how much the consultant could have sold the information.
Rachel Barnes is a partner in solicitor Beale & Company, www.beale-law.com.