knowledge 11 March 2021 |

Disputes: Application for an Imaging Order Granted but Search Order Refused

In Microstrain Ltd v Delany,¹ it was alleged that in breach of their contracts of employment and duties at common law, certain of the plaintiff’s former employees had obtained confidential information during their employment with the plaintiff and had used that information to establish and carry on a new business in competition with the plaintiff.

In response, the plaintiff had obtained a range of ex parte interim orders against the various defendants.  This included a springboard injunction restraining the solicitation or acceptance of business in respect of the projects or prospects on the plaintiff’s customer list and an order for the return of its property. 

In addition, the court granted an imaging order in respect of data contained on certain electronic devices to be delivered up by the defendants.  Imaging involves the taking of images of the contents of storage media incorporated in or associated with a computer without affecting the data stored there.

The interim orders had been executed and there was consent to an interlocutory order for the preservation by an independent IT consultant of the imaged data.  However, in addition to the imaging order, the plaintiff now sought a search order (Anton Piller order) against the defendants in respect of the imaged data. 

Specifically, the plaintiff sought an order permitting an IT consultant to search the preserved data for the purpose of establishing precisely what of the plaintiff’s materials were on the defendants’ devices, what use was made by the defendants of those materials, the circumstances in which the individual defendants came to establish their new business, and the circumstances in which those defendants came to commence working for that business while still employed by the plaintiff.  This application was opposed by the defendants.

In declining the plaintiff’s application, Allen J outlined that the purpose of a search order or an imaging order was to preserve evidence to ensure that it was not altered, destroyed or hidden.²  However, he said that imaging, by its nature, was incapable of discrimination between information that was relevant to the issues in the proceedings and information that was irrelevant business or personal information.  Imaging could not discriminate between information that was subject to legal professional privilege and information that was not.  Imaging could only ever be a preservation step, which must be followed by a proper consideration of the issues of disclosure and inspection.  If there was to be an inspection of documents on the images, it needed to be justified as a separate exercise and analysed in terms of the disclosure jurisdiction.

He said that the parties agreed that there was a presumption that the imaged data should not be interrogated at this stage.  That might be done in special circumstances, but he agreed with the defendants’ submission that the plaintiff had not made out such circumstances.

What the plaintiff had proposed was that the search should be conducted by the independent IT consultant and the results preserved pending further order of the court.  However, there was no evidence as to the extent of the information imaged.  Some of it was likely to be the plaintiff’s information but much of it would not be.  Any search to identify the plaintiff’s information would necessarily entail a perusal of the defendants’ personal information to exclude it.  There was no justification for doing that.

The court pointed out that the defendants had made significant admissions in the proceedings.  This meant that the extent of discovery required by the plaintiff might be very limited in contrast to a case that was fully contested.  In principle, the defendants would have the primary obligation to make discovery and the plaintiff would have to justify a search of the imaged information by reference to some deficiency or apprehended deficiency or shortfall in the material discovered. 

Allen J also pointed to the additional costs involved in a general examination of the imaged material which might later have to be supplemented by a focused search for particular categories of documents. 

The only justification offered by the plaintiff for the proposed search order now was that it would save an unspecified amount time.  Allen J did not accept that the defendants were stalling for time and also saw the plaintiff’s argument here as fundamentally flawed.  It presumed that the court would at some time in the future inevitably make a search order and in the same terms as were now proposed.  However, until the pleadings were closed it could not safely be assumed what categories of documents would be relevant and necessary.  Moreover, the application now for a search order presumed that there would be some shortcoming in the defendants’ discovery or other justification for such an order.  Moreover, the argument failed to engage with the requirement that there must be a strong justification for any interference with the defendants’ private information. 

Comment

Search orders involve the interplay of fundamental constitutional rights, including property rights and the right to privacy.  As such a plaintiff must make a compelling case for the necessity for search orders, particularly having regard to the discovery procedures available to the parties in an Irish dispute in the ordinary course and the stringent obligations to preserve potentially relevant information.

This decision emphasises the distinction between imaging orders, discovery orders and search orders and that separate tests apply in respect of the different reliefs, and makes clear that the grant of an imaging order is the not the automatic precursor to the grant of a search order, even where defendants admit to the removal and use of client lists for the purpose of setting up a competing business.  Where less invasive options, such as discovery, are available, the courts will lean against ordering an unnecessary search order, which will not generally be used to pre-empt discovery in the normal way.