Baldwins v Maidstone
On 3 June 2011 the High Court handed down a judgment which addresses the construction of non-solicitation clauses where contact is initiated by a former client.
Mr Maidstone sold his accountancy practice to Baldwins for £1 million. The share sale agreement included a covenant protecting the goodwill in the company from Mr Maidstone “canvassing, soliciting or endeavouring to entice away” former clients. During the period of the covenant Mr Maidstone joined a new firm, Charnwoods. Baldwins soon became aware that it was losing clients to Charnwoods and proceedings were issued against Mr Maidstone alleging breach of the non-solicitation clause. Mr Maidstone’s position was that some of his former clients had followed him to Charnwoods (there was no non-dealing clause), but that he had not “canvassed, solicited or endeavoured to entice” them away. At trial in March 2011 he called four clients to give evidence on his behalf, as well as the managing partner of Charnwoods. HHJ Simon Brown QC held that on a true construction of the clause Mr Maidstone was in breach in respect of each of the named clients in dispute. Significantly this included occasions where the former Baldwins client had made the first contact with Mr Maidstone.
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