Clarification of corporate contempt

In underlying proceedings to Back Office Ltd v Percival & Others, former employees of Back Office who had set up a rival payroll services firm settled claims for breach of fiduciary duty, breach of covenant and unlawful conspiracy. Settlement was achieved by the giving of undertakings that the rival firm, known as Liquidity, and named ex-Back Office employees, would not solicit or deal with certain named Back Office clients before 5 March 2013. 

In March 2013 Back Office issued corporate contempt proceedings against Liquidity and named individuals for breaches of those undertakings. The contempt case turned on whether it was a necessary element of the test for corporate liability that Liquidity either authorised its employees’ breaches, or failed to take reasonable steps to prevent them…

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