Credit crunch blamed for rising legal action

Legal action launched by businesses to prevent former employees using confidential information has risen sharply during the credit crunch, latest figures from legal law firm Reynolds Porter Chamberlain LLP (RPC) reveal.

Claims launched in the Chancery Division of the High Court have gone up from 3 in 2006 to 23 last year.

RPC explains that most of the claims relate to employees taking confidential client lists.

RPC says that this trend is expected to continue in 2009 as the recession tightens its grip and points out that for every claim that reaches the Courts there will be many more disputes that are settled outside the courts.

Cath Thorpe, partner at RPC comments: “Rising job insecurity is encouraging more employees to use the confidential information they have obtained with their current employer when they begin working for a competitor. Other employees are setting up their own businesses using confidential information in order to compete head to head with their former employer.”