In the recent case of Fairstar v Adkins  EWHC 2952 (TCC), the Court was asked to decide whether the content of emails can be considered 'property'.
It was alleged that during the period leading up to the takeover of Fairstar, a former CEO (Adkins) had not revealed that Fairstar had incurred a liability to a third party. The technical set up was such that incoming emails addressed to Adkins at his work email address were automatically forwarded to his private email address and then deleted by Fairstar's server. Outgoing emails were sent directly from Adkins’ own computer and did not pass through Fairstar's server. Fairstar needed to see the emails between its former CEO and the third party in order to determine the scope of its liability to the third party, but it soon found that it had no access to them.
Fairstar argued that it had a proprietary claim to the content of the emails, on the ground that materials created by, or that come into the possession of, an agent (Adkins) whilst acting for his principal are the property of the principal. Adkins argued that the content of an email is information, and information is not property.
After considering a number of both domestic and foreign authorities on the subject and deliberating over how the concept of ownership could apply to an email, the Court held that it would not be practical or realistic for there to be property in the content of an email. Fairstar’s application to inspect the emails held by Adkins was therefore denied.
There is a patchwork of other mechanisms by which information (such as the content of an email) may be protected against certain actions by third parties – for instance by copyright, as confidential information or as personal data within the meaning of the Data Protection Act – however there are specific requirements that must be met in respect of each of these and, ultimately, none of them provides the same degree of legal protection as outright ownership of a physical asset.
Perhaps more importantly, the decision serves as a reminder to employers (and businesses in general) of the importance of retaining de facto control of its information. Had Fairstar simply implemented a policy of automatically backing up all work-related emails on its server, it may have been able to save itself some potentially costly litigation.
For more information, please contact Dominic Hopkins on 01604 233233