The Civil Division of the Court of Appeal handed down its judgment in Tullett Prebon Plc and Others v BGC Brokers LP and Others [2011] EWCA Civ 131 on 22 February 2011. The parties were competing inter-dealer brokerage companies, the case concerning alleged attempts by BGC Brokers LP (“the appellant”) to recruit a “desk” of brokers from Tullett Prebon Plc (“the respondent”). The appellant had succeeded in persuading thirteen of these brokers to sign “forward contracts” (although three later changed their minds and stayed with the respondent) and these brokers resigned from the respondent company, claiming that they had been constructively dismissed. The appellants in turn made a {2878637 |Part 20} counter-claim in respect of the three brokers alleging that, inter alia, the respondent had induced each of them to breach his forward contract by terminating it without lawful justification and remaining with the appellant.

Jack J at first instance had held that that BGC Brokers LP had participated in an unlawful means conspiracy, including inducing the brokers to breach their contracts of employment by leaving early without lawful justification. He further found that, in respect of the Part 20 claim, that those brokers could rely on any conduct by the respondent which constituted a breach of its duty to not seriously damage the degree of trust and confidence which each was entitled to have in the respondent, and found that the respondent's conduct had not been intended to attack the relationship between the respondent and the appellant brokers, but had been intended to strengthen it. He rejected the appellant brokers’ claim for constructive dismissal and their claim that the respondent had induced breaches of the forward contracts.

The appellants appealed on two grounds: that the appellant brokers’ constructive dismissal claims be dismissed because they were wrong in fact and in law and inconsistent with the Mr Justice Jack’s approach to the Part 20 claim; and that, in dismissing the Part 20 claim, Jack J erred in law in his analysis of the allegation of inducement of breaches of contract and was inconsistent with his approach to the issue of the constructive dismissal. They submitted that the judge had correctly directed himself as to the objective test, but erred in law by effectively making a subjective analysis of the claimant's reasons for acting as it did and not an objective consideration of whether its conduct had been calculated or likely to seriously damage or destroy the relationship of trust and confidence.

In dismissing the appeal, Lord Justice Maurice Kay described Mr Justice Jack’s judgment as “meticulous”, finding that he had been correct to find as a matter of fact that the respondent had not manifested an intention to abandon and altogether refuse to perform their contracts with the appellant brokers, but had wanted to preserve those contracts. Thus there could not have been a repudiatory breach of contract sufficient to support a successful claim for constructive dismissal. Furthermore, the judge, in referring repeatedly to the need for objective assessment, had approached the issue of their reasons for acting as it had correctly. In doing so, he reached the conclusion that that intention was not to attack but to strengthen the relationship, and that this was a permissible and correct finding reached after a careful consideration of all the circumstances which had to be taken into account. The Part 20 claim thus failed at the first hurdle as the judge had been right as a matter of fact and law to conclude that the respondent had committed repudiatory breaches of the forward contracts, as a result of which the brokers had committed no breach when terminating their contracts.