“Good to see you today. I just want to make sure I capture the key elements of our discussion today, so we don't waste any ones time. We are looking to set up a new broker scheme for people relocating from another country to the UK. The initial focus will be Western Europe but we appreciate that there will be risks from the US, Japan, Australia and New Zealand. Target year 1 premium is£3 -4m. The scheme will utilise Mulsanne claims Action: Alexander to visit Key Claims Marshmallow is FCA approved but not to hold client monies. So there is a requirement for risk transfer. In return for this Mulsanne require client monies to be segregated … The IP for rating will come from Marshmalllow. The scheme will appear delegated but all price changes will be agreed with Mulsanne in advance. Action - Tim/Gary to send over rates and a follow up meeting will be required to work this up.”
“If a defendant is proved to have used confidential information, directly or indirectly obtained from the plaintiff, without the consent, express or implied, of the plaintiff, he will be guilty of an infringement of the plaintiff's rights.” (b) The most useful statement of the elements necessary to found an action for breach of confidence has been well settled for very many years and remains that of Megarry J in Coco v AN Clark (Engineers) Ltd[1969] RPC 41 at 47, which has been approved many times since at page 47 the learned judge said: “In my judgment, three elements are normally required if, apart from contract, a case of breach of confidence is to succeed. First, the information itself … must “have the necessary quality of confidence about it.”
““The information, to be confidential must, I apprehend, apart from contract, have the necessary quality of confidence about it, namely, it must not be something which is public property and public knowledge. On the other hand, it is perfectly possible to have a confidential document, be it a formula, a plan, a sketch, or something of that kind, which is the result of work done by the maker upon materials which may be available for the use of anybody; but what makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same process.” (per Lord Greene MR in Saltman Engineering Co v Campbell Engineering Co(1940) 65 RPC 203 at p215). This point was also referred to by Megarry J in Coco in these terms (at p 47): “Something that has been constructed solely from materials in the public domain may possess the necessary quality of confidentiality: for something new and confidential may have been brought into being by the application of the skill and ingenuity of the human brain. Novelty depends on the thing itself, and not upon the quality of its constituent parts”. (f) “Confidentiality does not attach to trivial or useless information. The information need not be commercially valuable, but the preservation of its confidentiality must be of substantial concern to the claimant: Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1985] R.P.C. 219,(1984) 156 CLR 414 , H.Ct of Australia at 438 (Deane J.).This is not a high threshold, however.” (per Arnold J in Force India at para 223). (g) As well as being proved by direct evidence of misuse, misuse in the form of copying or reproduction can be properly evidenced by evidence of similarity and evidence of the likelihood of the similarity arising from independent effort. (h) Misuse of confidential information is not confined to direct use in a product, system or method. It is misused if it is used en route to a user's final destination by providing shortcuts, saving effort and/or time even if the confidential information is then not directly used thereafter. This is the “springboard” principle emerging from Terrapin Ltd v Builders Supply Co (Hayes) Ltd(1959) 1967 RPC 375 . In certain circumstances it can justify a “springboard” injunction which halts the fruits of the misuse in its tracks for a period, but it does not seem to be suggested that such relief will be sought in this case. (i) It is very important that the confidential information relied on and its misuse be properly pleaded. This is said to be a significant point in this case so I emphasise it by citing Arnold LJ in Shenzhen Senior Technology Material Co Ltd v Celgard LLC[2020 EWCA Civ 1293: “32. It is well established that, in a claim for misuse of trade secrets, it is important for the claimant properly to particularise the information which is alleged to be a trade secret and to have been misused. The reasons for this were clearly and forcefully articulated by Laddie J, who had considerable experience in this field, in two judgments. First, in Ocular Sciences Ltd v Aspect Vision Care Ltd[1997] RPC 289 he said at 359-360: "The rules relating to the particularity of pleadings apply to breach of confidence actions as they apply to all other proceedings. But it is well recognised that breach of confidence actions can be used to oppress and harass competitors and ex-employees. The courts are therefore careful to ensure that the plaintiff gives full and proper particulars of all the confidential information on which he intends to rely in the proceedings. If the plaintiff fails to do this the court may infer that the purpose of the litigation is harassment rather than the protection of the plaintiff's rights and may strike out the action as an abuse of process. Such a case was John Zink & Co. Ltd. v. Wilkinson [1973] R.P.C. 717 in which the Court of Appeal ordered particulars before defence. The case returned to the High Court on a successful application to strike out. This is reported under the name John Zink & Co. Ltd. v. Lloyds Bank Ltd. [1975] R.P.C. 385. … The normal approach of the court is that if a plaintiff wishes to seek relief against a defendant for misuse of confidential information it is his duty to ensure that the defendant knows what information is in issue. This is not only for the reasons set out by Edmund Davies L.J.in John Zink [namely, that an allegation of misuse of trade secrets is a serious allegation] but for at least two other reasons. First, the plaintiff usually seeks an injunction to restrain the defendant from using its confidential information. Unless the confidential information is properly identified, an injunction in such terms is of uncertain scope and may be difficult to enforce: …. Secondly, the defendant must know what he has to meet. He may wish to show that the items of information relied on by the plaintiff are matters of public knowledge. His ability to defend himself will be compromised if the plaintiff can rely on matters of which no proper warning was given. It is for all these reasons that failure to give proper particulars may be a particularly damaging abuse of process." 33. Secondly, in CMI-Centers for Medical Innovation GmbH v Phytopharm plc[1999] FSR 235 Laddie J said, when considering an application for an interim injunction, at [27]: "As to the first of these four matters [namely 'the plaintiff must identify clearly what is the information he is relying on'], the fact that the proceedings are only at an interlocutory stage does not justify less precision. The defendant must be told what it is he is accused of misusing. He must be told precisely what it is that he will be prevented from doing or using by the injunction sought. This does not mean that the plaintiff is locked into his case at the interlocutory stage. He may find that additional information has been taken or misused by the defendant in which case he will be able to amend his claim to include additional material. He may find that some of the information which he had thought was confidential is not or has not been used by the defendant. In that case he can restrict his claim. But this does not affect his obligation to set out precisely what, at the interlocutory stage, is the confidential information he wishes to rely on.”
“However confidential the circumstances of communication, there can be no breach of confidence in revealing to others something which is already common knowledge.”
“It is not disputed that the interview was confidential. The question which I have to decide is whether the Defendant company has made any use of information, obtained from the drawings or from Mr. Johnson at the interview, which was not common knowledge.”
“Few other points to highlight - school student should be a decline, I've changed it. We had waiter as decline and waitress as accept, which could be viewed as discriminating on gender, so I've changed waiter to accept and set the rate the same as waitress. All other declines have stayed the same. Note unemployed is a decline and is only 2% of quotes in the aggregator data set. However we shouldn't be cancelling existing customers who become unemployed in the current environment, or even increasing their premium significantly. We need to be vigilant of people claiming to be actuaries one minute and then telling us they are now employed a week later but for any customer we've had for say 3 months we should maintain their price if they tell us they are unemployed at least until renewal. We probably need to get this agreed with Darren.”
“As discussed last week I have prepared a new Underwriting file (new and revised rates, with complete rule set and reference tables) that should get us “Aggregator ready”
"If Mulsanne's postcode file was in use within Marshmallow's rating engine in early 2020 then that was misused along with other items and is therefore relevant to the extent of misuse. If on the other hand the postcode file was NOT then in Marshmallow's rating model, we rely on all other items. These were: 536. 1 Elements of the Claims and Convictions Table as set out in paragraph 599 below; 536. 2 The Vehicle Segmentation File (including vehicle categorisation) as set out in §616 below; 536. 3 Occupation Decline Rules and amendments to occupation ratings derived from DM-2.3B as set out at §580 below; 536. 4 NCD Matrix as set out at §645 below; 536. 5 Voluntary Excess as set out at § 643 below [it is apparent that this should be a reference to para 641]; and 536. 6 Underwriting Rule Set as set out at §638 below."
“So I can start working on this for the reinsurer could I ask that I have access to the following please: – current guidelines/rules – current policy wording – Mulsanne binder or underwriting guidelines/rules – copy of proposed or draft QS slip and XOL slip (if available)" AKB responded on 29th September saying: “– Current guidelines/rules – is this just exclusions? Will attach the main ones tomorrow – current policy wording – attached –…" To which Ms Coulthard responded that she would look at the documents tomorrow and she went on: “In respect of the guidelines this is usually a document that sets all the underwriting rules and declines. If there isn’t one set up I’m happy to start drafting one. I can do this with the documents you’ve already attached. I would also need the decline/exclusion list. This should be enough to get me started although may need someone to talk me through the rating framework and rating rules.”
“The parameters for this rule are significantly different to those contained in [the relevant tab] of DM-2.6. There is therefore a serious question-mark about whether there really is a link between the draft guidelines of Ms Coulthard and DM-2.6.”
“We would like to get you guys onto our latest postcode file, which I have attached here. Could you please let me know how quickly you will be able to implement? If you have any questions please come back to me. Password to follow.”
“We won't be able to do this this week but might be able to next week, if not then the week after. Will keep you posted - we will of course prioritise asap!”
“Thanks, we updated this file as part of our annual refresh, so it makes sense for you to use the latest one.”
“In the current month and full past three full months, the sum of incoming transactions from any of the below mentioned merchants should not be£500 or more: Merchants Names: [20 delivery companies named, not all of which are food delivery companies, but the two identified in the DM-2.12 rule appear.]”
“Payday and short term loans - decline if any are found”
“And, if at least one is satisfied, the policy is declined: 1. Account has an incoming transaction within last 21 days with any of the below mentioned merchants. 2. Account has two or more payday loan transactions of more than£250 in the last two years from below mention[ed] merchants. 3. Account has payday loan transactions of more than£1500 in the last 2 years from below mention[ed] merchants.”
“Historical (typically at least 10 years) view of total portfolio size including rate changes, loss ratios and frequencies.”
“Please detail how you calculate achieved and applied rate change.”
“Alternatively, the information disclosed by the Defendants when seeking reinsurance capacity for, investment in, and regulatory approval for, the Second Defendant was generated and/or compiled by making use of the Claimant’s Confidential Information.”
“Now, the suggestion is that Mulsanne’s rating engine was used to arrive at some figures in this document [viz Question 1(a)]. Well, my learned friend can certainly put that to the witnesses, but we don’t anticipate that he will get anywhere with that point. So, if those are the iterations of the Springboard case, then there is nothing in any of those either.”
“On the postcodes. It is virtually impossible to tell with a full postcode review what is going on. What I would like to see [is] a chart on the distribution of the changes up and down and how does that correlate to the loss ratio. I want to make sure what we are increasing is bad and the educing good …”
“… Marshmallow used this Confidential Information as a springboard by referencing/crosschecking when creating and adjusting the postcode file used in the January Model and April Model.”
“I used market data (quotes from GoCompare [an aggregator]) from March 2020, pricing them with our pricing engine as we would today. The analysis is then based around the ratio of our price to the top market price. By comparing the mean values of this ratio for the different modification groups to the baseline (quotes with unmodified vehicles) I determine what pricing factor would be needed so that we essentially price the new quotes at the same “competitiveness” as are average for all other quotes, within the context of our existing rating structure. The results are as follows: Mod Group Pricing factor 1 0.965 2 0.994 3 1.206 4 1.274 … Based on this, I would propose no loads for groups 1 and 2 and follow the analysis loads for groups 3 (1.21) and 4 (1.27). Does this sound reasonable based on your experience or not? I also think it would be reasonable to add a small load to the first two groups initially.”
“ … to run an analysis to provide a preliminary indication of what loads or decline decisions to make regarding the modification groupings.”
“I prepared the voluntary excess table based on experience, and with assistance from analysts who established from price comparison data that we purchased how the market discounted premiums based upon an individual’s voluntary excess. In setting the discounts I was mindful that some people agree to a higher voluntary excess because they are actually unable to afford the premium – this is why I set modest discounts to dis-incentivise that type of behaviour.”
“Q. But you think, in paragraph 7.32, where you make a reference, “the analysts who established from price comparison data that we purchased how the market discounted premiums”, you think that the exercise of running sample risks through the ratings engine was performed for the purpose of voluntary excess table? A. Yes, it was. It was. And we established certain discounts depending on how high you wanted to push your excess to.”
“I drafted the range of NCD. This range was then checked against market quote data obtained from price comparison websites to ensure that we were price competitive.”
“14. If Marshmallow does not withdraw its assertion that the TOBA terminated by close of business on Thursday,28 January 2021 , [Mulsanne] will take the following steps in enforcement of its termination rights: (a) [Mulsanne] will enforce its rights under Clause 19.3.1 of the TOBA to appoint an alternative intermediary to service the insurance for all customers who hold an in-force policy underwritten by [Mulsanne] … (b) pursuant to Clause 19.3.4, all outstanding premiums… will become immediately payable to [Mulsanne]; and (c) pursuant to Clause 19.3.2, Marshmallow will be required to immediately deliver all records relating to [Mulsanne] policyholders with an in-force policy as at the date of this letter. 15. Should [Mulsanne] be required to take the above steps, it will contact Marshmallow directly to arrange the orderly transfer of the servicing of in-force policies to Complete Cover Group [another company in the Mulsanne group].”
“1.8 Whilst our client remains firmly of the view that it has the right to terminate for material breach of the TOBA under clause 19.1.5 as set out above and strictly without prejudice to and without waiving any of its rights to do so at a later point, our client withdraws its notice of termination for the present time as requested in your letter.”
“12. The TOBA is terminated with immediate effect, as a matter of common law, for each of the following reasons: (a) Marshmallow’s purported (and invalid) termination as set out in your letter of20 January 2021 amounts to a repudiatory breach of contract, which [Mulsanne] hereby accepts, thereby bringing the TOBA to an end; and/or (b) Your proposal to withdraw Marshmallow’s notice of termination on a caveated and temporary basis as set out in paragraph 1.8 of your letter of28 January 2021 does not amount to a proper withdrawal, and our client does not consent to withdrawal on these terms. Marshmallow is bound by its act of issuing the notice of termination, and our client accepts that notice, thereby bringing the TOBA to an end.”
“13. Alternatively, if for any reason MICL is not entitled to treat the TOBA as having been terminated at common law, MICL hereby exercises its contractual rights of termination so that the TOBA is terminated with immediate effect for any one or more of the following reasons: (a) MICL invokes its right to terminate the TOBA with immediate effect pursuant to Clause 19.1.5 since the matters set out in 12(a) and (b) above amount to a material breach of the TOBA; (b) MICL invokes its right to terminate the TOBA with immediate effect pursuant to Clause 19.1.5 since Marshmallow’s breaches of its data protection obligations and/or Clause 13.11 of the TOBA set out at paragraphs 10 and 11 above amount to a material breach of the TOBA; (c) MICL invokes its right to terminate the TOBA with immediate effect pursuant to Clause 19.1.5 since Marshmallow’s refusal to allow MICL to exercise its contractual audit rights under Clause 16.8 amounts to a material breach of the TOBA; (d) MICL invokes its right to terminate the TOBA with immediate effect pursuant to Clause 19.2.1 since Marshmallow has, in multiple instances, failed to comply with its obligations as a data controller, arising from its refusal to investigate data breach complaints by customers (as described by Mr Patel in the email referred to in paragraph 10(a) above), which amount to “persistent and repetitive breaches” of Clause 13.11 of the TOBA; (e) MICL invokes its right to terminate the TOBA with immediate effect pursuant to Clause 19.2.1 since Marshmallow’s multiple refusals to allow MICL to exercise its contractual audit rights – asserted by Marshmallow between11 November 2020 and28 January 2021 – amount to “persistent and repetitive breaches” of Clause 16.8 of the TOBA; and/or (f) MICL invokes its right to terminate the TOBA with immediate effect pursuant to Clause 19.2.7 since Marshmallow has (and/or MICL believes that Marshmallow has) entered or intends to enter into “an arrangement with another insurer, the effect of which is intended or which actually has the effect of transferring a major proportion of the business placed with [MICL] to the other insurer”. 14. Without prejudice to the foregoing and strictly on a protective basis in the unlikely event that all of the above bases for termination of the TOBA with immediate effect are held to be invalid, MICL hereby gives 180 days’ notice of termination in accordance with Clause 19.1.2.”
“You [ie Marshmallow] have or we believe that You have or that You intend to enter into an arrangement with another insurer, the effect if which is intended or which actually has the effect of transferring a major proportion of the business placed by Us to the other insurer.”
“Can you please send me a copy of your process that you follow when you are alerted of a data breach. If you have a process map, that details the checks to carry out and actions taken that would be helpful.”
“Apologies for the delay. In regards to your request I am unfortunately not in a position to send you a copy of our data breach process or any associated mapping. These documents are confidential to Marshmallow and the best I can do is to confirm we have them in place.”
“As you can see you are required to work with us and comply with your requirements under data protection legislation, as there have been a number of data breaches reported we are required to co-operate fully with each other and this includes you demonstrating and evidencing that you have the appropriate policies and processes in place. As you are administering policies on our behalf we need to be satisfied that you have compliant processes in place as per the terms of our agreement and data protection legislation. Even if the material is confidential we have an agreement between us that contains confidentiality protections and clearly states that we have the right to audit and have access these records [sic]. I hope that clarifies the position, can you please send me evidence of how you comply with GDPR/data protection legislation and the processes and policies you have in place.”
“You will co-operate with Us and We with You in complying with the requirements of this clause;”
“In respect of the Personal Data a Party processes under or in connection with this Agreement, the Party: 13. 11.1 shall comply at all times with its obligations under the Data Protection Law; and 13. 11.2 shall assist and cooperate fully with the other Party to enable the other Party to comply with their obligations under Data Protection Law, including but not limited to in respect of keeping Personal Data secure, dealing with Personal Data Breaches, complying with the rights of Data Subjects and carrying out Data Protection Impact Assessments.”
“[After the opening words which make it clear that the relationship is one of principal and agent] You will undertake to: … 16. 8 Grant Us, and the Regulators the right to audit and to copy and retain any documents in connection with such audit, where it is required of Us or by Us in a financial or regulatory capacity, or to ensure You have complied with the terms of this agreement. Such right to audit shall be on reasonable notice and You will supply all necessary facilities for copying required data free of charge;”
“7.1 As set out in this letter, MICL’s faith in Marshmallow’s assertions that it is complying with all its obligations of confidentiality under clause 13.9 of the TOBA has been severely compromised by Marshmallow’s conduct. Similarly, MICL does not accept that Marshmallow is able to establish a “ring-fenced” insurance business without extensive reliance on the Confidential Information. 7. 2 Pursuant to Clause 16.8 of the TOBA, MICL hereby exercises its right to conduct an audit of Marshmallow’s business, to verify that it is complying with its obligations of confidentiality and not misusing the Confidential Information in the course of establishing its new business venture. 7. 3 MICL is instructing specialist forensic investigators to carry out this audit. Representatives from MICL’s auditors will contact Marshmallow in due course to arrange the audit, which will commence later this month. 7. 4 If, as MICL expects will be the case, the audit reveals (mis)use of the Confidential Information by Marshmallow as part of its new business venture involving the captive insurer, this will result in a legal claim for, at least, infringement of trade secrets, breach of confidence and infringement of database rights against Marshmallow.”
“4.1 We do not agree that your client has a right to audit our client in the circumstances. 4. 2 Clause 16.8 of the TOBA does not give your client an unfettered audit right. The audit right exists to enable your client to check our client’s compliance with the TOBA in the context of clause 16, which deals with regulatory compliance risk, and it is against this background that the audit right must be read. Furthermore, there is no evidence of a breach of contract. Your client is not entitled to rely on clause 16.8 to perform an audit in order to dig around for information about our client’s business plans and strategy. Our client will not permit your clients to audit it for the purposes of a fishing expedition.”
“1.12 … in respect of the business underwritten by your client. That is what the TOBA envisages. What our client objects to is the suggestion, that your client appeared to be making, that it could investigate the wider business model and operations and plans of our client under the guise of an audit. 1. 13 On that basis, our client will write to you in due course on the subject of an appropriately delineated audit.”
“Official examination of accounts with verification by reference to witnesses and vouchers.”
“19.3 In the event of termination, the following shall apply: 19. 3.1 The company reserves the right to deal directly with the Insured or appoint another intermediary to service the relevant insurance in the best interests of the insured. In such circumstances You will not be entitled to any payment for goodwill which may arise from such arrangements neither will there be any duty to account to You in respect of such arrangements. 19. 3.2 All papers, records, software and any other property of Ours must be surrendered immediately. 19. 3.3 If required You must provide Us with full details of all transactions being carried out in the course of this agreement at the date of termination.”
“A firm must pay due regard to the interests of its customers and treat them fairly.”
“Outcome 1: Consumers can be confident they are dealing with firms where the fair treatment of customers is central to the corporate culture. Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale. Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect. Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.”
“2 For all policies the results of credit check undertaken against the customer 3. For all policies the results of ID check undertaken against the customer; 4. For all policies of the results of Lexis Nexis NCD check undertaken against the customer;”
“For all policies, details of any additional product the customer has been sold, along with details of the level of cover they have taken i.e. breakdown cover or legal expenses.this will need to include the name of provider along with the policy/reference numbers for those products;”
“Your Marshmallow policy is underwritten by capacity provider [sic] The schedule forms part of the Policy. Read it in conjunction with the Motor Certificate and Policy documents, and keep it in a safe place. Your add ons are (further details can be found in your policy document) – Legal Cover.”
“What’s covered ? Here’s what our policy covers you for should you proceed with renewal… What’s covered in our fully comprehensive car insurance…[details of the motor insurance are then set out in a column below]”
“Your add-on National Explorer Breakdown cover£6.56 per month (included in price) …”
“You must comply with the FCA rules and principles as they apply to the conduct of Your business when acting on Our behalf under this agreement.”
“You, Your employees, agents or representatives will adopt Good Industry Practice in connection with this agreement.”
“6. For all policies payment details, including bank account info for direct debits and/or credit/debit details for any continuous card payments.”
“5.3(c) Payment details: our client does not store any payment details.”
“2.1(b) Payment details: in our letter of24 February 2021 we set out our instructing client’s understanding at the time, which was that Marshmallow did not hold any customer payment details. On further investigation (and with apologies for providing an incorrect response previously), our client did start collecting selected payment records during the course of last two years, namely: (i) the last four digits of payment cards used by customers when making annual payments since27 May 2020 . This information was collected in the context of our client acting as Mulsanne’s agent and so will be provided to your client; (ii) [information about direct debits for customers who borrowed in order to pay the premium – this matter is not relevant to the point presently under consideration].”
“1.5…(b) Payment details: as explained in our letter of28 April 2021 , our client holds records of the last four digits of payment cards used by customers since27 May 2020 . Customers make their initial payments to a third party payment provider. In the context of doing so, Marshmallow collect the last four digits of their card number. That information is provided to Marshmallow and it is that information that can be passed to your client. Marshmallow does not have access to any other card details, as is perfectly normal in the context of E-commerce, and is for the protection of customers.”
“Marshmallow clearly does have recourse to payment details, which were collected (on Marshmallow’s own case) as agent for Mulsanne. 15. The fact that those payment details may be held by a third party (which we believe to be Stripe) does not alter the legal position that those details were collected while acting as Mulsanne’s agent, and that any refusal to provide those details (including by arranging for Mulsanne to access them through Stripe or another provider), and/or to profit from them, gives rise to a further breach of Marshmallow’s fiduciary duties. … 18. By refusing to facilitate Mulsanne’s (or Complete Cover Group’s) access to Stripe and/or Premfina, Marshmallow is actively obstructing the replacement intermediary’s ability to service the relevant business, and preventing Mulsanne’s exercise of its contractual rights following termination.”
“ 2.1 Regarding payment details, our client has provided the information it has within its possession and control and as required by clause 19.3.2 of the TOBA and our client’s overarching agency obligations. 2. 2 We have made this point repeatedly in correspondence but restated here for clarity: our client only holds records of the last four digits of payment cards used by customers since27 May 2020 . Our client does not hold any other card payment information in this regard, and is not entitled to any other such information…. 2. 3 As for your new suggestion that our client must “facilitate Mulsanne’s (or Complete Cover Group’s) access to Stripe and/or Premfina” - third-party service providers engaged independently of our client’s agency relationship with your client – this goes beyond both what your draft orders seek, what the TOBA provides for, and what your client may be entitled to as a matter of agency law. Upon termination, neither the TOBA nor our client’s overarching agency obligations require that our client effectively move its entire business and independent commercial relationships as a broker to your client. Even if our client had such an obligation to facilitate access to third-party service providers (which it does not), our client has no control over those third-parties to compel them to engage with your client.”
“ 2.6 In particular, Marshmallow is actively refusing to provide payment details to Mulsanne, either in the form of card details (for policyholders who pay their premiums in a lump sum) or details of policyholders’ premium finance arrangements (for the majority of customers who pay by instalments). Provision of such details is required by both clauses 19.3.1 and 19.3.2 of the TOBA , as well as pursuant to Marshmallow’s ongoing duties as Mulsanne’s former agent. 2. 7 As to card details, despite being asked on multiple occasions you have refused to explain how Marshmallow is able to represent to customers that it “holds on file” payment details which allow it to process payments when it suits Marshmallow. Your client is obliged to provide those card details or facilitate our client’s access to them both because Marshmallow (by its own admission) collected them in the course of acting as our client’s agent, and because it is required By Marshmallow’s contractual obligation to facilitate a change in intermediaries under clause 19.3.1 of the TOBA.”
“2.2 Card payment details. Marshmallow FS “actively refusing to provide payment details to Mulsanne”
“5 (a) … In the course of acting as the Claimant’s agent, the First Defendant collected premiums directly from policyholders (for payment policyholders)… (b) The payment details used (including card details for annual payments and premium finance loan details for monthly payments) to collect those payments were received by the First Defendant in its capacity as the Claimant’s agent. …. (e) the fact that the First Defendant use Stripe to collect card payments is irrelevant: it is perfectly common for insurance intermediaries (or any other company) to use payment processors to process card payments. The sub-delegation of payment processing to third party does not excuse the First Defendant from its fiduciary obligation to deliver up the payment details used to collect premiums. If the First Defendant is not able to obtain the details from Stripe, then it should procure the Claimant’s access to Stripe directly. We note below at paragraph 6 that the First Defendant plainly has access to the relevant card details and is willing to use them when it suits the First Defendant commercially.”
“7. In letters dated 5 May, 18 May and26 May 2021 , we specifically asked you to confirm how the First Defendant is able to make representations of the type set out above while representing to the Claimant that it does not have access to card details. On each occasion you have refused to answer those enquiries. It is obvious from the above that the First Defendant does have access to these records, which it is obliged to provide to the Claimant, but is not willing to provide them because it does not suit the First Defendant’s commercial interests to comply with the Claimant’s requests.”
“2.3 Marshmallow FS arranged for the receipt and processing of its customers’ up-front card payments to payment services providers; initially Stripe, and then Checkout,. In each case there was a contractual relationship between Marshmallow FS and each entity over the relevant period, by which first Stripe, and then Checkout, provided certain services to Marshmallow FS. In summary, these services enabled card transactions to be made between the customer and Marshmallow FS. Neither entity is obliged to hand over full customer card details to Marshmallow FS, still less to Mulsanne. 2. 4 Your client should be aware that the storage of payment card data is heavily regulated by, amongst other laws and regulations, the Payment Card Industry Data Security Standard [which] places obligations on companies who hold payment card details including as to how different elements of cardholder data may be held and the extent to which such data needs to be rendered unreadable, needs to be encrypted, and/or needs to be deleted … What our client can say is that it does not believe that its own systems are set up in a manner that would allow it to hold full payment card details (of the type your client has demanded) even if they are now available to Stripe/Checkout … it is therefore not possible for our client to obtain the details you seek from Stripe/Checkout nor would it be possible for those third parties to provide those details to our client (even if they now still hold them in full), in compliance with PCI DSS and/or other applicable laws and regulations. 2. 5 It is not clear what Mulsanne means by its assertion that Marshmallow FS should “procure the Claimant’s access to Stripe directly”
“Until your letter of29 September 2021 , Marshmallow FS had refused to engage with Mulsanne’s enquiries as to whether Marshmallow FS’ use of third party payment processors (including our letters of 18 and26 May 2021 ) to collect payments on behalf of Mulsanne. Marshmallow FS’ decision to contract with a sub-agent to carry out its fiduciary duties to Mulsanne does not diminish the extent of those duties: Clause 19.3.1 of TOBA requires Marshmallow FS to facilitate a transfer of servicing to enable direct dealing with Mulsanne Policyholders, including by procuring relevant details from or Mulsanne’s access to any sub- agents. 9. Mulsanne has no contractual relationship with Stripe, or Checkout, both of which are sub-agents of Marshmallow FS. It is for Marshmallow FS to make whatever arrangements are necessary with its sub-agents to discharge its own obligations to Mulsanne upon termination of the TOBA, including the transfer of payment information and Mulsanne’s ability to process payments directly. We reject your assertion that Marshmallow FS would have had no objection to Mulsanne unilaterally contacting Stripe to make arrangements: that would have been wholly inconsistent with Marshmallow FS’ approach to this matter to date including his continued assertions that the TOBA had not terminated until1 August 2021 .”
“Rather, the TOBA entitles your client to take over policy administration, including by dealing directly with the client and making its own arrangements with the payment services providers if it so wishes. Nevertheless, by our letter of29 September 2021 , our client made clear that if Mulsanne wanted it to take any specific action to enable Mulsanne to deal with Stripe all Checkout, it would consider the request… [quotes Mulsanne’s demands for access to payment records] … These requirements are ill-defined. Insofar as they amount to a demand for our client to procure Mulsanne’s direct access to full payment card details of customers, that is a demand for our client to do the impossible by trying (without any contractual right to do so) to persuade Stripe and Checkout to breach their own industry standards. 3. 4 We repeat now that our client is prepared to consider any request for it to take reasonable steps to make an introduction between Mulsanne and Stripe and/or Checkout and to facilitate Mulsanne (or CCG) dealing with those companies. We invite your client to consider and identify such reasonable steps.”
“28280002542 please be all over this one this looks like a ghost broking case. Check Stripe and Ravellin for payment issue. Was it a UK card, UK IP? [Reply] Yep UK card was used, IP and CVC check matched the postcode on the policy. Put through extra checks and will cancel if they fail.”
“6. For all policies payment details, including bank account info for direct debits and or credit/debit details for any continuous card payments.”
“4.3(b) Regarding payment details (paragraph 5.3(c)), we understand that the monthly premium collection is managed by Premfina Limited, and trust that MMFS will provide its reasonable assistance in enabling MICL to deal with Premfina following commencement of direct dealing. MMFS suggests that it is willing to do this following termination in the table in paragraph 5 of your letter (in relation to Clause 19.3.5).”
“2.1(b) … On a further investigation (and with apologies for providing an incorrect response previously), our client did start collecting selected payment records during the course of last two years, namely: … (ii) direct debits details for premium finance customers that signed up after30 April 2019 . This information was collected for the limited purpose of setting up premium finance loans for customers. It was not collected in relation to our client from acting as agent for Mulsanne, but in relation to the establishing of loans for customers (in relation to which our client generally acted as agent for the customers). This information will therefore not be provided, as it would not be appropriate to do so and indeed would impinge on the integrity of our client’s agency relationship with his customers.”
“8(g) As to your paragraph 2(b)(ii), the fact that a policy was purchased using premium finance, and the details of such transactions, are clearly material facts relevant to the First Defendant’s exercise of delegated authority on behalf of Mulsanne, and the issue of whether such policies were sold in a compliant manner. The First Defendant is therefore obliged to deliver our records relating to premium finance transactions.”
“The position is even more serious for customers who have elected to obtain premium finance from Premfina. Marshmallow’s refusal to even attempt to facilitate the replacement intermediary’s access to Premfina in order to process adjustments to financed insurance policies means that it is impossible for Mulsanne or its appointed intermediary to service those customers. Accordingly, whatever your proposal for the transfer of records, as matters stand it is wholly ineffective to transfer the servicing of a majority of customers. By refusing to facilitate Mulsanne’s (or Complete Cover Group’s) access to Stripe and/or Premfina, Marshmallow is actively obstructing the replacement intermediary’s ability to service the relevant business, and preventing Mulsanne’s exercise of its contractual rights following termination.”
“On the premium finance side, our client did not collect direct debit details for premium finance loans as agent for your client, but as agent for its customers. As for your new suggestion that our client must “facilitate Mulsanne’s (or Complete Cover Group’s) access to stripe and/or Premfina” - third party service providers engaged independently of our clients agency relationship with your client – this goes beyond both what your draft orders seek, what the TOBA provides for, and what your client may be entitled to as a matter of agency law. Upon termination, neither the TOBA nor our client’s overarching agency obligations require that our client effectively moved its entire business and independent commercial relationships as a broker to your client. Even if our client had such an obligation to facilitate access to third-party service providers (which it does not), our client has no control over those third-parties to compel them to engage with your client.”
“2.9 If a policyholder who pays for their policy in monthly instalments requires an MTA, the premium (whether additional premium or a refund) can only be processed if the intermediary has access to the finance provider. We would welcome Marshmallow’s clarification as to how it is possible for CCG to process MTA premiums for customers who pay by instalments without access to Premfina. Similarly, we welcome Marshmallow’s views as a regulated business as to how an arrangement whereby the intermediary responsible for processing MTAs has no ability to process MTA premiums is one which serves the policyholder’s best interests. 2. 10 For the avoidance of doubt, we are not suggesting that Marshmallow is obliged to return the double remuneration which it received for arranging premium finance. Marshmallow would receive a windfall from a change of intermediary. It appears that the sole basis for Marshmallow refusing to make the necessary arrangements for CCG’s access to Premfina is to ensure that CCG cannot offer a comprehensive service to the customers. Notwithstanding the commercial benefit that Marshmallow may derive from that outcome, it is in breach of both Marshmallow’s contractual obligations and its regulatory duties.”
“2.3 Premium finance details. We reiterate that our client arranges premium financing not as agent for Mulsanne, but independently of that status, and as a result your client is not entitled to any associated records. Moreover, Mulsanne does not need those details to administer its policies for essentially the same reason as given in 2.2 above. If a customer requires an MTA or a renewal from Mulsanne and a credit or debit has to be provided, that can be done independent [sic] of any premium finance loan. Our client is not prepared to communicate information regarding its customers to Mulsanne where the documents containing that information were not generated or obtained in relation to the conduct of Marshmallow FS’s agency for Mulsanne. 2. 4 MTAs for monthly instalment plans. You have asked how our client or CCG can administer MTAs for policyholders who pay their premium in monthly instalments. We understand that your client knows the annual premium paid by each customer; they will know the new annual premium to be charged to them, and on that basis any credit or debit due can be paid by credit or debit card at the point of the MTA.”
“5(d) Similarly, in respect of premium finance arrangements, the fact that the First Defendant also acted as a credit intermediary for the Mulsanne Policyholder is irrelevant to the agency analysis which applies to the collection of premiums, and the First Defendant’s fiduciary obligation to deliver up records relating to the collection of premiums from Premfina. If the First Defendant is unwilling or unable (in breach of its fiduciary obligations) to produce this information, then it should procure the Claimant’s access to Premfina so that the Claimant can obtain the information itself. (e) In accordance with Clause 19.3.1 of the TOBA, the Claimant has notified the First Defendant that it wishes to appoint CCG to service in-force Mulsanne Policies, including by collecting premiums from Mulsanne Policyholders and from Premfina. Clause 19.3.1 specifically contemplates that the First Defendant is obliged to make arrangements to facilitate the transaction to the new intermediary, at no cost to the Claimant. The First Defendant is in breach of that obligation.”
“2.6 as regards customers with premium finance loans, the position is as follows. Upon a transfer of policy administration, Mulsanne would know which customers have taken out such loans. Our client can confirm that, if Mulsanne does not have full records in this respect, Marshmallow FS is able and willing readily to identify to your client all such customers with premium finance loans. Mulsanne or a substitute intermediary (such as CCG) is entitled to ask those customers or Premfina to provide details of such loans. Marshmallow FS has no objection to this being done, and they are fully prepared to facilitate reasonable introductions to Premfina for this purpose. 2. 7 To be clear, our position remains that Marshmallow FS is not obliged to provide to Mulsanne further details of premium finance loans, because it did not arrange those loans as agent for Mulsanne. 2. 8 Nevertheless, and in a further effort to facilitate a transfer of policy administration, Marshmallow FS is prepared to provide full details of all premium finance loans (references, loan balances, etc), for all customers with current Mulsanne-underwritten policies. Further, if there are more details required in this respect, Marshmallow FS is prepared to consider providing such other details to Mulsanne or CCG, as they may reasonably request.”
“In any event, it has always been open for Mulsanne or CCG to contact Premfina directly to arrange for additional sums to be added to loan balances if appropriate.”
“Offers of arranging a “reasonable introduction” to Premfina (again, the first time this offer has been made, after nine months) are meaningless without specifics of how Marshmallow FS will procure Mulsanne’s access to information held by Premfina in relation to Mulsanne Policyholders’ premium finance arrangements.”
“For ‘Open Banking’ policies: bank transactional data used by Marshmallow to confirm the customer passed the checks required for this product. This data would also be used for ongoing analysis around which factors/trends were relevant for the checks required for this product.”
“’Open Banking’ Policies customer bank transactional data: this will not be provided. This data relates to business transacted by our Client outside of the limited agency on behalf of your client.”
“2.1(d) Open Banking Data: the open banking data in respect of customers is provided to our client by a third party service provider active in the open banking sector under terms that are restrictive of the data being shared further. The dataset shared is a very broad dataset that can result in an individual’s banking transactional history over many years being sent to marshmallow. Our client is, understandably, not comfortable sharing this broad transactional data with your client. Our client’s reluctance to do so stems from its desire to take account carefully of the nature of personal data held by it and whether it is proportionate and appropriate from a data protection and regulatory perspective to share that with you. Our client is willing to discuss this further to explore whether there is a narrow and/or anonymised category of information that can be shared with you if that can be achieved from a technical perspective. In addition, our client is more than happy to facilitate for you an introduction to the third party provider to ascertain if there is a way for you to obtain this data directly in a compliant manner.”
“We’ll be renewing your insurance soon [greeting] Your Marshmallow insurance policy is set to renew automatically on [date]. Important changes to your policy The underwriter of your policy will be changing to Marshmallow Insurance Ltd who are regulated by the Gibraltar Financial Services Commission and sells policies in the UK under the permission of the Financial Conduct Authority. Your underwriter has been changed to deliver a better customer experience. What this means to you? Your policy will be underwritten, sold and managed by the same company group. Your policy number will be the same but the number you need to contact if you make a claim has changed to [number given]. You will no longer be able to drive other people’s cars under 3rd party cover. Your policy will provide a hire car in the event that repairers don’t have a courtesy car available. We’ve linked a sample version of the new policy document. It’s important to give this a read to make sure the cover is suitable for your needs.”
“The law of passing off can be summarised in one short general proposition — no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.”
“What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection 224of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source. However widely extended or diffused its influence may be, goodwill is worth nothing unless it has power of attraction sufficient to bring customers home to the source from which it emanates. Goodwill is composed of a variety of elements. It differs in its composition in different trades and in different businesses in the same trade. One element may preponderate here and another element there. To analyse goodwill and split it up into its component parts, to pare it down as the Commissioners desire to do until nothing is left but a dry residuum ingrained in the actual place where the business is carried on while everything else is in the air, seems to me to be as useful for practical purposes as it would be to resolve the human body into the various substances of which it is said to be composed. The goodwill of a business is one whole, and in a case like this it must be dealt with as such.”
“Goodwill regarded as property has no meaning except in connection with some trade, business, or calling. In that connection I understand the word to include whatever adds value to a business by reason of situation, name and reputation, connection, introduction to old customers, and agreed absence from competition, or any of these things, and there may be others which do not occur to me. In this wide sense, goodwill is inseparable from the business to which its adds value, and, in my opinion, exists where the business is carried on. Such business may be carried on in one place or country or in several, and if in several there may be several businesses, each having a goodwill of its own.”
“Other ways in which the misrepresentation may be effected are by substituting other goods in response to an order for the claimant's goods in circumstances when it is not obvious to the customer receiving the goods that substitution has taken place, or by physically annexing or associating the defendant's goods to or with the claimant's goods, or by substituting a service or process employing other materials or machinery in response to a demand for the claimant's service or process, or by an agent who has been selling his principal's goods or services introducing new lines of goods or services of his own in such a way as to represent that they are from the same source. Implied misrepresentations may in some circumstances arise simply by customers assuming, in the absence of any indication to the contrary, that goods have passed through the normal channels of trade, or that goods are new, unadulterated or unaltered”