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The recent decision of Legends Live Ltd v Harrison demonstrates the importance of taking prompt and decisive action following a breach of a restrictive covenant.
Mr Harrison was a Michael Jackson tribute performer. He was contracted by Legends Live (LL) for the 2105 summer season. His contract contained a restrictive covenant preventing him from performing in another multi-tribute show in Blackpool for 12 months after the end of the season.
In January 2016, Mr Harrison entered into a contract with a competing production company (C) for the summer 2016 season. LL threatened legal proceedings when it became aware of the new contract. Crucially, however, LL did not seek injunctive relief until June 2016, shortly before the summer season was due to start.
In June, LL first sought an interim injunction to prevent Mr Harrison from performing until a full trial had taken place. The application was refused, due in part to the unexplained delay in bringing the claim and also to the belied that granting an injunction at such a late stage would be prejudicial to Mr Harrison and to C.
The claim proceeded to a full trial. In his defence, Mr Harrison again relied on the delay between LL's knowledge of his new contract with C and the commencement of legal proceedings.
LL attributed the delay to the cost of pursuing expensive litigation. It was accepted that, between January and March 2016, LL had insufficient funds to issue proceedings. Until then, it was therefore reasonable for LL to try to persuade Mr Harrison not to commit the breach. However, when funding became available in March, there was a further 3 month delay in issuing proceedings. The court held that this delay was unacceptable and that to grant the injunction at this late stage would case injust disruption to C's summer production.
This decision illustrates the importance of taking prompt action to enforce a restrictive covenant. This is not to say that parties should focus on litigation at the expense of alternative dispute resolution. However, consideration should be given at the outset to the urgency of the matter, the length of time the parties can afford to spend negotiating prior to the length of proceedings and how any such delay will be justified before a court, if questions are asked.