Insurance firms increasingly litigate over ‘team poaching’ disputes
Commenting in City AM, Associate Andrew Czechowski discusses the rise in High Court litigation between businesses over restrictive covenants and team moves, following a series of high-profile disputes in the London insurance industry.
"Restrictive covenants operate as the key deterrent to employees from leaving to join a competitor. Properly drafted, time-limited covenants can lawfully prevent senior executives from joining competitors. Restrictive covenants can include outright non-competes, restrictions on soliciting or dealing with clients, and prohibitions on poaching staff.
"Team moves are high-risk. Employers can seek urgent High Court injunctions to stop breaches to restrictive covenants immediately. If granted, costs can be substantial. Legal fees, damages and even an account of profits can follow. By the time many executives get legal advice, the damage may already be done. It is vital legal advice is taken at the earliest possible opportunity.
“In a successful venture, equity is often significantly more valuable to a senior executive than a salary or bonus. When forming part of a team move, the senior executive and their team may be offered equity from the outset, and the opportunity to earn more than if they remain a salaried employee.
"In many sectors, the commercial reality and competition for talent can be ruthless. Ready-made teams with a pre-existing revenue stream are hugely valuable, and employers are increasingly willing to offer team-movers lucrative financial terms. That includes offering indemnities and covering legal fees when disputes arise. Team move disputes are often funded by multiple corporates with deep pockets, treating litigation as a cost of hiring talent. Without an indemnity, executives may be less willing to move to a new firm because the cost of litigation outweighs the financial upside.”
An extract of Andrew’s comments was published in City AM, 15 January 2026.
