Industrial espionage, destroyed documents, search warrants and contempt of court – all around the home delivery of your groceries

Ocado grocery delivery van. Pic credit: Which?magazine

Extraordinary story of how two high flying former Ocado executives planned to use the company’s trade secrets to get business from rivals Waitrose

You will know that home delivery of your groceries is competitive with supermarkets vying with each other for your business. All rely on some form of new technology to get this done.

This week a final court judgement saw a City solicitor being convicted of destroying documents required by a court order in a culmination of an extraordinary saga that has raged for the last three years over home grocery deliveries.

The case had been brought by Ocado Plc, the parent company of the on line grocery retailer, which used to deliver groceries for Waitrose and now delivers groceries for Marks and Spencer as well as its own goods.

One of the co founders of Ocado, Jonathan Faiman and later another executive, Jonathan Hillary, left Ocado to set up a rival grocery technology business called  Project Today Holdings Ltd.

Marks and Spencer logo; Pic Credit: Wikipedia Commons

But as the courts were told their business plan was far from ethical. Mr Faiman tried to get a deal with M&S but was beaten by his former employer, Ocado. At a meeting with M&S to discuss the plans with the company’s chief executive, Steve Rowe, Mr Faiman insisted his colleague -Mr Hillary, still working for Ocado, should have a secret identity only known as” Jon”. Unfortunately for him when the trial began Steve Rowe recognised that Jon was Mr Hillary. A memo also revealed Mr Faiman had contacted senior Ocado staff using ” burner phones”.

Mr Faiman then opened talks with Waitrose and wanted to win their business using Ocado’s trade secrets. To get their business he got Mr Hillary to copy them. Over dinner at Mr Hillary’s home Mr Hillary provided Mr Faiman and Mr McKeeve with documents. These included a copy of a set of contract terms recently agreed between Ocado and M&S entitled, “Agreement for the Provision of the Apricot Smart Platform” (the “OSP Contract”), and operational schedules for Ocado’s contract for the provision of the Ocado Smart Platform to Groupe Casino (a French Supermarket group) (the “Operational Schedules”).

Discussions with Waitrose proceeded constructively, and on 15 May 2019, Mr Hillary resigned from his position at Ocado for a new role with Today. On 16 May 2019, Waitrose announced a new commercial relationship with Today. On 23 May, Mr Hillary was placed on gardening leave by Ocado. He remained an Ocado employee.

Ocado came to be concerned about Mr Hillary’s activities in communicating with Mr Faiman. They suspected he had handed over confidential information and/or had been working for Today while still employed by Ocado, in breach of his contract of employment.

According to Mischon de Reya, Ocado’s solicitors Faiman and Hillary later admitted in a settlement statement “While still employed by Ocado, Mr Hillary, at Mr Faiman’s request, provided Mr Faiman with a significant number of confidential documents belonging to Ocado, including documents relating to the running of Ocado’s automated warehouses and the key agreement under which Ocado would provide its online grocery technology to the joint venture with M&S.”

Mr Faiman then admitted he was taking the hard copy confidential documents with Ocado’s trade secrets to Waitrose with the aim of cementing a business deal just as Ocado, went for a search warrant to find out whether its documents had been stolen. Waitrose when it realised what was happening pulled out of any deal.

But the situation was going to get much worse. The courts granted a search warrant covering the Connaught Hotel, a luxury five star hotel in Mayfair, London where Mr Faiman was staying and Mr Hillary’s home in Ascot and the firm’s offices in The Foundry in Fulham. The search warrant covered documents, electronic devices and mobile phones and Ocado’s secret documents were recovered from Mr Faiman’s hotel rooms.

Connaught Hotel, Mayfair where lawyers found the Ocado documents

Mr Faiman decided to involve his friend Raymond McKeeve, a City solicitor , who counted his company as a client. Mr McKeeve had been involved in the Waitrose negotiations. When told of the search warrants he panicked rang an IT employee and told him to ” burn all” – ie start destroying them. This happened just after the search warrants had been served.

The reason, as the courts were to discover, was that the company had a sophisticated private message and call system -known as the 3CX app- as a way of disguising its dealings between Mr Faiman and Mr Hillary so Ocado would not know. The system could be destroyed permanently at short notice. Mr McKeeve was particularly worried as his wife’s name Belinda de Lucy who then was elected as a Brexit Party European MP for South East England, without her knowledge and he thought she would be drawn into a dispute with Ocado. Her name was first used as pseudonym for Mr Hillary to communicate with Mr Faiman.

Ocado bring claim for criminal contempt against City solicitor

Ocado plc brought a claim for criminal contempt accusing Mr McKeeve of intentionally interfering with the administration of justice by causing the deletion of documents which were essential to Ocado’s case and thwarting the purpose of the search warrant. They also tried to extend this to other documents and email systems.

Mr Faiman and Mr Hillary had to agree to permanently destroy all the stolen documents and a pay a very large undisclosed sum to Ocado in a settlement. His company is now in administration – the last known accounts at Companies House showing it owed over £8m to creditors- including nearly £2m to HM Revenue and Customs. Mr Faiman declares his official residence is in the tax haven of Monaco.

But for Mr McKeeve it was not all over as he faced criminal contempt charges.

Mr Justice Adam Johnson Pic Credit: Judicial Appointments Commission

At the hearing Mr McKeeve, a City solicitor with a number of private equity clients, clearly did not realise how serious this had been. The judge, Mr Justice Adam Johnson, described him in his judgement as “an intelligent and driven individual. At the relevant time, he had a successful practice as a solicitor in the private equity field, which he was proud of.”

The judge said “at times [he] exhibited a degree of arrogance (for example, in the evidence he gave about his ability to “annihilate” complex legal documents at high speed). He was also at times combative in the evidence he gave.”

The judge said he had shown ” shame and embarrassment” for what he had done saying at one point: “The idea that I would have committed a contempt of anything just horrifies me. The word is so perfectly chosen because it is a most horrendous word. I would only show contempt where enemies of the state or people are trying to harm my family. The idea of showing contempt for the rule of law and the court is just beyond the pale.”

McKeeve’s act of colossal stupidity – judge

But the judge said despite everything he “could not quite bring himself to accept that what he had done wrong might amount to a contempt of Court.” What he did the judge concluded his conduct had been a ‘spontaneous act of colossal stupidity’.

Judge Johnson found him guilty of contempt of court over the destruction of the phone system but not on other additional cases brought by Ocado,

A spokesperson for Ocado said: ‘We felt compelled to bring this solicitor’s conduct to the attention of the court as it was the right thing to do. Ocado has been vindicated in its decision to do so. We welcome the judgment but take no joy in it. It is regrettable that a solicitor failed in his duty to uphold the administration of justice and was found to be in criminal contempt of court.’

The case was adjourned until October 4 to decide what sanctions Mr McKeeve will face for his contempt.

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Marks and Spencer shamed: Sunday Mirror follows through my story of the 85 year old given a lifetime shopping ban

Sunday Mirror story on Patricia Stewart

Following my story on this blog on August 5 on the outrageous life time shopping ban given to a 85 year old Covid shielding woman by Marks and Spencer I decided it deserved wider publicity.

So I contacted the Sunday Mirror and I am delighted to say today’s paper includes a report of the incident and the ban.

Marks and Spencer did adopt an incredibly arrogant attitude in refusing to comment to me on why they justified the ban by ignoring my request as a journalist to the press office. I noticed when the Mirror rang they had to give a one line statement saying ” They cannot discuss individual cases. Excluding a customer is only done in rare circumstances.”

Patricia Stewart

As I said in my previous blog Patricia Stewart was obviously confused going round their Bexleyheath store and left her shopping there. The manager and his colleague who followed her out of the store and searched her shopping bag then seized on a pair of Brazilian knickers without a receipt and ” presumed” it was stolen. This evidently is enough for M&S to ban her for life shopping with M&S ever again. Her explanation is that she intended to get them exchanged as they were a gift from a friend but she had forgotten to bring the receipt.

Trespass Orders

I also notice they won’t tell the Mirror how they enforce the ban. From a trial run by her relatives where she ordered stuff directly on line and visited three other M&S stores away from Bexleyheath, it looks like to me as meaningless outside Bexleyheath. There is an interesting thread here on the Legal Beagles website -which describes someone else being banned at M&S in Harrow, north London. The ban covered ” unusual behaviour”.

You can see from it the person got really worried. M&S seem to take a rather overbearing attitude to some of their customers. Either they should prosecute if it is shoplifting or offer to help if someone is confused

Exclusive: How Marks and Spencer banned this 85 year old Covid shielding woman from shopping with them for life

Patricia Stewart

This is Patricia Stewart an 85 year old woman. She spent the first five months of the lockdown shielding from Covid 19 as she is a vulnerable person. Last autumn during the period when the first lockdown was lifted she ventured out to shop for the first time. As a M&S customer for over 60 years she went to her favourite branch in Bexleyheath shopping mall. What happened next is hardly believable but raises a lot of civil liberties issues.

Patricia Stewart was nervous about going round a public store for the first time. She went to the customer services desk and exchanged a babywear item for a bra. She then went round the food hall but being worried about Covid starting putting packaged food items into plastic bags. This attracted the attention of a security guard who told her not to do this.

According to details released by M&S following a subject access request by her relatives he ” deemed it as shoplifting “. She was then followed by a male manager and female colleagues. Now feeling thoroughly uncomfortable she approached the till four times and then changed her mind and decided to leave the trolley full of shopping and go out of the store.

M&S Brazilian knickers- a smoking gun?

She was followed into the shopping mall by the manager and a female colleague and while she was sitting on a bench waiting for a taxi they challenged her in public and demanded her name and address She refused to give it to them so they proceeded to search her shopping bag. They found none of the food shopping but did discover a pair of M&S Brazilian knickers without a receipt. They claimed they had been watching her on CCTV and saw her change a label adding that a customer had also complained about her.

Marks and Spencer store in Bexleyheath. Pic credit: M&S Facebook page

They then proceeded to serve her with a ” trespass order” – a device used by many stores to keep out suspect shoplifters without going to court – not only from the Bexleyheath store but from any store in the country and on purchasing anything from M&S on line for the rest of their life.

The ban has been challenged by her two daughters who asked to see the CCTV and for evidence of the other customer’s complaint. When challenged M&S couldn’t provide the CCTV to prove their allegation because according to them ” it wasn’t recording properly”. Nor could they produce the customer who complained.

But M&S stuck to their story and have now ended any correspondence with them -pointing out they are not regulated by anybody and therefore nothing else can be done.

Steve Rowe, chief executive, Marks and Spencer

I decided to investigate this and approached M&S Corporate Press for comment. Six weeks after failing to reply to me I escalated my inquiry to Steve Rowe, chief executive of M&S, who has ignored my email. Therefore I can’t put their response.

There are two issues here which are connected. First of all the particular case and the use of trespass orders and secondly how they can be enforced. The retailer is allowed to use them because their store is private property. A search on the internet reveals they could be quite common – for example someone complained in Bristol about being banned by M&S. And nobody knows how they can be enforced – one theory which sounds too fanciful to me – is that M&S are secretly using facial recognition cameras in their stores. The other is that the M&S Sparks card – both offers you treats but is used as a surveillance card to monitor customers. Since M&S would not respond to my questions all this is speculation.

The Sparks card was used by M&S in this case as proof of her not purchasing the knickers – they revealed in an email that they have records of many of her purchases going back two years but insisted they had no personal file on her. But according to her the knickers were purchased by a friend as a gift – so they wouldn’t be on her purchase list.

Failing to get a reply from M&S the relatives and I decided that we could test out the ban. First she decided to order a bra on line without using a Sparks card – and guess what she received a cheery note from the company telling them it was on its way and it was delivered last month. (see above)

She has since then shopped in three other M&S stores without any problem but has not returned to Bexleyheath.

This raises the question whether these ” trespass orders” can really be enforced or just used to intimidate people believing they can be banned. I would certainly have thought they would have to have an elaborate system to enforce them nationwide – that might be challenged by GDPR.

The other matter is a civil liberties issue – from what I have got from the subject access request – M&S would have had a flimsy case if they went to court. So why should they be judge and jury in deciding people’s individual liberties?

Tufail Ahmed, general manager of the Bexleyheath store. The store is the South East London Academy store, leading business initiatives and educating store teams across the region

According to their memos M&S believe their staff behaved with ” integrity” in banning her. Tufail Ahmed, the manager of the Bexleyheath store, who must be locally responsible for this, has a Linked In page in which he says:

 “M&S Manager of the Year 2018/2019. With nearly 20 years of retail experience working for leading retailers in various roles, I know that change is a very normal place in retail. I am now part of the change at M&S, leading and inspiring people to be the very best.

” My long term aim is to be an influential member of a business’ senior leadership team, that is what I am currently working towards.”

I suspect relatives of Patricia Stewart might beg to disagree.

As for Steve Rowe, who has built his entire career with M&S, his silence on the matter is deafening. He looks about the age to have elderly relatives, I wonder if he would like them to be treated like Patricia Stewart.