10-year restrictive covenant unenforceable

In Literacy Capital Plc v Webb [2024] EWHC 2026 the High Court considered a restrictive covenant in an investment agreement and found that it was unenforceable as it was too widely drafted and lasted too long.

Facts

In 2014 a doctor founded a company that provided medical services to sexual assault referral centres (SARCs) operated by the police. The company did well and in 2018 the founder sold a controlling interest to an investor.

The founder received some consideration upfront with the balance left outstanding via a loan note, which would be repaid on a long stop date or on an earlier sale of the company.