Question 2 – Learning Outcome 3 (10 marks)
Bella is currently employed by KL Ltd, an insurance broker. KL Ltd operates a single office in New Town.Bella has a contract of employment with KL Ltd, which states that ‘On leaving the firm, employees are notpermitted to work at any insurance broker within 25 miles of KL Ltd for a period of five years’.Bella intends to resign from KL Ltd and establish her own insurance brokerage in New Town. Joe, a competitor to KL Ltd, is to buy the insurance broking business from KL Ltd. (a)Explain, with justification, whether Bella is entitled to establish her own brokerage in New Town.Refer to one relevant case in support of your explanation.(6)
(b)Explain, with justification, how Joe could prevent the directors of KL Ltd from establishing anotherinsurance broking business in New Town.(4)
