BUSINESS AND PROPERTY COURTS IN LEEDS
CIRCUIT COMMERCIAL COURT (QBD)
B e f o r e :
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UMBRELLA LEGAL SOLICITORS LIMITED |
Claimant |
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- and – |
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AFFIRM LEGAL LIMITED |
Defendant |
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Mr Sebastian J. B. Clegg (instructed by Affirm Legal Limited) for the Defendant
Hearing date: 2 February 2022
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Crown Copyright ©
Her Honour Judge Kelly
Background
The Law
(1) a wrong must have been carried out, or arguably carried out, by an ultimate wrongdoer ('the first condition');
(2) there must be the need for an order to enable action to be brought against the ultimate wrongdoer ('the second condition');
(3) the person against whom the order is sought must:
a. be mixed up in, so as to have facilitated, the wrongdoing; and
b. be able or likely to be able to provide the information necessary to enable the ultimate wrongdoer to be sued ('the third condition').
"…I agree with Mr Akkouh that the appropriate analogy is not with service out, but with applications for freezing orders, where the test for when the requirement of a "good arguable case" is satisfied is well-established. The test laid down by Mustill J (as he then was) in The Niedersachsen [1983] 2 Lloyd's Rep 600 at 605 (lhc) has been followed and applied many times since:
"I consider that the right course is to adopt the test of a good arguable case, in the sense of a case which is more than barely capable of serious argument, and yet not necessarily one which the Judge believes to have a better than 50 per cent chance of success.""
"24. In my judgment despite the argument of Mr Carr that there is no authority directly in point, it is clear that the exercise of the jurisdiction of the court under Norwich Pharmacal against third parties who are mere witnesses innocent of any participation in the wrongdoing being investigated is a remedy of last resort. (It is the Claimant's case that the Defendant is such an innocent third party.) The jurisdiction is only to be exercised if the innocent third parties are the only practicable source of information. The whole basis of the jurisdiction against them is that, unless and until they disclose what they know, there can be no litigation in which they can give evidence: see e.g. Lord Kilbrandon in Norwich Pharmacal at 203B and 205G. Whilst there is a public interest in achieving justice between disputing parties, there is also a public interest in not involving third parties if this can be avoided: see Sir John Donaldson MR in Harrington v. Polytechnic of North London [1984] 1 WLR 1293 at 1299 F-G. The jurisdiction is both exceptional and only to be exercised when it is necessary: Lord Woolf CJ in Ashworth Hospital Authority v. MGN Ltd [2002] 1 WLR 2033 at 2049. The necessity required to justify exercise of this intrusive jurisdiction is a necessity arising from the absence of any other practicable means of obtaining the essential information."
"40. …the supposed pre-condition of necessity "does not require the remedy to be one of last resort, but the need to order disclosure will be found to exist only if it is a "necessary and proportionate response in all the circumstances"", per Zacaroli J in Blue Power Group SARL et al. v ENI Norge AS et al. [2018] EWHC 3588 (Ch), at [17(ii)], derived from the Rugby Football Union case, supra, per Lord Kerr of Tonaghmore JSC at [16]. Thus, it is not correct to say that the jurisdiction is limited to cases of strict necessity. Rather, the question is whether, in the circumstances of a particular case, justice requires from the facilitator the particular cooperation demanded of him by the Claimant, with a view to righting facilitated wrongdoing.
"42. I think there is room for the view that in truth there is:
(i) but one strict pre-requisite (unless the cause of action issue creates a second, as to the nature of the wrongdoing that the Claimant must be alleging), namely that the Norwich Pharmacal Defendant must have been mixed up in so as to have facilitated that which the Norwich Pharmacal Claimant alleges to have been wrongdoing against him; and
(ii) thereafter, a single question for the court, assessing and balancing all of the factors that bear upon it in any particular case, namely whether justice requires that the Defendant provide the assistance that the relief sought would compel him to provide, to further the end of righting a facilitated wrong."
"I7 The essential purpose of the remedy is to do justice. This involves the exercise of discretion by a careful and fair weighing of all relevant factors. Various factors have been identified in the authorities as relevant. These include: (i) the strength of the possible cause of action contemplated by the applicant for the order: the Norwich Pharmacal case [1974] AC 133, 199F-G, per Lord Cross of Chelsea, Totalise plc v The Motley Fool Ltd [2001] EMLR 750, para 27, per Owen J at first instance, Clift v Clarke [2011] EWHC 1164 (QB) at [14], [38], per Sharp J; (ii) the strong public interest in allowing an applicant to vindicate his legal rights: the British Steel case [1981] AC 1096, 1175C-D, per Lord Wilberforce, the Norwich Pharmacal case [1974] AC 133, 182C-D, per Lord Morris of Borth-y-Gest, and p 188E-F, per Viscount Dilhorne; (iii) whether the making of the order will deter similar wrongdoing in the future: the Ashworth case [ 2002] 1 WLR 2033, para 66, per Lord Woolf CJ; (iv) whether the information could be obtained from another source: the Norwich Pharmacal case [1974] AC 133, 199F-G, per Lord Cross, the Totalise plc case [2001] EMLR 750, para 27, President of the State of Equatorial Guinea v Royal Bank of Scotland International [2006] UKPC 7 at [16], per Lord Bingham of Cornhill; (v) whether the respondent to the application knew or ought to have known that he was facilitating arguable wrongdoing: the British Steel case [1981] AC 1096, 1197A-B, per Lord Fraser, or was himself a joint tortfeasor, X Ltd v Morgan-Grampian (Publishers) Ltd [1991] 1 AC 1, 54, per Lord Lowry; (vi) whether the order might reveal the names of innocent persons as well as wrongdoers, and if so whether such innocent persons will suffer any harm as a result: the Norwich Pharmacal case [1974] AC 133, 176B-c, per Lord Reid; Alfred Crompton Amusement Machines Ltd v Customs and Excise Comrs (No 2) [1974] AC 405, 434, per Lord Cross of Chelsea; (vii) the degree of confidentiality of the information sought: the Norwich Pharmacal case [1974] AC 133, 190E-F, per Viscount Dilhorne; (viii) the privacy rights under article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms of the individuals whose identity is to be disclosed: the Totalise plc case [2001] EMLR 750, para 28; (ix) the rights and freedoms under the EU data protection regime of the individuals whose identity is to be disclosed: the Totalise plc case [2001] EMLR 750, at paras 18-21, per Owen J; (x) the public interest in maintaining the confidentiality of journalistic sources, as recognised in section 1 of the Contempt of Court Act 19 8 1 and article 1 o of the European Convention for the Protection of Human Rights and Fundamental Freedoms: the Ashworth case [2002] 1 WLR 2033, para 2, per Lord Slynn of Hadley.
"18 Many of these factors are self-evidently relevant to the question of whether the issue of a Norwich Pharmacal order is proportionate in the context of article 8 of the Charter."
The Evidence
28 May 2020 | The Claimant entered into a consultancy agreement with Mr Malik. The agreement covered services provided by Mr Malik in relation to the "GDPR Helpline". It does not appear to relate to Personal Contract Purchase ("PCP") finance mis-selling nor to the development of a website under the brand name "Car Finance Refund" ("CFR"). |
Early 2021 | The Claimant decided to create a new department providing legal services for PCP mis-selling. |
Early June 2021 | The Claimant engaged the services of HestaBit to develop a website under the brand name CFR. The project was led by Mr Malik. |
13 July 2021 | The CFR webpages were completed by HestaBit and were awaiting the Claimant's approval before going live and being made available in the public domain. |
08 August 2021 | Mr Malik stopped working for the Claimant without providing any indication or prior notice. |
10 August 2021 | Mr Rashid undertook an online search of the Defendant's webpages on hearing a rumour that Mr Malik was engaged in a commercial partnership with the Defendant. On the Defendant's webpage for "Mis-Sold Car Finance", Mr Rashid discovered that some of the wording under various headings was identical to the text intended to appear on the Claimant's CFR website. |
11 August 2021 | The Claimant wrote to Mr Mansoor of the Defendant asserting use of confidential information, copyright infringement and passing off. The letter asserted copyright in the Claimant's website including the text, the layout and user experience and the code on which the website was built. The letter asked the Defendant to stop using the content and sought further information including the identity of the people involved in the creation of the Defendant's website, the date the web page was created and first publicised, and who was hosting the website. In addition, the letter sought information about Mr Malik confirming whether he was known to anyone within the Defendant firm, whether he had any kind of contract of service or for services and whether he had provided any services to the Defendant. They also required "a detailed witness statement endorsed with a statement of truth" in respect of those matters. |
18 August 2021 | Lawbriefs, acting for the Defendant, wrote to the Claimant informing the Claimant that the offending content had been removed from its website while it investigated the allegations made. The letter asserted that the Defendant had been provided with the content in good faith and was not aware that any other entity had any ownership claim to the intellectual property rights. The Defendant agreed not to use the specific content again in the future. In those circumstances, an injunction would not be required. The letter sought an amicable solution, but refused to provide the Claimant with any of the Defendant's confidential information at this stage. |
26 August 2021 | The Claimant wrote to Lawbriefs. In the letter, it was asserted, amongst other things, that Mr Malik was the person who had "misappropriated" the information. In addition, it asserted that the Claimant did not accept that the extent of the material passed to the Defendant by Mr Malik was confined to the website alone and the Claimant expected that other "know–how materials were made available relating to this and other projects. The website itself is likely to be the tip of the iceberg". The letter abandoned the passing off allegation but sought voluntary disclosure of all communications between the Defendant and Mr Malik in relation to the website. On the same day, Mr Rashid sent an email to Mr Malik asserting that Mr Malik had repudiated the consultancy agreement with the Claimant alleging multiple grave breaches of the agreement and refusing to pay any fees under the agreement as a result. |
14 September 2021 | Lawbriefs wrote to the Claimant stating that the relevant website content was provided to the Defendant. In addition, it stated that the Defendant was not in possession of any correspondence between itself and Mr Malik of any relevance to the material used on the website. There was therefore nothing to disclose. It was confirmed again that all copies of the allegedly infringing material had been deleted from the website and deleted or destroyed. |
22 September 2021 | The Claimant wrote to "LawBite" (the name on the postal address for Lawbriefs) seeking the identity of the contractor referred to in the letter of 14 September 2021 and the circumstances in which the material was provided. It again asked for that information to be provided in a witness statement confirmed with a statement of truth and signed by a director of the Defendant company. If the identity of the contractor was not disclosed, the Claimant threatened to bring an application for Norwich Pharmacal relief. |
28 September 2021 | Lawbriefs wrote to the Claimant on behalf of Mr Malik in respect of various allegations made against him and asserted no breach of the consultancy agreement. |
30 September 2021 | The Defendant wrote directly to the Claimant asserting that there was no requirement to provide a witness statement supported by statement of truth in relation to a Norwich Pharmacal order. Further and in any event, the letter offered to disclose the identity of the person who provided the material in open correspondence. |
04 October 2021 | The Claimant wrote to the Defendant insisting on provision of a witness statement verified by statement of truth. In addition, the letter sought additional details not previously requested in relation to the identity of the person, those being the full name, full postal addresses, telephone numbers and email addresses of the person. |
11 October 2021 | The Defendant wrote to the Claimant refusing to provide a witness statement and the additional details. The letter noted that the offer to provide the identity of the person to the Claimant in open correspondence had been refused. |
28 October 2021 | The Part 8 Claim Form was issued supported by the witness statement of Mr Rashid dated 28 October 2021. The Claim Form itself sought the identity of the contractor who had provided the alleged infringing copyright content. The draft order provided with the Claim Form sought the full name, postal addresses, telephone numbers and email addresses of the provider of the information, those details to be provided within a witness statement. The draft order also sought permission for the Claimant to use the information for the purposes of bringing breach of confidentiality and copyright infringement proceedings. |
14 December 2021 | HHJ Saffman extended time for the Defendant to respond to the claim to 20 December 2021. |
20 December 2021 | The Defendant acknowledged service of the claim and served the second witness statement of Mr Mansoor. |
05 January 2022 | The time for any statement in reply expired. |
11 January 2022 | The Claimant served a witness statement from Mr Ali in reply to the Defendant's evidence. |
12 January 2022 | The Defendant informed the Claimant that it would need to apply for relief from sanctions to rely on the evidence in reply. The Claimant filed an application and a second witness statement from Mr Ali seeking relief from sanctions. HHJ Klein listed the application for hearing on 2 February 2022 and gave directions. |
02 February 2022 | Application listed for hearing. |
The conditions for making a Norwich Pharmacal Order
A wrong must have been carried out or arguably carried out
Necessity for an Order
The Exercise of Discretion
a. the Claimant already knows the identity of those it believes may be the wrong doers and has declined an open offer of the identity of the provider of the information;
b. there is no evidence of wider use of the content than a relatively short-lived appearance on the Defendant's website at a time when the Claimant's website was not live;
c. the Defendant has agreed not to use the content at any time in the future and in those circumstances, it is difficult to see the Claimant could have sustained any loss;
d. the Claimant is plainly in dispute with Mr Malik about his consultancy agreement and has consistently sought additional information about Mr Malik from the Defendant; and
e. in those circumstances, it appears that the claim is more directed at furthering the Claimant's position in its dispute with Mr Malik about the consultancy agreement.
Decision