UMBRELLA LEGAL SOLICITORS LIMITED v AFFIRM LEGAL LIMITED

This judgment follows the hearing of the Claimant's application for a Norwich Pharmacal order. The hearing took place via Microsoft Teams on 2 February 2022.

Immediately before the hearing of the substantive application, I heard an application for relief from sanctions to enable the Claimant to rely upon the witness statement of Mr Amjad Ali in response to the Defendant’s evidence filed. I granted relief from sanctions and gave permission to rely upon the witness statement of Mr Ali. I do not propose to rehearse my reasons given during the hearing in this judgement.

I had the benefit of hearing from Ms Bridget Williamson for the Claimant and Mr Sebastian Clegg for the Defendant. Both counsel had also provided me with very helpful skeleton arguments in advance of the hearing and Mr Clegg also provided me with a detailed chronology.

The Claimant is a Company which provides legal services. The Claimant engaged contractors, HestaBit Technologies Pvt Limited (“Hestabit”), which is a company incorporated in India, to develop a website setting out information about the legal services provided by the Claimant. HastaBit worked closely with a Mr Adnan Malik (“Mr Malik”) who was contracted by the Claimant to assist the Claimant. Most of the development of the website was done between Mr Malik and HestaBit, with some input from various employees of the company.

Before the website went live, the Claimant became aware that text, identical to some of the information intended to be part of the Claimant’s website (specifically relating to the mis-selling of car finance), appeared on the Defendant’s website. The Claimant discovered this shortly after Mr Malik was no longer working with the Claimant company.

The Claimant wrote to the Defendant asking it to remove the material from its website. The Defendant promptly did so. The Defendant stated that it had received the material innocently from its contractors. Thereafter, the Claimant asked the Defendant to identify its contractors. The Defendant agreed to provide the identity of the contractors by way of open letter but refused to provide a witness statement as requested by the Claimant. The Claimant then brought this application for a Norwich Pharmacal order.

I have had the benefit of reading all of the witness statements contained within the bundle, together with the various documents to which I was taken during the course of the hearing and directed to in skeleton arguments. I read the witness statements of Mr Mohammed Majid Rashid dated 28 October 2021 and Mr Amjad Ali dated 11 January 2022 and 12 January 2022 for the Claimant. I read the witness statements of Mr Mohammed Mansour dated 7 December 2021 and 20 December 2021, for the Defendant.

I do not propose to rehearse all of the arguments raised, nor all of the evidence referred to during the course of the hearing. However, I record that I read and considered the evidence as a whole, as well as various documents within the trial bundle to which my attention was drawn, in addition to all those arguments, before coming to my decision.

Happily, counsel largely agree on the legal principles. The general principles upon which Norwich Pharmacal orders are made are set out in Baker LJ's judgement in EUI Limited v UK Vodaphone Limited [2021] EWCA Civ 1771 and in the decision of Lightman J Mitsui & Co Limited v Nexen Petroleum UK Limited [2005] EWHC 625 (Ch) at paragraph 21. Three conditions need to be satisfied for the court to exercise its power:

In Ramilos Trading Limited v Buyanovsky [2016] EWHC 3175 (Comm), Flaux J (as he then was) set out the test for making a Norwich Pharmacal order at paragraph 14 where he stated:

“…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."”

It is clear that the jurisdiction is an exceptional one. At paragraph 24 of his judgement in the Mitsui case, Lightman J stated:

“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.”

As to the first condition, the Claimant must establish a good arguable case that a form of legally recognised wrong has been committed against it by a person (see the judgement of Saini J at paragraph 35(i) in Collier v Bennett [2020] EWHC 1884 (QB)).

As to the second condition, the issue of necessity was considered by Andrew Baker J in the Burford Capital Limited v London Stock Exchange Group Limited [2020] EWHC 1183 (Comm) at paragraphs 40 and 42, where he stated:

“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.”

The jurisdiction cannot be used for evidence gathering nor for obtaining disclosure, but rather is strictly confined to obtaining necessary information (see paragraphs 46 and 62 of Flaux J’s judgement in Ramilos Trading Limited).

Even if all three conditions are satisfied, the court retains a discretion whether to make the order or not. The general principles to consider when exercising that discretion are set out in the judgement of Lord Kerr In the case of Rugby Football Union v Consolidated Information Services Ltd (formerly Viagogo Ltd) (in liquidation) [2012] 1 W.L.R. 3333, 3338F - 3339G. The need to order disclosure will be found to exist only if it is a “necessary and proportionate response in all the circumstances”. The test of necessity does not require the remedy to be one of last resort.

At paragraph 17 of his judgement in the Rugby Football Union case, Lord Kerr set out ten considerations:

“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 following chronology is relevant:

The Claimant asserts that there is adequate evidence within Mr Rashid’s witness statement to establish copyright infringement by virtue of the identical wording on the Defendant’s website. Further, the Claimant relies on the first witness statement of Mr Ali which asserts that the Claimant’s agreement with HestaBit provided that copyright of the website and its contents to belong to the Claimant. In addition, the consultancy agreement with Mr Malik provided for copyright of all work arising from the provision of services under the consultancy agreement to belong to the Claimant.

The Claimant further relies on the fact that the Defendant removed the material immediately on being asked to do so as evidence that the Defendant has made a tacit admission that copyright either had been or appeared to have been breached. As the Defendant identified no other owner of copyright, all of those facts taken together, it asserted, suffice to establish that the wrong either has been or has arguably been carried out.

The Defendant submits that it is important to have in mind what the Claimant’s complaint is at this stage. Although the initial letter complained about the use of “text, layout, user experience and website coding”, there is no evidence of any infringement presented by the Claimant apart from the same words appearing on the Defendant’s website. A passing off claim has specifically been dropped. The material on the website was unpublished at the time the Defendant put the material on its website.

No claim against the Defendant is intimated and there is no suggestion of any other potential infringement beyond use of the words on the Defendant’s website. Those words were removed almost as soon as the complaint was made by the Claimant.

Although the claim alleges copyright infringement pursuant to section 17 and 20 of the Copyright, Designs and Patents Act 1988 (“the 1988 Act”) by publication of the material on the Defendant’s website, the Defendant asserts that the burden is on the Claimant to demonstrate that a form of legally recognised wrong has been committed against it by a person (see Collier v Bennett). The Defendant asserts that the Claimant’s evidence has failed to identify the author of the work within the meaning of section 9 of the 1988 Act so as to establish ownership by reference to section 11 of the 1988 Act or otherwise.

Although Mr Rashid refers to using HestaBit to develop the website and the CFR webpages being completed by HestaBit, and that Mr Malik was leading the project, there is no evidence about who actually created or wrote the content. Mr Rashid did not give any evidence about intellectual property rights between the Claimant and HestaBit. After this omission was pointed out by the Defendant in Mr Mansoor’s witness statement, an attempt was made to rectify the omission in the witness statement of Mr Ali. Unfortunately, although Mr Ali referred to the contract with HestaBit providing for copyright on the website and its contents to belong to the Claimant, no part of that contract was exhibited, nor was it asserted that someone from HestaBit authored the relevant words.

There is an implication in the witness statement of Mr Ali that Mr Malik was the author of the relevant words. However, there is an additional difficulty here because although there is a provision in his consultancy agreement about the intellectual property relating to the GDPR Helpline, that consultancy agreement does not appear to cover any work relating to PCP finance mis-selling or CFR claims to which the offending words relate.

The burden is on the Claimant to establish the necessary elements for its claim. In the circumstances outlined above, I cannot find that the Claimant has established that a wrong must have been carried out or has arguably been carried out. The Claimant has simply not established that it was entitled to the copyright asserted on the evidence presented to the court.

In the event that I am wrong in my conclusion that the Claimant falls at the first hurdle, I will go on to consider the further conditions for making a Norwich Pharmacal order.

The Claimant asserts that it is necessary for an order to be made to enable it to identify the person who provided the information to the Defendant in breach of copyright. The Claimant set out that it believes that the category of potential Defendants can be narrowed down to either individuals from HestaBit or Mr Malik. However, the Claimant says it cannot go further than that.

Further, the Claimant asserts that this is not a case where the Claimant could obtain the information it requires by means of an application for pre-action disclosure pursuant to CPR 31.16 because the Claimant cannot say that either HestaBit or Mr Malik is a likely Defendant because the Claimant does not know which of them provided the information to the Defendant. For that reason, the Claimant asserts that the order is necessary to identify the provider. The Claimant also asserted during the course of the hearing that the Defendant’s letter dated 11 October 2021 suggested that the Defendant was now refusing to identify the provider of the content and that must be the correct interpretation as the name had not been given to the Claimant.

I do not consider that the wording of the Defendant’s letter dated 11 October 2021 can reasonably be read to mean that the Defendant was asserting it would not tell the Claimant who the provider of the material was. All the letter did, in my judgment, was note that the Claimant had refused the Defendant’s offer to provide the information in open correspondence as to the identity of the provider because it continued to require provision of the information in a witness statement verified by a statement of truth.

I accept the submissions made by the Defendant that the Claimant has not established that an order is necessary in the circumstances of this case. Firstly, the Claimant’s correspondence is littered with references to Mr Malik being the person who had misappropriated the information. The Claimant had therefore identified who they thought the likely wrongdoer was long before the proceedings were issued.

In any event, the Claimant has narrowed down the likely provider of information to either HestaBit or Mr Malik. Although the Claimant cannot say with certainty which of those two possibilities provided the information to the Defendant, that fact does not, in my judgment, prevent an application being made pursuant to CPR 31.16. As Mr Clegg observed during the course of the hearing, it is not at all unusual to seek pre-action disclosure against one or both of two possible Defendants when the Claimant is unaware who is more likely to be at fault. In those circumstances, it cannot be said that the Defendant is the only practical source of the information required.

Perhaps more fundamentally, and in any event, there is no evidence that the Claimant has written to either Mr Malik or to HestaBit putting its allegations concerning the content provided to the Defendant. Without taking those obvious steps, I accept that it cannot be said that there is a need for an order.

In addition, the Defendant has offered to provide in open correspondence the identity of the provider of the content. In my judgment, the Claimant could and should have accepted that offer to identify the provider and then considered its position. I accept that a witness statement verified by a statement of truth would put the Claimant in an evidentially stronger position than the identity of the provider simply being provided by the Defendant in open correspondence.

I further accept that in due course, if a claim was brought against the provider, evidence may be required from the Defendant in those proceedings and that evidence could potentially be compelled if necessary. However, I do not accept that when making a Norwich Pharmacal order, it is necessary for the information to enable Claimant to bring a claim against a wrongdoer to be in the form of a witness statement verified by a statement of truth. The Claimant cannot use the jurisdiction to gather evidence – it can only seek necessary information and that necessary information was offered before the claim was issued.

I do not propose to consider in detail the third condition because the Defendant accepted that if the first two conditions were made out, the third would also be made out.

However, in the event that I am wrong both about the establishment of the wrong and the necessity for an order, I am still required to consider the exercise of my discretion on whether or not to make an order.

The Defendant submits that in any event, the court should not exercise its jurisdiction to make the order sought. This is because the jurisdiction should not be used for evidence gathering but strictly to obtain necessary information. The Defendant asserts that the application is in effect an abuse of process because the real purpose of the Claimant’s claim must be evidence gathering or some collateral purpose because:

The court can only make an order in circumstances where the order is a necessary and proportionate response in all of the circumstances. Although there is an appearance within the documentation of the Claimant seeking more information than strictly would be necessary to identify the wrongdoer, it is not necessary to make any finding as to whether the intended purpose of this application was to gather evidence. However, in any event, given the circumstances of refusal of an open offer of identification of the wrongdoer and failing to exhaust of the possibilities for obtaining the relevant information, I would not in any event have exercised my discretion to grant the order sought.

In those circumstances and for all the reasons given, the Claimant’s application is dismissed.

I am grateful to counsel for their very able assistance in this matter.