Summary

Ahead of a breach of contract claim, it would be disproportionate to grant the defendants a Norwich Pharmacal order that the claimants disclose the source of documents in their possession that were potentially covered by the defendants' legal professional privilege. Given that it appeared that the parties had regularly shared such confidential information with each other over a number of years, the defendants' case on wrongdoing was weak, and the claimants were in no better position than the defendants to identify the particular source of any given document.

Facts

The defendants to a breach of contract claim applied for a Norwich Pharmacal order that the claimants disclose full information as to who had provided them with documents that were potentially covered by the defendants' legal professional privilege.

The claimants were associated companies who specialised in compressed natural gas technologies; the defendants were Italian oil companies. The parties had entered into an agreement in 2010 relating to a natural gas project. The claimants claimed that the defendants had breached the agreement. During standard disclosure, the claimants disclosed that a search carried out by an independent law firm had identified several documents in the claimants' possession, dating back a number of years, containing or referring to internal legal advice the defendants had received from in-house counsel on matters that were now in dispute between the parties. The claimants did not review the documents but returned them to the defendants. At the instant hearing, the claimants accepted that the documents might be potentially privileged. However, they explained that during their close working relationship with the defendants over several years, it was common practice for the parties to share internal confidential documentation and use it in the course of negotiations, and there was no professional duty of confidentiality under Italian law that applied to in-house lawyers.

The claimants submitted that, in the circumstances, there was nothing inherently suspicious in their being in possession of the defendants' confidential information and no evidence of wrongdoing. They further submitted that, given the common practice of sharing information over the years, they could not be expected to remember the particular source of any given document.

Held

First pre-condition of a Norwich Pharmacal order: a good arguable case of wrongdoing - The claimants' acceptance that the documents were potentially privileged meant that it was at least arguable that the supply of the documents to the claimants was not authorised by the defendants and had involved wrongdoing of some kind. However, that argument was very weak. First, the claimants' assertion that disclosure of internal confidential information between the parties had been commonplace provided a compelling answer to the argument in the absence of anything to contradict it. Second, the claimants' receipt of the documents against the background that Italian law did not recognise privilege in the information lent credibility to the claimants' assertion that their receipt would not have stood out as remarkable or suspicious. Third, the defendants knew the source of at least one of the alleged leaks of confidential information but had failed to adduce evidence from him. If his evidence was that there was no wrongdoing in the case of the document that he had supplied, that would seriously undermine the defendants' case that the mere fact of possession on the claimants' part was evidence of wrongdoing. Further additional points made by the defendants were not sufficient to advance their argument (see paras 40-55 of judgment).

Second pre-condition: the need for an order - Applying the test formulated in Rugby Football Union v Viagogo Ltd [2012] UKSC 55, in determining whether an order was a "necessary and proportionate response in all the circumstances", it was necessary to balance the defendants' ability to discover the identity of the wrongdoer for themselves against the claimants' ability to do it for them. It was also necessary to consider the extent of the burden that an order would impose on the claimants, Rugby followed. Accordingly, in the instant case, the second pre-condition had to be looked at in conjunction with the third pre-condition (para.59).

Third pre-condition: facilitation of the wrongdoing, and ability to provide information - If there was wrongdoing, the claimants were sufficiently involved so as to have facilitated it by receiving the documents. However, in terms of ability to provide information to enable the defendants to pursue the wrongdoer, given that the claimants' unanswered evidence was that the exchange of internal information was commonplace, it was difficult to see why receipt would have been memorable to the claimants or why it would be materially easier for them to track down the wrongdoer than it would be for the defendants. Further, the ability of the claimants to provide relevant information was seriously hampered by the fact that they had not seen the relevant documents (paras 60-63, 68).

Discretion - A Norwich Pharmacal order was not appropriate. It would place a disproportionate burden on the claimants given that, inter alia, the defendants' case was weak, the claimants were in no better position than the defendants to identify and provide full information on the wrongdoer, and there was a minimal, if any, risk of further leaks of documents, Rugby followed. The fact that the application related to information that was potentially privileged under English law did not outweigh those factors (paras 70-76).

Application refused