Test for Norwich Pharmacal order and whether it can be ordered if foreign proceedings are likely

The claimant applied for a wide-ranging Norwich Pharmacal order ("NPO") against the defendant (a British citizen and one of the managing partners of a company which the claimant accuses of wrongdoing). The order was refused by Flaux J who held as follows:

(1) One of the conditions for obtaining a NPO is that a wrong has either been carried out or has arguably been carried out. In Utd Company Rusal v HSBC, it was held that that means that the claimant must show that it has "much the better of the argument". Flaux J disagreed, finding that the test was looser and the same as that for applications for a freezing order, ie "more than barely capable of serious argument, and yet not necessarily one which the Judge believes to have a better than 50% chance of success".

(2) Once the conditions have been satisfied, the court still has a discretion whether or not to make the order. The claimant argued that caselaw has developed beyond ordering disclosure of the identity of, and information about, the wrongdoers, to disclosure of more detailed information in appropriate cases, in order to enable the claimant to bring (and not just perfect) its claim. Flaux J rejected that argument, holding that it is "quite clear that the jurisdiction cannot be used for wide-ranging discovery or the gathering of evidence, but is strictly confined to necessary information" and that "the true position is that the jurisdiction remains in a narrow scope". He added that "The court will not permit the jurisdiction to be used for wide-ranging disclosure or gathering of evidence, as opposed to focused disclosure of necessary information". The application here fell foul of that restriction , and amounted to a fishing expedition.

(3) The judge accepted that, even if the claimant had a good arguable case, it was unlikely that it could be pursued in England, and instead foreign proceedings were likely. Following the Court of Appeal's decision in R (Omar) v Secretary of State for Foreign & Commonwealth Affairs, Flaux J noted that a NPO application cannot be made if the Evidence (Proceedings in Other Jurisdictions) Act 1975 applies (the 1975 Act sets out a procedure for obtaining evidence to use in civil proceedings taking place abroad).

Flaux J also held that the 1975 Act applies to a wide range of evidence, including the production of documents, and covers not just foreign proceedings which are "up and running", but also proceedings which are being contemplated.

Reference was made to the earlier decision of Shlaimoun v Mining Technologies, in which Coulson J held that "I take the view that, depending on the facts, there is no reason why a Bankers Trust/Norwich Pharmacal application should not be made in circumstances where there is the possibility that the ultimate proceedings would be commenced in a foreign jurisdiction". He found that the situation would only be different if foreign proceedings had already been up and running by the time of any possible crossover with the powers of the English court.

Flaux J held that Shlaimoun could be distinguished here on the basis that the claimant in that case genuinely did not know where any proceedings might be commenced (whether in England or abroad) and whether such proceedings would be viable: "It seems to me that is the true ratio of the decision and… it is not a case about proceedings being contemplated in a foreign jurisdiction at all". Accordingly, "it is not permissible to bypass the statutory regime simply by asserting that the case is at some earlier stage before the institution of proceedings abroad is contemplated".

Here, unlike in Shlaimoun, the claimant had already identified the jurisdictions in which any claim could be brought (or, alternatively, it couldn't show a sufficiently arguable case that there had been any wrongdoing at all). Accordingly, the 1975 Act was engaged and the court had no jurisdiction to entertain the claimant's NPO to obtain evidence in support of foreign proceedings.

Flaux J added that "If, as I have held, the 1975 Act is engaged in respect of any attempt to obtain information or evidence, but the claimant is unable to obtain an order of the foreign court or a letter of request, that unavailability of relief from the foreign court is no answer to the argument that the statutory regime is engaged and precludes any common law remedies under the Norwich Pharmacal jurisdiction".

Furthermore, although it did not matter on the facts of this case, Flaux J held that it was no longer correct to draw a distinction between information (so that proceedings can be brought abroad) and evidence (earlier cases having held that the former was obtainable under a NPO, whereas the latter was not).

COMMENT: There are therefore now two conflicting High Court decisions as to whether a NPO can be obtained before foreign proceedings are commenced. Shlaimoun appeared to draw a line between proceedings which are "up and running" and those which are contemplated, whereas here Flaux J held that no NPO can be ordered where proceedings abroad are contemplated. Flaux J sought to distinguish Shlaimoun on the basis that it had not been clear in that case whether foreign proceedings might be brought, but the judge in Shlaimoun (although agreeing that was not a case where the applicant had always known that the documents would not be used in English proceedings) made it clear that his decision would have been the same even if foreign proceedings had been contemplated. (The issue did not arise in Omar, because foreign proceedings were already up and running there).