Smith v ADVFN Plc

In Norwich Pharmacal proceedings, an applicant seeking the identities of anonymous internet users must present alleged wrongdoing in a manageable and discriminating form. The court may decline to examine an indiscriminate and disorganised mass of postings item by item, although volume alone is not an impediment. The applicant should substantially reduce and organise the material so that the court can assess whether a wrong has arguably been committed. The court’s discretion is also informed by the intrusive nature of disclosure, European Convention on Human Rights Articles 8 and 10, data-protection considerations, and the cost and difficulty of compliance. A dismissal may be without prejudice to a renewed, narrower application. An innocent intermediary should not be assumed to finance potential defamation claims.

The appellant sought Norwich Pharmacal orders requiring ADVFN plc, operator of internet bulletin boards, to disclose information identifying anonymous users behind allegedly defamatory postings. An earlier order covered 23 avatars and 109 postings. The appellant later sought wider disclosure concerning 252 postings by 64 avatars, including IP addresses captured when the postings were made. Mackay J found compliance with the earlier order, made a narrower disclosure order, and declined the wider application. The appeal challenged that approach, the refusal to receive expert evidence, the exercise of discretion, timing and costs. The central issue was whether the judge was entitled to refuse an item-by-item examination of the additional postings.

Appeal dismissed. Lord Justice May gave the judgment, with Lord Justice Moore-Bick agreeing.

1. The court accepted the applicable Norwich Pharmacal framework. A claimant must show an actual or arguable wrong by an ultimate wrongdoer, the need for an order to enable proceedings against that person, and that the respondent was mixed up in the wrongdoing and could provide the necessary information. Only the first requirement presented a potential difficulty for the additional postings. The framework was derived from Norwich Pharmacal itself [1974] AC 133 and Mitsui Ltd v Nexen Trading UK [2005] EWHC 625.
2. Mackay J had a discretion to decline an item-by-item examination of an indiscriminate and disorganised mass of alleged defamatory material. Mere volume was not itself an impediment. The applicant nevertheless had to organise the material and reduce it substantially so that the court could readily assess whether a wrong had arguably been committed. The approach in Sheffield Wednesday Football Club v Hargreaves [2007] EWHC 2375 was distinguishable because it concerned materially different facts and a more focused examination.
3. Alleged defamatory postings could not always be assessed by reading isolated passages quickly, since context might affect their meaning. The court had to balance the apparent strength of the alleged wrongdoing against the intrusive nature of disclosure, bringing into play Articles 8 and 10 of the European Convention on Human Rights and the Data Protection Act 1998, together with the difficulty and expense of compliance.
4. Mr Smith accepted that a more discriminating selection was possible and desirable. Mackay J was therefore entitled to make the narrower order. The dismissal was without prejudice to a renewed application based on a substantially reduced selection, particularly the strongest postings.
5. On any renewed application, costs of disclosure and compliance, and any conditions securing payment, would remain matters for the judge’s discretion. The general costs position in Totalise Plc v The Motley Fool Limited [2001] EWCA Civ 1897 did not mean that the respondent had to finance the appellant’s potential defamation claims. The appellant should not assume that an order would be made on the basis of payment at an indefinite future date.

1. Court of Appeal (Civil Division) — On 15 April 2008, the court dismissed the appeal from Mackay J’s order: [2008] EWCA Civ 518.
2. High Court of Justice, Queen’s Bench Division — Mackay J found that ADVFN had complied with the earlier disclosure order, made a narrower order concerning essentially the original postings, and declined the wider application.
3. High Court of Justice — HHJ Hickinbottom made an ex parte disclosure order on 20 April 2007, which Gray J varied after an inter partes hearing on 24 April 2007.