FCFM Group Ltd v Hargreaves Lansdown Asset Management Ltd

A Norwich Pharmacal order in support of a proposed private prosecution is exceptional. The applicant must show an arguable wrong, a genuine need for disclosure to obtain justice, and that the respondent was mixed up in the wrongdoing and can provide the required information. Where the same facts are being litigated civilly, and public prosecuting authorities are already involved, the applicant will ordinarily need a strong reason why disclosure cannot be pursued in the civil proceedings or by those authorities. Orders seeking broad private records as a speculative investigation are inappropriate. The court must also balance the proposed disclosure against privacy rights under the European Convention on Human Rights.

FCFM Group Ltd sought Norwich Pharmacal relief against three companies: two investment or brokerage businesses and a mobile telephone provider. It wanted extensive trading records, communications, and call and text data concerning Mr and Mrs Y, who were not parties to the application and had not been notified.

The proposed disclosure was intended to investigate possible fraud, conspiracy, and insider dealing arising from negotiations for the purchase of shares before a takeover announcement. The same factual dispute was already the subject of civil proceedings in which FCFM had brought a Defence and Counterclaim. The prosecuting authorities had also been contacted. The central issue was whether the requirements for Norwich Pharmacal relief were met.

1. Application dismissed. The court held that the proposed orders were not justified under the Norwich Pharmacal jurisdiction.
2. The three conditions identified in Mitsui & Co Ltd v Nexen Petroleum (UK) Ltd were considered. There had to be an arguable wrong, a need for an order to enable action against the ultimate wrongdoer, and a respondent mixed up in the wrongdoing so as to have facilitated it and able to provide the necessary information.
3. The arguability threshold was more than a case barely capable of serious argument, but did not require a better than 50 per cent prospect of success. The judge assumed that threshold was met for present purposes.
4. The necessity requirement was not met. Norwich Pharmacal relief is exceptional and is available only where necessary to obtain justice. FCFM could seek relevant disclosure in the existing civil proceedings, including third-party disclosure. The proposed orders would instead disclose wide categories of material, including records extending over several years, without the safeguards of relevance, privacy, privilege, and participation by Mr and Mrs Y.
5. The involvement of public prosecuting authorities further weakened the application. They had been informed of the suspicions and were better placed to investigate and decide whether a prosecution served the interests of justice. A private prosecution did not confer an unlimited right to obtain investigative material through civil proceedings. In relation to suspected insider dealing, the proposed prosecution also required the consent of the Director of Public Prosecutions under section 61(2) of the Criminal Justice Act 1993.
6. The respondents had not been shown to be mixed up in the alleged wrongdoing. The proposed involvement of the brokers had not occurred, and the case against EE was speculative. The application was therefore characterised as a fishing expedition.
7. The breadth of the proposed disclosure also raised a substantial Article 8 privacy concern. Although Norwich Pharmacal relief may support a private prosecution in an appropriate case, this was not such a case.