Burford Capital Ltd v London Stock Exchange Group Plc

Norwich Pharmacal relief requires a claimant to show a good arguable case of wrongdoing and that justice requires the particular assistance sought. The jurisdiction is not confined to strict last-resort necessity, but disclosure must be a necessary and proportionate response assessed in all the circumstances.

In alleged market manipulation cases, patterns of orders, amendments and cancellations do not establish spoofing or layering without evidence that orders were placed without a genuine intention to trade and gave false or misleading market signals. A regulatory regime does not automatically exclude the jurisdiction, but regulatory findings, confidentiality, collateral damage to innocent participants and the availability of judicial review may weigh decisively against relief.

Burford, whose shares were traded on AIM and Turquoise, sought Norwich Pharmacal relief against the London Stock Exchange Group. It alleged that spoofing or layering had contributed to a sharp fall in its share price and sought participant identities for approximately 360,000 order events.

The claim was brought under Part 8. Burford proposed using the information for civil claims, private prosecution or regulatory action. The central issues were whether the evidence established a good arguable case of unlawful market manipulation, whether the regulatory scheme affected the jurisdiction, and whether justice required disclosure despite the confidentiality and commercial sensitivity of the information sought.

Disposition. The Norwich Pharmacal claim was dismissed.

1. Good arguable case. The claimant had to show more than a case merely capable of serious argument, although it did not have to establish that wrongdoing was more probable than not. Burford’s statistical analysis of anonymised order data did not meet that threshold. It showed patterns of cancellations and amendments, but those patterns were also consistent with genuine selling, execution algorithms and liquidity provision.
2. Market manipulation. Under Regulation (EU) No. 596/2014, the essential issue was whether conduct gave, or was likely to give, false or misleading signals about supply, demand or price. The inquiry could involve the trader’s actual intention when placing an order. A pattern of placing, cancelling and replacing orders did not itself establish spoofing or layering. The evidence had to support an inference that the orders were not genuine when placed.
3. Norwich Pharmacal framework. The judge preferred an analysis involving one strict precondition, namely facilitation of alleged wrongdoing, followed by a single assessment of whether justice required the assistance sought. The familiar factors included merits, vindication, deterrence, alternative sources, the defendant’s role, innocent third-party harm, confidentiality, privacy and data protection. The regulatory regime and the possible effect on the United Kingdom as an equity-trading venue were additional relevant considerations.
4. Statutory and public-law issues. A statutory scheme excludes the common-law jurisdiction only where Parliament or the relevant legislature has occupied the same territory in a way inconsistent with parallel relief. Regulation (EU) No. 596/2014 did not exclude Norwich Pharmacal relief for private-law claims. However, the FCA’s considered regulatory assessment and the availability of judicial review meant that justice did not require disclosure to facilitate a private prosecution or collateral challenge. The court left open whether the alleged wrongdoing had to involve a private cause of action.
5. Final balance. Even if a good arguable case had existed, the likely identification of many innocent traders, the invasion of confidential trading information and the absence of a substantial claim requiring vindication would have outweighed the factors favouring relief.

This was a first-instance decision. The claim was issued in the Commercial Court as Claim No. CL-2019-000604 and transferred to the Financial List by order dated 28 February 2020. No appeal is stated in the judgment.