Can you make a Norwich Pharmacal application against potential defendants?

In AQR Capital Management LLC & Ors v The London Metal Exchange & Anor [2022] EWHC 3313 (Comm), the claimants sought documents from the potential defendants before issuing proceedings by applying for an order for Norwich Pharmacal relief, as well as for pre-action disclosure under CPR 31.16. The High Court denied the application but it is an interesting reminder (i) that Norwich Pharmacal applications can theoretically be made against a potential defendant, not just a third party, and (ii) of the considerations for pre-action disclosure under the CPR.

Norwich Pharmacal relief and background facts

Norwich Pharmacal relief is a type of pre-action disclosure order. Norwich Pharmacal applications are usually made against a third party to a claim who holds the missing piece of information which will enable a claim to be advanced. However, in this case, the application was made against the potential defendants.

The claimants, a group of separate investment firms, sought information from the potential defendants, the London Metal Exchange (LME) and LME Clear, (the clearing house for the LME). The claimants requested the Norwich Pharmacal relief on the basis of their intention to bring legal proceedings in connection with the LME’s decisions to suspend nickel trading and to unwind any agreements made following the invasion of Ukraine by Russia, due to the impact on the market. The claimants requested both internal documentation and affidavit evidence relating to the reasons for the LME’s decisions (affidavit evidence would not have been available under CPR 31.16).

To secure a Norwich Pharmacal order, four elements must be satisfied:

1. The applicant must demonstrate a good arguable case that a form of legally recognised wrong has been committed against them by a person.
2. The respondent must be “mixed up” in so as to have facilitated the wrongdoing.
3. The respondent must be able to provide the information necessary to enable the wrongdoer to be pursued.
4. It must be appropriate and proportionate in all the circumstances of the case.

Decision

The judge acknowledged that there was no formal bar to claiming Norwich Pharmacal relief against intended defendants but this would affect the overall evaluation of the application. Such a claim is not based on the need for third party assistance, but on an entitlement to require a defendant to provide evidence against itself. Questions will immediately arise regarding why that was thought necessary and appropriate, and regarding procedural fairness.

On the facts, the application failed as the claimants could not satisfy the first element of the test for Norwich Pharmacal relief - they could not show a good arguable case that a legally recognised wrong had been committed.

The judge also went on to consider the other elements of the test. The second element was satisfied given that the relief was sought from the defendants. The third element was not satisfied as the claimants had the opportunity to pursue the claim via judicial review meaning a claim could have been brought without the need for disclosure. The judge stated, “the ostensible availability of alternate causes of action does colour and weaken the case of necessity”. Additionally, the information required should be comparable to the “missing piece of the jigsaw”. Due to the wide ranging disclosure request, this was deemed a request for information in order to determine whether there was any claim at all, rather than a request for a discrete piece of evidence to enable a claim to be made. The same analysis would apply to a CPR 31.16 application.

The application also failed the fourth element of the test as the weak merits of the case contrasted unfavourably against the wide ambit of the disclosure request.

Key takeaways

The application illustrated a novel approach to seeking pre-action disclosure. However, the judgment shows that it will be particularly difficult to persuade a judge to order Norwich Pharmacal relief against a potential defendant due to concerns over procedural fairness. It is a reminder that pre-action disclosure will not be ordered lightly. An applicant must seek key information without which a legally established claim cannot proceed. Norwich Pharmacal relief and pre-action disclosure applications cannot be used as a means of investigation to determine whether a claim should be pursued at all.

With thanks to Holly Tunnah for her assistance with this post.