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Totalise v Motley Fool

An applicant for a ‘Norwich Pharmacal’ style order will normally be required to pay the defendant’s legal costs, since it is for the applicant to prove to the Court that he or she is entitled to an Order for disclosure, rather than the defendant to make a (potentially erroneous) decision as to whether to provide disclosure.

Totalise Plc v Motley Fool Ltd

  • MCLR March 2002
  • [2001] EWCA Civ 1897
  • [2002] 1 W.L.R. 1233
  • [2003] 2 All E.R. 872

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Facts

The decision at first instance appeared in the August 2001 edition of MCLR ([2001] Masons CLR 87).  This is the appeal brought by the Second Defendant against the decision of Owen J., who ordered the Defendants to pay the Claimant's costs in a 'Norwich Pharmacal' application.  The subject matter of this appeal was considered in the commentary to the previous MCLR article and therefore no further commentary is provided here.

Briefly, the First and Second Defendants provided a bulletin board web site service.  A user of the service, 'Z Dust', made a number of postings which were allegedly defamatory against the Claimant.  The Claimant requested disclosure of Z Dust's identity from the Defendants.  The Defendants refused on the basis that disclosure would breach the Data Protection Act 1998 (the '1998 Act').  As a consequence the Claimant brought a Norwich Pharmacal application against the Defendants seeking a Court Order that they disclose Z Dust's identity and provide documents relating to the same.

Owen J. made an order for disclosure of Z Dust's identity and that the Defendants pay the costs of the application.  This costs order was made on the basis that although the Defendants had to carry out the balancing exercise as to whether or not to disclose the identity, in this case there was only one answer to that balancing exercise, namely that they should have complied with the requests made by the Claimant.  The costs part of the order formed the subject of the appeal.

Judgment

Aldous LJ held that the Court did have a discretion as to the order for costs in Norwich Pharmacal applications, but that such applications are not ordinary adversarial proceedings (on the basis that the defendants are not the wrong doers and have become mixed up in tortious acts through no conduct of their own).  In these situations it is for the applicant to satisfy the Court that the order for disclosure should be made, not for the defendant to take a view which could be wrong.

Section 35 of the 1998 Act permits disclosure of personal data where it is necessary for the purposes of establishing, exercising or defending legal rights.  However paragraph 6 of Schedule 2 to the 1998 Act states:

"(1) The processing is necessary for the purposes of legitimate interests pursued by the data controller or by the third party or parties to whom the data are disclosed, except where the processing is unwarranted in any particular case by reason of prejudice to the rights and freedoms or legitimate interests of the data subject."

Aldous LJ considered it manifest from paragraph 6 that no order might be made for disclosure of a data subject's identity, whether under Norwich Pharmacal doctrine or otherwise, unless the Court had first considered whether the disclosure was warranted, having regard to the rights and freedoms or the legitimate interests of the data subject.  Furthermore and particularly since the coming into force on 2 October 2000 of the Human Rights Act 1998, the Court must be careful not to make an order which unjustifiably invades the right of an individual to respect for his private life, especially when that individual is not before the Court.

The Court found that a defendant to a Norwich Pharmacal application should not make a disclosure of a person's identity merely on the basis of legal advice he has taken as to the likely outcome of the application.  Many factors are relevant as to whether disclosure is or is not ordered, and a defendant may easily come to the wrong view.

In general Norwich Pharmacal applications are akin to proceedings for pre-action disclosure.  The Court, when considering its order as to costs, after a successful Norwich Pharmacal application, should consider all the circumstances.  However in a normal case the applicant should be ordered to pay the costs of the party making the disclosure including the costs of making the disclosure.  Aldous LJ acknowledged that there may be cases where the circumstances required a different order but not in cases where:

  • the party required to make the disclosure had a genuine doubt that the person seeking the disclosure was entitled to it;
  • the party was under an appropriate legal obligation not to reveal the information, or where the legal position was not clear, or the party had reasonable doubt as to the obligations (in the current situation, the terms and conditions of the relationship between the Defendants and Z Dust prevented the Defendants disclosing his identity);
  • the party could be subject to proceedings if disclosure was voluntary;
  • the party would or might suffer damage by voluntarily giving the disclosure; or
  • the disclosure would or might infringe a legitimate interest of another.

Consequently, Aldous LJ found that Owen J. was wrong in making an order for costs against the Second Defendant in the circumstances, the appeal was upheld and the Second Defendant was entitled to recover its costs.