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We are grateful to Sarah Webb of Russell Jones & Walker for this article which gives the background to the orders obtained by a number of AIM-listed companies recently

It is always difficult for a business to decide whether to ignore rumours about its performance or to try and deal with them either through public relations or the courts.  The development of specialist business websites and blogs such as ADVFN have made the spread of information on the internet even more readily available.  Indeed, corporate gossip now spreads as quickly as the latest antics of footballers and celebrities.

Companies are beginning to realise the impact of such internet blogs on their share price and trading reputation. A company can sue for defamation just as an individual can.  Defamatory allegations that are damaging to its trading reputation or affect its business are actionable. 

Companies are also discovering that they can obtain the identity of what appear to be anonymous publishers of defamatory blogs on the internet.

Nighthawk action

The decision of Nighthawk Energy to take such action to identify those who had posted seriously defamatory allegations against them on an online message board is just the latest example of the use of Norwich Pharmacal orders.

 

These well established orders take their name from the case of Norwich Pharmacal Company v. Customs & Excise Commissioners in 1974.  They allow a person to make an application to the court for disclosure of information against a third party who is not a party to any proceedings nor will they become a party but where they have innocently become caught up in the “wrongdoing of another”.  The third party is more than a mere witness to such a wrongdoing and as such they can be compelled to disclose the identity of the ‘wrongdoer’ so that proceedings can be brought against them as the proper defendant.

 

Protection for ‘innocent disseminators’

Any organisation that hosts a bulletin board or invites comments in response to articles on its website is usually protected from action against them for defamation by Section 1 of the Defamation Act.  This protects what are known as innocent disseminators where they are just a mere conduit for the publication of the defamatory material.  Most hosters of bulletin boards do not moderate the content before it is published and so can rely on the protection of Section 1 as they are not considered to be publishers.  However, if defamatory allegations are posted then the hoster is, under the Norwich Pharmacal provisions, “caught up in the wrongdoing” in that they have enabled the material to be posted.  This entitles those who have been defamed to apply for a Norwich Pharmacal  order against them to disclose the email address of the person who has posted the defamatory material.  It is also possible to get the internet service provider’s address for the email.  Sometimes this is necessary because the person who posts the email uses a fictitious email address or in some other way disguises their identity.  Through the details of the internet service provider it is possible, often by making a further Norwich Pharmacal application against them, to obtain the address of the registered user of the fictitious email address.