Monday, 29 June 2015

Norwich Pharmacal Orders Explained Part 1

Obtaining information from third parties 
In this series of posts, the person or company seeking a Norwich Pharmacal Order is referred to as the Applicant and the person or company subject to the application is referred to as the Respondent. The person or company against whom the ultimate Freezing Order may be sought is referred to as the Defendant.
It is sometimes the case that an Applicant cannot clearly identify the proper Defendant to any potential proceedings due to the lack of information available to it.
In such circumstances, it is possible for an Applicant to seek disclosure of information or documents against a non-party to the proceedings (“the Respondent”) if it can be shown that
  1. The Respondent must have been involved in or mixed up in the wrongdoing, whether innocently or not: and
  2. The Respondent is unlikely to be a party to the potential proceedings.
Such Court Orders are known as Norwich Pharmacal Orders. These Orders can be obtained before proceedings are issued, during the course of proceedings or even after judgment has been obtained against a Defendant.
How Norwich Pharmacal Orders differ from normal disclosure applications
Norwich Pharmacal Orders differ from standard applications for pre action disclosure against third parties. The key difference is that under the Civil Procedure Rules the application is made where it is likely that the Respondent is going to be a party to the proceedings. Another key difference is that under the Civil Procedure Rules such an application can only relate to disclosure of documentation whereas under a Norwich Pharmacal Order, the application can also relate to the disclosure of information.
Why are Norwich Pharmacal Orders used?
Norwich Pharmacal Orders are commonly used in order to:
  • Identify wrongdoers.
 For example where a third party has become mixed up in the wrongful acts of others, they are then under a duty to assist the injured party to provide information which will help disclose the true identity of the wrongdoer. Examples of instances where these types of Orders can be very useful include applications against internet service providers and also applications against website hosting companies where content may contain defamatory material or infringe an Applicant’s copyright.
  • To help identify the full nature of the wrongdoing.
 Often it is the case that the Applicant already knows the nature of the wrongdoing when considering seeking injunctive relief by way of a Freezing Order, but in certain circumstances Norwich Pharmacal Orders can be used to help clarify the exact nature of that wrongdoing prior to any applications being made to Court for injunctive relief.
  • To assist tracing assets and proprietary claims.
 This is a common ground for the use of a Norwich Pharmacal Order as it is often the Applicant’s position that it urgently needs to obtain further information to help it trace stolen assets.
The leading case of Bankers Trust Company v. Shapira [1980] 1WLR1247 related to an application against a bank for disclosure of relevant financial information including accounts, correspondence, banking records and cheques. The Court held that
“in circumstances where there was strong evidence that the applicant had been subject to fraud and deprived of monies as a result, then the rules of equity were that such an application should be granted”.
The Court of Appeal further held that the Courts would not hesitate in making strong Orders in circumstances where they helped prevent the disposal of assets by a Defendant which had been wrongfully or fraudulently obtained from the Applicant.
  • For disclosure of the source of information contained in a publication
 Whilst not particularly relevant for fraud cases, these types of applications can be made often against newspapers who have received documents in breach of confidence.
  • To enable an Applicant to plead its case.
 If it is clear that the documents and/or information sought would allow an Applicant to properly assess the prospects of success of its claim and enable it to then fully plead the claim, then Courts are willing to grant a Norwich Pharmacal Order.
  • To enable the victim of a wrongdoing to answer allegations made against him.
 This deals with circumstances where a Defendant may benefit from the lack of information available to the Applicant.  Such non-disclosure may prevent proceedings being brought or continued and may ultimately frustrate the grant or continuation of a Freezing Order.  A third party Respondent is therefore required upon the grant of a Norwich Pharmacal Order to provide such information so as to prevent any facilitation of the Defendant’s case, where a wrongdoing exists.
  • To enable a Defendant to obtain information
 In exceptional circumstances, a Norwich Pharmacal Order can even be used by a Defendant in proceedings to obtain information which would enable him to answer the allegations against him. This is a very rare use of a Norwich Pharmacal Order.
  • To aid execution of a judgment.
 Again, whilst Courts have taken a restrictive approach in this particular area, the Court may consider an application by a judgment creditor for a Norwich Pharmacal Order to aid the execution of a judgment. This is only done where it can be shown that the judgment debtor is wilfully seeking to evade execution of the judgment.