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:
I) 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.
ii) 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.
iii) 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  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.
iv) 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.
v) 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.
vi) 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.
vii) 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.
viii) To aid execution of a judgement.
Again, whilst Courts have taken a restrictive approach in this particular area, the Court may consider an application by a judgement creditor for a Norwich Pharmacal Order to aid the execution of a judgement. This is only done where it can be shown that the judgement debtor is wilfully seeking to evade execution of the judgement.
Prerequisites of a Norwich Pharmacal Order
Before granting a Norwich Pharmacal Order NPO, the Court will need to be satisfied of the following:-
I) Evidence that the Respondent is involved in the wrongdoing.
a. There is much case law in this area as to what is meant by wrongdoing but as Lord Reid stated in the Norwich Pharmacal case itself, the Respondent cannot simply be an “innocent bystander”. There has to be some evidence that the Respondent (whether innocently or not) was mixed up in the wrongdoing.
b. An example of this is an application made against a telecommunications company for disclosure of the wrongdoers’ contact details in circumstances where it had not been possible to locate that particular individual.
c. It is even possible to apply for Norwich Pharmacal Orders against lawyers subject to issues of privilege. However, applications against entirely innocent lawyers are unlikely to be granted. Lawyers who, for example, who draft documentation which then enables the wrongdoer to facilitate a fraud could be held subject to an Norwich Pharmacal Order.
ii) The Defendant will not later be called as a witness – the “mere witness” rule
As a general rule, Norwich Pharmacal Orders are not available against individuals who may at a later stage may be called as a witness in the proceedings. This is known as the “mere witness” rule. There are exceptions for example where an Applicant cannot identify the wrongdoer without the information being provided by the party subject to the Norwich Pharmacal Order application.
iii) The interests of justice in making the Order
The Court will also consider the interests of justice when granting a Norwich Pharmacal Order. In so doing, it will balance the following factors when deciding whether to make an Order:
a. The likely consequence if the Order were refused.
b. Whether there are any alternative remedies available.
c. The potential advantages to the Applicant versus the potential harm to the Respondent.
d. The nature of the compliance and whether it is likely to be onerous.
4. Developing area of the law
Norwich Pharmacal Orders are a developing area of the law and there is recent authority (as or writing) for the fact that a Norwich Pharmacal Order could not be challenged on the basis that the information sought might be available from other sources.
This recent case also made it clear that each application before the Court is to be determined on the circumstances of that particular case, taking into account the size and resources of the
Applicant, the urgency of its needs to obtain the information and any public interests in having the Applicant’s needs satisfied.
Cross undertaking in damages
It is common in Norwich Pharmacal Orders that the Applicant provides an undertaking to pay the costs of the Respondent in the event that it may suffer loss as a result of complying with the Order. The Respondent cannot be liable for any legal or other costs arising from these separate proceedings, unless it was involved in the circumstances leading to the claim. As with Freezing Orders, the Applicant must demonstrate that it is in a financial position to meet any obligations which may arise in this respect.
Applying for a Norwich Pharmacal Orders
Much depends on whether the application is urgent or not.
If it is not urgent, then the first port of call is to write to the potential Respondent seeking voluntary disclosure of the information and setting out the reasons why it is sought. If the Respondent is unable or unwilling to comply then an application to Court might be the only way forward. However seeking the cooperation of a Respondent even in circumstances where it cannot provide the information (for example due to privacy) can still be a useful approach as that information can be put before the Court when asking for an Norwich Pharmacal Order.
Often, for privilege, data protection or other reasons, the Respondent will invite the Applicant to apply for a Norwich Pharmacal Order so that the Respondent can be relieved of its obligations to withhold such information. In such circumstances, as described above, the application should be relatively straightforward and the Applicant will have to provide for the Respondent’s costs in attending the proceedings and complying with the Norwich Pharmacal Order.
In terms of the procedure (both for urgent and non-urgent applications), an application must be supported by a detailed witness statement setting out the following:
1. The factual background arising to the application;
2. The nature of the claim sought by the Applicant;
3. The most likely cause of action against the wrongdoer;
4. Evidence that the mere witness rule will not be breached;
5. Evidence that the Respondent has been involved or mixed up in the wrongdoing (although not always necessary);
Specifying which documents or information is being sought and giving reasons for this;
Stating why the Respondent is believed to be in possession of the documents or information;
Stressing the Applicant’s intention to pursue the wrongdoer and not the Respondent.
If dishonesty is being alleged attention should be drawn to this.
That the application is in the interests of justice.
Any apparent basis on which the Respondent may seek to claim privilege against self-incrimination.
Any other relevant factors the Court may consider when exercising its discretion such as criminal activity etc.
Evidence in support of the undertaking in damages.
If the application is made without notice, then the need for urgency needs to be explained.
The terms of the Order the Applicant would like the Court to grant needs to be carefully drafted. Commonly, the Order also contains a gagging clause against the Respondent to stop them informing the Defendant that the application has been made. This is often because the Applicant does not want the Defendant being tipped off as it might be considering obtaining a Without Notice Freezing Order against it.
The Norwich Pharmacal Order, once granted, must be served on the Respondent and if it contains a gagging clause, this should be explained clearly to the Respondent at the time of service. The Norwich Pharmacal Order may also have a Penal Notice describing the criminal consequences of failing to adhere to the Norwich Pharmacal Order’s terms, including any gagging clause. Personal service is the ideal type of service as the gagging clause and Penal Notice can be clearly explained and it can make any consequential committal application against the Respondent (if the
Order is breached in any way) easier to secure.
Restrictions on use of documents obtained under a Norwich Pharmacal Order
Any documents and/or information obtained as a result of the Norwich Pharmacal Order could only be used for the purpose of the proceedings in which they have been disclosed. They could not be used for any other proceedings and/or released to any other party. The only exceptions to this are where the Court gives permission or consent is provided by the owners of the documents.
Costs of the application in terms of the costs of the application, as described above it is normal that the Applicant bear the
Respondent’s costs of the Norwich Pharmacal Order. This is something for the Applicant to bear in mind as a result of making an application for a Norwich Pharmacal Order.
Can a Norwich Pharmacal Order be challenged?
The answer is yes on the following basis:
1. The grounds set out above have not been met;
2. There are duties of confidentiality which the Court considers would not allow an Order to be made;
3. The release of the information may expose the Respondent to proceedings for a criminal offence and therefore, the Respondent invokes the right against self-incrimination.
It may be that the Respondent simply applies to Court for the grounds of the Norwich Pharmacal Order to be varied. This could be on the basis of reasonableness, proportionality and cost.
Furthermore, the Respondent may seek an extension of time to comply with the terms of the
Order, particularly if they are onerous.
Can Norwich Pharmacal Order’s assist foreign proceedings?
It is a developing area of the law as to whether Norwich Pharmacal Orders can be obtained in order to support foreign proceedings. Whilst formerly, Norwich Pharmacal Orders were not allowed to be used in such circumstances, the case law has developed insofar as the Courts will now consider applications against Respondents in support of foreign proceedings. Indeed, Norwich Pharmacal Orders can therefore be used to obtain documents that are subsequently used in proceedings in foreign jurisdictions.