In cases of fraud where the victim's bank is refusing to release further information due to client confidentiality, applying for a Norwich Pharmacal disclosure order can help. This is a useful legal tool in litigation where a third party withholds critical documents or information that could benefit your case.
Origins in 1974 patent infringement
A Norwich Pharmacal Order is a court order to compel innocent third parties to disclose information related to wrongdoings. It was first established in 1974 during a case called Norwich Pharmacal Co. v Customs and Excise Commissioners.
The House of Lords in the United Kingdom stated that if an innocent third party was involved in unlawful wrongdoing, a court should be able to compel them to provide information that could help the victim by providing the identity of the defendant or any elements of wrongdoing that were previously unknown.
Although first created due to patent infringement, the jurisdiction of a Norwich Pharmacal Order now extends to all kinds of contract breaches and defamation, and more recently with the rise of new media, internet fraud, allowing for the tracing of passage of information or assets. It is also practical to establish the precise amount of theft that has taken place in fraud cases, which is beneficial to the court when balancing public and private interests.
Wide scopes only granted in exceptional cases
Typically, the Norwich Pharmacal is restricted and is purely meant for the purposes of identifying the alleged wrongdoer. This identification can include anything from names to the information relating to the involvement of the alleged wrongdoer. Wider scopes can be granted in exceptional cases, where details of bank accounts can be revealed if necessary.
Fraud is one of the biggest examples of when a Norwich Pharmacal Order would be helpful. In many cases where victims send payments or transfers to a designated bank account created by the fraudster, money is then often transferred through different-tiered shell accounts in the hopes of making the transfers harder to track. At this stage, it is incredibly difficult for the victim to accurately identify the fraudster.
Nevertheless, a Norwich Pharmacal Order, when obtained in court after filing a lawsuit, would allow the victim to pursue the case and would require the bank to trace the various money transfers and to reveal the accounts to which the money was sent to. In formal terms, a Norwich Pharmacal Order is an order for innocent third parties to disclose information related to wrongdoings.
Effective also for foreign bank accounts
Banks and other third parties are typically under no obligation to provide confidential information on their clients’ accounts, which is why a court order in the form of a Norwich Pharmacal Order is often necessary to gain evidence for litigation. In the recent and relevant case of A1 and Another v. R1 and Others [2021] HKCFI 650, a new precedent was set when Hong Kong’s Court of First Instance issued a Norwich Pharmacal Order against accounts that were incorporated in both Hong Kong and Macau, which is a separate jurisdiction.
This is a landmark case where Norwich Pharmacal Orders were granted even when the bank accounts being traced were not Hong Kong accounts. Based on this decision, the Norwich Pharmacal relief can now be used to identify the defendant as well as obtain information in proceedings outside of Hong Kong.
Court will consider three factors
In the case of A Co v B Co [2002] 2 HKC 497, the High Court of Hong Kong specifically detailed three factors the court must consider before granting a Norwich Pharmacal order. There must be:
- “reliable and convincing evidence to prove that serious incidents have occurred”;
- the order “will or is likely to bring certain benefits to the plaintiff” and;
- “the content required to be disclosed should not be too wide”.
Therefore, for a Norwich Pharmacal Order to be granted, a high threshold must be met. The court must consider factors relating to existence, relevance, and necessity.
Existence, relevance and necessity
In a Norwich Pharmacal Order, “existence” refers to whether the third party actually holds documents and information related to the wrongdoings. Whereas “relevance” means the information held by the third party is related to the proceedings. “Necessity” refers to the fact that the disclosure of such documents by the third party is indeed necessary for the victim to pursue their case.
In short, this means that the court needs to make a decision towards balancing the conflict of interest between the victim’s request for justice and the third party’s confidentiality obligation to their clients. Hence, there are multiple thresholds that must be met before a judge grants a Norwich Pharmacal Order.
Orders not granted for large data requets
Nevertheless, while a Norwich Pharmacal Order can be useful, it cannot be used to access information before proceedings have been brought before the alleged wrongdoer: it can only be used to aid a case, but not for an applicant to decide to file for wrongdoing after seeing evidence.
Hong Kong courts have also explicitly said that Norwich Pharmacal orders would not be granted if it would require either party to examine large amounts of documents which would call for time and costs.
Alternative way to obtain disclosure: Article 42
Asides from the Norwich Pharmacal Order, another way to direct a third party to provide necessary information is through a court order, under Cap. 4 High Court Ordinance Article 42. One party of the legal process may submit an application of disclosure, and this court order is granted if the court believes that the third party has necessary information, but the process outlined under Article 42 only applies to filed judicial proceedings.
