Non-party is ordered to pay the costs of complying with a Norwich Pharmacal disclosure order

http://www.bailii.org/ew/cases/EWHC/Comm/2014/2019.html

A Norwich Pharmacal Order (“NPO”) requires a respondent who is “mixed-up” in wrongdoing (whether innocently or not), so as to facilitate that wrongdoing, to provide “full information” on the alleged wrongful act. The applicant will usually be expected to indemnify the respondent in respect of his costs of complying with the order (and those costs can usually subsequently be recovered against the wrongdoer). This case is an example, though, of a respondent being ordered to pay those costs himself (and there has been little judicial assistance to date on this issue). Flaux J made the following general points:

  1. A respondent is under a duty to provide full information, even if he has not incurred any potential liability to the applicant: “all the more so if he has actively and knowingly assisted wrongdoing…even if the [applicant] cannot or chooses not to join him as a defendant”. The judge rejected an argument that the court should take into account that the respondent is a “busy businessman” who did not have to consider documents properly.
  2. The applicant does not have to show that the respondent’s participation in the NPO process has been a “complete charade”. Here, there had been substantial compliance by the respondent but, crucially, his evidence on the critical issues covered by the NPO had been “dissembling and evasive”.
  3. A respondent can be ordered to pay costs in a NPO  case even if no crime or tort is eventually established  at a civil or criminal trial: “The question is whether at the time when the court is considering the appropriate order as to costs (which may well be after compliance or purported compliance with a Norwich Pharmacal Order as in the present case) on the material before the court, the court can be satisfied that the respondent has supported or is implicated in the wrongdoing or has sought to obstruct justice”.
  4. Furthermore, it is not only where the claimant establishes at a trial that the NPO respondent was implicated in the defendant’s wrongdoing that it is appropriate to depart from the normal costs order. If, at the interlocutory stage, the court is satisfied that the respondent is knowingly implicated in wrongdoing, it can express its disapproval by either ordering the respondent to pay his own costs or by ordering him to pay some or all of the applicant’s costs.