Often in a fraud claim, the identity of the individual/entity that perpetrated the fraud, or the location of misappropriated assets, is usually unknown. You are typically reliant on third parties to provide information about the possible wrongdoers, to put you in a position to start a claim to recover the relevant assets. The English Court has a number of remedies to help with this common problem, namely Norwich Pharmacal ("NPO") and Bankers Trust ("BTO") orders. Broadly, NPOs and BTOs allow a potential claimant to find out information about possible fraudsters from other third parties who may have become enmeshed in the fraud, e.g., banks or other payment processing businesses.
Much fraud is now of an international nature, particularly where crypto assets are concerned. This briefing note focuses on recent changes to English Civil Procedure Rules ("CPR") designed to make it easier for defrauded parties to get the information they need from foreign third parties (e.g. foreign banks) to identify fraudsters and seek to recover from them.
Updates were made to the CPR on 1 October 2022, following the 149th Practice Direction Update. This included amendments to Practice Direction 6B ("the PD") , which deals with service out of the jurisdiction of England and Wales. Paragraph 3.1 of the PD outlines the circumstances in which a claimant may serve a claim form out of the jurisdiction with the permission of the Court. The recent amendments provide a new 'gateway' to seek service out of the jurisdiction in respect of 'information orders against non-parties'.
Paragraph 3.1(25) of the PD now provides that:-
"The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where...
(25) A claim or application is made for disclosure in order to obtain information—
(a) regarding:
(i) the true identity of a defendant or a potential defendant; and/or
(ii) what has become of the property of a claimant or applicant; and
(b) the claim or application is made for the purpose of proceedings already commenced or which, subject to the content of the information received, are intended to be commenced either by service in England and Wales or pursuant to CPR rule 6.32, 6.33 or 6.36."
Prior to this amendment, the only basis upon which to seek information of this nature, was to commence an application for a NPO or BTO. However, in the absence of any binding authority, and on the basis of first instance authority precluding service out of an NPO application but permitting service out of a BTO application, the Court has often shown reluctance to grant permission for service out of, in particular, NPO applications and has generally taken quite an inconsistent approach in deciding whether to grant permission to serve out NPO and BTO applications.
Paragraph 3.1(25) not only provides much needed clarification of a prospective claimant's ability to serve an application for an information order out of the jurisdiction, but goes a step further in confirming that a potential claimant is entitled to serve a part 8 claim for disclosure of information, without the need to commence part 7 proceedings against persons unknown. This is of real practical significance, because it means that a potential claimant is not saddled with a potentially significant court fee at the outset of a fraud claim, when nothing is really known about the prospects of successful recovery.
Whilst the updates to the PD do not remove the need for a party to seek permission from the Court, to serve out of the jurisdiction, they do remove a significant hurdle for potential claimants in establishing a clear basis upon which to seek permission to serve an information order out of the jurisdiction. This can only assist in providing victims of fraud, an opportunity to seek recourse, at more proportionate cost and underscores why the Courts of England and Wales remain an attractive forum for fraud disputes.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
