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Norwich Pharmacal Orders (NPOs) - An In-Depth Guide

Author: Nicola Sharp  7 March 2024
8 min read

What is a Norwich Pharmacal Order?

A Norwich Pharmacal Order (NPO) is a disclosure order that can be applied for in England and Wales to allow information to be obtained from third parties who have knowingly or unknowingly become involved in wrongdoing.

An NPO helps those who are the victims of the wrongdoing to obtain information that can help them investigate it, pursue those who were responsible for it and regain what is rightfully theirs.

NPOs are frequently used when the person who has had the wrongdoing committed against them does not know the identity of those who committed it but is aware of a third party that does know. They are of great value in putting a case together against a wrongdoer and when looking to trace assets.

NPOs are a flexible option that can enable a person to gain the important information that they need to bring a legal claim against someone else. They can be used to gain such information from businesses and organisations such as banks and building societies, mobile phone companies and internet service providers, who all hold data about their customers.

Without an NPO, such data would usually remain confidential and unable to be obtained by anyone who may need it for their legal action.


When would a Norwich Pharmacal Order be used?

NPOs are often used in fraud cases with, for example, the third party being a bank that has been used to receive the proceeds of the fraud and/or move them elsewhere afterwards. Information about the name and other personal details of those that committed the fraud and where the money has now been moved to can be obtained through an NPO.

But NPOs can be used in a range of situations and against a variety of companies and institutions. These include:

  • To obtain IP address information about a person from a website operator or internet service provider.
  • To make someone who has received confidential information about the NPO applicant disclose who they obtained it from.
  • To compel the Land Registry to give information about whether a person suspected of wrongdoing has used the stolen assets to invest in properties.
  • To trace the proceeds of counterfeiting and other intellectual property offences.


What are the criteria for obtaining an NPO?

For a court to grant an NPO, the person applying for one (the applicant) has to meet a number of criteria. These are:

  1. There is a good arguable case that some form of wrongdoing has been committed.
  2. The victim needs the NPO to take action against the wrongdoer (although obtaining an NPO does not have to be the last available option in order for one to be granted).
  3. There is no appropriate option under the Civil Procedure Rules to obtain the same outcome.
  4. An NPO will not be granted if the applicant could have achieved the information via pre-action disclosure (CPR 31.16) or via order for disclosure against a person not a party (CPR 31.17). But the limits of these two approaches can make an NPO necessary.
  5. The person or organisation that the applicant wants information from (the respondent) is somehow involved in the wrongdoing.
  6. The respondent is likely to have relevant documents or information.
  7. That granting the NPO is a necessary and proportionate course of action.


What factors will a court consider before granting an NPO?

When considering an NPO application - and whether it passes the test for being granted - the court will consider various factors, including:

  • The strength of the legal claim for wrongdoing that the NPO applicant intends to bring.
  • The public interest in allowing the applicant to exercise their legal rights.
  • Whether granting an NPO will deter future wrongdoing.
  • Whether the information could be obtained elsewhere.
  • Whether the respondent knew or should have known that they were facilitating wrongdoing.
  • If complying with the NPO might lead to the names of innocent people being revealed.
  • How confidential the information being sought is.
  • The privacy and data protection rights of those whose identity is to be disclosed.
  • How difficult it would be to comply with the NPO.


What is the procedure for applying for an NPO?

The procedure for applying for an NPO is in three stages:

  1. Making of the application.
  2. Giving notice of the application to the person or organisation who will be the respondent.
  3. The application hearing itself.


1. Application

An NPO can be applied for as part of an existing legal action or before any legal action has begun. If it is being sought before proceedings have started, the court that the application has to be made in will depend on factors such as which court those future proceedings may be brought in. This is most often a branch of the High Court.

The applicant has to prepare an application. This includes a witness statement setting out the circumstances that have led to the application, how the criteria for an NPO have been met and a draft of the NPO that the court is being asked to make.


2. Giving Notice

Often, the person or organisation that will be the respondent if an NPO is granted is given notice of the application – meaning they are told that it is being made. It is common for the application to be made ‘on notice’ in this way.

Respondents may choose not to oppose the NPO being granted. But they can require the application to go before the court so they can object to it on grounds such as a breaching of a person’s confidentiality.

It is possible in some situations, however, for an NPO application to be made on a 'without notice' basis, with the respondent not being made aware of it until after the order has been made. A without notice application may be used if, in fraud cases, there is a risk of stolen assets being dissipated (meaning moved elsewhere or spent or squandered) or if the matter is so urgent there is no time to give the respondent formal notice of the application.

The application may also be made in this way if there is a concern that, for example, the respondent may inform the wrongdoer (although a legal gagging order can be sought to prevent them from doing so). If notice is given to the respondent, there are other approaches that can be taken to prevent the wrongdoer finding out about it.

These include the parties being referred to in court only by initials, the hearing being held in private and public access to the court file being restricted.


3. The Hearing

After an application for an NPO has been made, a court hearing will usually take place for the judge to decide whether it should be granted.

The hearing’s length will depend on how complex the application is. Factors such as the number of respondents, whether any of them object to the NPO being made and the amount of information sought by the applicant will determine how long it takes.

A legal representative for the applicant will outline the case to the court, usually by referring to a written 'skeleton argument' that has been made available before the hearing.

But if the matter is not urgent it can be possible for the applicant to ask the court to deal with the written application without the need for a hearing.


The Obligations on the Applicant

While anyone can make an NPO application, an applicant has to meet certain requirements.

An applicant must give full and frank disclosure – meaning that they have to clearly put before the court their arguments, the evidence supporting their case and anything that might go against the making of an order. Any failure to meet this last obligation can lead to any NPO that is granted being set aside (meaning it is no longer valid).

The applicant is also required to give a cross-undertaking in damages. This undertaking means that if it is later determined that the NPO should not have been made, the applicant will have to compensate the respondent and any innocent third parties - such as someone whose confidential information was made public - who suffer loss as a result of it being granted. The applicant will be required to show that they can afford to meet this obligation if it arises.

An applicant will usually have to give the respondent an indemnity, agreeing to bear their costs for responding to the application and complying with the NPO, if it is granted. But such costs tend to be low. The applicant will, however, have to pay their own costs, although it may be possible to reclaim them from the wrongdoer in any legal action that is then concluded.


What happens after a NPO is granted?

If an NPO is made, it has to be served on the respondent. The courts have been fairly flexible about how this is done. They have allowed the NPO to be served electronically in certain cases. If an NPO has been made without notice, full details of what was said at the hearing must be sent to the respondent with the NPO.

The respondent then has to provide the information required by the NPO within a time limit that has been set by the court. This is usually 28 days.

When an applicant receives the information that was requested in an NPO, they can only use it for the legal proceedings that they outlined when making the application. But if that same information is then needed to be used for other reasons – such as a private prosecution or in a related criminal investigation - an application can be made to the court for permission to do so.


How much does a Norwich Pharmacal Order cost?

As the costs for an NPO need to be paid – at least initially – by the applicant, it is worth seeking legal advice about both the value of making an application for one and what that is likely to cost.

Applying for an NPO will require payment of the court fees as well as the solicitors’ costs for the drafting of the witness statements, preparation of evidence, managing and responding to all relevant correspondence, making the formal NPO application and representing the applicant at the court hearing. But when it comes to NPO cost, it should be remembered that it can be possible to recover what has been paid out from the wrongdoer as part of any legal action that is brought.

Anyone who obtains an NPO must compensate the respondent (and any innocent third parties who suffer losses) if it is later found that the NPO should never have been made. The applicant must also cover the costs of a respondent responding to an application and then complying with any NPO that is made as a result of it.


NPO Case Example

Through the use of an NPO, Rahman Ravelli’s Syed Rahman secured a legal first in the case of Fetch AI Limited, Fetch AI Foundation PTE v Persons Unknown, Binance Holdings and Binance Markets.

To give a brief summary of this NPO case, London's High Court ordered the crypto exchange Binance to identify those who carried out a cryptocurrency hack and freeze their accounts. The court’s ruling forced Binance to help control the actions of its users and assisted those who had lost assets on the exchange.

Part of Syed’s approach in this case was to apply for an NPO. This application was successful, enabling his client to obtain information from Binance about the hackers.

The case was hailed as proof that those committing crypto-related crime cannot rely on the cloak of anonymity when conducting their activities. But it also showed what can be achieved by applying for an NPO.

The full judgement can be found here.


What are the alternatives to NPOs?

One alternative to an NPO is to seek a Bankers Trust order. This is an order that requires a financial institution (such as a bank) to disclose facts that would help locate assets before they can be dissipated (meaning moved elsewhere or spent or squandered). Like NPOs, they can be made on a without notice basis.

A Bankers Trust order, however, should not be confused with an NPO; even though there is some overlap between the two. An NPO is used as a way of identifying the wrongdoer and finding evidence of wrongdoing. But a Bankers Trust order is used as a way of protecting a person's proprietary interest in a claim – their right to own a particular asset that has been taken from them.


Conclusion

There is certainly a wide range of situations where an NPO can be the best course of action. They can be invaluable when it comes to obtaining information that may otherwise be unavailable to those who are either bringing legal action or thinking about doing so.

Maximising the chances of a successful NPO application can require informed advice. Such advice can also be important when it comes to making sure that any NPO that is granted is as effective as possible.

Nicola Sharp C 09983

Nicola Sharp

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nicola.sharp@rahmanravelli.co.uk
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Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.

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