"In Guernsey, this type of order features most frequently in litigation connected with financial services. A banker, trust officer or company administrator may often possess confidential information about their customer or client, or their financial dealings, which would be of great assistance to someone wishing to pursue a claim against that individual or entity."
"The required disclosure under a Norwich Pharmacal order may take any form. Usually, it takes the form of the production of documents, but it may also include providing affidavits or attending court to give oral evidence."

Third party disclosure in Guernsey

13 Mar 2013

The Guernsey courts have a selection of tools available to them to enable documents to be obtained from third parties who may be caught up in fraud or other wrongdoing.

Norwich Pharmacal relief
Norwich Pharmacal relief is a type of order first developed by the English courts, but which has been readily accepted into Guernsey law.  It enables a court to order a third party who may hold critical information about somebody else's wrongdoing to provide that information to the victim of that wrongdoing, so that the victim can obtain redress.  It is a valuable remedy which has been adapted and developed flexibly over years of jurisprudence.  As Lord Woolf pointed out in the English case of Ashworth Hospital Authority v MGN Ltd [2002] UKHL 29, "the limits which applied to its use in its infancy should not be allowed to stultify its use now that it has become a flexible and mature remedy".

In Guernsey, this type of order features most frequently in litigation connected with financial services.  A banker, trust officer or company administrator may often possess confidential information about their customer or client, or their financial dealings, which would be of great assistance to someone wishing to pursue a claim against that individual or entity.  On occasions, without being given the information, the plaintiff would not be able to pursue a claim at all.  The principle established by the House of Lords decision in Norwich Pharmacal Co. v Customs and Excise Commissioners [1974] AC 133, which has been adopted and adapted by the Royal Court in many cases since, may provide relief to the plaintiff seeking documents and information from an independent third party, so as to enable him to bring his claim.  The determinative question in any application for Norwich Pharmacal relief is whether justice requires the requested disclosure to be ordered.

In Norwich Pharmacal, the House of Lords reaffirmed what is termed the "mere witness" rule, which means that you cannot bring proceedings against an innocent third party purely for the purpose of obtaining information which you wish to use in proceedings against another.  Procedures exist which enable you to subpoena that innocent third party as a witness, after litigation has been commenced and in the run-up to trial.

The mere witness rule is based on the assumption that the plaintiff is able to bring a claim and that there will be a trial in due course, but in some cases the plaintiff needs to obtain information from a third party before they are in a position to make a legal claim.  The House of Lords considered that, where the information was needed to enable proceedings to be brought and where the person against whom disclosure of this information was sought had themselves, albeit innocently, been caught up in the wrongful acts of another so as to facilitate the wrongdoing, then in such circumstances it would be appropriate to make an order requiring the third party to divulge the information. 

The House of Lords further commented that it did not matter that a third party considered some of the information to be confidential.  It held that the public interest in confidentiality was outweighed by the interests of justice in disclosure for the purpose of the plaintiff's intended proceedings.

The standard of proof to which the court must be satisfied that a third party (such as a bank) has become innocently mixed up in alleged wrongdoing, such that it owes the plaintiff a duty of disclosure, has varied from case to case over the years.  Relatively recently, in Macdoel Investments v The Federal Republic of Brazil [2007] JCA 069, the Jersey Court of Appeal (whose decisions are usually highly persuasive in Guernsey) considered that the evidential threshold for innocent involvement should be such that a "reasonable suspicion" will suffice, provided there is prima facie evidence of wrongdoing and a "real prospect" that information held by the third party would assist the plaintiff in seeking redress.  Macdoel was applied with some reservations by the Guernsey Royal Court in Garnet v BNP Paribas, Government of Indonesia Intervening (2007).

The required disclosure under a Norwich Pharmacal order may take any form.  Usually, it takes the form of the production of documents, but it may also include providing affidavits or attending court to give oral evidence.

It is possible to obtain Norwich Pharmacal relief on an ex parte basis and, in appropriate cases, an order can include restrictions on communication, or "gagging orders".  Gagging orders, which restrain the third party from revealing the existence of the disclosure order to the ultimate defendant, may be vital.  This is especially so in cases of alleged fraud, for example, where unless there is total secrecy there is a risk that the defendant will have time to dissipate their assets and place them beyond the reach of the plaintiff.  The Royal Court requires convincing evidence to justify a gagging order, and in almost all cases it will be limited in time.

Bankers Trust
A similar approach to Norwich Pharmacal relief is to seek a Bankers Trust order (named after the English case Bankers Trust Co. v Shapira [1980] 1 WLR 1274).  The Bankers Trust order is essentially a variation of the Norwich Pharmacal order and may be used in tracing assets.  It is an order that requires parties who are not defendants to a substantive action to make full disclosure of facts which would enable funds described as the property of the plaintiff to be located and protected from dissipation before the action is concluded.  Again, it is possible to obtain such orders on a without notice basis and subject to gagging orders.

A Bankers Trust order should not be confused with Norwich Pharmacal relief.  Whilst there is undoubtedly some overlap between the two, they do remain distinct from one another. Norwich Pharmacal relief is geared towards disclosure of information in order to identify wrongdoers or evidence of wrongdoing, whereas Bankers Trust orders are aimed more specifically at protecting a plaintiff's proprietary interest in property which is subject to a legal claim.

Pre-action disclosure
The general rule in Guernsey is that pre-action disclosure is only available in personal injury cases.  Otherwise, standard disclosure in civil actions is only obtainable against persons properly joined as parties to an action.  This is one of the reasons why Norwich Pharmacal relief can be such a valuable remedy.

International judicial assistance
Whilst it is a valuable and flexible remedy, Norwich Pharmacal relief is subject to the usual limitations on jurisdiction.  If the Royal Court is unable to grant the relief sought because it lacks jurisdiction, it may be appropriate to seek the assistance of a foreign court in collecting evidence.  Similarly, overseas courts are able to (and regularly do) address letters of request to the Royal Court, seeking Guernsey's assistance in collecting evidence for use in foreign proceedings.  Guernsey is party to the Hague Evidence Convention and the Evidence (Proceedings in Other Jurisdictions) Act 1975 has been extended to the Bailiwick.

Typically, requests for international judicial assistance are directed at obtaining documents and answers to interrogatories, but it is also possible to request and obtain an opportunity to take live evidence from a witness, effectively on deposition.  In exceptional cases, where the overseas court specifically requests this, it is even possible for foreign lawyers to appear at the hearing which is fixed for these purposes, in order to ask questions of the witness and/or raise any objections, either under Guernsey or the relevant foreign law.  The Hague Evidence Convention contains a number of important formal requirements for letters of request, and Guernsey advocates can help both with the necessary drafting and with transmission and presentation of the resulting documents to the Royal Court.

Bankers' Books Evidence (Guernsey) Law, 1954
Finally, another tool which may allow a party to inspect and copy entries in Guernsey or Alderney bankers' books is the Bankers' Books Evidence (Guernsey) Law, 1954 (as amended). When considering any application pursued in reliance on this Law, the Royal Court will weigh the interests of maintaining confidentiality in banking matters against the public interest in achieving justice.

Summary
In summary, plaintiffs now have at their disposal a variety of remedies for obtaining third party disclosure, which have been adapted and developed over the years.  These remedies will doubtless continue to expand and develop as the legal, social and economic climate in which Guernsey operates continues to evolve.