Norwich Pharmacal and Bankers Trust orders: a seismic shift?
Ashley Pratt and Philippe Kuhn assess the introduction of gateway (25) in combatting international fraud and asset tracing claims
To great acclaim, very substantial revisions of the gateways for service out of the jurisdiction under Practice Direction 6B, paragraph 3.1 entered into force on 1 October 2022. These include new gateways concerning branch, agency or establishment arrangements (gateway 1A), claims for unlawfully causing or assisting in a breach of contract, fiduciary duty or trust (gateways 8A, 15A and 15C) and contempt of court applications (gateway 24).
While we join the chorus of practitioners who have welcomed this reform, we consider the advent of this new gateway and others introduced in the current round of amendments, forms part of a wider shift in jurisdiction disputes.
We start with the wording of gateway (25), which provides as follows:
Information orders against non-parties
“(25) A claim or application is made for disclosure in order to obtain information—
(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.”
The first part of the gateway is relatively broad, covering both disclosure applications concerned with the identity of a defendant or a potential defendant and property and its dissipation. It is the latter part of the gateway that brings home the point that a clear and substantial jurisdictional connection to England is required. The opening words “for the purpose of proceedings already commenced” in England highlight the simplest route for an applicant wishing to serve out, for example, a Norwich Pharmacal order would be to point to existing English proceedings which have been served as of right or with the necessary permission to serve out. In other words, substantive proceedings in which the English courts have already been satisfied to the threshold standard as to the issue of jurisdiction.
The further words “intended to be commenced” expand the concept of English proceedings to which a Norwich Pharmacal or other third-party disclosure order may relate to by also covering intended proceedings. Indeed, at least in international civil fraud and tracing claims this pre-action scenario is more common.
As we understand the new gateway, an English judge would need to be satisfied that the substantive proceedings in England would at least pass the service out stage when considering service out of a Norwich Pharmacal or other third-party disclosure order. This means where a claimant intends to proceed against non-English defendants in the English courts and to seek ancillary Norwich Pharmacal relief, there has to be a robust case on jurisdiction for the substantive claim. The words “subject to the content of the information received” must also be firmly borne in mind. They indicate the need to establish a clear causal connection between Norwich Pharmacal or other disclosure order and the claimant’s ability to properly issue substantive proceedings in England.
Having considered the travaux préparatoires, specifically the paper produced by the sub-committee of the Civil Procedure Rules Committee, it is clear the Rules Committee was persuaded of the utility of moving away from an ad hoc and at points inconsistent approach in the case law, in particular in the context of crypto fraud tracing claims.
In brief summary, a distinction had emerged as a matter of practice at High Court level between Bankers Trust orders (which were accepted in some cases to have a more proprietary character in the sense of assisting in safeguarding trust property) and Norwich Pharmacal orders (which were harder to serve out of the jurisdiction given the adverse decision in AB Bank Ltd v Abu Dhabi Commercial Bank PJSC  EWHC 2082 (Comm)).
A clear jurisdictional gateway
Illustrative cases dealing with Bankers Trust orders more liberally than Norwich Pharmacal orders, usually in conjunction with worldwide freezing orders, are CMOC v Persons Unknown  EWHC 3599 (Comm) and the well-known crypto fraud case of Ion Science Ltd v Persons Unknown (unreported, 21 December 2020, Commercial Court).
Now there is a clear jurisdictional gateway, most Norwich Pharmacal, Bankers Trust and other third-party disclosure orders will be encompassed within the wording of gateway (25). That said, the wording of the gateway is not confined to one type of order, so there may be questions as to whether certain Norwich Pharmacal and other third-party disclosure orders not specifically concerned with identity or property in the defined sense can be served out.
This is where the interesting very recent decision of the Court of Appeal in Gorbachev v Guriev  EWCA Civ 1270 may have enduring relevance. In that case, the Court of Appeal was content to allow service out of a conventional third-party disclosure order under the enactment gateway (20). The core reasoning was there was no exorbitant exercise of jurisdiction by the English courts where the requested disclosure was located in the jurisdiction, even if the respondent was outside the jurisdiction.
For third party disclosure orders not concerned with identity or property as per the new gateway (25), parties will continue to need to find another gateway and service out of such a disclosure order may only be possible if the documents are held within the jurisdiction (where the respondent is overseas).
The Court of Appeal left open the question of whether it had jurisdiction to grant permission for an order against a third party where the requested disclosure is located outside the jurisdiction.
Leaving aside what are likely to be unusual cases falling outside the new gateway, the more pressing debate, in our view, is whether there will now be more costly and resource-intensive debates about forum conveniens, in addition to the underlying merits of the substantive claim.
That seems likely given the overarching trend of increasing the number of gateways at a time when establishing jurisdiction has become greatly more discretionary given the end of the Brussels I recast era (save in legacy cases).
A recent illustration of this was Abu Dhabi Commercial Bank PJSC v Shetty  EWHC 529 (Comm) where the gateway issue was marginal and forum conveniens was the overwhelming focus of the decision on jurisdiction. The Commercial Court declined jurisdiction over $1.6bn civil fraud claim. The point is also apparent in the post-Brownlie era as far as the important tort gateway (9) is concerned.
In the cyber-fraud context, these are typically foreign banks, exchanges (including cryptocurrency exchanges) and corporate services providers.
To make that jurisdiction effective, given the usually rapid dissipation of the proceeds of a fraud, it will often also be necessary to seek alternative service under CPR 6.15 and/or CPR 6.27, such as by WhatsApp, Facebook or text message. Such orders are an increasingly important part of the High Court’s toolkit in cases of this kind. However, the relief is available in all classes of cases, not only cases of alleged fraud.
The English courts of course do not have an enforcement jurisdiction overseas, so compliance with orders of the High Court depend on the reputation and standing of the English courts and London as a global financial centre.
The more established the target of the Norwich Pharmacal or Bankers Trust order, the more likely they will comply provided the application is properly prepared and the costs of compliance are met by the applicant.
This also reduces the risk of contentious ‘return hearings’ challenging the service out of such orders. The nature of the relief is such that we anticipate jurisdiction disputes to be less likely than with service out of substantive fraud claims.
One potential future development is fresh bilateral arrangements for the reciprocal enforcement of disclosure orders between the UK and Commonwealth jurisdictions (including major offshore hubs like the BVI and Cayman Islands and a range of other important jurisdictions like Singapore, Australia and Canada).
The current regime is limited to final money judgments. Another matter for future consideration is the extent to which the growing disclosure powers of the English courts begin to rival the well-known Section 1782 jurisdiction of the US courts.
For now, the clear remaining difference is English disclosure has to be sought in aid of English proceedings as far as Norwich Pharmacal and Bankers Trust orders are concerned, but the statutory jurisdiction under section 25 of the Civil Jurisdiction and Judgments Act 1982 may be invigorated by the policy considerations underpinning the new gateway (25).
Ashley Pratt is a barrister and Philippe Kuhn is a barrister at 39 Essex Chambers 39essex.com