High Court emphasises narrow scope of the "Norwich Pharmacal" jurisdiction

The High Court has refused to order a bank to disclose to fraud victims further customer account information, beyond documents already produced by the bank in response to an earlier Norwich Pharmacal order. In doing so, the court reiterated that the power to grant Norwich Pharmacal relief is an exceptional jurisdiction intended only for the focused disclosure of information necessary to enable a victim of wrongdoing to pursue legal redress: Hussey v Barclays Bank UK plc [2024] EWHC 2133 (Comm).

In the judge's view, none of the further information was necessary for any of the wide-ranging purposes for which the claimants sought it – which was said to include not only pursuing the fraudsters (as is typical) but also to provide the information to the police and the Financial Conduct Authority (FCA), to make regulatory complaints against the bank, and possibly to bring a civil claim against it. 

The judgment will be of interest to banks and other potential recipients of Norwich Pharmacal orders, particularly for the court's discussion of the use of such orders to provide information to public bodies. Amongst other points, it indicates that Norwich Pharmacal relief will not be justified merely because a claimant wants to provide the authorities with as much information as possible so as to encourage the authorities to take action.

Background

The claimants were beneficiaries under a deceased's estate in the US. The executor of the estate initiated payments to certain UK bank accounts, purportedly belonging the claimants. However, those transactions were said to have been fraudulently procured, in that the accounts were not those of the claimants. In respect of three of the claimants, payments were made to accounts at the defendant bank, which was able to return some but not all of the funds when the fraud was uncovered. (For the two other claimants the payments were made to a different bank, which was able to return all of those monies).

In 2023, the claimants obtained from the High Court (unopposed by the bank) a Norwich Pharmacal order requiring the bank to produce various information regarding the accounts, including details of the named account holders who were suspected to be involved in the fraud ("the 2023 Order"). As is standard, the claimants provided an undertaking not to use the produced documents for any collateral purpose.

Following the bank's production of documents, the claimants commenced the present proceedings seeking:

• release from the collateral use undertaking, to enable them to share the produced documents with the FCA and police, to enable the authorities to take any necessary action; and
• further Norwich Pharmacal orders, requiring additional information (including documents it asserted should have been produced under the 2023 Order).

The claim form alleged that the bank bore some blame for the losses, including suggestions of negligence and failure to adhere to anti-money laundering (AML) and "Know Your Client" (KYC) regulatory obligations. The claimants asserted that the further information sought was needed to enable them to make a complaint against the bank to the Financial Ombudsman Service, and they sought a referral to the FCA. It also stated that they "may wish to pursue a claim" against the bank or any other involved parties.

Decision

The High Court (Mr Nigel Cooper KC):

• granted (unopposed) the release from the collateral use undertaking as against the three applicants (but not the other two claimants, given that they did not appear to have any potential claim for losses); but  
• refused to grant any further Norwich Pharmacal relief.  

The judge outlined the well established requirements for the grant of a Norwich Pharmacal order, as summarised in Collier v Bennett [2020] EWHC 1884 (QB), being:

1. a good arguable case that a form of legally recognised wrong has been committed against the claimant;
2. the respondent was mixed up in, so as to have facilitated, the wrongdoing;
3. the respondent is likely to be able to provide the information or documents necessary to enable the ultimate wrongdoer to be pursued; and
4. if those circumstances are met, the court must then be satisfied that ordering disclosure is an appropriate and proportionate response in all circumstances, bearing in mind the exceptional but flexible nature of the jurisdiction.

The judge also highlighted and endorsed the following often-quoted observation in Collier v Bennett:

“The Norwich Pharmacal jurisdiction remains an exceptional jurisdiction with a narrow scope. The court will not permit the jurisdiction to be used for wide ranging disclosure or gathering of evidence, as opposed to focused disclosure of necessary information.”
 

Arguable case

It was accepted that the claimants had a good arguable case that the fraud was committed, and therefore that there may be a claim against the potential fraudsters (though probably not by the two claimants who had received their money back).

As to a possible claim against the bank, the judge considered it "almost certainly correct that there is no good arguable case against it", on the basis that the bank owed no duty of care to third parties, and that the alleged AML/KYC  failures, even if established, would not give rise to a cause of action under the relevant regulations nor an assumption of responsibility to the claimants for the purposes of a negligence claim.

Nevertheless, the judge stated that if he were otherwise persuaded to grant the order and was concerned only with the question of a good arguable case, he would be reluctant to refuse the order on this basis alone.

Necessity

As the bank accepted that it met the "mixed up in" condition, and was likely to be in possession of at least some of the information sought, the key question for the court in this case was whether disclosure of the additional documents was necessary to enable a wrongdoer to be pursued.

The judge emphasised that, in approaching the issue of necessity, it was important to keep in mind that a Norwich Pharmacal order is an exceptional jurisdiction and any disclosure ordered should be confined narrowly. He relied on ORB v Fiddler [2016] EWHC 361 and AQR Capital v LME [2022] EWHC 3313 as authority that documents sought under a Norwich Pharmacal order must be necessary for the particular proceedings that the claimant seeks the documents to support.

In the case of any documents that were sought primarily in order to provide them to public bodies such as the FCA or the police, the court needed "to look critically as to whether or not it is an appropriate use of the Norwich Pharmacal jurisdiction to make documents available for that purpose", particularly when applying the test of necessity.

In that regard, the judge noted that the bank had itself already reported the potential frauds to the relevant authorities and that the FCA had requested a review of the KYC / AML issues. Similarly, the claimants had already pursued a complaint to the Financial Ombudsman Service, who had concluded that it had no jurisdiction over some aspects of the complaint and rejected the rest. The bank also relied on the fact that each of the police, the FCA and the Financial Ombudsman Service have their own powers to compel the production of documents.

The judge proceeded to consider the question of necessity in respect of each category of documents sought by the claimant.

1. Compliance with the 2023 Order: bank "statements"

The 2023 Order required "bank statements" for each of the relevant accounts. The claimants objected that, for one of the accounts, the documents provided were not conventional style bank statements on letterhead, in the form that would normally be provided to an account holder, but rather a printed ledger of transactions.

The judge dismissed that complaint. Although the documents provided were not in the typical form (and there was no evidence as to the reason for that), they provided the claimants with the information they needed. The missing letterhead and footer, with branch details and telephone numbers, was not information required for any of the purposes for which a Norwich Pharmacal order is properly made.

The judge did not accept the claimants' concerns that there was a heightened risk of manipulation of such ledger-style documents, or that they would hold less weight with any authorities or in any claim against the fraudster.  

2. Further Norwich Pharmacal relief

The remaining documents sought all fell outside the scope of the 2023 Order, and so required the court to consider whether they were appropriate for Norwich Pharmacal relief.

The claimants sought the following, each in relation to accounts that were the subject of the previous disclosure:

• Additional / alternative addresses of two account holders;
• Details of linked accounts;
• VAT registration information for one of the account holders; and
• Confirmation that credit reference checks had been carried out in respect of three account holders who had since been identified as having criminal records.

The judge refused to order the production of any of those documents - either because the bank had confirmed it did not hold the information or because there was no obvious link between the information and any of the potential avenues of redress the claimants had identified.

In particular, the judge did not consider the information necessary for the purposes of providing information to the police, FCA or Financial Ombudsman Service. He did not accept the claimants' submission that the more information they could provide to the authorities, the greater their chance of persuading the authorities to take notice of their complaint and pursue it. That was not a sufficient justification to grant a Norwich Pharmacal order.

Nor was the information necessary for the claimants to pursue any claim against either the alleged fraudsters or the bank.