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Courts should resist attempts to restrict use of Norwich Pharmacal orders, says expert


A bank was within its rights to obtain information about a bank account holder who refused to repay money paid into his bank account by mistake through the use of a so-called 'Norwich Pharmacal' order (NPOs), an expert has said.

However Alan Sheeley of Pinsent Masons, the law firm behind Out-Law.com said that Master Matthews, who is the master of the High Court's Chancery division, was right to restrict the information provided to the bank to the accountholder's name and address, and not to disclose other information sought by the bank. NPOs are an "equitable" form of relief, and this relief "should not be abused" by those looking for information, the asset recovery expert said.

Sheeley was commenting after Master Matthews granted three NPO applications brought by Santander, the bank. He had been asked to reconsider the applications, which he had refused to grant in January 2014, in response to a High Court ruling that NPOs were justified in restitution cases. In his ruling, Matthews said that he was bound to grant the orders on the basis of the High Court's findings, but that he did not agree with the judge's reasoning.

Master Matthews said that disclosing information about an accountholder who had received money by mistake involved "a serious invasion of privacy and a burden on persons (banks) who have in some way become involved in the affairs of others".

"It ought therefore to be reserved for exceptional cases," he said.

"A debt or restitution claim of the kind sought to be made here does not arise out of fraudulent, dangerous or even deliberate acts of the putative defendant. For myself, I do not consider that a claim in debt or restitution of this kind is sufficiently exceptional to justify this invasion of privacy," he said.

"The only 'wrong' committed by the third party [in this case] was to refuse to pay the money back when that was demanded. Not having induced the payment, and not knowing it was coming, it was not in any legal or moral sense wrong of the third party merely to receive it ... For these reasons, which so far as I can see were not considered by the judge during argument or in his judgment, I respectfully consider that the judge's decision on the applicability of the Norwich Pharmacal jurisdiction to the facts of these cases is flawed," he said.

An NPO is a special type of disclosure order, which can be obtained from a court in very limited circumstances. It allows a victim of wrongdoing to obtain evidence and information from an innocent third party that has become mixed up in that wrongdoing, such as a bank or accountant. It can often be used without informing the person that has committed the wrong.

In this case, Santander had asked the court to force three different banks to disclose the details of accountholders who had received money by mistake. Santander had applied for NPOs in each case seeking the full name, addresses, email addresses, telephone numbers and full dates of birth of the accountholders. Master Matthews originally refused to grant the orders as the banks had not become mixed up in any "wrongdoing". As the money was paid into the accounts by mistake, there was no wrongdoing until the accountholders made the decision not to pay back the money, by which time the banks' "part in the story was over", he said.

Although he said that the High Court judge's findings required him to grant the orders sought, he would not disclose the email addresses, telephone numbers or dates of birth, he said.

"[Santander] is seeking to make a claim for recovery of a mistaken payment when it has exhausted all other possibilities," he said. "But for the launch of legal proceedings the bank needs only the name and postal address of the putative defendant ... Therefore such information cannot be justified by exigency. It is not necessary."

Civil fraud and asset recovery expert Alan Sheeley said that in order to be properly effective as a means of allowing victims of wrongdoing to obtain information, NPOs had to remain "as flexible as possible".

"Victims should be able to use these applications to enable them to bring lawful claims, whether in restitution or otherwise, against parties that have received monies wrongfully," he said.

"In an honest society, we should expect people to say that they have received monies when they are not entitled to them. If they do not act as a reasonable man would do then the law should protect the person who has been wronged, whether by mistake or otherwise; and assist them to recover what rightly belongs to them. Limiting the use of NPOs in the way suggested by Master Matthews would create an anomaly: the law in effect would not assist a wronged party in order to obtain what rightly belongs to them," he said.

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