Amendments to the Civil Procedure Rules 1998 (CPR) from 1 October 2022 mean that it should become more straightforward to seek information orders against non-parties to litigation located outside England and Wales.
This is a result of a new paragraph 3.1(25) of Practice Direction (PD) 6B, which creates a new jurisdictional gateway for service out of the jurisdiction in circumstances where:
“A claim or application is made for disclosure in order to obtain information
(a) regarding:
(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 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 New Gateway)
The New Gateway is part of a large number of changes to PD 6B (the text of these changes is available in the 149th Practice Direction Update), but this amendment is of particular note for those involved in fraud proceedings. In such proceedings, it is often particularly challenging to establish the identity of potential defendants, how a fraud has been perpetrated, and the location of misappropriated assets, especially where – as is so often the case – there are cross-border elements. Such challenges can be even greater when dealing with fraud concerning digital assets. As set out in a speech by Judge Mark Pelling QC in July 2022, the objective behind the New Gateway (referred to in his speech as Gateway 23, though it has since become 25) is, in particular, to assist victims of crypto-currency fraud in overcoming such difficulties. Seeking information orders from third parties can assist with establishing these crucial elements, and the New Gateway should benefit victims of fraud in crypto-currency fraud disputes, and more widely in fraud disputes not relating to digital assets.
Types of information orders against non-parties to which the New Gateway may apply include Norwich Pharmacal Orders (NPOs) and Bankers Trust Orders (BTOs), both of which types of relief are granted by the English court to assist with seeking information from third parties. While NPOs and BTOs can be critical tools in fraud disputes, prior to the introduction of the New Gateway, an applicant could face potential problems where the respondent, and the information or documents that the applicant sought, were outside England and Wales. This is primarily because the English courts have taken a restricted approach to granting applications for service out of the jurisdiction in such circumstances (particularly in the case of NPOs), and there has been a lack of consistency and clarity in the courts’ approach.
The New Gateway aims to resolve these issues with seeking permission to serve out applications (or Part 8 claims if proceedings have not been commenced, but for ease, we refer to both as applications) for NPOs and BTOs against such foreign third parties. Where a party wants to rely on the New Gateway, permission will still be required from the English court, including the full test for permission to serve out. However, the provision of a specific gateway for such applications removes the obstacle of identifying an appropriate gateway for serving these types of applications outside the jurisdiction, which may previously have precluded the availability of such relief. The New Gateway also aims to resolve the discrepancy between how the English courts have approached applications for service out of NPOs and BTOs, where the latter has been more available than the former.
This development can be viewed as part of wider changes to the regime for service out of the jurisdiction post-Brexit, where the court’s permission will be required more frequently than prior to Brexit. While the enforcement of information orders outside the jurisdiction may present its own set of issues, the introduction of the New Gateway should nevertheless provide welcome assistance to the process of seeking such an order. It should further bolster the attractiveness of England and Wales as a jurisdiction for commercial fraud disputes with an international component.
