Norwich Pharmacal Orders, Seal-and-Gag Orders and Getting It Right

Applications for disclosure orders and seal-and-gag orders against third parties are important for many claimants, but correct procedure must be applied in the interests of justice. The award-winning commercial lawyers at ParrisWhittaker advise businesses organisations on all types of disclosure disputes, including those involving third parties.

In a recent ruling¹, the BVI commercial court (which hears a significant number of NPO applications every year) set out invaluable guidance on the correct process for seeking such orders. Most NPO applications are made against corporate service providers supplying registered agency services for BVI-incorporated companies.

What is a Norwich Pharmacal Order?

NPOs are a specific type of disclosure order made against a non-party in court proceedings. The purpose of the order is to require an individual or organisation to disclose documents and information that is believed could help identify someone suspected of wrongdoing, such as fraud or other criminal activity.

Importantly, the order is made against an innocent party and the courts will not grant an NPO without clear justification for doing so.

What happened in this case?

Several issues arose out of an application for an NPO by a judgment creditor in relation to an outstanding foreign money judgment. The applicant succeeded in securing an NPO – as well as a ‘seal-and-gag’ order – against two BVI-registered agents (professional corporate service providers).

A seal-and-gag order (often sought alongside an NPO) prohibits the respondent from communicating anything about an application to others, except for, eg their lawyers. The purpose is to avoid tipping off suspected wrongdoers which could lead, for instance, to evidence disappearing or assets being dissipated.

There was nothing unusual about the applications made in this case, or the types of documents sought under the NPO, but the applications were made ex parte (without notice) and at the same time. It was the simultaneous nature of the applications that concerned the judge.

Guidance

In granting the orders, the judge reiterated the correct approach where both an NPO and a seal-and-gag order are sought.

The only time it is appropriate to seek an NPO ex parte is in cases of urgency – when there is literally no time to give notice to the respondent. Such cases will be rare and exceptional and otherwise, it is not justified. The court then gave this guidance:

• A combined application for both orders at the same time are appropriate only in exceptional circumstances, eg where time is of the essence
• An applicant should first apply ex parte for a seal-and-gag order, which may be determined on the papers or at a hearing
• Following service of the gagging order, an application for the NPO can then be made on notice to the respondent

Such an approach upholds and applies the fundamental principle of natural justice, particularly that a respondent should have a ‘right of reply’ unless there are exceptional reasons to the contrary.

How can we help?

Anyone seeking an NPO or resisting an application should take urgent advice from commercial lawyers experienced in disclosure orders. ParrisWhittaker has an outstanding reputation in securing all court orders, including NPOs, as well as defending applications and protecting the respondent’s interests.

For expert legal advice contact Jacy Whittaker on +1.242.352.6112 or email him at info@parriswhittaker.com