New CPR gateway to help unmask fraudsters outside of England and Wales

Out-Law Analysis | 29 Sep 2022 | 2:11 pm | 3 min. read

An update to the Civil Procedure Rules (CPRs) in England and Wales has handed fraud litigators a new key to help unmask fraudsters and trace misappropriated assets.

The 149th Practice Direction (PD) update, due to take effect from 1 October 2022, will extend the current 21 “jurisdictional gateways” in CPR PD 6B through which the English courts may give permission for a claim to be served outside the jurisdiction of England and Wales.

With the assent of a court, a claimant will be able to serve an application on an overseas respondent for the disclosure of information about the identity of a potential defendant – or what has become of a claimant’s property – where the information is required for proceedings that have already commenced or are intended to be commenced in England and Wales.

The courts have been carefully considering the need to assist parties in obtaining information from non-parties in circumstances where assets have been removed from the jurisdiction. The issue is becoming ever more common as complicated frauds, cross-border disputes and cryptoassets change the jurisdictional landscape.

Disclosure orders

Norwich Pharmacal orders (NPOs) and Bankers Trust orders are disclosure orders that are usually sought by claimants seeking to help identify a wrongdoer or to trace assets by using information from a third party that has been innocently mixed up in wrongdoing. Banks, as well as internet service providers and website operators, are common respondents to these types of order. The information disclosed as a result of the order can then be used to bring a claim against the wrongdoer.

Herring Andrew

Andrew Herring

Partner

The new gateway will give victims and fraud litigators additional firepower in helping to unmask fraudsters responsible for fraudulent transactions, gather information on misappropriated assets and give them extra-territorial scope

While NPOs and Bankers Trust orders can be used to seek information from third parties in England and Wales, it has traditionally been difficult to obtain this type of information from parties outside of the jurisdiction – an issue that is compounded by conflicting case law on the point. In some instances, courts have not been satisfied that the current gateways included in PD 6B give them the relevant jurisdiction over entities outside of England and Wales. This uncertainty has led to questions over whether an NPO application can be properly served out of the jurisdiction.

The new gateway

Victims of fraud will now be able to use NPOs and Bankers Trust orders with greater jurisdictional reach through the new gateway, allowing them to make a claim or application for disclosure in order obtain information from entities outside England and Wales to assist them in bringing further action in the English courts.

The new gateway will give victims and fraud litigators additional firepower in helping to unmask fraudsters responsible for fraudulent transactions, gather information on misappropriated assets and give them extra-territorial scope. This new gateway for third party information will be of particular use in traditional international fraud cases – as well as in ever-evolving decentralised cryptoasset and blockchain transactions, where the importance of speed in tracing allegedly misappropriated assets is key.

The addition of the new gateway is another step in making English law and courts the law and forum of choice for borderless blockchain technology, as has been the hope of the Master of Rolls, Sir Geoffrey Vos (5-page / 175KB PDF).

While this development is good news, NPOs and Bankers Trust orders are still relatively draconian remedies with a number of requirements to be satisfied. Because of this, court applications need to be navigated with care to achieve a successful outcome, and therefore require experienced and specialist legal advice.

Other changes to the PD 6B jurisdictional gateways

There are several other gateway changes to PD 6B included in the 149th PD update, including the expansion of the gateways for claims for breach of confidence and misuse of private information. New wording will allow a claimant, with the permission of the court, to serve outside of England and Wales a claim for unlawfully causing or assisting in a breach of confidence or misuse of private information, where the obligation or right in question arose in the jurisdiction of, or is governed by the law of, England and Wales; or the detriment was suffered or will be suffered here; or the act which caused such detriment was committed or is likely to be committed here.

A new gateway is also being added to deal with claims for contempt of court where the person alleged to be in contempt is outside of the jurisdiction.

Co-written by Raam Hargun of Pinsent Masons.

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