Norwich Pharmacal Relief In The Offshore World: The Latest Developments In Cayman And The BVI

In recent years, the offshore courts have shown a greater willingness to provide assistance to claimants or potential claimants by ordering third parties to disclose information about wrongdoing. Norwich Pharmacal relief, the equitable principle by which the courts make orders for discovery against innocent third parties who are "mixed up" in the wrongdoing of others, has been used by common law courts for decades. It has become an increasingly attractive tool in the offshore world to assist with tracing assets and enforcing judgments or arbitral awards, particularly against registered agents who hold potentially valuable information about entities incorporated offshore.

History

Norwich Pharmacal v Customs & Excise1 was decided by the House of Lords some 45 years ago. The leading speech of Lord Reid in that case has been referred to in numerous decisions as the starting point from which the jurisdiction has developed. In particular:

"... if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrongdoing he may incur no personal liability but comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers... justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration."

Traditionally, the three conditions to be satisfied for the court to exercise the power to order Norwich Pharmacal relief were:

A wrong must have been carried out, or arguably carried out, by an ultimate wrongdoer; There must be a need to enable action to be brought against the ultimate wrongdoer; and The person against whom the order is sought must: (a) be mixed up in so as to have facilitated the wrongdoing; and (b) be able or likely to be able to provide the information necessary to enable the ultimate wrongdoer to be sued. These principles have developed incrementally and there have been some inconsistencies and differences in respect of their application between courts in different jurisdictions. In general, however, and particularly in more recent times, the jurisdiction has been described in broader and more flexible terms.

In Ashworth Hospital2, it was said "new situations are inevitably going to arise where it will be appropriate for the jurisdiction to be exercised where it has not been exercised previously. The limits which applied to its use in its infancy should not be allowed to stultify its use now that it has become a valuable and mature remedy."

Developments to the traditional principles were summarised in the decision, Mitsui v Nexen Petroleum3, where the English courts clarified that:

The jurisdiction is not confined to circumstances where there has been tortious wrongdoing; it is also available...