Evidencing Fraud – What sources of information can be targeted with a third party disclosure order?

A claimant pursuing a claim in fraud needs to rely on cogent evidence in order to make good its case. In many fraud claims, the fraud is perpetrated surreptitiously and the identity of the fraudsters, the identities of those with whom the fraudsters were in conspiracy and the precise nature of the fraud can be difficult to establish by relying solely on information or documents in the claimant's control, or documents disclosed by the defendants. This is where the Court's power to grant third party disclosure orders against third parties (also known as Norwich Pharmacal orders – "NPOs") that hold potentially important information in relation to the fraud can be invaluable.

This article discusses how NPOs can be used and the types of institutions that can be targeted that may hold key information.

How do NPOs work?

An NPO requires a respondent to disclose certain documents or information to the applicant where that third party has been inadvertently 'mixed up' in the wrongdoing. An NPO can be made in the context of existing proceedings or as standalone proceedings. Often, respondents to an NPO application will take a neutral position and will not oppose the making of a Court order requiring them to disclose documents.

The information sought through an NPO can be used for three key purposes in a fraud claim:

• Identifying the wrongdoers
• Identifying the full nature of the wrongdoing
• Tracing assets

The main limitation on NPOs is that they cannot typically be obtained if the respondent, and the information or documents sought, are outside of the English jurisdiction (although the Court may make an NPO in circumstances where the respondent has a branch in the jurisdiction).

Sources of information

In the digital age, it is very difficult to commit fraud without leaving some sort of digital footprint. Indeed, many frauds rely heavily on the use of electronic communications and electronic money transfers. This information can potentially be requisitioned by a claimant in a fraud claim in order to make good its case.

The following are often relevant targets for NPOs in fraud claims, all of which Fieldfisher has obtained successful NPOs against in the past.

A. Banks and electronic money service providers

One of the most useful sources of information is banks, to or through which the proceeds of fraud have flowed. An NPO can be used to obtain not only the bank statements of a particular account in order to trace the destinations of monies, but also KYC/AML information held by the bank in relation to particular accounts. This information can be particularly helpful in identifying the wrongdoer, which in turn can enable steps to be taken to freeze assets and recover funds.

Such information can be sought not only from traditional banks, but also from electronic money service institutions, such as those that operate online wallets and foreign exchange services. Recently, NPOs were made against a Bitcoin exchange to disclose the identities of those holding Bitcoin on the blockchain.

B. Mobile telephone providers

If mobile phones were used in perpetrating a fraud, and if a record of the mobile number is retained, this can be used to obtain a wealth of information from mobile telephone service providers. Once the claimant has determined the relevant provider (which is apparent from the first few digits of a UK mobile number), the following information can be sought:

• Location where the SIM card was purchased and when
• Bank card used to purchase the SIM card
• Call data, including dates, times and duration of calls, and the recipient number
• Call location by reference to the cell tower through which the calls were broadcast
• SMS messages - dates and times sent/received, as well the number of the sender/recipient

Mobile telephone information can be particularly important in conspiracy claims where strong evidence is required to demonstrate that several individuals were acting in collusion. The existence of calls and SMS messages between individuals can be key in these circumstances.

Location data also enables a claimant to pinpoint where calls were made. In a recent case where Fieldfisher was acting for the claimant in a multi-million pound fraud, we were able to demonstrate that the telephone call that precipitated the fraud was made within 90m of the office of the defendant.

C. Email service providers

Provided that the email service provider is located in (or has a branch in) England and Wales, a claimant can use an NPO to obtain all emails from a particular email address, in addition to the information used by the creator of the account when it signed up to the provider.

D. Law enforcement

It is not unusual for civil fraud claims against defendants to intersect with criminal proceedings against the same defendants. When this happens, law enforcement institutions, such as the police, may hold relevant information in relation to the defendants that can be obtained with an NPO. Law enforcement institutions may resist an NPO application if disclosure could prejudice an ongoing case or investigation, particularly before individual(s) have been charged.

E. Websites

Where a fraud has been perpetrated using a web presence, information can potentially be obtained from the domain host, including the information used to pay for the website and any information provided to the domain host.

F. Asset dealers

In instances where monies and assets have been misappropriated, anyone dealing with those assets may be made subject to an NPO in order to provide information about the transference and location of those assets, and any information held regarding the identities of those who bought or sold the assets. This can include auction houses, art dealerships, vehicle dealerships and property dealerships.