Victims of Fraud Series Part 2: Using information orders to identify a fraudster and trace assets

One of the most alarming aspects of falling victim to fraud is knowing where to start. It is very common for a victim to know almost nothing about what has happened, except for the fact that they have been scammed and the assets have gone. However, there are options available even if you don’t know the identity of the fraudster and the assets have, apparently, disappeared.

Norwich Pharmacal Orders

If you are armed with the name and details of the first bank or financial institution that the assets were transferred into, you might just have the key to tracing the proceeds of the fraud and recovering the assets.

A potential claimant can apply for a type of disclosure order called a Norwich Pharmacal order (NPO), which allows information to be obtained from third parties who are involved or “mixed up” in the wrongdoing. This can be very helpful in identifying the proper defendant to a claim or in obtaining enough information to plead a claim against a fraudster, and tracing the assets.

In fraud cases, NPOs are often sought against the banks that have received the proceeds of the fraud and/or been used to dissipate the proceeds. A NPO will usually order the financial institution to give the victim information about a third party’s bank account, including bank statements for a specified period. That information can then be used to identify the owner of the account and/or inform the applicant about other bank accounts that might have been used to perpetrate the fraud. In complex fraud cases it can be necessary to go back to court multiple times to seek further NPOs, as more bank accounts come to light.

In order to obtain an NPO, the victim must be able to show that there is a good arguable case that there has been wrongdoing, and that the NPO is a just and proportionate response. The respondent to a NPO must also be involved or “mixed up” in the fraud, which can include parties who are completely innocent. NPOs are a flexible and discretionary remedy that will be granted if the court decides it is necessary and proportionate in all the circumstances. They can be a key weapon in the arsenal when it comes to getting the right information to trace the proceeds of a fraud.

Bankers Trust Orders

Bankers Trust Orders (BTOs) are another type of disclosure order, used in cases where there is good evidence that the applicant’s property has been misappropriated. It requires a bank to disclose information about the whereabouts and details of the stolen assets.

Both BTOs and NPOs are usually made without notice to the fraudster and may include a “gagging order” which means that the bank is not permitted to inform the fraudster about the existence of the order for a period of time, to avoid tipping them off.

Seeking information orders in cross-border cases

In October 2022 the court rules changed in order to introduce a new ‘gateway’ for service of information orders against non-parties outside of the jurisdiction. It means that there is now a specific provision in the rules allowing an applicant to serve a disclosure order on a foreign entity, provided the court gives permission and the applicant meets the other service criteria. This means that it is now much clearer how applicants can serve information orders on third parties overseas, which is crucial as fraud is almost always multi-jurisdictional.

Conclusion

Disclosure orders are not just available against banks, although financial institutions are still the most common respondents. They can be used to seek critical information from other third parties who might have been mixed up in the wrongdoing, such as telephone companies, accountants and internet service providers.

In all cases, the intention is to help you get more information about the fraudster in order to bring a claim against them and/or trace the proceeds of the fraud. NPOs and BTOs are a particularly flexible remedy that were introduced by the courts in order to give victims a greater chance of recovering assets. The more quickly you can apply for a disclosure order, the more likely you are to find that it is effective in helping you to recover your funds.