Norwich Pharmacal relief in Guernsey: a strategic tool for asset tracing and enforcement

If your client suspects that an innocent third party may hold documents and information that could assist them with issuing legal proceedings or enforcing an existing judgment, what legal avenues exist to compel the release of this information? Particularly when pre-action disclosure is generally not available in Guernsey?

Norwich Pharmacal relief is a legal remedy that provides a jurisdiction to the Court to compel an innocent third party to disclose documents and information if they have inadvertently become involved in the suspected wrongdoing.

What is Norwich Pharmacal relief? 

Norwich Pharmacal relief serves as a powerful tool to compel production of documents and information. When an innocent party becomes inadvertently involved in the acts of a wrongdoer, and as a result holds information about the wrongdoer, the wronged party can, if certain conditions are met, obtain a court order requiring the innocent party to provide it with that information.

The legal test for Norwich Pharmacal relief

Guernsey's Lieutenant Bailiff Day laid out these principles in the Royal Court of Guernsey decision of Equatorial Guinea and these principles were endorsed by Guernsey's highest appeal court, the Privy Council, in the matters of Equatorial Guinea and Procureur of Equatorial Guinea v Royal Bank of Scotland International Logo Limited and Systems Design Limited.  

From this decision, seven key principles were established in order to test whether Norwich Pharmacal relief can be granted. 

1. The order cannot violate the "mere witness" rule, meaning that it must not be for the purpose of obtaining pre-trial discovery of what a witness may say if called at trial. 

2. The third party must be involved (in its widest sense) in the wrongdoing concerning which discovery is required. 

3. The information can be very wide in scope such as the identity of wrongdoers, details of wrongdoing or the location of assets for enforcement. For example, the records which corporate service providers or financial institutions hold, such as information relating to bank transactions or information obtained pursuant to Guernsey's anti-money laundering legislation, may be relevant.

4. The involvement of the third party does not have to be to the extent that the third party could or should be joined as a party to the substantive proceedings, as the involvement may, and usually is, wholly innocent. 

5. The party seeking the production of documents must identify the alleged wrongdoing which must be a recognised unlawful act.

6. There is no requirement that the party seeking the order has started or intends to commence civil proceedings in respect of the wrongdoing. It is sufficient if the purpose of the disclosure is to protect a legitimate interest by seeking redress (in its widest sense) or by lawful protection against further wrongdoing. 

7. The party seeking disclosure must specify the intended use of the information, and the Court has a wide discretion to limit the use of the information which is to be produced. That discretion is applied on the basis as to whether if it is “just and convenient” to order the production.

Discretion when applying for Norwich Pharmacal relief

The applicant must demonstrate that the order is "essential and necessary" or "just and convenient" to achieve justice. The Court will only grant the order if the information is indispensable and cannot be obtained by other means. 

It is sufficient for the applicant to show that they are seeking to protect a legitimate interest. This can be demonstrated where a party is seeking redress (in its widest sense) or lawful protection against further wrongdoing. For example, if there is a real risk of further dissipation of assets, which would prejudice enforcement against them by a judgment creditor.

It may also be helpful to impose a 'gagging' or confidentiality injunction as part of the relief. Without this, there is a real risk of disclosure of information to related or affected parties caught by the order, which may assist the wrongdoer in the further dissipation of assets. 

The Court typically orders the requesting party to cover the costs incurred by the respondent, which may include  costs for legal advice incurred by the order for disclosure.  

Is Norwich Pharmacal relief available in a post-judgment context in Guernsey?

There are differences in which legal test is to be applied, depending on whether the production of documents is sought either:

• before an initial judgment has been obtained, or 

• in circumstances where a judgment has been obtained in a foreign jurisdiction and the production in Guernsey is sought consequential upon the foreign order 

In a recent case in which Ogier acted, the Court acknowledged guidance from the English Court of Appeal in the decision of NML Capital Ltd v Chapman Freeborn Holdings [2013] EWCA Civ 589 that post‑judgment Norwich Pharmacal relief is available, albeit in “very particular and restricted circumstances". These are generally tied to “wilful evasion” rather than mere non‑payment of a debt. The circumstances where that may be applicable, would include a clear dissipation of assets and use of innocent intermediaries (such as a bank in an offshore jurisdiction) to place assets beyond the reach of creditors.

Although not binding, the Royal Court took comfort from Jersey authorities. 

In Macdoel Investments v Federal Republic of Brazil [2007] JCA 069, the key question was whether, in the interests of justice, the Court should order disclosure. The evidential bar is reasonable suspicion that the third party has been involved in the wrongdoing – a lower threshold than a prima facie case. The Court also stressed policy reasons for helping victims of wrongdoing, so Jersey courts are generally prepared to order disclosure where it is justified to secure redress.

In Jomair v Hourigan [2011] JRC 042, the Court drew a firm distinction between disclosure sought before and after a judgment. In a post-judgment context, the bar is much lower because the creditor has already proved its claim against the debtor and therefore the relief sought is ancillary to an existing order. The Court also confirmed it can order disclosure not only from the defendant, but also from third parties where that information will help enforce the judgment. In short, where disclosure will aid execution, the interests of justice are usually in favour of granting it.

When an intermediary, such as a bank is the target of Norwich Pharmacal relief, the Court will consider the following questions:

• has the applicant identified wrongdoing amounting to wilful evasion?

• is the target entity mixed up (even innocently) by providing facilities?

• is the order essential and necessary to progress enforcement and not obtainable by any other means?

• is the scope of the order targeted, with purpose limitations and cost undertakings to temper the intrusion on confidentiality?

Practical implications of Norwich Pharmacal relief for…

Banks

Offshore institutions should be aware that courts may compel disclosure where clients are suspected of asset concealment, even if they are innocently involved in the wrongdoing or unlawful act undertaken by a third party.

Creditors

Norwich Pharmacal relief remains a powerful tool for post-judgment enforcement, particularly in cases involving complex asset structures and cross-border transfers.

Trustees and service providers

Courts will prioritise transparency over confidentiality where justice demands it.

Conclusion

The Jersey law decision in Macdoel Investments v Federal Republic of Brazil underscores Norwich Pharmacal relief as a route of protection for the Channel Islands to preserve their status as premier offshore jurisdictions. If such relief were not available then this could have an adverse reputational effect on the Bailiwick. 

In Guernsey, where pre-action disclosure is generally unavailable, this remedy fills a critical gap in the pre-action phase and, in limited cases, in post-judgment scenarios. Combined with gagging injunctions, it empowers applicants with the ability to  pierce secrecy, trace assets, and uphold the Bailiwick’s reputation as a responsible offshore jurisdiction.

The Royal Court has granted this relief in numerous previous cases and will back serious, evidence based enforcement with robust disclosure and confidentiality tools. Applicants must meet the elevated “essential and necessary” test and respect the limits of client confidentiality through the use of undertakings. For creditors facing cross border judgment evasion, Guernsey remains a practical and principled venue for unlocking information that moves the recovery dial.

How Ogier can help

Ogier has recent experience in successfully obtaining such orders from the Guernsey Court. Please get in touch with our Guernsey Dispute Resolution team or your usual contact for more information. 

About Ogier

Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.

Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice