Norwich Pharmacal Orders

In the case of Santander UK Plc v Nat West Bank Plc (1) HSBC Bank PLC (2) Bank of Scotland Plc (3) Barclays Bank Plc (4) Halifax Plc (5) Nationwide Building Society (6) Northern rock Plc (7) before Mr Justice Birss in the High Court of Justice (Chancery Division) – 31/07/2014.  Mr Justice Birss’s judgment related to the many Applications to the court made by Santander UK Plc, the Applicant, for Norwich Pharmacal Orders.

In the case of Norwich Pharmacal v Commissioners of Customs & Excise (1974) the House of Lords made a decision that the court may force a person who is entangled in the wrongdoing of others, even if they did so without having any knowledge of the wrongdoing, to point out the wrongdoer. They reasoned that if a person is entangled in that wrongdoing they are more than a witness, they become a part of it. A Norwich Pharmacal Order thus gives the Claimant who is unable to ascertain the identity of that person committing the wrongdoing to then discover who that person is, in order to institute proceedings against them.

The Applications by Santander were in respect of the mistakes they made in transmitting payments, in error, to accounts held in the other Banks listed above as Respondents. Santander sought to recover the monies by asking the Banks who received the monies to let them have full details of their customers involved such as, full name, address, telephone numbers and dates of birth. However, the Banks would not reveal their customers’ details because of confidentiality issues and as such would not let Santander have the details without a court order. Subsequently, Santander made applications to the court for Norwich Pharmacal Orders under Part 23 of the Civil Procedure Rules (CPR).

The court had to decide whether Santander should receive refunds of the payments sent in error to the other Banks and consequently agree to the Norwich Pharmacal Orders being made thus allowing Santander full details of the customers involved.

The court held that:

  1. Any reasonable person who had been informed that they had mistakenly been sent monies which they were not entitled to, would have made attempts to return that money. Therefore, in this case, Santander would have a claim for unjust enrichment against the people receiving the monies from them in error and as such a Norwich Pharmacal Order would be justified in these circumstances.
  2. On the assumption that the receiving Banks had informed their customers of the errors in payments to them, which their customers had ignored, then Santander would have no other reasonable way forward than to take action against them to recover their monies.
  3. Some of the payments made were as low as £600 and others higher and therefore the Norwich Pharmacal orders should be proportionate and not be refused on the amount owing as Santander was not requesting disproportionate facts about the customers involved. The court did say that when dates of birth were requested that it should be referred to in the orders that the information is limited as to how it could be used by Santander.
  4. The court ruled that future applications be made under Part 7 or Part 8 of the CPR where a claim number would be allocated and the parties would be able from the start of the proceedings to inform the court the nature of the matter, particularly that it an uncontested matter, to enable all the aspects of the action to be dealt with by the court at an early date.

This case highlights the fact that the Banks will make payments in error by the nature of their business and as such they will require information of the person who received that money by default so that their monies can be returned to them. The court here is saying that besides making the Norwich Pharmacal Applications under Part 23 CPR, future applications should be brought under 7 or 8 of the CPR, with the court being fully informed at the outset what the claim is all about, making this a more efficient way to bring a claim against those Banks receiving payments made in error.

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