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EUI Ltd v UK Vodaphone Ltd: a Norwich Pharmacal reminder

EUI Ltd v UK Vodaphone Ltd: a Norwich Pharmacal reminder

Overview

On 24 November 2021, the Court of Appeal provided a clear reminder of the limited bounds within which the English Courts will make an order for third party disclosure pursuant to a Norwich Pharmacal application.

In EUI Ltd v UK Vodaphone Ltd[1], the Court of Appeal confirmed that a mobile phone service provider ("Vodaphone") was not required to disclose documents to an insurer ("EUI") that could support EUI's potential claim against an allegedly fraudulent insurance policy holder (the "Policy Holder"). The Court of Appeal emphasised the requirement that the recipient of a Norwich Pharmacal order must be more than a 'mere witness' to the alleged wrongdoing, and held that this requirement had not been met on the facts of this case.


[1] [2021] EWCA Civ 1771

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What is a Norwich Pharmacal application?

The Norwich Pharmacal principle (so-called after a case of the same name) allows a potential claimant to obtain disclosure from a third party where all of the following conditions are met:

1)   a legal wrong (whether criminal or civil) has at least arguably been carried out by a wrongdoer against the potential claimant;

2)   the disclosure sought is likely to enable the potential claimant to bring a claim against the wrongdoer; and

3)   the person against whom the disclosure application is made must be more than a 'mere witness'; they must have facilitated the wrongdoing in some way.

Given that the purpose of a Norwich Pharmacal application is for the potential claimant to obtain information that will enable it to bring a claim against the wrongdoer, such applications are often made before proceedings are issued.

Facts of the case

The Policy Holder made a claim under a home insurance policy in relation to water damage at his property. The insurance policy allowed for the Policy Holder to claim up to the full monthly rent of alternative accommodation, but this was capped at £1,000 per month if the Policy Holder stayed with relatives. Although the Policy Holder and his family initially stayed with his parents, he subsequently informed EUI that he was renting alternative accommodation owned by another relative for £1,850 per month. However, it later transpired that the accommodation was owned by his parents.

The Policy Holder initially informed EUI that his parents were in India at the point that he moved into the alternative property. He later revised this account to claim that his parents were in fact in Milton Keynes at that point and had intended to go to India, but subsequently returned to their house owing to his mother's illness.

EUI believed that the Policy Holder may have acted fraudulently and claimed an excess amount under the insurance policy. Before bringing a claim for civil fraud, EUI sought disclosure from Vodaphone (the mobile phone service provider of the Policy Holder's mother) of the call records and geolocation data on that phone, which would show the true location of the phone during the period in question.

EUI argued that Vodaphone was not a mere witness to the potential fraud on the grounds that mobile phones have enabled people to live in one place but conduct their affairs as if they were somewhere else.

Holding

In a short judgment, the Court of Appeal held that Vodaphone was not required to provide the disclosure sought by EUI.

The Court of Appeal accepted that Vodaphone may hold data that showed the whereabouts of the Policy Holder's parents during the relevant period (and may therefore be relevant to the underlying claim against the Policy Holder), but was unpersuaded that Vodaphone was more than a mere witness.  The fact that an individual could use a mobile phone to pretend that they were located somewhere that they were not did not implicate Vodaphone in the wrongdoing.  Indeed, Vodaphone's position was no different to that of anyone else who may be able to provide evidence to the claim (including, for example, the neighbours to the rented property).

The Court of Appeal further observed that EUI likely held sufficient information to bring proceedings without needing the additional disclosure from Vodaphone, including the fact that the Policy Holder had changed his account of the whereabouts of his mother during the relevant period.

In making its ruling, the Court of Appeal indicated that, if EUI proceeded to bring its claim, the Court may grant an order for third party disclosure under Part 31.17 of the Civil Procedure Rules, provided that disclosure of the documentation held by Vodaphone was necessary to fairly dispose of the claim against the Policy Holder. (Applications under Part 31.17 can only be made once underlying legal proceedings have been commenced).

Comment

This case provides a helpful reminder of the limits of the Norwich Pharmacal principle and the relative stringency of the mere witness rule. This point is further amplified by the fact that Vodaphone itself did not oppose the application in this case.

It also helps to illustrate differences between alternative routes to third party disclosure and demonstrates that applications brought under the Norwich Pharmacal principle face the significant additional hurdle of the 'mere witness' rule that is not present in other types of third party disclosure application. It may be preferable (where possible) for a potential claimant to issue formal proceedings before seeking third party disclosure, such that the potential claimant can rely on the provisions of Part 31.17 without needing to avail themselves to the Norwich Pharmacal principle.

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