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Obtaining information from third parties mixed up in the wrongdoing of others: who pays the cost?

Under the well-known Norwich Pharmacal principles, an order may be made by the court for the disclosure of information by third parties relating to the wrongdoing of others against the applicant, including the identity of the wrongdoer, if the applicant can establish: (1) good grounds for suspecting that it was the victim of wrongdoing; (2) necessity for information sought in terms of both (i) a legitimate purpose and (ii) a proportionate request; and (3) the respondent is “mixed up” in the wrongdoing, in the sense of being more than a mere witness. 

If the applicant succeeds in obtaining such an order, who should pay the costs of the application?

The general rule is that the applicant should pay the costs, both its own and those of the third party (which can later be recovered from the wrongdoers if the claim against them succeeds). There may be cases which justify departure from the general rule, but these will not include: (a) where the third party had a genuine doubt whether the applicant was entitled to the information sought; (b) the third party was under a legal obligation (contractual or common law) not to reveal the information, or there was reasonable doubt as to this; (c) voluntary disclosure might expose the third party to proceedings; (d) the third party might suffer damage by voluntary disclosure; or (e) the disclosure might adversely affect the legitimate interests of others.

These principles fell to be considered by the Cayman Islands Grand Court in the recent (7 March 2019) Discover Investment Company v Vietnam Holding Asset Management Limited. In applications in the Cayman Islands, the provisions of the Confidential Information Disclosure Law (2016), which provides defences to, and a statutory mechanism for court permission for, disclosure of confidential information will also come into play (the making of the NPO will itself provide such a defence).

Put shortly, the third party will only be ordered to pay the costs of the application if it has acted unreasonably in not acceding to, or in seeking to set aside, an NPO order, or if the third party is not innocent of any alleged wrongdoing.

Obtaining information from third parties mixed up in the wrongdoing of others: who pays the cost?

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