The Asset Tracer's Armoury
| Published date | 01 February 1996 |
| Pages | 373-377 |
| DOI | https://doi.org/10.1108/eb025740 |
| Date | 01 February 1996 |
| Author | Karen Houston |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 3 No. 4 — Civil Procedure and Recovery
CIVIL PROCEDURE AND RECOVERY
The Asset Tracer's Armoury
Karen Houston
From the media it is easy to believe that the law
does not provide a realistic remedy against fraud-
sters and that even if they are caught, the assets
which they have whisked away will have disap-
peared into the ether. However, the recent success
of lawyers representing the Salvation Army in
recovering monies lost in international fraud
demonstrates that the fraudsters do not always get
the upper hand. Using an effective and at times
innovative combination of ancillary orders to
compel the disclosure of evidence and information
and to freeze assets, Slaughter and May were able
to retrieve for their client not only the $8.8m
originally lost, but also $4.9m in interest and costs.
This article looks at the legal background to the
three principal types of order which were obtained
— Norwich Pharmacal1 orders, Anton Piller2
orders and Mareva3 injunctions — and draws on
the Salvation Army case to illustrate their use in
practice.
OBTAINING INFORMATION
As the phrase implies, asset tracing involves iden-
tifying where the funds of which the plaintiff has
been defrauded have gone. The key to the process
is therefore information. In the Salvation Army
case it was clear that a substantial proportion of the
$8.8m which had fraudulently been transferred out
of an account held on trust for the Army in Lux-
embourg had come to the UK and had been paid
into the client account of a firm of solicitors. It
was vital to discover where it went thereafter and
to this end a Norwich Pharmacal order was
obtained.
Although the Anton Piller order which allows
the plaintiff to enter the defendant's premises and
seize or copy relevant materials, and the Mareva
injunction which freezes the defendant's assets to
prevent him dissipating them prior to judgment
are the interlocutory remedies which spring most
readily to mind when one first thinks of asset trac-
ing, without some idea of the location of assets or
evidence, such orders may be of limited or little
value. Because surprise is the essence of the
Mareva and the Anton Piller, that information
cannot be sought from the defendant. This is
therefore where the Norwich Pharmacal order
comes into its own in that in certain circumstances
it allows information to be obtained from parties
other than the defendant (and if appropriate the
person from whom disclosure is required may be
ordered not to communicate to the defendant or
other third parties what has happened other, of
course, than for the purpose of obtaining legal
advice).4
'If through no fault of his own a person gets
mixed up in the tortious acts of others so as to
facilitate their wrongdoing he may incur no per-
sonal liability but he comes under a duty to
assist the person who has been wronged by
giving him full information and disclosing the
identity of the wrongdoer.'5
This was the general principle stated by Lord
Reid in Norwich
Pharmacal
on the basis of which
disclosure was ordered. To obtain such an order,
the plaintiff must identify the wrongdoing in ques-
tion and it must be demonstrated that the party
from whom disclosure is sought facilitated or
became mixed up in the wrongdoing. It will also
be essential to explain why it is necessary for a
Norwich Pharmacal order to be made: the juris-
diction is not an excuse for the plaintiff to go on a
'fishing expedition' in the hope that useful infor-
mation may be obtained.
Although the application will often be made
inter
partes
and the order will require the information to
be disclosed on affidavit within a certain time, in
cases of urgency ex
parte
proceedings are possible
and oral disclosure of information may be ordered.
The court will, however, only require oral dis-
closure in exceptional cases because it robs the
party against whom the order is made of an effec-
Page 373
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