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Under the Norwich Pharmacal procedure the court can order that an individual or entity (the third party), who is not a party to court proceedings but who must be, innocently or not, mixed up in the wrongdoing, must assist a party to those proceedings (the applicant) by providing information or documents in respect of the (intended) proceedings. The information/documents might be required to enable the applicant to identify the wrongdoer, to pursue its claim and plead its case fully, to identify the full nature of the wrongdoing and/or to trace assets. In these circumstances the usual costs rule followed by the court is that the party seeking the information bears the costs and expenses incurred by the third party in complying with the order and in providing that information.
However, the High Court has recently held that there might be circumstances where such a costs order would not be just and appropriate. Those circumstances are not limited to cases where the third party was subsequently convicted of a crime or where judgment was entered against him in respect of a tort.
The question for the court when considering the appropriate order as to costs is whether the court can be satisfied that the third party has supported the wrongdoing of a defendant or sought to obstruct justice.
In the recent case of JSC BTA Bank (Claimant) v Mukhtar Ablyazov & 16 Ors (defendants) & Sergey Petrovich Tsychenko  EWHC 2019 (Comm), the court was satisfied that the third party had assisted a defendant in moving assets in breach of freezing and receivership orders and was implicated in the defendant’s wrongdoing. These matters were material changes in circumstances which justified the court exercising its discretion as to who should bear the third party’s costs. That conclusion was supported by the sliding scale of discretion that is available to the court as to the appropriate order for costs.
Such costs order was made even though the liability of the defendant had not yet been established at a trial.
The costs order to be made will, of course, depend upon the facts of each case but if the actions of a third party as respondent to a Norwich Pharmacal order support the wrongdoing of a defendant or obstruct the operation of justice, they can expect to be responsible for any costs and expenses incurred by them in complying with that order.
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