Mr Justice Birss:
- This judgment relates to numerous applications made by the bank Santander for Norwich Pharmacal orders.
- In Norwich Pharmacal v Commissioners of Customs & Excise [1974] AC 133 the House of Lords decided that the court may make an order compelling a person caught up in the wrongdoing of another, even innocently, to identify the wrongdoer. That is because by being caught up in the wrongdoing the person is more than a mere witness. A Norwich Pharmacal order allows a claimant who cannot find out the identity of the wrongdoer but can identify a person caught up in the wrongdoing, to find out who to sue.
- The circumstances of these applications are explained in a witness statement of Mr Gareth Howard, Head of Operational Support of Geoban UK Ltd. Geoban is part of the Santander group and has been appointed by Santander to manage the operational side of its business.
- The applications all arise from mistakes made by Santander whereby payments had been made electronically into the wrong bank account. The payments were usually made using the Faster Payments interbank payment method but some occurred in BACS and CHAPS transfers. Typical errors include duplicate payments, the selection of an incorrect mandate and the insertion of an incorrect account number.
- In this judgment the "customer" refers to the person from whose account the mistaken payment has been made and "beneficiary" and "beneficiary bank" refer to the person whose account received the money by mistake and the bank at which that account is held.
- Although at one stage it was not clear whether the mistakes were necessarily all made by Santander itself rather than by its customers, Mr Howard's statement makes it clear that these applications do not relate to customer mistakes. The applications all and only relate to mistakes made by the bank itself.
- Mr Howard explains that the number of mistakes by the bank is very small considering the volumes of transactions made. For example in May 2014 Santander sent 8.5 million Faster Payment transfers and there were 603 Santander errors relating to those payments in the same period.
- Some of the applications relate to mistakes made in 2012 and some to later mistakes. The way Santander has dealt with this problem has developed over time. In early 2012, the way Santander dealt with errors was to send an email to the beneficiary bank asking them to contact their own customer to obtain the customer's authority for the payment to be returned. As a result of investigations and analysis by Mr Howard and his colleagues in 2012, significant changes were introduced in 2013 including a new database and staff training but the details of the changes do not matter.
- Today Santander's has a dedicated team known as the Refunds and Recoveries team who work on recovering payments sent by mistake. The current process is:
i) All customer refund requests, following an incorrect payment out, are reviewed within 24 hours of the request.
ii) In many cases the mistake has led to payment to a beneficiary with whom the customer has a family or some other relationship which means that the matter can be resolved easily and without a refund. The customer may pay the beneficiary regularly anyway.
iii) If a refund is required, this is made and paid out to the customer from an internal Santander account used for refunding bank errors.
iv) When a refund is given by Santander, the bank then sends an email to the beneficiary bank asking to return the funds into Santander's bank error refund account. The beneficiary bank does not disclose the identity of the beneficiary to Santander. The beneficiary bank takes the view that it should not do so as a result of client confidentiality.
v) Before 1st April 2014, the beneficiary bank needed the authority of its customer for the misapplied payment to be refunded. Since then the Faster Payments system has been changed and member banks may choose not to request debit authority from the beneficiary and return funds directly to Santander.
vi) Santander will chase the beneficiary bank if there is no response within 10 days and if, after a further 10 days, there is no response or the beneficiary declines to return the funds Santander contact its own customer for support.
vii) Santander's customer will sometimes cooperate if they know who has received the funds but sometimes the customer may not know who the beneficiary is. Also sometimes the customer may not be willing to help since the mistake was Santander's in the first place.
viii) If sufficient details of the beneficiary are provided then Santander will contact the beneficiary directly and seek recovery of the misapplied payment.
ix) If the details are not provided then Santander can either write off the loss or take some other step to identify the beneficiary. Santander's policy is that if the loss is less than a certain sum (which they regard as confidential) it will be written off but values more than that are transferred to the bank's solicitors to progress an application for a Norwich Pharmacal order. Mr Howard explains that Santander do not approach the court unless it has no other way of contacting the beneficiary.
x) Santander's external solicitors contact the beneficiary bank. The beneficiary bank generally adopts the position that it does not consent to nor does it oppose the making of a Norwich Pharmacal order. An application for a Norwich Pharmacal order is made to the court. If it is granted it is then served on the beneficiary bank, which then complies with the order and reveals the identity of the beneficiary. The beneficiary bank also confirms its costs of complying with the order, which are paid by Santander.
xi) A letter is sent to the beneficiary and if possible a settlement negotiated. If the beneficiary does not respond attempts may be made to trace them using enquiry agents.
xii) If no settlement is reached and the case is not worth fighting then the matter is dropped. Otherwise legal proceedings are commenced. I am told that the number of legal actions commenced is very small. There have been 3 or 4 county court actions.
- In 2013 Santander started making applications for Norwich Pharmacal orders on a substantial scale to deal with mistaken payments. So far they have made 85 applications. I am told there are likely to be a further 250 within the following year. Each application is supported by a witness statement which is supposed to set out the relevant circumstances. The applications have all been to the Chancery Division of the High Court, some to masters and some to judges.
- In February 2014 Master Bragge identified that a number of very similar Santander applications were being made before the masters as paper applications. He directed that the matter should be referred to a judge. In the same period a number of the paper applications were also being handled by judges. I received a number of them and independently came to the same conclusion as Master Bragge, that the applications raised common issues and would be best considered at a hearing. Santander welcomed this approach since from its point of view the applications were not being handled consistently. Santander does not believe there is any material difference between the applications but so far 55% have been approved and 8% have been refused while the remaining (36%) are still being considered. Moreover the approvals were not always the same since sometimes all the information sought by Santander was ordered to be provided and on other occasions some information was refused.
- There have also been administrative difficulties in dealings between Santander's solicitors and the court. There are numerous applications with the same respondent bank and so identifying an application as for example "Santander v National Westminster Bank" does not uniquely identify which application is referred to. The applications are not given claim numbers as they have been brought as CPR Part 23 applications and not as Part 7 or Part 8 claims. That is why this judgment has no case number. Some applications have been given application numbers (e.g. I/A XX of 2014) but it has not always possible to cross-reference these numbers with the applications themselves. One of Santander's suggestions is that the solicitor's reference number, which uniquely identifies each application, should be used on the headings of any orders and other formal documents.
- The matter came before me on 24th June 2014, and Ms Alexia Knight represented Santander instructed by Shoosmiths. Mr Howard's witness statement to which I have already referred, was prepared for that hearing. One of the very real problems was to work out precisely which applications were before the court. I will return to this below.
- I will take the first application which came before me. It is Santander v National Westminster Bank, solicitor's reference 218247.000805 issued on 3rd Feb 2014. It is supported by a witness statement of Alexandra Philpott. She explains that on 8th February 2012 £10,005.22 was transferred from a Santander customer account to an account at the respondent bank. Both numbers are given in Ms Philpott's statement. Santander's customer had intended Santander to make a payment but the payment had gone to an account with the wrong details. The mistake was made by Santander. Santander had refunded its customer. Ms Philpott's evidence exhibits screen prints showing the mistaken payment, the refund to the customer and the acceptance of the payment at the beneficiary bank. Santander emailed the beneficiary bank and by 20 July 2012 the beneficiary bank confirmed that they had not had a response from the beneficiary account holder. The mistaken payment has not been returned and Santander is contemplating issuing proceedings against the beneficiary account holder to recover £10,005.22. For that it needs to know the identity of the beneficiary and seeks a Norwich Pharmacal order for disclosure of the full name, address, telephone number, email address and data of birth of every account holder. Also provided with the application notice is a copy of a letter from RBS Group stating that the respondent bank neither consents nor objects to the court order.
- The second application which came before me is Santander v HSBC solicitor's reference 218247.000804 issued on 3rd Feb 2014. It is also supported by a witness statement of Alexandra Philpott. She explains that on 30th June 2012 £15,000 was transferred from a Santander customer account to an account at the respondent bank. Both numbers are given in Ms Philpott's statement. The problem was that by mistake Santander caused the payment to be made twice. The same kinds of screen prints are provided as before to show what had happened and as before beneficiary bank confirmed that they had not had a response from the beneficiary account holder (this was on 2nd August 2012). The mistaken payment has not been returned and again Santander is contemplating issuing proceedings and seeks a Norwich Pharmacal order for disclosure of the same details as before. Also provided with the application notice is a copy of a letter from HSBC confirming that it neither consents nor opposes the application.
- In the third application before me the respondent is Nat West, the solicitor's reference is 218247.000819 and Ms Philpott explains the mistake was a payment in triplicate of £7,460 making a total mistakenly paid of £14,290. Everything else about this application is the same as the second one.
- The fourth application is against Barclays (ref 218247.000752). It is supported by a witness statement of Ms Kirsty Davie. The application relates eight entirely distinct events. Each is a mistaken payment from a Santander customer account to a beneficiary account held at Barclays but they are all distinct. The sums involved are modest: £650, £700, £780, £700 in total (two payments of £350), £622.92, £575.41, £695 and £600. The order sought relates to all eight beneficiary accounts together. Otherwise it is the same as before.
- The fifth application is against Nationwide (solicitor's ref 218247.000551). It relates to a mistaken payment of £1,000. It is the same as the others.
- The sixth application was against Halifax Plc or Bank of Scotland Plc (solicitor's ref 209520.000257). It relates to a mistaken payment of £5,000. The confusion about the name of the respondent arose from the fact they are in the same group. This paper application was before me with the other five referred to above when I directed that a hearing take place. No doubt in part due to the confusion about the name of the respondent, while arrangements were being made to fix a hearing, a duplicate version of this same application then came before Nugee J on paper in May 2014. He adjourned the application for clarification, given the confusion about the respondent's name and other matters.
- As a further illustration of the administrative difficulties associated with these applications, on 30th June it emerged that (a) the first application before me (solicitors reference 218247.000805) had in fact come before Master Bragge on 10th February 2014 and he had made the order sought, and (b) the sixth application (solicitor's ref 209520.000257) had come before Nugee J on 30th June 2014 and he had made the orders sought.
- Also before me are four more applications which were referred by Master Bragge. They are the same as the ones above save for the following details:
i) I/A 22 of 2014. The Respondent is Barclays. Solicitor's reference is 218247.000447. It concerns nine distinct and unrelated mistaken payments ranging from £550 to £12,000 made between January and August 2012.
ii) I/A 25 of 2014. The Respondent is Northern Rock (UKAR) Plc. Solicitor's reference is 218247.000734. It concerns two distinct and unrelated mistaken payments of £540 and £600 in February and March 2012.
iii) I/A 13 of 2014. The Respondent is Barclays. Solicitor's reference is 218247.000422. It concerns a mistaken payment of £900 in March 2013.
iv) I/A 19 of 2014. The Respondent is HSBC. Solicitor's reference is 218247.000545. It concerns three distinct and unrelated mistaken payments for £700, £950 and £1,100 in March to May 2013.
- Santander's external solicitors sought to identify all the outstanding applications which were before the court and produced a bundle of them. The two bundles contained 31 applications. As a result of the ambiguities about the naming and number of these applications and the fact they are not given case numbers because they are pre-action matters, it has not been possible for the court to work out in an expeditious way where all the other applications are and gather them together. Accordingly this judgment will only decide the issues in the eight live applications I have identified above.
- Referring to the text book Goff & Jones, 8th Ed, paragraphs 1-12 and 1-18, Ms Knight submitted that based on well established principles Santander had a cause of action entitling the bank to recover payments from an unintended beneficiary on the ground of unjust enrichment. She submitted that prima facie the bank has a right to restitution from the beneficiary because the bank transferred the benefit to the beneficiary by mistake.
- The evidence as a whole shows that in each case the bank has paid money to the beneficiary as a result of the bank's mistake. The beneficiary has been given money to which they have no claim or right. They obtained the money by mistake. A reasonable person who was told in good time that money had been paid into their bank account by mistake would take steps to pay it back. On the face of it therefore the enrichment is unjust. I accept Ms Knight's submission that prima facie the bank has a good claim in these circumstances to recover the money paid by mistake. There may be defences in individual cases that a beneficiary would be entitled to rely on to defeat the claim but they would be matters for the beneficiary to raise in due course.
- Ms Knight submitted that an equitable wrong such as unjust enrichment was sufficient to engage the Norwich Pharmacal jurisdiction, referring to Bankers Trust v Shapira [1980] 1 WLR 1274. I accept that submission that an equitable wrong of that kind is capable of justifying a Norwich Pharmacal order.
- The Bankers Trust case related to a fraud worth $1,000,000 against the claimant bank by two men, Shapira and Frei. The claimant bank sought orders for disclosure from another bank (D) which held accounts for the two men into which much of the money had been paid. The claimant bank knew the identity of the wrongdoers. It had obtained a Mareva (freezing) order against the money in the accounts and sought disclosure from D relating to the accounts including details of all transfers from the accounts. The Court of Appeal relied on the then fairly recent Norwich Pharmacal decision and held that although it was a very strong action on the part of the court to order a bank to break their duty of confidentiality to their customer, the order was appropriate in the circumstances. Lord Denning MR emphasised (p1282 B) that this jurisdiction must be carefully exercised and that it is a strong thing to order a bank to disclosure the state of its customer's account and the documents and correspondence relating to it. Nevertheless with various safeguards in place the court should help the claimant bank in its equitable tracing claim and make the order. Waller LJ gave a short judgment in the same vein, stating that "Clearly it is undesirable that an order such as this should be lightly made". It was justifiable because there was very strong evidence indeed of a fraud worth £1,000,000 (p1283 B).
- There is a striking difference between the sums in issue in Bankers Trust and the sums in this case. Many of the claims relate to payments of less than £1,000. On the other hand the information sought by the bank is simply the identity of a beneficiary who, prima facie, has been unjustly enriched. Bankers Trust was concerned not with disclosure of identity but of the details of the respondent bank's customer's affairs.
- It is also relevant that the beneficiary bank has been informed of the problem but despite that the repayment has not been made. Although the evidence does not establish with certainty that the beneficiary bank has in every case actually informed the beneficiary himself or herself, it is a reasonable inference that that has happened and so it is a reasonable inference that the beneficiary has neglected or refused to repay the money or otherwise engage with the matter. Subject to one point, Santander has therefore no other option if it wishes to recover the money.
- The one point is that in some cases it is clear that Santander's own customer, from whose account the mistaken payment was made, must have some information about the beneficiary. That is in the repeated payment cases. There the customer wanted to pay someone but by mistake Santander paid that someone twice or even three times. The customer presumably knows who the beneficiary is in that case. Norwich Pharmacal orders are exceptional and the jurisdiction is only exercised when the court is satisfied that it is necessary (Ashworth Hospital v MGN Ltd [2002] 1 WLR 2033 per Lord Woolf paragraph 57 and see also Lightman J in Mitsui v Nexen [2005] EWHC 625 (Ch)). Surely one might think Santander should simply ask its customer who the beneficiary is in those cases. Mr Howard's statement explained (although the statements provided on the individual applications did not) that the applications were a last resort and only made after Santander had exhausted its enquiries with its own customer and with the beneficiary bank. Ms Knight also explained on instructions that Santander's position is that since the mistake is Santander's own, its customers are not obliged to help and on some occasions do not do so.
- I am satisfied that on the applications before me, Santander has no other reasonable course open to it if it is to pursue a claim for the mistaken payment.
- Finally relating to the Norwich Pharmacal jurisdiction in this case, I should record that the beneficiary bank clearly knows or should know the identity of the beneficiary and is mixed up in the unjust enrichment sufficiently to justify an order. After all the money was paid into an account at the beneficiary bank.
- That leaves the exercise of the court's discretion and the question of proportionality. At this stage wider considerations fall to be considered. In Rugby Football Union v Consolidated Information Services [2012] UKSC 55 the Supreme Court considered a Norwich Pharmacal order which would lead to the disclosure of personal data and addressed the need to balance an individual's rights under Art 8 of the Charter with the applicant's rights and interests. In Golden Eye v Telefonica [2012] EWCA Civ 1740 the Court of Appeal considered a case in which a claimant was seeking Norwich Pharmacal relief in order to identify a large number of members of the public against whom it had a claim. The putative claim in that case was for copyright infringement. Although an important aspect of the situation in Golden Eye was that it was an intellectual property claim (and so in addition to the ECHR, Council Directive 2004/48/EC of 29th April 2004 (The IP Enforcement Directive)) also applied, the principles are applicable generally. At paragraph 6 Patten LJ (with whom Dyson MR and Sullivan L J agreed) said:
"It is, of course, in the nature of these applications that the respondent to the disclosure application has no position on whether the order should be made and will usually (as in this case) consent to the relief being granted subject in appropriate cases to the payment of the costs incurred in making the disclosure. Wider and more fundamental issues such as whether the relief is excessive, a disproportionate invasion of the users' Article 8 and data protection rights, or is unjustified by the evidence or the status of the claimants will usually be matters for the judge to consider unaided by any adversarial argument."
- Patten LJ explained that in the particular case before the court, the position was different. The court, both at first instance and on appeal, was assisted by Counsel for Consumer Focus, which body had been given permission to intervene in the proceedings and played a useful role. The background to the intervention by Consumer Focus was judgment of mine in the then Patents County Court in Media CAT v Adams [2011] EWPCC 6 which involved a similar scheme with claims for Norwich Pharmacal relief in order to identify a large number of members of the public against whom a claimant claimed to have a copyright claim.
- In Golden Eye the Court of Appeal summarised the issues which Arnold J had to deal with as:
"(i) had arguable wrongs been committed against the claimants? […]
(ii) was O2 mixed up in such arguable wrongs?;
(iii) were the claimants genuinely intending to try to seek redress for these arguable wrongs?;
(iv) was disclosure of the names and addresses necessary in order to enable the claimants to pursue that redress?;
(v) was the order sought proportionate having regard to the privacy and data protection rights of the intended defendants and the terms and contents of the draft order?; and
(vi) should the court exercise its discretion in favour of granting relief?"
- I have already dealt with points (i) and (ii) above. As for point (iii), there is no doubt about the genuine nature of the claimant's approach. I have mentioned point (iv) already. The claimant can go no further without an order. Points (v) and (vi) are the remaining questions of proportionality and discretion.
- In considering whether it is proportionate to make this sort of order the court is required to balance the need to protect the claimant's fundamental rights and the fundamental rights and freedoms of the beneficiaries in respect of privacy and data protection (see RFU v Consolidated, above). A convenient summary of a number of the issues arising is in paragraphs 16 to 21 of the judgment of Patten LJ in Golden Eye, as follows:
"16. In addition there is, of course, Article 1 of the First Protocol to the European Convention on Human Rights and Article 17 of the Charter of Fundamental Rights of the European Union ("the Charter") which provides that:
"Right to property
1. Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest.
2. Intellectual property shall be protected."
17. In relation to the intended defendants, the Court has to consider Article 8 of the Convention and Articles 7 and 8 of the Charter which guarantee (subject to stated exceptions) the right to respect for private and family life and the protection of personal data. These are re-inforced by the Data Protection Directive (95/46/EC of 1995) and by s.35 of the Data Protection Act 1998.
18. The conduct of this balancing exercise as part of a proportionality review is a matter of considerable importance and was one of the reasons why Arnold J. gave permission for this appeal. He described his task and his approach to the resolution of competing rights in paragraphs 116 and 117 of his judgment:
"116. In addition to the reasons which were accepted by the Court of Appeal in RFU v Viagogo, there are two further reasons why it is necessary to consider the proportionality of the proposed order in the present case. The first is that Article 3(2) of the Enforcement Directive imposes a general obligation to consider the proportionality of remedies for the infringement of intellectual property rights, including orders for the disclosure of the identities of infringers: see Case C-324/09 L'Oréal SA v eBay International AG [2011] ECR I-0000 at [139]-[144]. The second is that the CJEU has held that, when adopting measures to protect copyright owners against online infringement, national courts must strike a fair balance between the protection of intellectual property rights guaranteed by Article 17(2) of the Charter and the protection of the fundamental rights of individuals who are affected by such measures, and in particular the rights safeguarded by Articles 7 and 8 of the Charter: see Case C-275/06 Productores de Musica de España (Promusicae) v Telefonica de España SAU [2008] ECR I-271 at [61]-[68] and Case C-70/10 Scarlet Extended SA v Société belge des auteurs compositeurs et éditeurs (SABAM) [2011] ECR I-0000 at [42]-[46], [50]-[53].
The correct approach to considering proportionality
117. In my judgment the correct approach to considering proportionality can be summarised in the following propositions. First, the Claimants' copyrights are property rights protected by Article 1 of the First Protocol to the ECHR and intellectual property rights within Article 17(2) of the Charter. Secondly, the right to privacy under Article 8(1) ECHR/Article 7 of the Charter and the right to the protection of personal data under Article 8 of the Charter are engaged by the present claim. Thirdly, the Claimants' copyrights are "rights of others" within Article 8(2) ECHR/Article 52(1) of the Charter. Fourthly, the approach laid down by Lord Steyn where both Article 8 and Article 10 ECHR rights are involved in Re S [2004] UKHL 47, [2005] 1 AC 593 at [17] is also applicable where a balance falls to be struck between Article 1 of the First Protocol/Article 17(2) of the Charter on the one hand and Article 8 ECHR/Article 7 of the Charter and Article 8 of the Charter on the other hand. That approach is as follows: (i) neither Article as such has precedence over the other; (ii) where the values under the two Articles are in conflict, an intense focus on the comparative importance of the specific rights being claimed in the individual case is necessary; (iii) the justifications for interfering with or restricting each right must be taken into account; (iv) finally, the proportionality test – or "ultimate balancing test" - must be applied to each."
19. The Supreme Court has subsequently approved this as a correct statement of the approach to the question of proportionality in Rugby Football Union v Consolidated Information Services Limited [2012] UKSC 55 and it is not therefore necessary to re-visit that issue in this judgment. In terms of outcome, it is enough to note that Lord Kerr (at paragraph 46) recognised that there is no presumption that the need to identify arguable wrongdoers should, so to speak, trump the privacy and data protection rights of the subscribers and that:
"The particular circumstances affecting the individual whose personal data will be revealed on foot of a Norwich Pharmacal order will always call for close consideration and these may, in some limited instances, displace the interests of the applicant for the disclosure of the information even where there is no immediately feasible alternative way in which the necessary information can be obtained."
20. That statement was made by reference to the facts of the present case as summarised by Arnold J. in paragraph 119 of his judgment:
"The Intended Defendants are not, of course, before me. With the assistance of Consumer Focus' submissions, however, it seems to me that the position of the Intended Defendants can be summarised as follows. It is likely that most of the Intended Defendants are ordinary consumers, many of whom may be on low incomes and without ready access to legal advice, particularly specialised legal advice of the kind required for a claim of this nature. The grant of the order sought will invade their privacy and impinge upon their data protection rights. Furthermore, it will expose them to receiving letters of claim and may expose them to proceedings for infringement in circumstances where they may not be guilty of infringement, where the subject matter of the claim may cause them embarrassment, where a proper defence to the claim would require specialised legal advice that they may not be able to afford and where they may not consider it cost-effective for them to defend the claim even if they are innocent."
21. But the judge then proceeded to consider as part of the proportionality review various amendments to the proposed order including some suggested by Consumer Focus which could meet some of the concerns referred to by him in paragraph 119. This process involved removing various recitals from the order to avoid giving the impression that the court has already made a finding of infringement against its recipients and to remove an implicit threat of publicity following the commencement of any proceedings. The draft order also contained the letter of claim which is to be sent to all identified P2P users who appear to have downloaded the copyright material. The judge considered the letter to be objectionable in a number of respects. As drafted, it gave any reader the impression that the court had already made a finding of infringement and failed therefore to make clear the possibility that the addressee might not be responsible for the downloading of the relevant files. The judge also considered that the threat contained in the letter to make "an application to your ISP to slow down or terminate your internet connection" was unjustifiable."
- I turn to consider the balancing exercise in this case.
- First I will return to the genuine nature of the claim and the claimant's conduct. Unlike the Media CAT case, there is no evidence of members of the public complaining about the behaviour of Santander in this case. That is why I did not think it was necessary to invite a third party such as Consumer Focus to intervene. Understandably Santander wished to make clear that they were not engaged in the kind of operation which came before the court in Media CAT. Mr Howard's statement explained in detail how Santander used the identity of a beneficiary once it had been obtained and gave a detailed example, exhibiting the relevant correspondence. Neither the letter of claim used by Santander nor its conduct exhibits any of the problems which arose in the Media CAT case. There is nothing about the drafting of the orders which raises any issue of the kind which arose in Golden Eye.
- Second, there is no presumption in favour of an order in this case. Points against the making of the order include the following:
i) The beneficiaries are not before me. The accounts could be held by anyone from a major corporation to an individual member of the public. Since there is a real risk that the beneficiary will be an ordinary individual, it is right to consider the application from that perspective. As in Golden Eye (see the quoted paragraph 119 from the judgment of Arnold J) an order will invade the privacy and data protection rights of ordinary people. It will expose them to a legal claim. They will receive a letter before action from the claimant's solicitors.
ii) In many cases the sums of money at stake are really very small. The ordinary person may have spent the money many months ago, not realising it was received in error.
iii) In some cases the claim relates to mistakes made two years ago, in 2012.
- Third, considering some of the factors listed in paragraph 17 of the judgment of Lord Kerr in RFU v Consolidated and some other matters, points in favour of the order in this case are the following:
i) Santander has a good, strongly arguable claim for return of the money. It is not obvious what the beneficiary's defence would be;
ii) There is a strong public interest in allowing an applicant to vindicate his legal rights;
iii) The information cannot be obtained from another source;
iv) The respondent beneficiary bank has been told about the mistake and knows that it holds the account into which the money was paid. It knows it has (unwittingly) facilitated the wrongdoing;
v) The order will not risk revealing the names of innocent persons. The order is limited to the name(s) of the holder of the account into which the money was paid;
vi) The underlying legal claim is not factually or legally complex, unlike the copyright claims in the Golden Eye case. An ordinary member of the public will understand the basis of the claim and, if they wish to take legal advice, will not need a specialist;
vii) The claimant's right to use the information provided is limited to the purpose explain in the application. It can be used to further the claim to recover the money paid by mistake but for no other reason.
- Balancing these factors together, one aspect stands out. Even the largest sums at stake are modest and in many cases to sums involved are tiny. The court is entitled to wonder whether it is really appropriate to exercise this exceptional jurisdiction in such circumstances. Set against that is the point I have already mentioned that these orders are sought as a last resort by Santander when it has no other option. It emphasises that it is seeking the minimum information it needs and does not seek disclosure of the beneficiary's account statements to establish the use to which the money has been put. It is seeking to act in a proportionate manner.
- I have concluded that the fact that some of the payments are for sums as low as £600 is not a reason to refuse Norwich Pharmacal relief in this case. In Golden Eye the orders were approved even though the sums at stake in the individual cases were very likely to be much less than even the sums in issue in this case. In Golden Eye a payment of £700 had been sought in the letter before action but to the extent that sum could be justified at all, it was based largely on legal costs.
- In my judgment in this case an order along the lines sought is an appropriate exercise of the court's discretion subject to appropriate safeguards. I turn to consider the safeguards.
- First, I am not satisfied that the beneficiary's date of birth should be provided. That is unduly intrusive and unnecessary. Santander submits this information may be useful to provide to an enquiry agent. That is not a sufficient reason to include it. I also doubt Santander will need an enquiry agent very often but in any case an agent will still be able to act without that information. I note that in some Santander applications in which an order has been made other judges and masters have refused disclosure of the date of birth.
- Bearing in mind the claimant's limited right to use it, the other information sought is proportionate, i.e. the name, address, telephone number and email address of the beneficiary.
- Second, these applications have rightly been brought in the High Court given the balancing exercise which they raise but that does not mean that the claimant should bring any claim against the beneficiary in this court. The small number of claims Santander has brought against beneficiary's so far have (rightly) been brought in the county court. Many of the mistaken sums are within the small claims limit and so even if Santander had to litigate and won its claim against a beneficiary, the beneficiary would not be liable for costs (save for the recognised exceptions for small claims costs in CPR Part 27).
- Third, there is a question of Santander's costs and whether the beneficiary would be liable for them (perhaps including sums reimbursed by Santander to the beneficiary bank for its costs of compliance). Sometimes a claimant who has obtained a Norwich Pharmacal order seeks the costs of obtaining that order from the wrongdoer, once they are identified. However on these applications Santander's position is that it does not seek the recovery of its legal costs of the application for a Norwich Pharmacal order from the beneficiary. Should Santander proceed with legal action against the beneficiary, it seeks only the costs it may be entitled to of those separate legal proceedings, not the costs associated with the application for a Norwich Pharmacal order. As to the costs of this hearing on 24 June 2014 and Santander invited the Court to make an order of "No order as to Costs".
- Fourth, given that the claimant may only use the information produced for limited purposes, that restriction ought to be set out on the fact of the order. The draft order proposed in this light of seeing the draft of this judgment includes a suitable undertaking to that effect.
- Subject to these points, I will make the applications sought in the eight live cases before me.
Further matters
- Dealing with these applications has raised other issues which relate not specifically to the eight live applications but to future handling of applications of this kind.
- First, these applications have been brought under Part 23 by using an application notice (form N244). This may well have contributed to the difficulties the court administration has encountered in trying to find the other outstanding Santander applications. In Norwich Pharmacal itself the claim for relief was commenced by originating summons. In Golden Eye the claim was commenced under the Part 8 procedure. When a Norwich Pharmacal order is sought in a complex case some form of originating process ought normally to be used. The White Book paragraph 31.18.11 notes that the application may be brought under CPR Part 7 or Part 8. On the other hand, as Santander rightly pointed out, paragraph 4.2 of the Chancery Guide provides that although such applications may be made by Part 7 and Part 8 claims, if the application is or is thought likely to be uncontested the court may entertain an application under Part 23 supported by evidence.
- In these cases the beneficiary bank does not consent but does not oppose the applications and so the application is unlikely to be contested. That is why Santander has used the Part 23 procedure up to now. In doing so it acted properly however an unforeseen consequence of that approach has been that the applications are not readily identifiable once they have been made. With the benefit of hindsight, in future an applicant embarking on an exercise of this kind would be well advised to bring its first application(s) as claims under Part 7 or Part 8 as appropriate even if they are likely to be uncontested so that issues relating to them can be identified early and they can be managed appropriately.
- Second, Santander proposed that the solicitor's reference be used on the heading of the cases since that was the only unique identifier of a particular case. Santander's proposal is a sensible one and I will consult with others in the Division to see if this can be accommodated.
- Third, whether any form of docketing of Santander's future applications is something to be considered further given the likely volume. So far some applications have come before masters and some before judges. They can be dealt with by either tribunal (see CPR r2.4 and PD2B). Given the likely volume in future, this is also a matter to be considered further along with docketing.
- Fourth, the draft orders provided with the applications are often poorly drafted and contain errors. They need to be properly drafted.
- Fifth, the information contained in the supporting witness statements needs to be reviewed to ensure that it explains all the relevant circumstances. Santander suggested that a checklist be developed with the assistance of the court. I can see the sense in Santander's external solicitors developing their own checklist to ensure the evidence they prepare covers the appropriate points but I am not convinced a checklist would be appropriate for use by the court.
- The large number of applications brought and the mass approach taken to them means that there might be a risk that they are not considered as carefully they should be given the exceptional nature of the Court's jurisdiction. Santander believes that there is no material difference between all its applications so far and yet while many have succeeded, some have not. Without reviewing each application, it is impossible to assess if they are all truly identical. I will say that from the applications I have had the chance to look at, which include copies of many more than the ten before me, they do appear to raise materially the same point but they are not identical and the quality of the witness statements does vary. In a number of cases it has been or would have been appropriate to require Santander to provide further information or clarification.
- Sixth, if another claimant in the position of Santander here is embarking on a similar course in future, it may be wise to alert the court at the outset and invite the court to consider how best to deal with the large number of claims.
Conclusion
- The Norwich Pharmacal jurisdiction is a useful and important remedy available from the court to enable justice to be done. It is potentially intrusive and the balancing of the parties' rights and interests is not always straightforward. In the eight live applications before me, Santander has a proper claim to disclosure from the beneficiary banks of the identities of the beneficiaries of the mistaken payments.
