I.F.T. S.A.L. Offshore v Barclays Bank PLC

Permission to use documents obtained under a Norwich Pharmacal order for a collateral purpose may be granted where the applicant shows cogent and persuasive reasons. The court must examine the particular circumstances and balance the public interests engaged, including the just resolution of litigation and the prevention and detection of fraud against the confidentiality of banking relationships and the risk of speculative claims. The fact that the applicant initially had no intention of suing the respondent does not prevent later permission where subsequent disclosure materially changes the position. The court should not determine the merits prematurely. Weak or hopeless claims can be controlled through strike-out or summary judgment.

The claimant was the victim of an authorised push payment fraud. Funds intended for an Austrian supplier were paid into an account at Barclays and rapidly transferred abroad. The claimant obtained a Norwich Pharmacal order requiring Barclays to disclose documents concerning the receipt and payment of the funds. It initially undertook not to use the material for proceedings against Barclays, but later obtained permission to review it when considering a possible claim.

The claimant sought further permission to use the documents in support of an application for pre-action disclosure and possible proceedings against Barclays. The issue was whether the claimant had shown cogent and persuasive reasons for collateral use.

1. Permission granted. The claimant was permitted to use all the documents covered by the application for the proposed purposes.
2. The governing test was whether there were cogent and persuasive reasons for permitting collateral use. The principles in the Court of Appeal decision in Tchenguiz v Director of the Serious Fraud Office [2014] EWCA Civ 1409 were fact-sensitive. The court had to examine the circumstances carefully and weigh the competing public interests.
3. The claimant’s initial statement that it did not intend to sue Barclays did not create a bar. The relevant question was the position when permission was sought. The disclosed material and the absence of any realistic prospect of recovery from the fraudster provided a materially changed context.
4. The public interest in facilitating the just resolution of civil litigation and in preventing and detecting fraud supported permission. The confidentiality of the banking relationship was not decisive, particularly where fraud was involved, as illustrated by Bankers Trust Co v Shapira [1980] 1 WLR 1274.
5. The court declined to decide at this stage whether the proposed claims would succeed. The matters relied upon, including the account-opening information, unusual transactions, suspicious activity reports, delay after notification and an unexplained recall request, meant that an arguable case could not presently be excluded. Speculative or hopeless claims could be addressed by strike-out or summary judgment.

not stated in the judgment.