Asset tracing is a cornerstone of our business. Here the search for the proverbial “paper trail” presents constant hurdles. To unlock the financial puzzle of our subjects' assets, we not only have to find evidence but also obtain it in a proper manner.
Confirming benefical ownership can present an insurmountable barrier, for instance where the beneficiary is recorded as a trust or company registered offshore. Using a variety of open source techniques, surveillance, interviews and witness statements, we can attempt to identify the ultimate owner, but other than finding an 'inside' source the only option may be to apply to a court for assistance.
One of the most valuable instruments used in English Common Law jurisdictions for asset discovery is a precendent set in 1974, the Norwich Pharmacal Order (NPO). This is especially useful where normal disclosure orders are not feasible or practical. The NPO’s broad scope enables a claimant to seek disclosure of documents and information from a third party where the identity of the subject is concealed.
In most cases, an NPO is filed against a third party who possess information which may help shine light on a subject’s asset profile, such as financial institutions, real estate companies, accountancy firms and so forth. Such data can often be decisive in enforcement actions.
Like all disclosure orders, an NPO has its peculiarities. There must be a good arguable case and it must satisfy the court that a third party is either complicit or inadvertently involved in a transgression. It must also persuade the court that the party in fact possess the relevant information. The burden often falls to the investigator to make this case, and the pressure is high given that the applicant will bear the costs and expenses incurred in the process.
The NPO is unique among disclosure orders in that it can be sought at any stage of the litigation process. If used quickly, it can uncover information that may forestall the dissipation of assets and avoid long and expensive enforcement proceedings.
Recently the NPO has become a potent weapon in the effort to access offshore jurisdictions. An example in the BVI saw a local commercial court uphold a foreign NPO against a locally registered agent. The claimant thereby successfully revealed the beneficial owner of a BVI registered company, no small feat.
Aran McArdle is an Analyst at Raedas specialising in international asset recovery. He was previously in the investigation team of litigation boutique Joseph Hage Aaronson LLP and holds a PhD in Legal History.