Can Norwich Pharmaceutical Prescriptions be used to seek disclosure of cell phone recordings to prove fraud?

Ashley Fairfrere, with Jack Walsh, To Edmonds Marshall McMahon examines the response of the Court of Appeal in EUI Limited v UK Vodafone Ltd [2021] EWCA CIV 1771 and says the ruling shows that Norwich Pharmaceutical Prescriptions (“NPO”) are only available to seek disclosure of cellphone recordings if it can be shown that the mobile phone provider has been in some way ” mixed up ”in the wrongdoing, instead of being a“ mere witness ”; it may not be easy to show.

What is the background to this case?

EUI Limited is an insurance company providing home insurance. An insured, based in London, reported a water leak and made a claim. A claim was made for travel expenses, paid at the capped rate of £ 1,000 per month since the insured was staying with his parents. The policyholder then presented EUI with an Insured Short Term Rental (AST) and said he would no longer stay with his parents but would pay £ 1,850 per month for the rental of a property, for which he wanted to claim. EUI discovered that the rented property was in fact owned by the parents of the insured and began to investigate. The parents reportedly moved to India first, but the policyholder and his mother said the parents went to Milton Keynes just days before returning. The insurer was concerned that the AST had been concocted to circumvent its limit on travel expenses when the insured was staying with relatives. EUI suspected that the parents had in fact not moved at all, whether to India or Milton Keynes. Analysis of the mother’s cell phone site would show where she was at the relevant time and whether the claim was fraudulent.

What were the issues?

The Court had to examine the three conditions for granting Norwich Pharmacy relief, which were stated by Lightman J in Mitsui & Co Ltd v Nexen Petroleum (UK) Ltd [2005] EWHC 625 (Ch), [2005] 3 All ER 511:

  1. A fault must have been committed, or arguably committed, by an ultimate offender;
  2. There must be a need for an order to bring an action against the ultimate offender; and
  3. The person against whom the order is sought must: (a) be involved in such a way as to facilitate the wrongdoing; and (b) be able or likely to be able to provide the information necessary to enable the perpetrator of the final offense to be prosecuted. They should not be mere witnesses.

The High Court recently considered a similar claim in FCFM Group Ltd v Hargreaves Lansdown Asset Management Ltd, EE Limited & Ors. [2018] EWHC 3075 (QB), where the applicant in this case did not overcome the second limb, given that there were already ongoing civil proceedings in which requests for disclosure could be made. The judge, however, made brief obiter comments on part three, to the effect that he did not consider the third parties to be involved in the wrongdoing but were, at best, mere witnesses. In particular, the judge considered as “pure speculation” the suggestion that the cell phones provided by EE, whose recordings of calls and text messages were wanted, were used by the alleged perpetrators for the purposes of reprehensible.

In this case, the third branch took center stage.

Are the telephone providers “embroiled” in the wrongdoing or “mere witnesses”?

In short, EUI requested the cell phone records of the insured’s mother from the respondent, Vodafone, in order to use the call and SMS recordings, but more specifically the cell site and GPS data for help prove his case. It seems that the EUI has not presented its case on the basis, as it seems FCFM did, that the respondent mobile phone provider was embroiled in the wrongdoing because calls and text messages over its mobile phone network facilitated the wrongdoing. On the contrary, EUI’s “ingenious” argument was that the mobility, in and of itself, of cell phones was essential to the realization of the fraud. Unlike landlines, it has been argued, cell phones have allowed people to lie about their fate at some point. Thus, Vodafone was, albeit innocently, “involved” in the wrongdoing, instead of being a “mere witness” in providing mobile telephony. Thus, it was said that the Court had jurisdiction to order the disclosure of the records.

This argument was rejected; Vodafone as the operator of the mother’s cell phone was just a witness. While the court accepted that phone records can help establish the truth about the whereabouts of the parents, in this regard, the phone company is clearly a mere witness, akin to a company that installs CCTV footage or to a neighbor who is observing a person; the phone company, the CCTV provider, and the neighbors are just witnesses. The fact that a holder of a mobile phone account can claim that he was elsewhere does not result in any mobile phone operator in the wrongdoing. Vodafone, as a mobile phone provider, was not in a different position from any other mobile phone provider.

What options do you have?

The court suggested that the appropriate solution might be to seek third-party disclosure against the mobile company once proceedings are pending. This of course requires the opening of a procedure before requesting the disclosure of the evidence, which can involve a risk of litigation depending on the state of the other evidence before the request.

Other available options may include seeking pre-action orders or third party disclosure directly against third parties who may have been involved in the fraud, for example, parents, asking them for evidence such as evidence. location data from their mobile phones, or other documents indicating their whereabouts during the relevant period.

Conclusion

Cell phone data is increasingly seen by potential requesters as having the answers to many questions and can indeed do so. Case law has shown that the Court will not grant relief to Norwich Pharmacal in the cases unless the mobile phone provider has been somehow involved in the wrongdoing. It may not be easy to show.

The result in the EUI Limited v UK Vodafone Ltd The matter may depend on the “ingenious” manner of making the request, which is that it was the mobility, per se, of the phones provided by the Respondent that embroiled her in the wrongdoing. Although the application for cell phone recordings in the FCFM the case was dismissed on the grounds that it was a fishing expedition, if there was a strong evidence base to support that cell phones had been used to commit wrongdoing, that is – say they were intrinsic to the wrongdoing, a court might in the future be persuaded that a mobile phone provider was indeed involved in the wrongdoing and was not a mere bystander.

Those considering filing a complaint, however, should be prepared to explore other options to obtain the evidence required to initiate proceedings.

About Anne Wurtsbach

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