Sealing and Gagging Relief Peter D. Maynard Counsel & Attorneys ICC FraudNet, Third Annual Conference on Fraud, Asset Recovery & Cross Border Insolvency Cooperation, Sao Paulo, Brazil, November 7 th and 8 th, 2013

Judicial Secrecy and Suspension of Adversarial Proceedings Help the Courts to maintain their effectiveness Thereby, Help the fraud Victim to block and recover from the Big Fraudster or Crime Syndicate

Super Injunctions Also known as interim non disclosure orders with a prohibition on reporting the fact of the proceedings Given in rare and exceptional circumstances when non disclosure is strictly necessary to secure the Court’s effectiveness, such as anti-tipping off

Test Derogations from the general principle can only be justified in exceptional circumstances, when they are strictly necessary as measures to secure the proper administration of justice. They are wholly exceptional: R v Chief Registrar of Friendly Societies, ex parte New Cross Building Society [1984] Q.B. 227 at 235; Nutuli at [52] – [53].

Open Justice is the General Rule A hearing should be open to the public Scott v Scott [1913] AC 417 (HL) Everyone has a right to freedom of expression, to hold opinions… (Art. 10 ECHR) But, the Court has discretion to grant relief that might affect the exercise of the Convention right to freedom of expression… (s.12, HRA 1998 (UK))

Derogations from Open Justice Only be in the rarest cases that an interim non-disclosure order containing a prohibition on reporting the fact of proceedings (a super-injunction) will be justified on grounds of strict necessity. For example anti-tipping-off situations, where short-term secrecy is required to ensure the applicant can notify the respondent that the order is made: DFT v TFD [2010] EWHC 2335 (DFT). It is then only in truly exceptional circumstances that such an order should be granted for a longer period: Terry v Persons Unknown [2010] 1 FCR 659 (Terry) at [141].

Gag, Seal & Closed Hearings Such Relief has 3 primary characteristics: 1. Gagging – all persons aware of proceedings prevented from disclosing the existence of the proceedings or contents of Court’s file to anyone except as necessary to seek the advice of counsel; 2. Sealing - Court’s file is sealed, i.e., persons not involved in action not allowed to view the file or its contents; and 3. Secret, closed hearings.

Open Justice vs Courts’ Effectiveness

Procedure For Sealing And Gagging/Super-Injunctions Applications for Sealing and Gagging Relief made: Ex-Parte; Supported by Affidavit with full and frank disclosure to the Court; Backed by Skeleton Arguments. Practice Guidance issued by Lord Neuberger (M.R.) on 1 st August 2011 entitled “Interim Non-Disclosure Orders” Affirmed in Hutcheson v Popdog Ltd [2011] EWCA Civ 1580

Civil Law Jurisdictions Civil Law jurisdictions do not make explicit provision for the types of relief contemplated under Bankers Trust, Norwich Pharmacal, or Mareva Orders A shift may be taking place within the context of EU law within the sphere of the enforcement of intellectual property rights pursuant to Article 9 of EU Directive 2004/48/EC

Barletta Case [1998] BHS J. No 150 Interim Order obtained prohibiting publication relating to proceedings. Issue arose as to whether the court’s file should continue to be sealed as this may affect the availability of evidence for use in the proceedings in the Dominican Republic. Court held at paragraph 120 that the Interim Order prohibiting publication should be revoked, but that there lies in the Court, power in appropriate cases to restrict publication of a report of court proceedings but this power should be used in sparingly and in exceptional circumstances.

In a single case, there may be a Constellation of Super Injunctions The 'Guru of Ponzi' Arthur Ferdig operated a Forex Ponzi scheme known as Tradex Sentenced in 2011 to 18 months in federal prison for tax evasion. A constellation of super injunctions were used to recover information and assets for victims

Tradex (In Liquidation) The investigation of Tradex Ltd, a sophisticated Forex Ponzi, was massive, requiring a global search and coordination among many jurisdictions, including The Bahamas. Our firm and others represented the Liquidator. In the Bahamas phases of the case, Marcus A. Wide, Liquidator of Tradex Ltd (In liquidation) obtained information from a wide group of persons, banks and other institutions about Tradex, and recover assets concealed in various countries across the globe. A luxury town house condominium was recovered in Nassau, Bahamas.

Tradex (In Liquidation) Such orders in the Bahamas included: An Order filed 5 th April 2005 that the Court’s file and record be sealed and all parties were prevented from disclosing either the fact of the application or content of the pleadings save and except, as was necessary for parties to seek advice from legal counsel; An Order 1 September 2005 that the Court’s file remained sealed and all persons having notice of the proceedings were restrained from disclosing such information save as necessary to seek advice from legal counsel; An Order filed 10 th May 2006 extending the previous orders; Other orders restrained specific persons and banks from disclosing related information save as necessary to seek advice from legal counsel. In this same matter the court exercised its discretion to issue a Norwich Pharmacal/Bankers Trust Order against third parties and then restrained those third parties from disclosing the existence of the proceedings. All the persons, banks and institutions were required to disclose information on Tradex accounts and assets to the Liquidator, leading to the recovery of the townhouse and assets elsewhere.

Conclusion Therefore, in these circumstances, judicial secrecy and suspension of adversarial proceedings can help to maintain the Court’s effectiveness.

Peter D. Maynard Bay & Deveaux Sts. 2 nd Floor Nassau, Bahamas