Beyond Borders: The Power and Limits of Bankers Trust Orders

The Courts of England and Wales remain an attractive choice for international litigants, with international parties representing a significant number of Claimants and Defendants in fraud cases in England and Wales. In this article, we explore the strategic advantages of Bankers Trust Orders, whilst considering the careful balancing act courts must perform between aiding victims and respecting international legal systems and jurisdictional boundaries.

What is a Bankers Trust Order?

Developed from the landmark decision in Bankers Trust Co v Shapira [1980] 1 WLR 1274, a Bankers Trust Order is a form of interim disclosure order that compels third-party institutions, typically banks, to reveal information required to trace misappropriated assets. Unlike Norwich Pharmacal orders, which are primarily aimed at identifying wrongdoers, Bankers Trust Orders are targeted at tracing assets and are directed against the person suspected of being in possession of the property or involved in its transfer (e.g. a bank).

Requirements for obtaining a Bankers Trust Order

To obtain a Bankers Trust Order, there are five requirements which need to be met:

1. Ownership: Good grounds for considering that the money or assets about which information is sought belonged to the applicant;

2. Utility: A real prospect that the information sought will lead to the recovery or preservation of the property;

3. Location: The order should be directed at uncovering the location of the property;

4. Proportionality: The interests of the applicant should be balanced against the detriment of the respondent in having to comply with the order; and

5. Undertakings: The applicant must provide two undertakings:

•  an undertaking to pay the costs of the respondents’ compliance with the order, and compensation for any losses suffered; and

• an undertaking to restrict the use of the information obtained to tracing the assets or their proceeds, and for no other purpose.

Bankers Trust Orders against foreign parties

In LMN v Bitflyer Holdings Inc [2022], it was held that the making of a Bankers Trust Order against foreign parties “constitutes an infringement of the sovereignty of a foreign jurisdiction and should only be made in exceptional circumstances”.

Two subsequent cases have considered this further:

1. Tonstate Group Ltd & Ors v Wojakovski & Ors [2024] EWHC 975 (Ch)
   
   In Tonstate, the High Court granted a Bankers Trust Order against a foreign trustee involved in post-judgment enforcement. The trustee, though domiciled abroad, was a director of a UK company and had a UK service address. The court found a sufficient connection to justify jurisdiction and held that the disclosure sought was essential for the enforcement of the judgment.

2. Scenna v Persons Unknown & Ors [2023] EWHC 799 (Ch)
   
   By contrast, in Scenna, the High Court discharged previously granted Bankers Trust Orders against Australian banks. The court found that compliance would likely place the banks in breach of Australian law, and that equivalent disclosure mechanisms were available in Australia. Furthermore, the urgency typically required for such extraterritorial relief was absent. This judgment reinforces the principle that English courts will not lightly compel foreign entities to act contrary to their domestic legal obligations.

Practical Considerations for Applicants

The contrasting outcomes in Tonstate and Scenna highlight the importance of:

1. Establishing jurisdiction: Courts will scrutinise the connection between the respondent and the jurisdiction. Ties to this jurisdiction (e.g., being a director of a UK company) can weigh in favour of granting relief.

2. Urgency and risk of dissipation: Bankers Trust Orders are more likely to be granted where there is a clear, immediate risk that, without disclosure, the assets will be dissipated.

3. Avoiding jurisdictional conflict: Applicants must be cautious when seeking information from institutions in other jurisdictions. If local law prohibits compliance, the application is likely to fail unless truly exceptional circumstances are present.

4. Post-judgment enforcement: As illustrated in Tonstate, Bankers Trust orders can be particularly effective in the post-judgment phase.

Conclusion

Bankers Trust Orders remain an effective tool for victims of fraud and judgment creditors seeking to identify and recover misappropriated assets. However, they are not without limits. Courts remain alive to the risk of overreach, especially where foreign respondents are concerned. Legal practitioners must therefore approach such applications strategically, ensuring a strong jurisdictional foundation.

How can Laytons ETL help

The Dispute Resolution team at Laytons ETL has extensive experience in commercial fraud litigation, with a strong track record of advising both domestic and international clients. We provide strategic guidance on the use of interim disclosure tools – including Bankers Trust Orders, Norwich Pharmacal Orders, and worldwide freezing orders – to support asset recovery and fraud investigations. With extensive experience handling complex cross-border disputes, our team is well-positioned to navigate jurisdictional challenges and deliver effective enforcement solutions.

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Disclaimer: This publication is provided by Laytons LLP for informational purposes only. The information contained in this publication should not be construed as legal advice. Any questions or further information regarding the matters discussed in this publication can be directed to your regular contact at Laytons LLP or Laytons’ Disputes team.