Imaging orders offer another useful tool to civil fraud litigators needing to urgently prevent the concealment and destruction of relevant digital evidence.
In any civil fraud claim, preserving evidence can be just as critical as freezing the underlying assets. Some fraudsters will be looking to alter, conceal or even destroy evidence linking them to accusations of fraudulent wrongdoing. At their core, imaging orders are effectively a screenshot of electronic evidence held by the individual or organisation against whom the order is made, including potentially relevant evidence that could implicate the fraudster.
Successfully seeking an imaging order from the courts in England and Wales requires a party to give immediate access to electronic storage devices to an independent computer specialist, to copy the contents. Such devices range from computers to smart phones to virtual cloud storage, as well as online accounts including email accounts and payment systems.
The goal of these orders is to preserve evidence at risk of being wiped or destroyed by the responding party. Their purpose is not to provide early disclosure or permit the claimant to build their case.
Why consider an imaging order?
An imaging order is therefore a useful tool to help victims of fraud seeking urgent interim relief.
Imaging orders are closely related to the more well-known search order, which enables a party with the benefit of such an order to enter the respondent’s premises to search for and remove evidence that might otherwise be destroyed or concealed.
In any civil fraud claim, preserving evidence can be just as critical as freezing the underlying assets
Search orders are a draconian order which may permit a search of both business and home premises, and which therefore require significant substantiation and the putting in place of safeguards including the instruction of an independent supervising solicitor to supervise the search. The courts have emphasised that the primary purpose of a search order is to preserve evidence, not as some form of early disclosure.
In the modern world, where more and more evidence is held in digital form, parties and their legal advisers should consider whether an imaging order may be a more proportionate tool for preserving evidence. Imaging orders do not involve physical entry into premises and are therefore less onerous and intrusive than traditional search orders. As a result, it may be easier to persuade the court to grant an imaging order than a search order.
Imaging orders may also prove to be a cheaper option. While there is of course a cost attached to obtaining the order and taking steps such as appointing an independent computer specialist, the costs of physically executing a search order, sometimes on multiple premises, could far exceed the costs associated with an imaging order.
Obtaining an imaging order
The test an applicant needs to satisfy in order to be granted an imaging order is not entirely settled, so specialist advice is needed on its availability and the best way to frame the application in the circumstances of any particular case. Historically, different tests have been applied for the variety of imaging orders sought depending on how onerous they were. At times, imaging orders have been classified as search orders in all but name.
Recent case law, applying the test summarised by Mr Justice Jacobs in the 2019 case of Arcelormittal USA LLC v Essar Steel Ltd, indicates that an applicant should show:
- a strong case that there is a cause of action on the merits;
- there is a serious danger to the applicant which the order will avoid – the evidence to be preserved must be of major, if not critical, importance;
- clear evidence that the respondent has relevant evidence;
- a real possibility that that evidence will be destroyed if relief is not given; and
- that the harm likely to be caused to the respondent by the order will not be out of proportion to the legitimate object of the imaging order.
We are yet to see how the courts will approach the test for imaging orders following the introduction of the model order discussed below, but with its implementation of safeguards for respondents, it may be easier than previously to satisfy the court that any harm to the respondent is proportionate, and therefore to obtain an imaging order. This could be advantageous for victims of fraud seeking urgent orders to preserve evidence at risk.
Applications for imaging orders are made without notice to avoid the respondent having time to clear any online accounts or devices before they are copied. Such an application needs to be supported by an affidavit setting out the facts relied on and listing the relevant data sources. The applicant must be able to provide evidence that the listed electronic data storage devices are likely to contain the information they are seeking. As the application is made without notice to the respondent, the applicant has a duty of ‘full and frank disclosure’ and so must give a balanced and full account of all the relevant facts, including those which go against the granting of the order. Preparing the application and supportive affidavit therefore requires great care.
The order must be no wider than necessary but wide enough to capture all devices or accounts holding potentially relevant evidence. The breadth of data that can be imaged is vast and can include information such as online bank statements. While this can be far-reaching, it is important as an applicant to limit what you are seeking to what is really needed. Striking this balance and avoiding accusations that the applicant is engaging in a fishing exercise is critical to the court granting the order.
The order will specify a ‘return date’ for a hearing where both parties will attend the court following the execution of the order to decide next steps regarding inspection of the imaged records. In a recent High Court decision, Isbilen v Turk and others, the court at the return date imposed a two-stage process for reviewing the imaged records: first, a key word search to identify privileged documents; and second, a keyword search for relevance.
Penal notice and undertakings
The imaging order contains a penal notice that prevents the respondent from denying the independent computer specialist the ability to access or make copies of information, for example by changing passwords. Nor can the respondent tip off anyone else about the order in such a way as may affect their data storage devices.
Like any interim injunction, the applicant must give a cross-undertaking in damages that promises to compensate the respondent for any loss caused by the imaging order that is later found to be unnecessary. The independent computer specialist must also give a set of undertakings in the same way a supervising solicitor would in a search order.
The new standard form
Previously, there was concern that imaging orders left the door open to parties being able to steal a first look at imaged documents without the consent of the party subject to that order, or permission from the court. This led to satellite litigation involving unauthorised access to privileged or personal information without justification. For example, in a 2020 case, TBD (Owen Holland) Ltd v Andrew Simons & Ors, imaged drives were inspected by the applicants without consent or permission.
With the ever-increasing need to safeguard data, and in light of comments made by the judge in the TBD case, a new standard form imaging order annexed to CPR PD 25 was brought into force on 6 April 2022 addressing the need to protect the interests of the respondent. Under the standard form order, the independent computer specialist must hold the electronic records and the applicant cannot access or inspect them before the court makes an order allowing this. Applicants should rarely deviate from the standard form without giving reasons to the court.
With a model order in place, agreeing the form of an imaging order has been simplified and may prove to be more cost effective and attractive to applicants.
What should you do if served with an imaging order?
If you find yourself on the receiving end of an imaging order, you will need to look carefully at precisely what the order requires. Keep in mind that you are subject to the penal notice – breach of which may be a contempt of court punishable by a fine or even imprisonment - and must not do anything to prevent access to the data storage devices and online accounts identified in the order.
That said, respondents will usually wish to make sure that they are providing no more than is required by the terms of the order. It is vital that you immediately seek legal advice from specialist civil fraud and asset recovery lawyers on how you can protect your position when served with such an order. You will also need representation at the return date hearing, crucially to inform the process which is then agreed for the review of your data. Experienced lawyers – with input from e-data specialists as needed - will protect your position.
Alexandra Algazy and Rebecca Wilson of Pinsent Masons contributed to this guide.
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