Matthew Stanley, solicitor at Plexus Law, and Thomas Herbert, barrister at Ropewalk Chambers, consider the circumstances in which a defendant must provide information about its insurance arrangements.
- When will the court order a defendant to provide information about its insurance position?
- The economic impact of the COVID-19 pandemic is well-known and is being felt acutely in certain sectors, with others looking on anxiously. Concern as to the adverse financial effect of the pandemic seems to have prompted, at least in the authors’ experience, an increase in requests by claimants for details of the defendant’s insurance position and the provision of policy documentation.
- The starting point in this area is Irwin J’s decision in Harcourt v FEF Griffin  PIQR Q9. This was a liability-admitted personal injury case, which the claimant asserted was worth in the region of £7.5 million. The claimant was concerned about the defendant’s ability to meet the claim. He accordingly applied under CPR Part 18 for information about the nature and extent of the defendant’s insurance cover. Irwin J acceded to the application on the basis that Part 18 should be interpreted “reasonably liberally” and was broad enough to cover the information sought: see , -.
- A year later came David Steel J’s decision in West London Pipeline and Storage Ltd v Total UK Ltd  1 CLC 935. The claim arose out of the Buncefield oil explosion. Total sought a contribution from a third party and were concerned about the level of that third party’s insurance cover. It accordingly applied under CPR Part 18 for information about the third party’s insurance arrangement on the basis that the information was relevant to the issues in the case and/or that it was necessary for the purposes of efficient case management. David Steel J referred to a number of authorities not cited to Irwin J in Harcourt and came to the conclusion that the court had no jurisdiction to make the order sought, however liberally Part 18 was interpreted: see , .
- Harcourt and West London Pipeline are thus conflicting decisions of coordinate jurisdiction. They were both considered by Thirlwall J in XYZ v Various  2 Costs LO 197.
- Rather than analysing XYZ directly, however, it is helpful to look at three later decisions in order to ascertain the current state of the law.
- The first is the Court of Appeal’s decision in Dowling v Griffin  EWCA Civ 1545. This was a professional negligence claim against a solicitor and considered the above authorities in determining whether the solicitor was negligent in failing to make an application to the court for disclosure of insurance arrangements. It accordingly does nothing to develop the relevant law, but Lewison LJ’s analysis of the cases at - is of assistance.
- Harcourt is summarised at  and West London Pipeline is summarised at . XYZ is then considered at -:
 The ordinary rules of precedent are that where a judge has considered and refused to follow a previous decision of a judge of coordinate jurisdiction a third judge must follow the second judge unless clearly convinced that he was wrong. Thus, in XYZ v Various  EWHC 3643 (QB) Thirwall J [sic] followed the decision of David Steel J on the scope of Part 18 but, she held, the court has power to order disclosure of information about insurance under CPR Part 3.12(m) which enables the court to take any step or make any order for the purpose of managing the case and furthering the overriding objective.
 What the claimants wanted to know was whether the defendant in question had sufficient insurance; (1) to fund its participation in litigation to the end of the trial, (2) to meet any order for damages and (3) to meet any order for costs. Thirwall J [sic] held that the first question related to case management because it might influence the case management directions that the court would make and made the order sought. However, she refused to order the second and third questions to be answered because they did not relate to case management. This is a very limited extension to the position as it appeared in 2008 following the decision of David Steel J.
- On this analysis, the court’s case management powers may be exercised to order a defendant to provide information as to its insurance arrangements for case management purposes (question (1) above); but may not be exercised for the purposes of ascertaining whether the defendant will be able to meet any order for damages and/or costs (questions (2) and (3) above).
- This approach is supported by the decision of Hildyard J in the RBS Rights Issue Litigation  1 WLR 3539. This case related to disclosure of an ATE insurance policy and also dealt with security for costs, but there is a full exposition of the authorities at -.
- The following paragraphs are of particular assistance:
 [In XYZ] Thirlwall J held that CPR r 3.1.2(m) gave the court power to order a defendant to provide a witness statement setting out whether there was adequate insurance to fund the defendant’s participation in the litigation to the completion of trial and the conclusion of any appeal, thereby enabling the court to manage the litigation on the basis of adequate information. It is however, important to note the context in which she did so, and the limit of the relief she gave.
 Thirlwall J had previously made a series of case management directions designed to enable the trial of three issues in four sample cases which were devised to lead to the resolution of the whole of the group litigation. The chosen cases all involved Transform as defendant. After these directions were made, serious concerns had surfaced as to the financial position of Transform, not only in terms of its prospects of meeting claims but also in terms of its potential collapse before or at the time of trial. Thirlwall J considered on the evidence that, without funding and insurance Transform might well not be able to fund the litigation to trial. Its collapse would put in jeopardy all the case management directions previously given. Yet Transform refused to state more than that it had insurance to cover funding, to meet any order for damages and to meet any adverse cost order, without specifying the terms or amount of cover.
 Thirlwall J concluded that she should require Transform to provide a witness statement setting out whether it had insurance adequate to fund its participation to the completion of the trial and the conclusion of any appeal. If it did, the earlier directions could stand; if not they would require to be substantially revised. The statements would furnish the court with the information necessary to determine how the litigation should proceed. That was plainly within her case management powers.
 She declined, however, to make any order requiring Transform to provide evidence as to whether it had cover to enable it to meet any order for damages or costs award against it. Such evidence would go to the ability of the claimants to enforce judgment; and she was quite satisfied (see para 35) that “Whether or not the claimants will be able to enforce judgment is not a matter which affects case management”. …
 I have no doubt that in an appropriate case, exemplified by the XYZ case and subject to the limitations apparent from Thirlwall J’s decision as explained above, the court’s case management powers under CPR r 3.1 do extend to requiring disclosure of an ATE policy when its disclosure is necessary to enable the court proportionately and efficiently to exercise its case management function.
 … Although CPR r 3.1 is stated to apply “except where these Rules provide otherwise”, in my view the court should not be quick to cut down the general power of case management by reference to other provisions directed to other matters. A sufficient control is provided, as in the XYZ case, by being careful to apply the case management power only to what is genuinely a case management issue, rather than by reference to some general mantra, be it “cards on the table” or the like.
 In that regard, I do not think that David Steel J’s decision in [West London Pipeline] is authority to the contrary. That case concerned an application for disclosure of a policy for the purposes of “assessing the prospects of an effective recovery”, which was said to concern case management on the basis that it might affect the appropriate share of the court’s resources to be allocated to it. That is the sort of justification rightly, to my mind, rejected in the XYZ case. Stripped of any plausible case management justification, the only other justification was a bare recourse to the modern approach described as being “cards on the table”. Steel J (again rightly, in my view) did not accept it, and determined that the only remaining basis for disclosure was CPR Pt 31 which was inapplicable, since the material in question was not relevant to an issue in the action.
- It seems tolerably clear, then, that there must be a “case management justification” for the request for information/application for disclosure. Assessing the prospects of an effective recovery of damages and/or costs is not, in and of itself, sufficient justification.
- The final decision of assistance is that of Peel Port Shareholder Finance Co Ltd v Dornoch Ltd  Bus LR 1663. This dealt with the slightly different point of pre-action disclosure of insurance arrangements. Of note are Jefford J’s general conclusions at :
(ii) There has never been an express statutory provision entitling a litigant to obtain the insurance policy of a solvent insured (because a litigant takes his defendant as he finds him). …
(iv) Attempts to deploy other provisions of the CPR [besides CPR 31.16] to obtain the insurance policy of a solvent insured have failed.
- For completeness, it is worth noting the decision of HHJ Robinson (sitting as a Judge of the High Court) in Senior v Rock UK Adventure Centres  EWHC 1447 (QB). The defendant employer in a liability-admitted personal injury claim was ordered to disclose details of its employers’ liability insurance cover, ostensibly on the basis that such information would be useful to ensure the proper conduct of the upcoming trial. HHJ Robinson accepted that in order for the trial judge to decide whether it was appropriate to make any periodical payments order, he had to be satisfied that continuity of payment under such an order was reasonably secure. This decision is something of an outlier, and likely per incuriam, for a number reasons: (i) the reasoning is sparse; (ii) the judge referred only to Harcourt, and did not consider West London Pipeline, XYZ or Dowling v Griffin; (iii) the judge accordingly did not follow West London Pipeline/XYZ in accordance with the ordinary rules of precedent; and (iv) the security of payments under a periodical payments order relates to the prospects of an effective recovery and is not obviously a case management consideration, such that the decision is difficult to reconcile with the test as subsequently confirmed in the RBS Rights Issue Litigation.
The practical position
- In the authors’ view, the following conclusions may be drawn from the above analysis:
- The court may exercise its case management powers to order the provision of information about insurance arrangements.
- There must, however, be a case management justification for such an order.
- Ascertaining whether a defendant will be able to meet any order for damages or costs is not a case management justification.
- Indeed, a claimant must take a defendant as he/she finds him/her/it. This is because details of insurance are a private matter between an insurer and an insured.
- Before the court will make an order for provision of information about insurance arrangements:
i. there must generally be an evidential basis for concern about the defendant’s financial position; and
ii. the information sought must be necessary to determine how the litigation should proceed (i.e. it must serve a case management purpose).
16. In a sense, therefore, the practical position is as simple as this:
i. where a claimant seeks the provision of insurance information, the onus will be on them to advance a valid case management justification for their request; and
ii. any justification advanced will have to be considered against the above authorities, keeping the need for a case management purpose clearly in mind.
17. Whether any particular request is justified is, however, an inherently fact-sensitive question. The Rumsfeldian ‘known unknown’ is the extent to which COVID-19 might feature in the court’s analysis. It is well-established on the authorities that mere financial instability occasioned by the pandemic will be neither here nor there. But it is possible to envisage situations where the economic impact of the pandemic might arguably jeopardise case management directions previously given, as in XYZ. In those circumstances, further case-specific arguments as to the level of detail to be provided will inevitably arise.
18. Formal advice is therefore, as ever, recommended on a case-by-case basis.
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Matthew Stanley, Solicitor
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Thomas Herbert, Barrister
T: 0115 947 2481 | E: email@example.com | Bio | W: www.ropewalk.co.uk
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