UK: Disclosure Order Made Against Individual And Companies Controlled By Him In Respect Of Marine Insurance Claim

Suez Fortune Investments Ltd v Talbot Underwriting Ltd (unreported)

The First Claimant, owners of a vessel, claimed against the Defendant Insurers for an indemnity in respect of damage to their vessel.

The Defendant argued that an individual was the ultimate beneficial owner of both the First Claimant and of the corporate group of which the First Claimant was a part. Neither the individual nor the group were parties to the proceedings. However, there were connections between the three parties in respect of the claim which was the subject of the proceedings. There was evidence that the individual was regarded as the client as far as the Second Claimant Bank was concerned. He had signed a personal guarantee, and the group had given a corporate guarantee. The First Claimant admitted that it was the individual who provided instructions to its solicitors. An employee of the corporate group had signed a disclosure statement.

The Defendant applied for an order disclosing documents under the control of the individual and the corporate group, on the basis that because of the relationship between the parties those documents were under the control of the First Claimant.

The application was granted.

CPR 31.8 limits a party's duty of disclosure to documents that are, or have been, in its control. "Control" involves a legal right of access by a party to litigation to obtain documents. Here, there was no reason to suppose that the First Claimant did not have a right to documents held by either the individual or the corporate group.

It was clear that the individual exercised control over the First Claimant and the corporate group for the purposes of the matters which were the subject of the claim. He had, to a large extent, had conduct of the dispute from an early stage and did not need to take instructions from any other party as to any issues which may arise. For the purposes of the claim, the individual and the corporate group were acting for the First Claimant.

This case emphasises the fact that a party's duty of disclosure may well extend to documents held by individuals or entities who are not party to the proceedings. If the party to the proceedings has the right to access those documents, then they may be disclosable. This should be considered at an early stage of the proceedings. Not only may such documents be relevant to the issues in dispute, but this will avoid the costs of dealing with specific disclosure applications.

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