UK: Disclosure Of Details Of ATE Insurance Cover In Litigation

Last Updated: 1 June 2009
Article by Maxine Cupitt and Daniel Spendlove

In a recent decision, the Technology and Construction Court ruled that a defendant was entitled to have access to the details of a group of claimants' After The Event (ATE) insurance policy.

In the recent decision in Barr & Ors v Biffa Waste Services Limited, a defendant sought an order for disclosure of the claimants' ATE policy. The claimants had obtained a Group Litigation Order (GLO), which referred to the existence of the ATE policy. The defendant sought disclosure of the ATE policy because it was concerned about the claimants' ability to meet the defendant's costs should the claimants be unsuccessful at trial.

The court ruled that the claimants' ATE policy should be disclosed. This was because it was referred to in one of the claimants' witness statements and it was therefore disclosable under the Civil Procedure Rules (CPR).

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In a recent decision, the Technology and Construction Court ruled that a defendant was entitled to have access to the details of a group of claimants' After The Event (ATE) insurance policy.

In the recent decision in Barr & Ors v Biffa Waste Services Limited, a defendant sought an order for disclosure of the claimants' ATE policy. The claimants had obtained a Group Litigation Order (GLO), which referred to the existence of the ATE policy. The defendant sought disclosure of the ATE policy because it was concerned about the claimants' ability to meet the defendant's costs should the claimants be unsuccessful at trial.

The court ruled that the claimants' ATE policy should be disclosed. This was because it was referred to in one of the claimants' witness statements and it was therefore disclosable under the Civil Procedure Rules (CPR).

Background

The claimants (a group of residents of a housing estate) applied for a GLO in respect of their claims in nuisance and negligence against the defendant (a waste contractor) arising out of alleged odour emissions from a landfill site. In correspondence, the claimants referred to an ATE insurance policy - a policy taken out after a legal action has been brought to cover the costs of bringing that action (the Policy).

The defendant subsequently sought disclosure of the Policy, citing a concern about the claimants' ability to meet the costs of the litigation should they be unsuccessful at trial. In particular, it wanted to see the Policy in case it had any relevant exclusion clauses.

The defendant sought disclosure under the Court's power to order the disclosure and inspection of documents under CPR Rule 31.14, since the Policy was "mentioned in", amongst other things, a witness statement relied on by the claimants.

Decision

The Court confirmed the traditional approach, namely that disclosure of a party's insurance policy will generally not be permitted because such policies are a private matter between the insured and the insurer. It referred to two recent cases on the issue - both with different outcomes - Harcourt v FEF Griffin and West London Pipe Line Storage Limited v Total UK Limited and Others. For further details of those decisions, please click here and here.

The Court in Barr v Biffa ruled that the Policy was discloseable under CPR Rule 31.14.

In doing so, the Court rejected the defendants' arguments that the Policy was either irrelevant or covered by litigation privilege:

  1. The Policy was relevant because it was deliberately referred to in a witness statement for a particular purpose (in support of the application for the GLO) and it was obviously relevant to the GLO, because the litigation would not have been pursued had it not been for the GLO, and the GLO would not have been possible had it not been for the Policy. The Court held that the claimants' solicitors had already accepted that the terms of the Policy were relevant because a letter acknowledged that the existence of possible exclusion clauses and the level of cover was relevant.
  2. The claimants had argued that the amount of premiums stated in the Policy could be said to reflect legal advice as to the prospect of success, and accordingly was privileged. The Court deemed this argument "a little far-fetched" but said that there were circumstances in which the point might have at least some force. On this basis it ordered the redaction of the amount of premiums from the Policy when it was disclosed.

Comment

Whilst this decision would appear to run contrary to the most recent case in this area (West London Pipeline), where disclosure was rejected, this decision is probably distinguishable on the basis that it involves ATE insurance, rather than liability insurance. The Court in Barr v Biffa drew a distinction between the two forms of insurance, stating that liability insurance might have been in place well before the cause of action accrued and might have no direct connection with the events in the proceedings, whereas ATE insurance (particularly in the context of group litigation) may be a critical factor in the existence of the proceedings themselves, and was therefore directly relevant to those proceedings.

It is questionable in this case whether, had the claimants not referred to the existence of the Policy in correspondence and in the witness statements, the decision would have been any different. It would still have been open to the defendant to seek disclosure under CPR Rule 18.1 (as the parties did in Harcourt and West London Pipeline).

The message to parties who benefit from ATE insurance - and wish to avoid disclosure of it - is to avoid alerting the opposition to it by steering clear (as far as possible) from any reference to the policy in underlying correspondence, pleadings and witness statements, and to seek to downplay its significance in the proceedings. Parties who are quick thinking and who wish to obtain disclosure, however, may well seek to rely on this present decision.

It remains to be seen whether this case will be followed. The Court acknowledged that all of these cases are fact-sensitive and that it is difficult to draw hard and fast principles from them. This is not the first - and it will certainly not be the last - case where the courts grapple with this difficult issue.

Further reading : Barr & Ors v Biffa Waste Services Ltd [2009] EWHC 1033 (TCC)

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 28/05/2009.

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