UK: (Re)insurance Weekly Update 45- 2016

Last Updated: 28 December 2016
Article by Nigel Brook

A summary of recent developments in insurance, reinsurance and litigation law.

This Week's Caselaw

Ramilos Trading v Buyanovsky: Test for Norwich Pharmacal order and whether it can be ordered if foreign proceedings are likely

http://www.bailii.org/ew/cases/EWHC/Comm/2016/3175.html

The claimant applied for a wide-ranging Norwich Pharmacal order ("NPO") against the defendant (a British citizen and one of the managing partners of a company which the claimant accuses of wrongdoing). The order was refused by Flaux J who held as follows:

(1) One of the conditions for obtaining a NPO is that a wrong has either been carried out or has arguably been carried out. In Utd Company Rusal v HSBC (see Weekly Update 9/11), it was held that that means that the claimant must show that it has "much the better of the argument". Flaux J disagreed, finding that the test was looser and the same as that for applications for a freezing order, ie "more than barely capable of serious argument, and yet not necessarily one which the Judge believes to have a better than 50% chance of success".

(2) Once the conditions have been satisfied, the court still has a discretion whether or not to make the order. The claimant argued that caselaw has developed beyond ordering disclosure of the identity of, and information about, the wrongdoers, to disclosure of more detailed information in appropriate cases, in order to enable the claimant to bring (and not just perfect) its claim. Flaux J rejected that argument, holding that it is "quite clear that the jurisdiction cannot be used for wide-ranging discovery or the gathering of evidence, but is strictly confined to necessary information" and that "the true position is that the jurisdiction remains in a narrow scope". He added that "The court will not permit the jurisdiction to be used for wide-ranging disclosure or gathering of evidence, as opposed to focused disclosure of necessary information". The application here fell foul of that restriction , and amounted to a fishing expedition.

(3) The judge accepted that, even if the claimant had a good arguable case, it was unlikely that it could be pursued in England, and instead foreign proceedings were likely. Following the Court of Appeal's decision in R (Omar) v Secretary of State for Foreign & Commonwealth Affairs (see Weekly Update 24/12), Flaux J noted that a NPO application cannot be made if the Evidence (Proceedings in Other Jurisdictions) Act 1975 applies (the 1975 Act sets out a procedure for obtaining evidence to use in civil proceedings taking place abroad).

Flaux J also held that the 1975 Act applies to a wide range of evidence, including the production of documents, and covers not just foreign proceedings which are "up and running", but also proceedings which are being contemplated.

Reference was made to the earlier decision of Shlaimoun v Mining Technologies (see Weekly Update 46/11), in which Coulson J held that "I take the view that, depending on the facts, there is no reason why a Bankers Trust/Norwich Pharmacal application should not be made in circumstances where there is the possibility that the ultimate proceedings would be commenced in a foreign jurisdiction". He found that the situation would only be different if foreign proceedings had already been up and running by the time of any possible crossover with the powers of the English court.

Flaux J held that Shlaimoun could be distinguished here on the basis that the claimant in that case genuinely did not know where any proceedings might be commenced (whether in England or abroad) and whether such proceedings would be viable: "It seems to me that is the true ratio of the decision and... it is not a case about proceedings being contemplated in a foreign jurisdiction at all". Accordingly, "it is not permissible to bypass the statutory regime simply by asserting that the case is at some earlier stage before the institution of proceedings abroad is contemplated".

Here, unlike in Shlaimoun, the claimant had already identified the jurisdictions in which any claim could be brought (or, alternatively, it couldn't show a sufficiently arguable case that there had been any wrongdoing at all). Accordingly, the 1975 Act was engaged and the court had no jurisdiction to entertain the claimant's NPO to obtain evidence in support of foreign proceedings.

Flaux J added that "If, as I have held, the 1975 Act is engaged in respect of any attempt to obtain information or evidence, but the claimant is unable to obtain an order of the foreign court or a letter of request, that unavailability of relief from the foreign court is no answer to the argument that the statutory regime is engaged and precludes any common law remedies under the Norwich Pharmacal jurisdiction".

Furthermore, although it did not matter on the facts of this case, Flaux J held that it was no longer correct to draw a distinction between information (so that proceedings can be brought abroad) and evidence (earlier cases having held that the former was obtainable under a NPO, whereas the latter was not).

COMMENT: There are therefore now two conflicting High Court decisions as to whether a NPO can be obtained before foreign proceedings are commenced. Shlaimoun appeared to draw a line between proceedings which are "up and running" and those which are contemplated, whereas here Flaux J held that no NPO can be ordered where proceedings abroad are contemplated. Flaux J sought to distinguish Shlaimoun on the basis that it had not been clear in that case whether foreign proceedings might be brought, but the judge in Shlaimoun (although agreeing that was not a case where the applicant had always known that the documents would not be used in English proceedings) made it clear that his decision would have been the same even if foreign proceedings had been contemplated. (The issue did not arise in Omar, because foreign proceedings were already up and running there).

Aviva Insurance v Randive: Court gives permission for insurer to bring contempt proceedings relating to an exaggerated road traffic accident claim

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/QB/2016/3152.html&query=title+(+randive+)&method=boolean

The respondent was involved in road traffic accident and the other driver's insurer admitted negligence but denied causation of the personal injury and consequential loss alleged by the respondent. At trial, the respondent discontinued his claim and the insurer was awarded its costs on the basis that the district judge found the claim to be fundamentally dishonest. The insurer then applied for permission to bring proceedings against the respondent for contempt of court by making false statements in documents verified by statements of truth, without an honest belief in the truth of those statements.

(No permission was required for the insurer to also pursue contempt proceedings in respect of a false statement made by the respondent in an affidavit in answer to the insurer's application).

The respondent sought to argue that committal for contempt of court should be reserved for the most serious lies, for example, contrived accidents in road traffic claims. It was argued that the courts are routinely faced with unreliable witnesses and inconsistent evidence, but that does not normally lead to contempt proceedings, Furthermore, the respondent had already been ordered to pay £8,000 in costs to the insurer and serious damage might be caused to his career.

Slade J rejected those arguments. Had the respondent's lie only related to a claim for £200 of travel expenses, she would not have considered that pursuing committal proceedings would have warranted the attendant use of court time and resources. But the respondent had also claimed £4,500 in lost wages and exaggerated the severity of the accident. The judge held that "bringing a false claim in the courts is extremely serious. Apart from the dishonesty of bringing such a claim, false claims lead to waste of court time and resources. Although the claim brought by the Respondent was small in financial terms and contempt proceedings will be costly, in the interests of justice and the overriding objective I consider it proportionate for contempt proceedings to be pursued".

Barclays Bank v Ente Nationale: Stay of proceedings where related cause of action only introduced later on

http://www.bailii.org/ew/cases/EWCA/Civ/2016/1261.html

Proceedings were commenced in Italy and the defendant in those proceedings then commenced these (unrelated) proceedings in England. The Italian proceedings were then amended to introduce a cause of action which was said to relate to the same cause of action in the English proceedings. A stay of the English proceedings was sought. Article 27 of the Judgments Regulation provides that where two or more Member State proceedings involve the same cause of action and the same parties, any court other than the one first seised must stay its proceedings. The issue was whether the actions have to be related when the Italian court was first seised in order to obtain a stay.

A similar issue was considered by the Court of Appeal in Stribog v FKI (see Weekly Update 19/11), although that case concerned the operation of Article 28 of the Judgments Regulation (which provides that where related actions are pending before the courts of different Member States, any court other than the one first seised may stay its proceedings). In that case, the Court of Appeal held that all that was required was that the proceedings be related at the time the application for the stay was made (ie it made no difference that they had not been related when the first court was seised).

However, in this case, the Court of Appeal held that the position was different for Article 27, because it deals with related causes of action and not proceedings. Thus the proceedings did not involve the same cause of action until the amendment was filed in the Italian court. Accordingly, the Italian court had not been first seised of this cause of action and no stay was required.

(Re)insurance Weekly Update 45- 2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Nigel Brook
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.