UK: (Re)Insurance Weekly Update 06- 2016

Last Updated: 2 March 2017
Article by Nigel Brook
Most Read Contributor in UK, November 2017

This week's caselaw

Wheeldon Brothers Waste v Millenium Insurance: Whether insurer could instruct an expert whom the insured had also subsequently used

Following a fire at the insured's premises, insurers instructed an expert to investigate. The conclusions of that investigation led the insurer to decline liability. The insured then instructed the same expert (not as a CPR r35 expert and with the loss adjusters' permission) to investigate whether the insured could bring a claim against third parties.

When the insured subsequently commenced proceedings against insurers, insurers sought to instruct the expert under CPR r35 and the insured sought to prohibit that. The insured relied on the House of Lords case of Prince Jefri Bolkiah v KPMG [1999] (which did not concern the appointment of an expert), in which it was held that accountants who provide litigation support services have a duty to preserve confidentiality (including not acting for the other side). However, in Meat Corporation of Namibia v Dawn Meats (see Weekly Update 10/11) Mann J held that the strict test in Prince Jefri does not apply just because an expert has received privileged and confidential information.

Coulson J agreed with that reasoning and held there was no basis for preventing the insurer from relying on the expert here. That was because:

  1. The expert had undertaken a contemporaneous investigation and so was in "the best possible position" to assist the court;
  2. There had been no overlap between what the insurer and the insured has asked the expert to do. The insurer had had no interest in whether a claim could be brought against third parties;
  3. Experts owe an overriding duty to the court and "that duty trumps everything else... the existence of that overriding duty also modifies the strict application of the rule in Prince Jefri"; and
  4. Crucially, there was no evidence that confidential information had been passed to the expert here and "certainly no risk that it would be passed to the defendant". The insured's letter instructing the expert had included a confidentiality clause.

Dunn Motor Traction v National Express: Whether shareholder undertaking as good as ATE insurance in security for costs application

The defendants applied for a security for costs order on the basis that the claimant is a company and there "is reason to believe that it will be unable to pay the defendant's costs if ordered to do so" (CPR r25.13(2)(c)). The claimant sought to rely on recent caselaw in which it was held that the existence of an ATE insurance policy should be taken into account in deciding whether the claimant will be able to pay. It was recently held in Premier Motorauctions v PWC (see Weekly Update 38/16) that the question is simply whether there is reason to believe that the insurer will not pay.

In this case, there was no ATE policy, but the claimant's sole shareholder had irrevocably undertaken to indemnify the claimant in respect of its costs liability to the defendant. Teare J held that the approach towards ATE policies did not apply to an indemnity from the shareholder. That is for various reasons, including the fact that the counterparty to an ATE policy is a "responsible and reputable insurer", whereas the shareholder is, in a practical sense, the adversary of the defendant. Furthermore, "Whereas ATE policies are now "a central feature of the ability of parties to gain access to justice" indemnities provided to a company by its owner in respect of the company's liability to pay legal costs are not so regarded".

Accordingly, only in exceptional circumstances will the shareholder's indemnity be a sufficient asset to demonstrate that the claimant will be able to pay the defendant's costs.

DTEK Trading v Morozov: High Court again confirms that permission to serve claim form out of the jurisdiction cannot be given where the respondent is not a party to the arbitration

In Cruz City v Unitech (see Weekly Update 42/14), Males J held (obiter) that section 44 of the Arbitration Act 1996 ("the Act") does not include any power to grant a remedy against a non-party to the arbitration agreement or arbitration (and so permission to serve the claim form out of the jurisdiction on a non-party could not be given). Males J noted that section 44 is one of the few sections of the Act which applies even if the seat is outside England and Wales, and he doubted that Parliament intended to give the English court jurisdiction to make orders against non-parties in support of arbitrations happening anywhere in the world.

Cruz City had concerned an application under CPR r62.5(1)(c), where the claimant is seeking a remedy other than an order under section 44 of the Act (in that case, the freezing of assets belonging to a third party). In this case, the claimant sought an order under section 44 (namely, the preservation of evidence) and therefore sought to rely on CPR r62.5(1)(b). It sought to argue that Cruz City had been wrongly decided. That argument was rejected.

The judge, Cockerill QC, held that section 44 does not permit an order to be made against a non-party: "While some of the provisions may be not unsuited to third party orders, there is nothing in the wording which indicates that the sections are designed with applications against third parties in mind. On the contrary however, when reading them together and not separately I concur with Males J's conclusion that the wording is more suggestive of applications confined to the arbitration parties than otherwise".

Nor did it matter that this conclusion effectively creates a lacuna, whereby a non-party might be able to take steps to thwart the arbitration agreement because there is no right to obtain injunctive relief against a non-party: "the fact that there would be a lacuna is not a reason to find a jurisdiction which is not justified on the wording of the relevant sections against the relevant background".

Twin Benefits v Barker: An application for non-party disclosure and privilege issues

The applicant sought a non-party disclosure order under CPR r31.17. It was common ground that one class of document sought from the non-party (a solicitor) was covered by legal professional privilege ("LPP"). It was also common ground that the solicitor's client and the applicant had a common interest which meant they were jointly entitled to claim LPP. As a result, the applicant was entitled to inspection of the documents. However, the applicant had a duty to withhold inspection by the other parties to the proceedings (if it did not have the consent of the solicitor's client).

Given those circumstances, the issue was whether CPR r31.17(3)(a) was satisfied. That rule provides that the court can only order non-party disclosure where "the documents of which disclosure is sought are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings". It was submitted that this requirement had not been satisfied where the applicant could inspect the documents but could not deploy the documents as part of its case.

That argument was rejected by Arnold J. He accepted the argument that once the applicant has inspected the documents, it may be able to prove their contents in other ways "and hence the documents may support its case even though they cannot themselves be deployed as part of that case".

Roshan v Singh: Whether a non-party can set aside a judgment on the ground of fraud

One of the issues in this case was whether only a party to the original proceedings is entitled to set aside a judgment in those proceedings because it was fraudulently obtained. The judge held that there is no such general principle, and that a non-party can apply to have the judgment set aside: "It might well be that where a judgment is sought to be impeached it would be a rare case where a non-party can say to the court that because a judgment in a case to which he was not a party was obtained by fraud it should be set aside; it might be said that the non-party had no personal (as opposed to a more general public- spirited or general) interest in that happening. However, it seems to me that the present case is different. If [the non-party] is right .... then he... [has] been cheated out of [his] beneficial ownership of the Property because of a fraud, and the courts ought not to allow a judgment obtained by fraud to stand; it would deprive them of their rights". There was no need for the non-party to demonstrate that the original proceedings were part of a conspiracy to damage his interests. The non-party would have to show, though, that (inter alia) the evidence supporting the assertion of fraud could not, with reasonable diligence, have been obtained at the trial.

(Re)Insurance Weekly Update 06- 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

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

Nigel Brook
In association with
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
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 you may opt out by clicking here

    Terms & Conditions and Privacy Statement (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

    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’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.


    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.


    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.

    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 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.


    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.


    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.


    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.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    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

    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

    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

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

    By clicking Register you state you have read and agree to our Terms and Conditions