Court requires disclosure of insurance details by defendant in personal injury context – wider implications as yet unclear

In Senior v Rock UK Adventure Centres and other the court ordered disclosure of the defendant’s insurance arrangements in the context of a personal injury claim on the basis that failure to do so would result in problems at the stage of assessment of damages. The judgment referred to the decision in Harcourt v FEF Griffin & Ors [2007] EWHC 1500 (QB) but did not discuss other case law which has challenged the rationale applied in Harcourt. There remains, therefore, some uncertainty as to the circumstances in which the courts will order disclosure of a party’s insurance arrangements.

Background

The claimant, Mr Senior, was seriously injured in the course of his employment with the defendant outdoor adventure company, Rock UK Adventure Centres (“Rock”). The injury was sustained when a cable broke, causing Mr Senior to fall. Mr Senior issued proceedings against Rock in July 2011. Liability was not disputed by Rock and in December 2011 judgment was issued for an amount to be assessed. The schedule of loss on a lump sum basis was in excess of £5 million.

The trial for assessment of damages is scheduled to take place in July 2015. In advance of that trial Mr Senior applied for an order that Rock disclose details of its Employer’s Liability Insurance cover. The defendant adopted a neutral position to the application. The issue for the court was whether such an application should be granted.

Decision

Mr Justice Robinson granted the application. In reaching his decision, he noted that the reason why the issue raised by Mr Senior was important was because he sought damages in the form of a lump sum and an order for periodical payments to reflect the heads of future loss, being loss of earnings, pension and care and case management. Robinson J concluded that before making an order for periodical payments, a judge would need to be satisfied that the continuity of payment under the order was reasonably secure, as per section 2(3) of The Damages Act 1996. In this case there was a real concern on behalf of Mr Senior as to whether there was sufficient cover in place to meet the anticipated damages.

In reaching his decision Robinson J referred to the following paragraph in Harcourt, a personal injury claim in which the claimant applied for disclosure of the defendant’s insurance arrangements:

“Without knowing (1) whether the appropriate level of periodical payments can be met (2) what is the nature of the extent of the cover provided in relation to compensation by way of periodical payments, lump sum damages and costs, it seems to me neither the claimant nor the court can make a reasonably informed assessment of the relevant relative advantages and disadvantages as between the periodical payment award and the lump sum award.”

Robinson J accordingly concluded that the level of cover arranged by Rock was important and the trial judge would want to know these details when assessing damages. He considered that there would be no prejudice to Rock in providing the details but, in contrast, failure to provide the details would most likely result in problems at the stage of assessment of damages.

Comment

Historically, the courts have tended not to require parties to disclose insurance arrangements unless such arrangements are relevant to the issues in dispute. For example, in Cox v Bankside Members Agency C/A 29 November 1994 names and members agents sought disclosure of errors and omissions cover provided by underwriters. Underwriters sought to redact the limits of cover and excess details. The court allowed the redactions, concluding that “The funds available (or not available) are relevant to the question of whether the Names will recover anything from their Agents or the Errors and Omissions Underwriters; they are not in my judgment relevant to the questions which fall to be answered under the originating summons” (per Saville LJ). Similarly, Sir Thomas Bingham MR concluded that “… it is highly advantageous for a litigant to know what his opponent is worth, and this knowledge may be very relevant to enforcement. But the ease or difficulty of enforcement cannot bear on the matters or legal principle in question in the cause.”

The decision in Harcourt, however, altered the position, at least in relation to the disclosure of insurance arrangements in the context of personal injury claims and the payment of periodical payments. In Harcourt, a personal injury claimant applied under CPR 18 for disclosure of the insurance arrangements of the defendant that was liable for the injury. Under CPR 18 a court may order a party to clarify any “matter in dispute” in the proceedings or give additional information in relation to any such matter. Mr Justice Irwin acknowledged that the nature and extent of the defendants’ insurance cover was not in itself a matter in dispute in the proceedings between the parties, because the proper quantum of damages could be determined without determining whether the defendants could actually pay those damages. However, he concluded that CPR 18 was broad enough to cover a request for disclosure of the insurance information:

“the wording of CPR. r. 18 requires to be interpreted reasonably liberally. The purpose of the jurisdiction must be taken to be to ensure that the Parties have all the information they need to deal efficiently and justly with the matters which are in dispute between them. Moreover, the wording need not be taken to imply that there must be a live disagreement about the relevant issue, since on very many occasions parties are properly required to furnish information pursuant to CPR r. 18 precisely to discover whether there is or is not a live disagreement between the parties on a given point. The whole thrust of the new approach to civil litigation enshrined in the CPR is to avoid waste of time and cost and to ensure swift and, as far as possible, proportionate and economical litigation.”

Irwin J went on, however, to caution against any general practice of ordering disclosure along these lines and concluded that it should “only be ordered where a claimant (or where the situation arises, any other party) can demonstrate that there is some real basis for concern that a realistic award in the case may not be satisfied.”

The case of Harcourt, however, appears to have been a limited exception to the general rule. In West London Pipeline & Storage Ltd v Total UK Ltd [2008] EWHC 1296 (Comm) (which was not a personal injury claim), Mr Justice Steel declined to follow Harcourt. He could not accept, particularly in light of the wording of Practice Direction supplementing CPR 18, that CPR 18 could be construed liberally so as to allow for disclosure of insurance arrangements where that information did not relate to any matter in dispute in the proceedings. Notwithstanding the overriding objective of the CPR, Steel J concluded that the submission by the claimant that disclosure was necessary on the grounds of case management would require “a rewriting of both the rule and the practice direction”. The conclusion of Steel J in relation to CPR 18 in West London was followed by Mrs Justice Thirlwall in XYZ v Various [2013] EWHC 3643 (QB) (albeit she granted disclosure of the respondents’ insurance arrangements under the case management powers afforded by CPR 3.1(2)(m)) and by the Court of Appeal in Dowling v Giffin [2014] EWCA 1545.

The judgment in Senior is brief. It does not state the provision under which the application for disclosure was made nor does it refer to the decisions set out above. We do not therefore know whether the judge considered the case law beyond the Harcourt quotation. It is worth noting however that Senior concerned periodical payments of damages for personal injury and in that respect is similar to the facts in Harcourt. It may be that applications for disclosure for the purposes of determining whether periodical payments of damages for personal injury can be made will be treated as limited exceptions to the otherwise general rule that a court will not order disclosure of a party’s insurance arrangements unless they are relevant to the issues in dispute. However, it will be interesting to see whether a future judgment provides clarity on this issue.