Whether third party claimant entitled to pre-action disclosure of currently solvent insured's insurance policy

The owners of a warehouse which was damaged by fire alleged that the fire was caused by the activities of the insured. The insured is currently solvent but the warehouse owners allege that it would be unable to meet any judgment against it and so would be wound up. The owners therefore sought pre-action disclosure of the insured's public liability insurance policy from its insurers, in order to determine whether to pursue its claim. Those insurers allege that they are entitled to deny liability under the policy because of a breach by the insured of a "hot working" endorsement to the policy.

The insurers argued that the judge should not exercise his discretion under CPR r31.16 (the pre-action disclosure rule), because to do so would be to ignore the provisions of the Third Parties (Rights against Insurers) Act 2010. That Act contains a specific regime for the provision of information (but not documents) about an insolvent insured's insurance provision. It was argued that there would have been no need for Parliament to have introduced such a regime if disclosure of the policy could instead be obtained under CPR r31.16.

Jefford J accepted that argument and dismissed the application for pre-action disclosure.

She agreed that Parliament could not have envisaged that CPR r31.16 would (or would commonly) be used to obtain policies from the insurers of insolvent insureds. Furthermore, it has been accepted in prior caselaw that the CPR provisions cannot be used to obtain the insurance policy of a solvent insured (because the policy is not relevant to any issue in the case) and there has never been an express statutory provision entitling a litigant to obtain the policy of a solvent insured either (because a litigant takes his defendant as he finds him).

She concluded that: "It would, against this background, be curious if a potential claimant (A) could say that because the solvent insured might become insolvent and that he, A, might then have a claim against insurers, he should have disclosure of the policy under Rule 31.16. In my judgment, this militates strongly against my exercising my discretion to order disclosure in this case". Nor did it make any difference that it was highly probable that the insured would (if the litigation proceeded) be held liable, as it had not advanced any defence, and that it was highly probable that it would be put into liquidation because it could not meet any judgment against it.