In Travelers Insurance Company Ltd v Countrywide Surveyors Ltd [2010] EWHC 2455 (TCC), the Technology and Construction Court dealt with an application for pre-action disclosure in a situation where the parties had already entered into an arbitration agreement.

The Claimant was the lead underwriter on the Defendant’s professional indemnity insurance policy, the Defendant being a firm of surveyors. Various claims had been brought against the Defendant for allegedly fraudulent valuations. The Claimant was considering invoking an exclusion clause and avoiding the policy for misrepresentation and/or non-disclosure. The Claimant therefore requested documents from the Defendant relating to the extent to which the Defendant was aware of the possibility of fraud at the time the policy was taken out. While the Defendant supplied several documents, the Claimant believed that more existed and so applied to the court for pre-action disclosure.

The Defendant resisted this application, arguing that as there was an arbitration agreement in place, the court had no jurisdiction to order such disclosure. The Defendant argued in the alternative that even if the court did have such jurisdiction, the requirements of CPR 31.16 (which deals with the requirements for pre-action disclosure) had not been met on the facts of this case. The Claimant argued that the dispute between the parties would inevitably be litigated, and that even though there was an arbitration agreement in place the court still had the statutory jurisdiction to order the disclosure applied for.  

The court found in the Defendant’s favour, holding that the dispute was subject to a binding arbitration agreement, and therefore under section 33(2) of the Senior Courts Act 1981 (which gives the High Court its powers to order pre-action disclosure) the court had no jurisdiction to order pre-action disclosure. As a matter of construction, it is clear from this section that the court’s power to order pre-action disclosure may only be invoked by an applicant who, in the court’s opinion, would be a likely party to subsequent proceedings in that court.  

The Claimant had also based one strand of its argument on section 44(3) Arbitration Act 1996, which provides that “if the case is one of urgency the court may, on the application of a party or proposed party to the arbitral proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets”. Coulson J stated that this section was only to be invoked in exceptional circumstances, for example where crucial evidence could be irretrievably lost, and there were no such exceptional circumstances in this case.  

The court’s decision is consistent with one of the stated aims of the Arbitration Act 1996, i.e. to minimise the level of court intervention in arbitration. Generally the tribunal should make all necessary procedural orders, and the court should only intervene where the tribunal is unable to act effectively.