The owners of a warehouse at Sheerness Docks in Kent, which was damaged by fire on 14 January 2013, brought an application for pre-action disclosure of the potential defendant’s insurance policy so that they could decide whether to bring a claim. The owners were concerned that, if an award was made for damages in the amount that they were claiming, the potential defendant would be insolvent and wound up.

The decision

  • The insurers resisted the application on the basis that ordering disclosure would cut across established practice, which militates against disclosure of a solvent insured’s policy, and the Third Parties (Rights against Insurers) Act 2010 (which provides a particular process for provision of information in relation to an insolvent insured party)
  • The Judge agreed and dismissed the application – the potential defendant was not insolvent and therefore circumstances were not sufficiently exceptional to justify departing from the established legal position.

The decision is a sensible restatement of the law and is consistent with the Third Parties (Rights against Insurers) Act 2010 which recently came into force. Exceptional circumstances will be required before the Court will consider ordering disclosure of a solvent insured’s policy.