Cards face up on the table: Are parties to litigation entitled to know how deep their opponent's pockets are?

Parties to litigation will often want to know the extent to which their opponent is insured, in order to avoid pursuing costly proceedings against those whose pockets would otherwise be empty.

What are they entitled to know?

		Generally, (subject to a few statutory exceptions) although a party might be required to identify their insurers, parties have no right to know the terms, including the level of cover, of any insurance contract that their opponent might have.  Such details are not normally deemed relevant to the issues in dispute in the proceedings and, therefore, do not have to be disclosed.
		Following the case of Harcourt v FEF Griffin late last year, however, there appears to be greater scope for a litigant to seek an order compelling their opponent to provide information relating to the opponent's insurance coverage provided there is:

			a "real basis for concern" that the opponent might not have the financial means to satisfy any judgment debt, and
			a real basis for suggesting that the information requested is necessary in order to determine whether pursuing the litigation will be useful or simply a waste of time and money.

The court considered that the relevant provision of the Civil Procedure Rules ("CPR") under which the application for information was made needs to be interpreted "reasonably liberally" to ensure that the parties have all the facts they need to deal efficiently and justly with the dispute.

The court acknowledged that there were likely to be cases where revealing the amount of insurance cover would give the other side a tactical advantage in the litigation, but suggested that the courts would consider any prejudice on a case by case basis.

Implication of this ruling

The decision is obviously welcome to litigants who have insufficient information to ascertain whether their opponent has sufficient funds to make payment of a judgment debt.  It seems likely that the ruling will encourage litigants to give serious consideration to making requests for details of insurance coverage, especially where there is a risk that the opponent is impecunious. Claimants may, for example, seek to rely on the decision to gain a tactical advantage in the litigation by ascertaining whether there is sufficient insurance coverage to satisfy a judgment debt in their favour. The Court stressed, however, that it was not opening the door to tactical applications. Therefore, save for exceptional cases where a litigant can demonstrate that there is a real basis for concern that a judgment debt might not be met, it will be possible to resist such requests on the basis that information relating to a litigant's insurance coverage does not bear upon any matter in dispute in the proceedings.

Furthermore, the Courts are likely to take a cautious approach in extending the principles of the case to a pre-action application for disclosure. The pre-action disclosure provisions of the CPR are even more restrictive than those of Part 18 because a party can only be ordered to give disclosure of documents that satisfy the requirement of the standard disclosure test. Generally speaking, documents relating to a party's insurance coverage in respect of the subject matter of the proposed proceedings will not satisfy that test. This indicates that, unless the proposed proceedings fall into the limited number of exceptions to the general rule,  a party must commence proceedings before it can establish any basis under the CPR for obtaining details of its opponent's insurance coverage.

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