Poker face once more: New decision makes it harder for parties to litigation to discover how deep their opponent's pockets are.

We reported earlier this year on the High Court decision of Harcourt v FEF Griffith¹. In line with the modern emphasis of cards being "face up on the table", Harcourt potentially made it easier for parties to litigation to obtain an order compelling an opponent to reveal the extent of their insurance cover.  Knowledge of cover may be central to the question of whether to pursue proceedings against those whose pockets would otherwise be empty.  A decision last week of Mr. Justice David Steel in West London Pipeline and Storage Ltd v Total UK Ltd [2008], however, will come as welcome relief to defendants, third parties and their insurers as it means that opponents will only rarely be required to provide such details and will, therefore, be able to keep their cards close to their chest.

What is the position now?

In Harcourt, Mr Justice Irwin held that a party could seek an order compelling their opponent to provide information relating to the opponent's insurance coverage provided there was:

			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 under Part 18 of the Civil Procedure Rules ("CPR"), under which the application for information may be made, should be interpreted "reasonably liberally" to ensure that the parties had all the facts they needed to deal efficiently and justly with the dispute.   The ruling led to the concern that litigants would  give serious consideration to making requests for details of insurance coverage wherever possible, especially where there was a risk that the opponent was impecunious.

Despite the more open approach to litigation, conversely, in last week's judgment, Mr Justice Steel considered that the CPR, "however liberally interpreted", did not give the court jurisdiction to make such orders under Part 18. The information requested under that Part must clarify a "matter which is in dispute in the proceedings".  In this case, as, arguably, in most cases, the existence or scope of insurance cover was not material to any of the issues in dispute between the parties. Because the "insurance position does not impact on the ability to prepare the case, let alone understand any potential defence", the court will generally not have jurisdiction under Part 18 to make such an order.

We have returned, therefore, to the position that, 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 (subject to a confined number of statutory exceptions) deemed relevant to the issues in dispute in the proceedings and, therefore, do not have to be disclosed.

Implications of this ruling

Defendants, third parties and their insurers should continue to refuse requests for disclosure of their insurance details where the requesting party is merely "fishing" for information that does not bear upon the issues in dispute in the proceedings.  Last week's clear ruling means that in the event that an application for an order of such details under CPR Part 18 is made, it is unlikely that, except where the level of insurance cover is material to a matter in dispute between the parties, defendants will not be compelled to disclose the level of their insurance cover.

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1 [2007] EWHC 1500