Josh Harcourt v FEF Griffin (Representative of Pegasus Gymnastics Club) and others
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The claimant, aged 16, was very seriously injured in an accident at a gym and sued the gym owner and two coaches who worked there. The defendants admitted 75% liability but the amount of damages remained to be decided.
The claimant's solicitors said the claim was worth over £6 million. None of the defendants had any significant assets, but they had accidentally disclosed a certificate of insurance which indicated cover was available to the tune of £5 million. It was not clear if this was the only insurance available, whether it was a “once and for all” limit or how it would apply to periodical payments, if at all.
Naturally, the claimant wanted to know how any damages and costs awarded to him would be met, so he made an application under Part 18 of the Civil Procedure Rules for more information about the insurance.
Part 18 allows the court to order a party to “clarify any matter which is in dispute in the proceedings…or give additional information in relation to any such matter”.
The claimant argued that, if the maximum cover was £5 million overall, there would be little point in having a lengthy battle over quantum. But if further insurance funds were available, it would be in his interest to try to maximise the award. And without this information, his solicitors could not consider whether an order for periodic payments would be appropriate.
The defendants argued that it was an elementary rule that an outsider has no right to know the terms of an insurance contract to which he is not a party. Disclosure of policy details would give claimants an unfair advantage in litigation and applications of this sort would rapidly become standard practice.
Mr Justice Irwin found in the claimant’s favour and ordered details of the insurance cover to be disclosed.
He acknowledged that the nature and extent of the defendants' insurance cover was not strictly a “matter… in dispute in the proceedings”, but decided that the wording of Part 18 should be interpreted reasonably liberally.
The overall objective of the court rules was to ensure a swift, proportionate and economical approach to litigation. Part 18 in particular was intended to ensure the parties had "all the information they need to deal efficiently and justly with the matters that are in dispute between them".
The judge did, however, make it clear that such disclosure should only be ordered when the claimant could demonstrate there was a “real basis for concern that a realistic award may not be satisfied” and that disclosure was necessary to determine whether further litigation would be useful or a waste of time and money.
Despite the judge’s cautionary words about the need to demonstrate a ″real basis″ for disclosure, the decision will alarm defendants and their insurers who may consider that the discovery of deep insurance pockets will only encourage claimants to litigate for longer.
The limits of the decision are also unclear. Quite a few defendants might have trouble meeting a £6 million damages award. In asking for the information, this claimant was not on a fishing expedition because the accidental disclosure of the insurance certificate meant he knew that insurance of some sort was in place and that the limit appeared to be lower than the likely damages. But would the judge have reached the same conclusion had no certificate been disclosed?
Almost a year after the Harcourt decision, another High Court judge faced with a similar application in West London Pipeline v Total firmly concluded that the court had no jurisdiction to order disclosure of insurance details. Whether or not the defendant would be able to pay any damages awarded was not a “matter… in dispute in the proceedings”.
This is clearly an issue that needs to be resolved.