Court orders defendant to tell plaintiff about its liability insurance

Professor Greg Reinhardt taught me civil procedure in my undergraduate degree. Then he taught me Advanced Litigation, Professional Indemnity Insurance, and Insurance Litigation, in a post-graduate degree I did. In the latter subject, I wrote an essay about, in part, plaintiffs’ attempts to join defendants’ liability insurers to proceedings for declarations that they were bound to indemnify the defendant against the plaintiff’s claim, and published it in two parts at (1998) 9 Insurance Law Journal 208; (1998) 10 Insurance Law Journal 29. Plaintiffs want to know how much insurance defendants have. Little point angling for a $2 million settlement if there’s only $1 million in insurance. Better to characterise the other side’s wrongdoing as negligence rather than deliberate or dishonest conduct if his indemnity insurance doesn’t respond to liability for such wrongdoing. Professor Reinhardt has recently given a paper dealing with the courts’ willingness to take the existence of, responsiveness of, and amount of an insurance policy of one party or another into account, and I report below a full-on development noted in his paper.

Professor Reinhardt gave his paper as the Australian Insurance Law Association‘s 2007 Masel Lecturer in honour of Phillips Fox’s (the late) Geoff Masel, a man about whom I have never heard an ill word spoken, author of what was for a long time the leading Australian text on professional liability, and a universally acknowledged insurance law guru. (By way of aside, all of AILA’s conference papers from 2002 to last year are available here, for free download, including lots on proportionate liability and on litigation funding.)

After that long introduction I come to the scary bit. The High Court of England granted an application by the plaintiff for an order that the defendant show him its liability insurance policy so it could work out whether to contest quantum, liability having already been agreed upon in a compensation claim for catastrophic personal injuries. The case was Harcourt v FEF Griffin [2007] EWHC 1500 (QB), which I cannot find on Bailii, the UK’s version of Austlii. There is a CMS Cameron McKenna case note here though.  Professor Reinhardt quoted the following passage:

‘The nature and extent of the Defendants’insurance cover is not in itself a “matter… dispute in the proceedings” between the Parties, in the sense that the proper quantum of damages payable to the Claimant could be determined without determining whether the Defendants can actually pay those damages. However, it appears to me that the wording of [the relevant discovery rule] requires to be interpreted reasonably liberally. The purpose of the jurisdiction must be taken to be to ensure that the Parties have all the information they need to deal efficiently and justly with the matters which are in dispute between them. Moreover, the wording need not be taken to imply that there must be a live disagreement about the relevant issue, since on very many occasions parties are properly required to furnish information pursuant to [the rule] precisely to discover whether there is or is not a live disagreement between the parties on a given point. The whole thrust of the new approach to civil litigation…… is to avoid waste of time and cost and to ensure swift and, as far as possible, proportionate and economical litigation. Therefore, I have no hesitation in finding that if there is no rule of law or significant rule of practice to the contrary, then the wording of [the rule] is broad enough to cover information of this kind.’

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One Reply to “Court orders defendant to tell plaintiff about its liability insurance”

  1. Stephen, a different approach to topping up inadequate cover. There was a case I ran a long time ago, where I succeeded against an insurance broker for failing to arrange the correct cargo insurance (resulting in the rejection of the claim for total loss). The broker’s cover was assumed to be inadequate, but I turned up some case law (UK?) suggesting you could go the liability insurer for maintaining the defence of the case when there was no reasonable prospect of success. I wonder if this line has progressed at all. Cheers, Derek.

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