Hollywood Realisations Trust Ltd. v Lexington Insurance Company & Ors

Permission to use exchanged witness statements for another purpose under CPR 32.12 is discretionary. The court must balance the policy protecting the confidentiality and privilege of unused statements against any sufficiently strong countervailing public policy. Facilitating settlement of substantial multi-party litigation may justify permission, particularly where insurers or reinsurers need informed access to participate in settlement decisions. Any order should restrict disclosure to specified recipients, require written confidentiality undertakings, limit use to the settlement process, and require return of the documents. Such orders are not confined to exceptionally large proceedings.

The claimant applied under CPR 32.12 for permission to use witness statements and expert reports exchanged in substantial multi-party insurance litigation for the purpose of a court-ordered settlement conference. The first defendant’s reinsurers needed access to the material to make informed decisions, but other parties objected on confidentiality, privilege and prejudice grounds. The central issue was whether the public interest in facilitating settlement outweighed the protection ordinarily afforded to unused statements, and what safeguards should govern any permission.

1. The application was granted under CPR 32.12, subject to appropriate safeguards. A witness statement may ordinarily be used only for the proceedings in which it was served. The court may permit another use under rule 32.12(2)(b).
2. The protection of unused witness statements rests on public policy. They are exchanged to facilitate the efficient conduct of the trial and settlement. Wider disclosure or use may cause prejudice, including the creation of new claims, defamatory use, third-party intervention or exposure of material that never enters the public domain. Comfort Hotels v Wembley Stadium Ltd [1988] 1 WLR 872 and Prudential Assurance Co v Fountain Page Ltd [1991] 1 WLR 756 illustrated the governing principles.
3. Permission requires a strong countervailing public policy basis. The public interest in facilitating settlement of exceptionally large, costly and complex litigation was sufficiently strong. The reinsurers had a vital role in deciding whether the first defendant could agree an overall settlement, and delay in informing them could jeopardise the settlement conference.
4. The order was limited to specified individuals and nominated advisers. The recipients had to be identified to the other parties, give written undertakings against further disclosure and use, restrict use to the court-ordered settlement discussions, and return the documents immediately after the conference.
5. The judge added that comparable orders may be appropriate in substantially more modest cases where required by the Overriding Objective.

First-instance decision. No prior appellate decision was stated in the judgment.