Arroyo & Ors v BP Exploration Company (Colombia) Ltd

Rules requiring disclosure of information about conditional fee agreements and after-the-event insurance do not generally require disclosure of the policy itself. They require only the prescribed information necessary to identify an additional liability and, where applicable, the level and staging of cover.

General case-management powers do not permit the court to circumvent the detailed disclosure scheme. An individually negotiated ATE policy may attract legal advice and litigation privilege where its terms reflect advice on prospects, risks and litigation strategy. Disclosure may also be refused where it would provide a substantial tactical advantage and cause prejudice to the insured.

This was a case management application in group litigation brought by Colombian farmers against BP Exploration Company (Colombia) Ltd. The defendant sought disclosure and inspection of the claimants’ ATE insurance policy, principally to assess the prospect of recovering costs, to decide whether to seek security for costs or a costs-capping order, and to understand the possible ATE premium.

The claimants had disclosed the information required by the applicable costs rules and had voluntarily supplied further information about the policy, including the £1.8 million limit of indemnity and the non-staged nature of the premium. The central issues were whether the court had jurisdiction to compel production, whether the policy was privileged, and whether disclosure should nevertheless be ordered in the exercise of discretion.

1. Application dismissed. The Senior Master held that the court had no jurisdiction under the CPR or the Group Litigation Practice Direction to compel production of the claimants’ ATE policy. The policy was not relevant to the substantive issues and the detailed funding provisions formed a complete code for the information which had to be provided.
2. CPR 44.15 required information only where a party sought recovery of an additional liability. It did not create a general right to know an opponent’s resources or ability to satisfy a costs order. The phrase permitting the court to order otherwise allowed relief from prescribed disclosure; it did not authorise additional categories of information. This reading was reinforced by the restrictions elsewhere in the costs regime on advance disclosure of additional liabilities.
3. CPR 3.1, CPR 18.1 and paragraph 12 of PD 19B did not supply the missing jurisdiction. CPR 18.1 concerned information about matters in dispute, whereas the ATE arrangements were not part of the substantive dispute. The policy was relevant, at most, to enforcement or costs proceedings.
4. The individually negotiated policy was privileged. Its terms reflected legal advice and assessments of litigation risk, prospects and tactics, and were created to aid the conduct of litigation. The policy therefore attracted both legal advice privilege and litigation privilege. The court distinguished earlier first-instance decisions which had ordered disclosure on materially different evidential bases.
5. Even if jurisdiction and privilege had been established against the claimants, disclosure would have been refused as a matter of discretion. The defendant already had the information reasonably required under the amended regime. Disclosure of bespoke terms could reveal tactical information and cause irreparable prejudice.
6. The court also rejected the suggestion that policy terms had to be disclosed for security-for-costs or costs-capping applications. Such applications would proceed on the basis of the stated £1.8 million cover, or, if its accuracy were properly challenged, on the basis that no available assets existed. Costs of the application were proposed to be awarded to the claimants.

First-instance case management decision. No prior appellate decision is stated in the judgment.