Jonathan Holt v Allianz Insurance PLC

For pre-action disclosure, statutory and procedural conditions must be considered separately from the court’s discretion. A putative defendant must show, on the evidence of the particular case, that it may well be a party to the anticipated proceedings. General evidence that insurers are often sued directly is insufficient where reliable case-specific evidence indicates that another defendant will be sued.

Where a credit hire claim substantially exceeds the basic hire rate and the claimant does not disown impecuniosity, that issue may well arise in later proceedings. Limited financial disclosure may therefore satisfy the jurisdictional requirements for pre-action disclosure and may be desirable to assist settlement or save costs. The appeal nevertheless succeeds where the application was brought only by an insurer unlikely to be a party.

The appellant claimed credit hire charges exceeding £10,000 following a road traffic accident for which liability was accepted. The respondent insurer asserted that ordinary hire rates were substantially lower and sought pre-action disclosure of financial documents relevant to possible impecuniosity.

The County Court ordered disclosure under section 52(2) of the County Courts Act 1984 and CPR 31.16. Permission to appeal was granted because of differing County Court approaches to similar applications. On appeal, the central issues were whether the insurer might well be a party to subsequent proceedings, whether the documents were relevant to an issue likely to arise, whether disclosure was desirable, and whether the discretion should be exercised in favour of an order.

1. Appeal allowed. The pre-action disclosure order should not have been made because the application was brought only by Allianz. The evidence of the appellant’s solicitor indicated that proceedings would be brought against the insured or tortfeasor, not Allianz. The possibility of later joinder under CPR 19.2(2) was speculative. The statutory and procedural requirement that the respondent might well be a party was therefore not satisfied.
2. The County Court had erred by relying on the frequency with which insurers were sued directly in similar cases rather than assessing the evidence in the particular case. The relevant question was whether there was sufficient reason to doubt the case-specific evidence that Allianz would not be sued.
3. Obiter, the court approved the approach that the statutory conditions and the discretionary question must be considered separately. Under Black v Sumitomo Corpn, the relevant statutory requirements concern what may well happen in the anticipated litigation. The requirement under CPR 31.16(3)(c) is satisfied where the documents may well be within standard disclosure if the likely issue arises.
4. On the merits, impecuniosity might well have been an issue. The claim correspondence showed a substantial difference between the credit hire rate and the asserted basic hire rate, and no alternative claimant-specific justification was advanced. The documents sought would therefore have been within standard disclosure if impecuniosity were pleaded.
5. Disclosure was also desirable under CPR 31.16(3)(d). It offered a real prospect of assisting resolution without proceedings or saving costs. The prospective claimant could not properly avoid considering impecuniosity at the pre-action stage merely because proceedings had not begun. Limited disclosure of financial information was proportionate and its privacy impact did not outweigh the interests of resolving the dispute.
6. The judge’s substantive conclusions would have been upheld if the correct applicant had brought the application. The independent costs appeal was moot in substance; permission was refused, although the court retained jurisdiction to revisit consequential costs following the main appeal.

• High Court (King’s Bench Division): appeal from the Cardiff County Court allowed. The order for pre-action disclosure was set aside because Allianz was not shown to be likely to be a party to the anticipated substantive proceedings.
• Cardiff County Court: HHJ Harrison ordered pre-action disclosure under section 52(2) of the County Courts Act 1984 and CPR 31.16.