Royal & Sun Alliance Insurance & Anor v Kroll Advisory Ltd

An order for non-party disclosure may be made before the opposing party serves a defence where the key dispute is already clear and unlikely to change. The applicant must show that the documents may well support its case or adversely affect another party’s case, and that disclosure is necessary for the fair disposal of the claim or to save costs. A request must identify clear and discrete categories rather than require a non-party to search generally for relevant documents. The court must also consider the overriding objective, proportionality, confidentiality and the practical burden of compliance.

The claimants, insurers of Kroll Advisory Ltd, sought disclosure under CPR 31.17 from two former administrators of Glasgow Rangers Football Club. The disclosure concerned confidential settlements and mediation material arising from proceedings brought by the administrators against Scottish prosecuting authorities. The claimants had paid Kroll £4.7 million towards criminal defence costs and alleged that sums referable to those costs were recoverable under a settlement agreement.

Kroll had not yet served a defence, but extensive correspondence had established its principal position that the settlements contained no payment for criminal defence costs. The issues were whether the documents might support the claim, whether disclosure was necessary, and whether the application was premature or otherwise disproportionate.

1. Application granted. The court ordered Mr Clark and Mr Whitehouse to disclose the four identified categories of documents. The claimants were to meet their compliance costs, and the privilege protection in CPR 31.17 applied.
2. Documents sought under CPR 31.17 must be documents which may well support the applicant’s case or may well adversely affect another party’s case. Where a class is sought, the test must be capable of application to every document within the class. Documents which provide important context may, together with other documents, satisfy the test.
3. Disclosure must also be necessary fairly to dispose of the claim or to save costs. Necessity may be absent where the documents or their information can be obtained from another source. The order must clearly identify what the non-party must produce; it should not require a general search for documents relevant to pleaded issues.
4. The application was not premature merely because Kroll had not served a defence. Extensive pre-action correspondence had identified a central dispute which was unlikely to disappear. The court could therefore determine the application before service of the opposing statement of case. The approach in Abbas v Yousef [2014] EWHC 662 (QB) illustrated a case where waiting was appropriate, but did not establish an inflexible rule.
5. The requested settlement agreements, pleadings and mediation documents were capable of informing the interpretation of the settlement agreement and any apportionment of the settlements. The claimants had shown that the material could not reasonably be obtained from Kroll, the Lord Advocate or the Scottish court. The categories were limited, discrete and readily identifiable.
6. The court did not finally decide whether the settlement agreement extended to sums paid in settlement rather than sums awarded by judgment. That construction issue remained arguable and could not be conclusively determined in proceedings to which Kroll was the principal party.
7. Mr Clark was awarded his costs of the application in the first instance. Those costs, and the claimants’ costs, were costs in the case as between the claimants and Kroll.