Rhea Taranee Nauer-Statham & Anor v Direct Line Group PLC

Pre-action disclosure under CPR 31.16 requires satisfaction of the jurisdictional conditions and a separate discretionary assessment. The prospect that disclosure might assist settlement must be real rather than speculative. The jurisdiction is directed principally to enabling a prospective claimant to understand the events giving rise to the substantive dispute, formulate a claim, or negotiate on an informed basis. It does not generally extend to obtaining the opponent’s internal assessment or views about an already understood dispute. Pre-action disclosure remains exceptional and is ordinarily unnecessary where the applicant can bring the claim and progress the pre-action process using information already available. A tightly focused request for one document is relevant, but it does not by itself justify the order.

The claimants sought pre-action disclosure from their household insurer under CPR 31.16 of a report prepared by loss adjusters after a meeting concerning water damage to their home, alternative accommodation, and the insurer’s concerns about rental payments for a property owned by relatives.

The insurer resisted disclosure, principally on the grounds that the report was privileged and that the application was not an appropriate exercise of the pre-action disclosure jurisdiction. The claimants said that disclosure would help them understand the insurer’s position, correct any misapprehension, and re-engage in negotiations. The central issues were whether the CPR 31.16 conditions were met, whether disclosure was desirable to assist settlement, and whether the court should exercise its discretion. The court also considered, but did not decide, the privilege issues.

1. Application dismissed. The claimants and defendant were likely to be parties to anticipated litigation. The burden for establishing that requirement was not high, and the circumstances made litigation distinctly likely.
2. The report would fall within the scope of standard disclosure in the anticipated proceedings, at least in principle. Its relevance was unaffected by the defendant’s privilege claim. Privilege could prevent inspection, but did not alter whether the document was within the standard disclosure process.
3. The court was doubtful that the requirement in CPR 31.16(3)(d) was satisfied. Under Black v Sumitomo Corp, the court must identify a real prospect that disclosure will assist one of the statutory purposes and must keep that jurisdictional question distinct from the later discretionary assessment. The claimants’ hope that the report would restore confidence, reveal a misapprehension, or facilitate settlement was speculative, particularly because the effect would depend on its contents.
4. Even assuming the jurisdictional requirements were satisfied, the discretion should not be exercised. The claimants knew the facts, the damage, the loss and the remedies they sought. They could issue proceedings without the report. If they wished to continue negotiations, they could permit a further inspection and answer the insurer’s questions about the alternative accommodation. Disclosure would therefore add little to their ability to formulate or progress the claim.
5. The policy of CPR 31.16 is not to provide access to an opponent’s thinking about the dispute where the applicant already possesses the information needed to advance its case. Granting disclosure on that basis would risk the satellite litigation deprecated in Black v Sumitomo Corp. The request was focused, but that factor did not overcome the exceptional nature of the jurisdiction.
6. The court declined to determine privilege. It provisionally considered that privilege would ordinarily be addressed after an order for disclosure, unless its existence were obvious and disclosure pointless. It also expressed provisional views that the report might be privileged as a whole, while recognising that waiver or severability might require further argument.