AmTrust Speciality Limited v Endurance Worldwide Insurance Limited

When deciding whether to order search-based extended disclosure under CPR Practice Direction 57AD, the court must identify key issues requiring contemporaneous documents for a fair resolution and assess reasonableness and proportionality by reference to all the specified factors. There is no separate threshold test of relevance. The court should assess the likelihood and potential probative value of documents, but should not definitively decide their relevance to the trial issues or pre-judge contractual construction. Documents expressly incorporated into an insurance policy, or forming part of its factual matrix, may be probative of the scope of cover and exclusions. Standard-form wording and regulatory minimum terms do not make pre-contractual material irrelevant as a matter of principle.

The appeal arose from a case management conference in Part 20 proceedings concerning professional indemnity policies issued to two insolvent solicitors’ firms. AmTrust, as statutory assignee under the Third Parties (Rights against Insurers) Act 2010, sought disclosure of pre-inception communications between the firms and Sompo concerning a litigation funding scheme and agreements with AmTrust or its agent.

The disclosure was sought for preliminary issues concerning the scope of the insuring clause and the application of policy exclusions. The deputy High Court judge refused disclosure on the basis that the material was unlikely to assist construction of the policies. The central issue was whether that approach applied the correct disclosure test and improperly determined questions reserved for trial.

1. Appeal allowed. The deputy judge erred in principle by applying the wrong approach to the selection of disclosure issues and by pre-judging the construction of the policies. The decision refusing disclosure was set aside, and the communications sought in Disclosure Issues 1A and 1B were ordered to be disclosed.
2. Under CPR Practice Direction 57AD, an issue for disclosure is a key issue in dispute which will need to be determined with some reference to contemporaneous documents for a fair resolution of the proceedings. Search-based extended disclosure must also be reasonable and proportionate having regard to the overriding objective and the factors in paragraph 6.4. The inquiry is multi-factorial.
3. There is no minimum or threshold test of relevance. The likelihood that documents exist and will have probative value is one factor in assessing reasonableness and proportionality. Other factors may justify disclosure even if the judge considers that the documents are unlikely ultimately to affect the trial outcome, particularly where deciding that question would pre-judge the issue.
4. The disclosure judge must not definitively determine the ultimate relevance of documents to contractual construction where doing so would pre-judge the trial issues. The trial judge had to determine whether the incorporated documents, or documents forming part of the factual matrix, were relevant to construction of the insuring clause and exclusions, including whether the policies covered activities connected with the litigation funding scheme.
5. The court rejected the submission that standard-form policy wording, modelled on Solicitors Regulation Authority minimum terms, made the documents of little or no relevance. The authorities on professional indemnity insurance confirmed the importance of the regulatory background and objective construction, but did not determine the effect of the express incorporation clause in these policies. The possible effect of section 9 of the Insurance Act 2015 could not be decided without the documents.
6. Fairness and the overriding objective also supported disclosure. AmTrust stood in the shoes of the insured firms but lacked documents which they would ordinarily possess, while Sompo had access to them. It was in principle unsatisfactory to construe the policies without seeing all documents said to form part of them. The documents were available and disclosure was not said to be disproportionate.

• Court of Appeal (Civil Division) [2025] EWCA Civ 755: allowed the appeal and ordered disclosure of the communications sought in Issues 1A and 1B.
• Commercial Court (KBD), Business and Property Courts of England and Wales [2024] EWHC 3409 (Comm): at a case management conference, refused to approve those disclosure issues, considering the documents unlikely to be relevant to the fair resolution of the claim.