Acasta European Insurance Company Limted v Emmiera Group Limited

Disclosure of documents preserved under an imaging order is a separate exercise from preservation. It is not an automatic or ancillary consequence of the order. The normal position is that disclosure occurs after pleadings close and is undertaken by the disclosing party through its solicitors.

A claimant seeking early disclosure bears the burden of showing sufficient justification. Strong prima facie evidence of both dishonesty and a propensity to conceal or destroy evidence may justify departing from the usual process, but allegations which cannot yet be pleaded do not justify wide-ranging disclosure intended to discover whether a broader fraud case exists. The court must also consider intrusion, privacy, proportionality and the focus of the requested order.

Acasta European Insurance Company Limited, an insurance underwriter, sought disclosure and inspection of documents preserved under an imaging order made without notice by Marcus Smith J. Acasta alleged breaches of contract and fiduciary duty, deceit and conversion by Emmiera Group Limited, its claims-handling agent.

The parties agreed that preservation should continue and that Acasta should receive documents in which it claimed a proprietary interest or contractual right of access. The dispute concerned wide-ranging bank statements and electronic messages relating to the parties’ business relationship. Acasta relied on suspected further frauds and sought disclosure to investigate and plead them. The issue was whether early disclosure was justified and, if so, what form it should take.

1. The application was dismissed. The preservation order remained in place, and the court dismissed the application for disclosure of the two broad categories of bank statements and electronic messages.
2. Disclosure of documents captured by an imaging order is a separate exercise which must be justified under the disclosure jurisdiction. The purpose of imaging is principally to preserve documents, not to give the claimant an early, self-directed disclosure exercise. The usual position is that the defendant gives disclosure in the ordinary way after pleadings close and a case management conference has taken place, subject to sufficient justification for departure from that process. This approach was drawn from A v B [2019] EWHC 2089 (Ch) and confirmed in TBD (Owen Holland) Ltd v Simons [2020] EWCA Civ 1182.
3. The burden lay on Acasta to establish a sufficient reason for early disclosure. Relevant considerations included strong prima facie evidence of dishonesty and concealment or destruction of evidence, the intrusive nature of inspection, the presence of irrelevant private or confidential material, whether the defendant could appropriately conduct the exercise through its solicitors, and whether the order was focused and proportionate.
4. The court could not determine at this interim stage whether fraud had been established. Acasta’s pleaded allegations were limited, while the wider allegations remained suspected allegations which Acasta was not yet able to plead. The uncorroborated allegations of a known fraudster were given no serious weight. The evidence did not establish a deliberate refusal by Emmiera to engage with Acasta’s requests or otherwise demonstrate the necessary cover-up.
5. Seeking disclosure in order to discover whether a wider fraud case could be pleaded was a fishing exercise and an impermissible reversal of the normal order of litigation. The requested categories were also excessively wide and unfocused. The court therefore did not need to decide who should conduct any inspection, but recorded serious concerns about departing from the usual principle that disclosure is handled by the disclosing party through its solicitor.