Barr & Ors v Biffa Waste Services Ltd [2009] EWHC 1033 (TCC)

[2009] EWHC 1033 (TCC)Case No HT-09-165
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
WESTMILL LANDFILL GROUP LITIGATION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 15 th May 2009
Before
MR JUSTICE COULSON
Between
DERRICK BARR AND OTHERSClaimantsBIFFA WASTE SERVICES LIMITEDDefendant
Nigel Cooksley QC and John Bates (instructed by Hugh James) for ClaimantsIan Croxford QC and Thomas de la Mare (instructed by Nabarro LLP) for DefendantGreg Cox (of Colemans-ctts LLP) for Intervening InsurersHearing Hearing Date: 23rd April 2009
Judgment
[1]THE APPLICATION On 3rd March 2009, the Claimants applied to Ramsey J for a Group Litigation Order (“GLO”) in respect of their claims in nuisance and negligence against the Defendant arising out of odour omissions from the Defendant’s site at Westmill, near Ware, in Hertfordshire. In the run-up to the hearing of that application, the Defendant made it clear that, whilst it did not necessarily object to the making of the GLO, it sought, as a condition of such an order, disclosure of the Claimants’ After The Event (“ATE”) Insurance Policy.[2]At the hearing before Ramsey J on 27th March, the Claimants sought to defer consideration of the Defendant’s application for disclosure of the ATE Policy because the Insurers concerned, QBE Insurance Limited, wanted to intervene and be heard on the issue. Accordingly, Ramsey J granted the GLO, and deferred the application in relation to the disclosure of the ATE Insurance until 23rd April. The GLO has now been approved by the President of the Queen’s Bench Division. Schedule 2 of the GLO states that the Claimants’ liability to pay costs “shall be several and not joint”. The GLO also includes a so-called mail shot letter, common in these cases, to be sent to other residents on the estate, which referred to the no win no fee agreement with the solicitors and the existence of the ATE Policy “to cover any potential cost liability”.[3]At the hearing on 23rd April, the Defendant renewed its application for disclosure of the ATE Policy. That application was resisted by the Claimants and by the Intervening Insurers. The parties’ respective submissions took the entirety of that day and I therefore reserved Judgment. I am very grateful to all of the advocates for their considerable assistance in dealing with the interesting issues that arise from this application.[4]I set out briefly the background in Section 2 below. At Section 3 I set out what seem to me to be the relevant principles of law. At Section 4, I summarise the parties’ submissions. Thereafter, at Section 5 I consider the application pursuant to CPR 31 and at Section 6, the application under the court’s general case management powers, particularly Parts 3 and 19 of the CPR. There is a short summary of my conclusions at Section 7.[2]THE FACTUAL BACKGROUND[5]As noted above, these claims in private nuisance/negligence arise out of alleged odour omissions from the Defendant’s Westmill Landfill Site. There are around 140 Claimant households in all, residents of a single housing estate on the other side of the A10 from the Westmill Site. The Defendant is a well-known waste contractor.[6]During the course of his introductory remarks, Mr Croxford QC, on behalf of the Defendant, made it clear that the Defendant regarded this as an important test case, and that there were a variety of factual and legal issues which would need to be resolved at the trial. He also indicated that, as the Defendant saw it, there would be a need for expert evidence relating to (amongst other things) the historic land use in the area; the proper operation of a landfill site such as this; and, possibly, European law and policy relating to waste disposal and recycling. Mr Cooksley QC was doubtful as to whether expert evidence in all these fields would be either permissible or required.[7]It is not possible for me to say, at this early stage, what the scope of any expert or indeed factual evidence in this case is likely to be. On some issues, expert evidence may not be appropriate at all and, even if it was, a single joint expert might well be sufficient. However, I can certainly see that expert evidence on each side relating to the proper operation of this site will be of critical importance. Such evidence is likely to be extensive (and therefore relatively costly). Thus, whilst Mr Croxford’s estimate of the costs of the litigation (at £2 million for each side) might be exaggerated, I am sure that the total costs will be well over £1 million. This is significant, because the parties are agreed that, but for the GLO, this action would probably not have been pursued at all. Even if sustained, each of the Claimant’s individual claims is likely to be worth only a few thousand pounds, whilst the costs to pursue each claim would have been so high that, without the GLO, it is most unlikely that any of them would have been pursued. I accept that the costs of any individual claim would have grossly outweighed the value of the claim itself.[8]On 9 July 2008, prior to the commencement of proceedings, the Claimants’ solicitors sent the Defendant’s solicitors a letter of claim, in accordance with the Pre-Action Protocol. At that time, the solicitors acted for 134 households and said that they were in the process of securing instructions from the remaining 98 households. As to funding, the solicitors said:
“Please be advised that our clients have secured a policy of insurance in support of the Conditional Fee Agreement. The policy provides for a staged premium, the stages being pre-issue, post-issue and 60 days prior to trial. We will provide you with specific details as to the policy in due course as further notice of Funding Form N251 are served.”
[9]In a follow-up letter of 4 August 2008, the Claimants’ solicitors gave further information about the ATE Policy as follows:
“As you will be aware from previous correspondence we represent our clients under the terms of a conditional fee and agreement which provides for a success fee. Our clients now have the benefit of ATE policy with QBE Insurance (Europe) Limited in support of the conditional fee agreement. The QBE policy provides for a staged premium policy. There are 3 stages. Premium (i) is payable if the claim is concluded before the issue of proceedings; premium (ii) is payable if the claim is concluded after the issue of proceedings but more than 60 days before the date listed for the commencement of the trial or the trial window; premium (iii) is payable if the claim is concluded 60 days or less before the beginning of the trial or the trial window as listed by the court or is heard at trial.”
[10]On 26 September 2008, the Defendant’s solicitor wrote, dealing with a variety of matters, and commented on the draft GLO that they had been sent. The letter concluded:
“Finally, we note that your clients now have the benefit of ATE Insurance. Our client is concerned about the Claimants’ ability to meet its costs should the Claimants be unsuccessful at trial. The decision of Marion Henry v British Broadcasting corporation [2005] EWHC 2503 (QB) confirms that our client has a legitimate interest in knowing the extent of protection provided by the ATE policy and whether the ATE policy contains any exclusion clauses. Accordingly, to allow our client to assess its potential financial exposure in this claim, please provide a copy of the ATE policy by return.”
[11]In their letter of 6 October 2008, the Claimants’ solicitors rejected this request. They maintained that they had provided the Defendant’s solicitors with Notice Funding Form N251, together with other details of the Policy, and that no further information was necessary. Importantly, in my judgment, they went on to say this:
“We can confirm that there are no exclusion clauses which are likely to render the policy invalid by reference to any anticipated defence to this claim. Furthermore we confirm that the policy provides an adequate level of cover and that this will be continuously reviewed as the litigation advances and as the parties file the appropriate Estimate of Costs at the appropriate stages of the litigation.”
The letter maintained that the decision in Henry was not authority for disclosure of the ATE policy and that in any event the judge’s comments in that case were obiter, and the facts could be distinguished. The letter concluded that the Claimants’ solicitors did not believe that the Defendant was “entitled to a copy of the policy at this stage.”[12]Thereafter, the correspondence consisted of renewed requests by the Defendant’s solicitors for the document (see, for example, the letters from the Defendant’s solicitors of 9 October and 26 November 2008) and repeated rejections by the Claimants’ solicitors (see, for example, the letter of 28 October 2008). That explains why, when the Claimants made their application for a GLO, the Defendant responded immediately by saying that one of the conditions of such a GLO should be the disclosure of the ATE policy. The fact that the GLO in this case was made in advance of the determination of the disclosure issue was because of the need to accommodate the Intervening Insurers, and it seems to me that, in such circumstances, the existence of the GLO cannot now operate to the Defendant’s disadvantage in pursuing this application.[3]THE RELEVANT PRINCIPLES 3.1. The Provisions of The CPR Relating to Group Litigation And Funding Arrangements[13]The relevant provisions concerning the making of a GLO can be found at CPR 19.10 and onwards. Rule 19.13 deals expressly with case management and makes clear that CPR Part 3, which contains general provisions concerning the case management powers of the court, are applicable to Group Litigation. Of course, the court’s case management powers under CPR Part 3 must be exercised in accordance with the overriding objective at CPR 1.1, to deal with cases “justly” and in ways which are proportionate (amongst other things) to the importance of the case and the financial position of each party. The court also has the power to order the disclosure and inspection of documents pursuant to CPR 31. Rule 31.14 deals expressly with documents “mentioned in”, amongst other things, a witness statement. That is said to be relevant here because the ATE Policy has been mentioned in two witness statements relied on, for different purposes, by the Claimants.[14]Many of the provisions of the CPR relevant to this application can be found in Parts 43 and 44 which, although expressly concerned with costs, contain a number of provisions relating expressly to the effect of a GLO, including arrangements as to a possible Conditional Fee Agreement (“CFA”), percentage increases on basic fees to reflect success, and litigation (after the event or ‘ATE’) insurance.[15]CPR 44.15 is entitled:
‘Providing information about funding arrangements’
. It provides:
“(1) A party who seeks to recover an additional liability must provide information about the funding arrangement to the court and other parties as required by a rule, practice direction or court order.”
An ‘additional liability’ is defined at CPR 43.2(1) (o) as meaning:
“…the percentage increase, the insurance premium, or the additional amount in respect of provision made by a membership organisation, as the case may be.”
[16]The Practice Direction attached to Part 44 contains important guidance as to the provision of information as to funding arrangements. Section 19 contains the relevant paragraphs (44 PD.13). They are as follows: “19.1(1) A party who wishes to claim an additional liability in respect of a funding arrangement must give any other party information about that claim if he is to recover the additional liability. There is no requirement to specify the amount of additional liability separately nor to state how it is calculated until it falls to be assessed. That principle is reflected in rules 44.3A and 44.15, in the following paragraphs and in Sections 6, 13, 14 and 31 of this Practice Direction. … 19.2(1)…(a) A claimant who has entered into a funding arrangement before starting the proceedings to which it relates must provide information to the court by filing the notice [Form N251] when he issues the claim form. b) He must provide information to every other party by serving the notice. If he serves the claim form himself he must serve the notice with the claim form. If the court is to serve the claim form, the court will also serve the notice if the claimant provides it with sufficient copies for service. … 19.4(1) Unless the court otherwise orders, a party who is required to provide information about a funding arrangement must state whether he has -… taken out an insurance policy to which section 29 of the Access to Justice Act 1999 applies… (2) Where the funding arrangement is a conditional fee agreement, the party must state the date of the agreement and identify the claim or claims to which it relates.. (3) Where the funding arrangement is an insurance policy, the party must state the name and address of the insurer, the policy number and the date of the policy, and must identify the claims to which it relates… 19.5. Where the court makes a Group Litigation Order, the court may give directions as to the extent as to which individual parties should provide information in accordance with rule 44.15 (Part 19 deals with Group Litigation Orders).” 3.2. The Traditional Approach to Disclosure of Liability Insurance Policies[17]The terms of any liability insurance policy held by one party to litigation will often be of practical interest to the other parties. For example, a claimant may consider that a defendant is not worth pursuing in litigation unless he has cover, and so may request sight of any relevant insurance policy. However, the traditional approach has always been to treat such policies as a private matter between the insured and the insurer, with the result that such policies are not generally disc losable. That was the position in Bekhor v Bilton [1991] QB 923 and Cox v Bankside Members Agency (an unreported decision of the Court of Appeal dated 29 November 1994). This approach was confirmed by the Law Commission in their paper on Third Parties - Rights Against Insurers (Cm 5217 2001), when they stated that information about cover held by a solvent insured was not available to a claimant unless it was volunteered. It was accepted that the details of such insurance were private matters between an insurer and an insured, and that the mandatory production of such insurance policies might encourage speculative litigation.[18]More recently, in Harcourt v FEF Griffin [2007] EWHC 1500 (QB), Irwin J was dealing with a potentially large personal injury claim where the insurance position (if any) of the first defendant, an unincorporated association, was of considerable significance. A Part 18 request was made designed to discover the extent of its insurance cover. Irwin J accepted that the nature and extent of the first defendant’s insurance cover was not in itself a matter for dispute in the proceedings, but he adopted what he described as liberal interpretation to CPR Rule 18 and allowed the request. He said:
“The purpose of the jurisdiction must be taken to be to ensure that the parties have all the information they need to deal efficiently and justly with the matters which are in dispute between them. Moreover, the wording need not be taken to imply that there must be a live disagreement about the relevant issue, since on very many occasions parties are properly required to furnish information pursuant to CPR Rule 18 precisely to discover that there is or there is not a live disagreement between the parties on a given point. The whole thrust of the new approach in civil litigation enshrined in the Civil Procedure Rules is to avoid waste of time and cost and to ensure swift and, as far as possible, proportionate and economical litigation. Therefore, I have no hesitation in finding that if there was no rule of law or significant rule of practice to the contrary, then the wording of CPR Rule 18 is broad enough to cover information of this kind.”
[19]Subsequently, in West London Pipe Line Storage Limited v Total UK Limited and Others [2008] EWHC 1296 (Comm), the first in a series of decisions by David Steel J in connection with the Buncefield disaster, the learned judge had to address a similar application, although it might be observed that, there, the application was patently more ‘tactical’ than in Harcourt. He doubted whether Harcourt could have been correctly decided because, inter alia, a number of the relevant cases had not been cited to Irwin J. He set out the traditional position, which I have endeavoured to summarise at paragraph 17 above, and went on: “30. It follows that there is in my judgment no jurisdiction to make the order sought. I reach this conclusion with some considerable hesitation- not least because it is contrary to the view of Irwin J in Harcourt. The trend is strongly towards an open approach to litigation. Albeit the potential for prejudice to the defendant and his insurers must be borne in mind, in the modern age of ‘cards on the table’ the question is readily posed: why should not the one factor which may be key to the claimant’s view of the merits of pursuing a claim, namely what is the limit of cover and will the costs eat it up anyway, be-known? By the same token, concerns as to the appropriate share of court resources to be allocated to a case ought to include allowance for the prospects of an effective recovery. But I am not persuaded that the provisions of CPR, however liberally interpreted, have lead to a significant change in law and practice.” 3.3. The Approach to ATE Insurance Policies[20]ATE Insurance is a relatively modern creation, and it therefore follows that there are far fewer decisions dealing with the proper approach to the disclosability (or otherwise) of such policies. However, leading counsel have identified two cases that touch on this issue, and whilst neither of them are directly applicable to the present facts, they are, in my judgment, of considerable assistance in identifying the proper approach to the disclosure of such policies. In particular, they illustrate that the existence of an ATE Policy is very often a critical element of the litigation itself because, as in the present case, without the existence of the ATE Policy, there could be no claim at all. They demonstrate that different considerations may therefore apply to the disclosure of the ATE Policy.[21]Hobson v Ashdown Morton Slack Solicitors and Others [2006]EWHC 1134 (QB) was a decision of Sir Michael Turner in which, in trenchant terms, he rejected the claimants’ application for a GLO. He had numerous criticisms to make of the claimants’ entire approach to the application in that case. Some, at least, of those criticisms related to the ATE Insurance.[22]Although the facts in Hobson are not entirely easy to follow, it appears that, on the first day of the hearing, the judge ordered the disclosure of the ATE Policy. It seems that, given the difficulties that the claimants faced, they did not object to the making of that order, which the judge clearly regarded as crucial to his deliberations. The Policy revealed that the sum insured was £1 million maximum in respect of adverse costs, and the insurance could become void able after inception in certain specified circumstances. When the learned judge set out his reasons for refusing the GLO, one of them was “the lack of any certainty about the sufficiency of the ATE Insurance in terms of the amount of cover and its enforceability” (see paragraph 71.7 of the judgment). It does not appear that, in that case at least, there was ever any suggestion that the ATE Insurance Policy was not a relevant document which required to be disclosed for the court’s consideration prior to the making of a GLO, or was in some way privileged.[23]The second authority on the point, Henry, was cited by the Defendant’s solicitors in their letter of 26th September 2008 (paragraph 10 above). In that case, Gray J was dealing with an application for a cost-capping order, and Mr Croxford therefore properly accepted that Gray J’s comments about the ATE Policy were strictly obiter. However, it appears that Gray J was in no doubt at all that the ATE Policy was disclosable.[24]The critical paragraphs of his judgment were as follows:
“23. Both the amount of cover and the existence of material exclusions in the policy are of obvious relevance to the opposite party, who must be in a position to make informed choices as to the conduct of the litigation. If the discrepancy between the amount of cover and the updated estimate of costs up to and including trial had been made known promptly to the BBC (as they could and should have been) the present application could have been mounted far sooner. It is said on behalf of the Claimant that exclusions such as those contained in the Temple policy are commonplace in this field. If so, that is a further reason for candour on part of the insured’s solicitors about the possible limits on the ability of the opposite party to recover under the policy. It is also said on behalf of the Claimant that insurers such as Temple would be unlikely to seek to avoid liability by reference to the exclusion clauses summarised above. I see no reason why this or any defendant should proceed on any such assumption particularly in a high cost case. 24. As to the claim for privilege made in CR’s letter of 14 July 2005, it was utterly misconceived. As the Litigation Department pointed out in its letter of 19th September 2005, the BBC must be entitled to see the provisions of the policy in order to assess its financial exposure in any action and to consider whether to apply for a costs capping order. The letter stressed the urgency of the request. Despite that and despite a reminder letter having been written to CR on 23rd September it was not until after the BBC on 4 October issued an application seeking disclosure of the policy and a cost cap that CR finally disclosed the policy.”
Both Mr Cooksley and Mr Cox accepted that, if I considered that the approach in Hobson and/or Henry was relevant to the present case, then they were bound to argue that the judges in both those cases were wrong to reach the conclusions that they did. 3.4. Documents Referred To In a Witness Statement[25]I have referred at paragraph 13 above to the provisions of CPR 31.14, which provides that a document mentioned in a witness statement is disclosable. The principal exception to this would be if the document in question was in some way privileged (Section 3.5 below).[26]The most recent consideration of CPR 31.14 can be found in Expandable Limited and Another v Rubin [2008] EWCA Civ 59. In that case, the Court of Appeal said that the principal issue on an application such as this would be whether the document could be said to have been “mentioned” in the witness statement. Rix LJ said:
“24. The second matter is that, subject to my first comment, the expression ‘mentioned’ is as general as could be. This is not to my mind intended to be a difficult test. The document in question does not have to be relied on, or referred to in any particular way or for any particular purpose, in order to be mentioned. Subject to Mr Lightman’s second point, that the mention of a document within CPR 31.14 amounts to automatic and absolute waiver of privilege in it, which if correct would give to that rule a most important effect, I do not see why there should be need for a strict approach to a request for inspection of a specific document mentioned in one of the qualifying documents. The general ethos of the CPR is for a more cards on the table approach to litigation. If a party thinks it worthwhile to mention a document in its pleadings, witness statements or affidavits, I do not see why, subject to as I say to the question of privilege, the court should put difficulties in the way of inspection. I look upon the mention of a document in pleadings etc as a form of disclosure. The document is question has not been disclosed by list, or at any rate not yet, but it has been disclosed by mention in what, for the purposes of litigation, is another important and formal category of documents. If so, then the party deploying that document by its mention should in principle be prepared to be required to permit its inspection, and the other party should be entitled to its inspection. What in such circumstances is the virtue of coyness?”
For completeness, I should note that, on behalf of the Claimants, Mr Cooksley also contended that, as a matter of principle, a document referred to in a witness statement was not disclosable if it could be shown that it was not relevant. He cited no authority in support of that proposition (Atos Consulting Limited v Avis PLC [2007] EWHC 323 (TCC), the case he did rely on, was concerned with redactions generally, not allegedly irrelevant documents mentioned in pleadings or statements). On one view, by setting up a further ‘difficulty’ in the way of the disclosure of ‘mentioned’ documents, the Claimants’ reliance on relevance is contrary to the Court of Appeal’s approach in Expandable. Moreover, in practice, it will always be rather difficult for a claimant to argue that a document which has been expressly referred to in support of an earlier application to the court is not, in fact, relevant at all. Be that as it may, for the purposes of this application, I am prepared to accept that, in theory, it may be possible to avoid disclosure of a mentioned document on the ground of relevance. I deal with the detailed submissions on relevance below. 3.5. Litigation Privilege[27]In Winterthur Swiss Insurance Co and Another v AG (Manchester) Limited (In Liquidation) and Others [2006] EWHC 839 (Comm), Aikens J (as he then was) sets out a very helpful summary, at paragraph 65 and following, of the definition of legal professional privilege. He identifies two sub-types, namely legal advice privilege and litigation privilege. It is the latter with which we are concerned with in this case. He defined it as follows:
“ 68. The rational for … litigation privilege rests, in modern terms, on the principles of access to justice, the proper administration of justice, a fair trial and equality of arms. Those who engage in litigation or are contemplating doing so may well require professional legal advice to advance their case in litigation effectively. To obtain the legal advice and to pursue the adversarial litigation efficiently, the communications between a lawyer and his client and a lawyer and a third party and any communication brought into existence for the dominant purpose of being used in litigation must be kept confidential, without fear that what is said or written might be disclosed. Therefore those classes of communication are covered by ‘litigation privilege’.”
He went on at paragraph 71 to identify what fell within the scope of litigation privilege. He said:
“The privilege obviously covers legal advice given by a lawyer to his client for the purposes of such existing or contemplated litigation. It also extends to communications between the lawyers and his client and the lawyer and third parties, provided that those communications are made for the sole or dominant purpose of obtaining legal advice or conducting that litigation. In deciding whether a communication is subject to ‘litigation privilege’, the court has to consider objectively the purpose of the person or authority that directed the creation of the communication.”
[28]Two of the decisions already identified above also deal with privilege. In Expandable, the Court of Appeal reasoned that the terms of CPR 31.14 did not automatically apply to documents which were privileged. More pertinently perhaps, in Henry, Gray J rejected in clear terms any suggestion that an ATE Policy was a privileged document (see the passage quoted in paragraph 24 above).[4]AN OUTLINE OF THE PARTIES’ SUBMISSIONS 4.1. The Defendant’s Submissions[29]Mr Croxford’s submissions can be summarised as follows: a). The Defendant is concerned to protect itself, at the end of the trial, against a result whereby it wins the litigation, but then fails to recover its costs because the ATE Policy does not cover its costs or is limited in some way. There is no doubt that such a situation would lead to significant costs of enforcement against the Claimants “severally”, and may prove fruitless if the Claimants are not worth pursuing. b). The Defendant is presently unable to make any assessment as to the realistic value of the Claimants’ cover. It therefore cannot know whether the policy provides proper cover for the Defendant’s costs if the Defendant is successful. Likewise, it does not know if there are any exclusion clauses within the policy which may invalidate that policy altogether, or whether there are limits which might affect its coverage or value. c). Whilst the Defendant might wish to seek a costs-capping order, or to amend the standard provision within the GLO that costs be borne by the Claimants severally, these are difficult applications to make in the absence of information about the ATE Policy. d). The practical advantages to the Defendant of seeing the Policy, so that it can work out what its potential exposure might be, are obvious, as per Gray J in Henry. On the other hand, there is no detriment to the Claimants if the Policy is disclosed. The Defendant points out that the Claimants have not identified any prejudice to them should the Policy be disclosed. In addition, the Defendant has made it plain that, if the Claimants wish to do so, the amounts of the premiums can be redacted from the version of the ATE Policy that is disclosed, just in case it is said that the amount of the premiums themselves might indicate the nature of any advice given to the Claimants as to the strength or value of their claims.[30]As a matter of law, the Defendant puts its application for disclosure and inspection of the ATE Policy in two principal ways. First, it maintains that, since the policy has been mentioned in the witness statements of Ms Evans and Mr Stockdale, the Claimants’ solicitors, it is entitled to see the policy pursuant to CPR 31.14. The Defendant rejects any suggestion that the policy is either a privileged document or is somehow irrelevant. Alternatively, the Defendant seeks disclosure of the Policy pursuant to CPR 3, and/or CPR 18 and/or CPR 19, that is to say, by reference to the court’s general case management powers. Unsurprisingly, in making this application, the Defendant relies in particular on the decisions in Hobson and Henry. 4.2. The Submissions of the Claimants and the Intervening Insurers[31]The Claimants and the Intervening Insurers did not identify any actual detriment if the ATE Policy was disclosed. But they maintained that, as a matter of principle, the policy was not disclosable. In answer to the application under CPR 31.14, the Claimants submitted that, although the ATE Policy was mentioned in the witness statements, it was not relevant and/or it was covered by litigation privilege. Furthermore, in answer to the wider claim put by reference to the court’s case management powers, both the Claimants and the Intervening Insurers relied on the decision of David Steel J in Total (set out above), to argue that an insurance policy can never be a disclosable document, because it is a private matter between insured and insurer and irrelevant to the issues between the parties.[32]In the light of these submissions, I propose to deal first with the application under CPR 31.14 (Section 5 below), before going on to consider the wider application pursuant to the court’s general case management powers (Section 6 below).[5]THE APPLICATION PURSUANT TO CPR 31.14 5.1. The Mention of The ATE Policy[33]The Claimants’ application for a GLO was supported by a witness statement signed by Gwen Evans, the Claimants’ solicitor, dated 23rd February 2009. At paragraph 15 of that statement, Ms Evans said this:
“My firm has the necessary resources to deal with this case and are experienced in handling environmental group actions involving allegations of private and public nuisance. We have entered into Conditional Fee Agreements (CFA) with the Claimants in these proceedings and are also able to assist in relation to the funding of disbursements. The CFA is supported by a policy of insurance.”
[34]Following the application by the Defendant for disclosure of the ATE Policy (because, amongst other reasons, it was expressly referred to in Ms Evans’ statement) the Claimants served a further statement from Neil Stockdale, the partner in charge of the case. His evidence is important. He said:
“7. The ATE policy was referred to at paragraph 15 of the witness statement of Gwen Evans dated 23rd February 2009. However, it was not the intention of the Claimants or Gwen Evans in making reference to the policy in the statement to waive privilege. 8. Gwen Evans has informed me, and I recall when discussing the preparation of the statement at the relevant time, that the reference to the policy was included to address comments made by Sir Michael Turner in Hobson v AMS Solicitors [2006] EWHC 1134. 9. The Hobson matter concerned an application for a Group Litigation Order where there was a lack of certainty about the extent of any After the Event Insurance Protection said to be awarded to the Claimants. Sir Michael Turner was extremely critical of the litigation and dismissed the application for a Group Litigation Order. 10. In the circumstances given Sir Michael Turner’s comments concerning ATE Insurance both Gwen Evans and I felt it appropriate that the Claimants’ application for a Group Litigation Order provide information relating to the way in which the claimant’s were funding their case.”
[35]It seems to me that the following must flow from this evidence. First, the ATE Policy has plainly been mentioned in these witness statements, so that a claim for disclosure under CPR 31.14 has been properly triggered. Secondly, it seems to me clear beyond doubt that the policy was deliberately referred to in Ms Evans’ statement, for a particular purpose. It was not merely mentioned in passing. It was deliberately deployed by the Claimants in support of their application for the GLO.[36]It follows therefore, that unless I am persuaded that the ATE Policy is either irrelevant or is covered by litigation privilege, then I should order disclosure of the policy pursuant to CPR 31.14, and follow the approach outlined by the Court of Appeal in Expandable. 5.2. Relevance[37]There are, so it seems to me, three reasons why the ATE Policy is relevant. First, the fact of the policy was regarded as an important matter by the Claimants’ solicitors for the reasons explained by Mr Stockdale. They deliberately referred to the Policy in Ms Evans’ statement. It is not suggested by Mr Stockdale that the Policy was irrelevant; on the contrary, he accepts that it was relevant to the application for a GLO. The Claimants cannot now argue that the Policy is somehow irrelevant.[38]Secondly, it seems to me that the ATE Policy is obviously relevant to this Group Litigation. The parties are agreed that, if there was no GLO, this litigation would not be pursued, because the value of each individual claim is modest, whilst the costs (and therefore the costs risk) would be likely to be very significant. If there was no GLO, there would be no proceedings. And there would be no GLO without the existence of the ATE Policy: that is why it was referred to in Ms Evans’ witness statement in the first place. It is therefore relevant to the very existence of this litigation.[39]Thirdly, it seems to me that the terms of the Policy are relevant to the issues before the court. In this regard, I respectfully agree with the approach of Sir Michael Turner in Hobson, as well as the approach of Gray J in Henry.[40]Furthermore, were there any remaining doubt about it, it seems to me that the Claimants’ solicitors have already accepted that the terms of the Policy are a relevant matter. I have referred at paragraph 11 above to their own letter of 6 October 2008. That letter acknowledges that questions such as the existence of possible exclusion clauses and the level of cover, are relevant. It is for that reason that the letter purported to summarise the contents of the Policy on both topics. It seems to me that, since the Claimants’ solicitors have acknowledged the relevance of the terms of the Policy, they cannot reasonably expect either the Defendant or the court to accept their summary of the document, as opposed to the disclosure of the Policy itself. Again, this very point was made by Gray J in Henry: it is wrong in principle to make the Defendant continue to incur costs merely on the assumption that the Hugh James letter is an accurate summary of the ATE Policy.[41]What would be the position if, contrary to Hugh James’ advice, there was a relevant exclusion clause which meant that, at the end of this potentially expensive litigation, the policy was avoided and the Defendant was unable to recover its costs without pursuing 140 different Claimants? Would the Defendant then have a claim in negligence against the Claimants’ solicitors because the letter of 6th October was misleading? It seems to me that this would be encouraging satellite litigation of the worst sort. Given the contents of the letter, I conclude that the ATE Policy, which is there summarised, should be provided to the Defendant so that it can form its own view as to its limits and exclusion clauses.[42]This point can also be illustrated by reference to a dispute that arose during the hearing. Although the letter purported to confirm that the Policy provided an adequate level of cover, during his submissions Mr Cooksley said that the level of cover was irrelevant because it might be limited and might be altered. He also suggested that the sum insured was meaningless and might not be the whole amount. In reply on that point, Mr Croxford expressed the Defendant’s concern that the letter of 6 October 2008 (which of course said that the cover was adequate) might in fact be wrong or misleading, and he made the point that in those circumstances, the Defendant was even more concerned to see the actual ATE Policy. In the light of this argument about the important issue of the possible level of the Policy limit/cover, it seemed to me that this submission was well-founded.[43]Finally, on the question of relevance, I should address the reliance by the Claimants, and also by the Intervening Insurer, upon the decision in Total and the other cases referred to in Section 3.1 above. It seems to me that there is a difference between liability insurance, which may well have been in place years before the events which gave rise to the subsequent litigation and have absolutely nothing to do with those events, and ATE Insurance (particularly in the context of Group Litigation), the inception of which may be a critical factor in the existence of the proceedings themselves. In the former situation, it is easy to see why the courts have been reluctant to order the disclosure of a commercial transaction which was and remains an entirely private matter between the insured and the insurers, the inception of which had nothing whatsoever to do with the events which later formed the subject matter of the litigation. But, in my judgment, that approach is of no assistance in the consideration of an application for the disclosure of an ATE Insurance Policy which, depending on the facts, will have been taken out for the sole purpose of allowing a claimant to pursue litigation which would otherwise not be possible.[44]In circumstances such as these, where the GLO depends on the ATE Insurance Policy, and where, without such a Policy, there would be no proceedings at all, it does not seem to me that the traditional approach to liability insurance is of direct relevance. On the contrary, I consider that the correct approach to the disclosure of the ATE Insurance Policy is that set out in both Hobson and Henry.[45]For all these reasons, therefore, I conclude that the ATE Insurance Policy is a relevant document, which is why it was referred to in the witness statement of Ms Evans in the first place. Thus, unless it can be shown that the document is covered by privilege, it is disclosable pursuant to CPR 31.14. 5.3. Litigation Privilege[46]In my judgment, the ATE policy is not covered by litigation privilege. I note that, during the course of his able submissions, Mr Cooksley was unable to identify any case in which an ATE Policy has been found to be a privileged document. Although he relied on Winterthur, that was a case about documents created after the inception of the Policy, and whether they were privileged. It was not concerned with a claim for privilege in the Policy itself. On the contrary, as far as I am aware, the only authority in which this point has been considered is Henry. It is fair to say that Gray J was not overly troubled by the suggestion that the ATE Policy was privileged, rejecting the argument in a few crisp lines (see paragraph 24 above). I respectfully agree with him.[47]The type of documents covered by litigation privilege are summarised in paragraph 71 of the judgment of Aikens J in Winterthur (paragraph 27 above). In my judgment, the ATE Insurance policy in this case does not fit into any of these categories. It is not a document containing legal advice. It is not a communication between the Claimants’ solicitors and the Claimants, or between the Claimants’ solicitors and third parties. It is simply not caught by this description.[48]The one potential exception to that is the information within the ATE Policy as to the amount of the premiums. It is rightly accepted by Mr Croxford that, as a matter of principle, privilege will extend to material which would allow the reader to work out what legal advice had been given. Here, the Claimants have indicated that the amount of the premiums stated in the Policy could be said to reflect legal advice as to the Claimants’ prospects of success and, although I regard that as a little far-fetched on the facts, I can see circumstances in which that point might have at least some force. Accordingly, it seems to me that the amounts of the premiums should be redacted from the disclosed ATE Policy document.[49]Apart from the amounts of the premiums, the Claimants and the Intervening Insurer were unable to identify any other parts of the Policy which would otherwise fall within the category of litigation privilege. For the reasons which I have set out above, I am in no doubt that the Policy itself is not so caught. 5.4. Summary[50]The ATE Insurance Policy was clearly mentioned in Mr Evans’ first statement, which was made in support of an application for a GLO, and referred to again in Mr Stockdale’s later statement. Following the approach of the Court of Appeal in Expandable, those ‘mentions’ made the document disclosable pursuant to CPR 31.14 unless it could be shown that the document was privileged. This document was not privileged.[51]Although there is no authority for the proposition that CPR 31.14 does not apply if the document is irrelevant, I have assumed that there is such a principle for the purposes of this application. However, it is plain that on the facts the Policy was indeed relevant, and considered by the Claimants’ solicitors to be so.[52]Accordingly I consider that, pursuant to CPR 31.14, the Policy is a disclosable document and should be disclosed for inspection. In this way, the Defendant will be able to form its own view of the terms of the Policy, and not be forced to rely on the Claimants’ solicitors’ summary. I do, however, order that the amounts of the premiums should be redacted from the version of the Policy that is disclosed.[53]In the light of this conclusion it is, strictly speaking, unnecessary for me to go on to consider the alternative basis for the application, pursuant to the court’s general case management powers. The CPR 31.14 application is decisive in this case, which means, amongst other things, that Mr Cox’s submissions – which were limited to the secondary case - were ultimately immaterial to the result. However, in the light of the detailed submissions that I have heard from all parties, and on the assumption that I am wrong to allow the application under CPR 31.14, I go on to deal with the application pursuant to the court’s case management powers.[6]THE APPLICATION PURSUANT TO THE COURT’S CASE MANAGEMENT POWERS 6.1. Disclosure of Insurance Policies[54]For the reasons outlined in paragraphs 43 and 44 above, I consider that different considerations apply to the disclosure of a pre-existing liability policy (which may or may not be triggered by the subsequent litigation), and an ATE Policy, the existence of which is a vital component in the litigation itself. Accordingly, I consider that the traditional approach to the disclosure of liability insurance policies, as summarised by David Steel J in Total, is not directly applicable to the disclosure of ATE Insurance Policies. Accordingly, I turn to the CPR to see what general provisions may be relevant to this application. 6.2. The ‘Cards On The Table’ Approach Behind The CPR[55]I have already referred to the overriding objective (r1.1) and the court’s wide case management powers under CPR Part 3. In a number of the cases which I have cited above, the judges talk of the ‘cards on the table’ approach that lies behind the CPR. In my judgment, pursuant to that approach, the ATE Policy should be disclosed.[56]I reach this conclusion by balancing the parties’ respective interests in the litigation, and the effect upon them of the disclosure of the Policy. On the one hand, it is plainly in the Defendant’s interest to know the terms of the Policy (as per Henry), so that it can see what exposure it might have if, at the end of the case, the Defendant is successful and seeks to recover its costs. In one sense, that only puts the Defendant in the same position as the Claimants are in already, because they can know, by checking the Defendant’s most recently filed accounts, that the Defendant is a large company with more than sufficient assets to meet any costs liability that it may have should it lose these proceedings.[57]I consider therefore that it is just and fair that the Defendant is able, at this stage, to identify the risks, if any, inherent in this Group Litigation. I accept, as Gray J accepted in Henry, that this can only be done by a sight of the ATE Policy. I consider that it would be unjust and unfair to require the Defendant to participate in this Group Litigation knowing that it would have to pay the Claimants’ costs if it lost, but not knowing that it might not recover any of its own costs if it won, because of some exclusion or limit in the Policy. That would not be a level playing field.[58]On the other hand, the Claimants have not been able to identify any prejudice to them if the ATE Policy was disclosed. I accept that things might be different – the balancing of the parties’ respective interests might lead to another result - if the Claimants had been able to identify some particular detriment or disadvantage to them if the ATE Policy was disclosed (with the amounts of the premiums redacted). But no such detriment has been demonstrated.[59]At one point, Mr Cooksley suggested that, if the ATE Policy was disclosed, the Defendant would then seek to exploit its knowledge of the level of cover by running up huge costs bills, thereby forcing the litigation off the road and into the ditch. There are two points to be made about that submission. First, there is absolutely no evidence that the Defendant, a large and well-known organisation, would engage in such tactics, and I could not decide the outcome of this application on such a speculative basis. But secondly, and much more importantly, the submission ignores my own wide case management powers as the assigned judge. In the TCC, cases are managed by the same judge from the first CMC all the way through to judgment, which gives the court every opportunity to ensure that the costs are kept down and that all steps and directions are justifiable on costs/benefit grounds. The Claimants can rest assured that this Group Litigation, which I will case manage in the usual way, will be tightly controlled, with the result that the costs will always be kept to the lowest possible level in all the circumstances. There will be no question of costs being run up to obstruct the purpose of the Group Litigation.[60]Accordingly, in endeavouring to do justice between the parties, I am faced with a situation where the Defendant would be litigating in the dark without sight of the ATE Policy, whilst the Claimants can identify no detriment to them if the terms of the Policy were disclosed. In such circumstances, on a proper application of the court’s general case management powers, I would conclude that the Policy should be disclosed. It would be proportionate to the financial position of each party (CPR 1.1(2) (c) (iv)). On that basis, therefore, the only reason why I would not go on and make such an order would be if there was a specific part of the CPR which prevented or prohibited it. 6.3. 44 PD. 19[61]In support of the Claimants’ position, Mr Cooksley and Mr Cox submitted that, since the Claimants had already provided the information identified in 44PD Section 19, they were not obliged under the CPR to provide any further information. Mr Croxford submitted that the information identified in Section 19 was the minimum information required, to be supplied in all cases, but that the provisions there did not prevent a party in the position of the Defendant in the present case from seeking disclosure of the entirety of the ATE Policy.[62]In my judgment, Mr Croxford’s submissions are correct. There are a number of reasons for this. First, there is nothing within 44 PD Section 19 which stipulates that no information (other than that contained in paragraph 19.4) is ever to be provided. On the contrary, it seems to me that this part of the Practice Direction is stipulating the minimum that must be provided in every case, without any suggestion that, in a particular case where the need has been made out, the Policy itself should not be disclosed.[63]Secondly, it would be an odd outcome if the court were prevented from exercising its wide case management powers pursuant to CPR 1.1 and/or CPR 3 and/or CPR 19 by reference to a list of information buried away in a Costs Practice Direction. That is not how the CPR works. The parties must comply with the applicable Practice Directions; they set out the particular rules and procedures to be followed in any given situation. To that extent, I accept Mr Cox’s submission, that paragraph 19.4 is a Code to be followed in cases of this sort. But the court’s case management powers apply across the board and, in the absence of express words, cannot be regarded as being restricted or limited in the way contended for by the Claimants and the Intervening Insurers.[64]In my judgment, this approach is confirmed by the introductory words to paragraph 19.4(1) of 44PD (“unless the court otherwise orders…”), set out in paragraph 16 above. Mr Cox was obliged to argue that those words were designed to permit the court only to make an order disallowing the provision of even the minimum information set out in that paragraph, but could not be read as giving the court the power to order the provision of more information than that set out there. The basis for that submission was unclear; it seems to me that these words are not to be read in such an artificial and restricted way. On their face, these words allow the court, in appropriate circumstances, to order the provision of either more or less information than that set out in paragraph 19.4. There is nothing to suggest that the power can only be exercised one way.[65]Accordingly, in my judgment, the general application of the court’s case management powers (which, for the reasons set out in Section 6.2, would lead me to allow the application) are not circumscribed or restricted by 44 PD Section 19. 6.4. Other Considerations[66]There are two other matters, canvassed during the course of the submissions, which also seem to me to support my conclusion that I should exercise the court’s general case management powers to allow the defendant’s application.[67]Despite the absence of clear words in the CPR, an ATE Insurance Policy might well be disclosable in particular circumstances in any event. One example was an application for costs-capping. In a case where a claimant had the advantage of an ATE Policy, and the court is considering making costs-capping order, it is very difficult to see how a sensible order could be made without sight of the ATE Policy. Mr Cox accepted that proposition, (at least insofar as it related to the amount of the premium) despite the fact that the relevant part of the CPR (CPR 44.19 and the associated Practice Direction), do not contain any express reference to disclosure of the ATE Policy.[68]Similarly, a claimant who has the benefit of ATE Insurance may face an application for security of costs. Although CPR 25.12-25.15 do not expressly deal with that topic, the disclosure of the Policy may be necessary in order for the court to arrive at a fair conclusion both as to the principle of ordering security and, if established, the level of security to be provided. Mr Cox accepted that, in such circumstances, the party concerned may well elect to disclose the Policy to enable the Court to reach a sensible conclusion. Both these examples suggest to me that the disclosure (or otherwise) of an ATE Policy will depend on the facts of the particular case and the specific reasons that disclosure is being sought, regardless of the absence of any specific reference to disclosure of the ATE Policy in the relevant Rules.[69]The second matter which, so it seems to me, confirms my approach, is the recent decision of the Court of Appeal in R (On the application of Buglife-The Invertebrate Conservation Trust) v Thurrock Thames Gateway Development Corporation [2008] EWCA Civ 1209. In that case, one of the matters that the court was concerned with was disclosure of the level of the success fee element of a CFA, in the context of a cost-capping order. The provisions of 44 PD do not say in terms that the level of a success fee should be disclosed. However, in the context of an application for a costs capping order, the Court of Appeal had no doubt that this information should be supplied. At paragraph 27 of his judgment, Sir Anthony Clarke MR set out a part of an Appendix to a Report from a Working Group on Access to Environmental

Justice (which suggested that the success fee was not to be disclosed) and went on:

“We do not accept that approach in this context. The agreed success fee is relevant to the likely amount of the liability of the defendant to the claimant if the claimant wins. It is therefore relevant to the amount of any cap on that liability. In our opinion the court should know the true position when deciding what the cap should be.”
[70]Mr Croxford argues, by analogy, that if, in a particular set of circumstances, the level of the success fee was disclosable, then a fortiori, in certain circumstances, the general terms of an ATE Policy must be disclosable too. It all depends on the facts and particular reasons for the application.[71]I accept Mr Croxford’s submissions on this issue. It does seem to me that these cases are fact-sensitive, and it is dangerous to draw hard and fast principles from different factual situations. But the cases demonstrate that sensitive matters or documents relating to funding arrangements can be disclosable if they are required in order to allow the court to dispose justly of the particular disputes between the parties. 6.5. Summary[72]For the reasons set out above, it seems to me that the considerations arising on an application for disclosure of an ATE Insurance Policy may well be different to those that arise in relation to a conventional liability insurance policy, particularly where, as here, the ATE Policy is an integral element of the Group Litigation itself. It seems to me that, on a proper consideration of the court’s case management powers under the CPR, the order for disclosure of the Policy in the present case should be allowed. 44PD.19 is not to be read as somehow restricting or preventing the court from exercising those powers in the best way to meet the over-riding objective. Depending on the particular application and its reasons, the terms of an ATE Insurance Policy, and even the level of the success fee, may be matters which are required to be disclosed in order to deal fairly and justly with any given litigation.[73]Taking into account all of the considerations set out in this Section I consider that, on the exercise of court’s general case management powers, the Defendant is entitled to the disclosure and inspection order sought.[7]CONCLUSIONS[74]For the reasons set out in Section 5 above, I consider that the ATE Insurance policy referred to in the original statement of Ms Evans is a disclosable document pursuant to CPR 31.14. The document is relevant and it is not privileged.[75]For the reasons set out in Section 6 above, I consider that, pursuant to the court’s case management powers, on the material available to me in this particular case, the ATE Policy should be disclosed. That would properly do justice between the parties. 44PD.19 does not prohibit or prevent any such order.[76]For the avoidance of doubt, I should make clear that, if the application for disclosure had been argued at the same time as the application for the GLO (as it would have been, but for the need to accommodate the Intervening Insurers), I would have made the GLO on condition that the ATE Policy was disclosed, but with the amount of the premiums redacted.[77]I will deal with all other matters arising out of the Defendant’s application, including all questions of costs, at the handing down of this Judgment.

Cited in 5 later judgments