Peel Port Shareholder Finance Company Ltd v Dornoch Ltd [2017] EWHC 876 (TCC) serves as a reminder of the court’s approach to the rules on pre-action disclosure and the Third Parties (Rights against Insurers) Act 2010 (the 2010 act).

Pre-action disclosure rules and the 2010 act

Civil Procedure Rule 31.16(3) states that a court may make an order only where: (a) the respondent is likely to be a party to subsequent proceedings; (b) the applicant is also likely to be a party to those proceedings; (c) if proceedings had started, the respondent’s duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and (d) disclosure before proceedings have started is desirable in order to (i) dispose fairly of the anticipated proceedings; (ii) assist the dispute to be resolved without proceedings; or (iii) save costs.

CPR 31.16(3)(a) and (b) were construed by the Court of Appeal in Black v Sumitomo Corporation [2001] EWCA Civ 1819 at [71] to mean not that the court had to consider the likelihood of there being proceedings, but that the applicant and respondent were likely to be parties to proceedings if they were commenced. As for CPR 31.16(3)(d), Rix LJ in Black v Sumitomo observed that it is a difficult test to interpret, ‘for it is framed both in terms of a jurisdictional threshold (“only where”) and in terms of the exercise of a discretionary judgment (“desirable”)’. His lordship concluded by saying: ‘In my judgment, for jurisdictional purposes the court is only permitted to consider the granting of pre-action disclosure where there is a real prospect in principle of such an order being fair to the parties if litigation is commenced, or of assisting the parties to avoid litigation, or of saving costs in any event. If there is such a real prospect, then the court should go on to consider the question of discretion, which has to be considered on all the facts and not merely in principle but in detail.’

The 2010 act provides for the transfer of the rights of the insured against his insurer to a third party to whom he is liable in the event of his insolvency or on the voluntary winding up of a company. Section 1(3) of the 2010 act states: ‘The third party may bring proceedings to enforce the rights against the insurer without having established the relevant person’s liability; but the third party may not enforce those rights without having established that liability.’ The ‘relevant person’ is a defined term as a person who is insolvent. Section 11 also enacts schedule 1 to the act which sets out the specific regime for the provision of information.

Facts and arguments

The claimant, Peel Port (PP), argued that a fire had been caused by the activities of EAPL which resulted in damage to PP. It also argued that EAPL had failed to articulate any defence in open correspondence. Although EAPL was solvent, PP contended that it would be unable to meet any judgment and would be wound up. EAPL’s insurers, Dornoch (D), denied that the claim was covered under its insurance policy with EAPL because EAPL had failed to comply with various conditions endorsed on the insurance policy. D did not disclose the policy and PP brought an application for pre-action disclosure for a full copy of the insurance policy.

PP argued that the jurisdictional threshold under CPR 31.16(3) had been met, because if the policy were disclosed and the endorsement was effective then it would not pursue EAPL and D, and this would avoid litigation and wasted costs. D, on the other hand, argued that the court should not exercise its discretion because to do so would be to ignore the provisions of the 2010 act. D argued that where a claimant (A) sues a defendant (B) and B is insured, the general position is that the insurance policy is not disclosable because it is not relevant to any issue in the case (West London Pipeline and Storage v Total UK Ltd [2008] EWHC 1296). Where B is insolvent, however, A may have a direct claim against B’s insurers under the 2010 act which provides a specific regime for the provision of information about B’s insurance position. There would have been no need for parliament to enact such a regime if disclosure of B’s insurance policy could be obtained under CPR 31.16.

In response, PP contended that there are two statutory regimes that may be relevant: section 33(2) of the Senior Courts Act (together with CPR 31.16) and schedule 1 to the 2010 act.  The existence of the latter did not preclude the operation of the former where the relevant tests are met. PP argued that schedule 1 provides an express right to specified information, while section 33(2) and CPR 31.16 give the court a power to order pre-action disclosure, exercising its discretion, if threshold tests are met.


Jefford J noted that the disclosure regime under schedule 1 to the 2010 act is concerned only with the position of insolvent insureds. In the judge’s opinion, the Law Commission (which preceded the 2010 act) did not express any view that a third party should not obtain early disclosure under the CPR where the insured was insolvent, ‘but rather that it seemed to them at best unclear whether the third party would obtain such disclosure’. Reflecting on the Law Commission report, Jefford J stated that: ‘The most I can take from the report in the context of this application is as follows: the Law Commission assumed that the established position was that the court would not order disclosure of a solvent insured’s insurance policy in litigation against the insured; they considered it uncertain whether the court would order pre-action disclosure of the policy in relation to anticipated proceedings against the insurer of an insolvent insured; and they recommended a regime to bring as much certainty as a statutory regime ever can bring to the provision of information about the insurance position of an insolvent insured.’

Concluding that this application could only be made under CPR 31.16, the issue that remained was one of discretion. Jefford J held as follows:

i)    The provisions of schedule 1 demonstrate that parliament cannot have envisaged that CPR 31.16 would or would commonly be used to obtain insurance policies from the insurers of insolvent insureds.  

ii)    There has never been an express statutory provision entitling a litigant to obtain the insurance policy of a solvent insured (because a litigant takes his defendant as he finds him).

iii)    In proceedings against the insured, CPR 31.16 does not provide a route for a prospective litigant to obtain the insurance policy of a solvent insured because the policy does not meet the test for standard disclosure.  

iv)    Attempts to deploy other provisions of the CPR to obtain the insurance policy of a solvent insured have failed (see, for example, West London Pipelines; XYZ v various [2013] EWHC 3643 and [2014] EWHC 4056).

Dismissing the claimant’s application, the judge held that it would, against the above statutory and procedural background, ‘be curious if a potential claimant (A) could say that because the solvent insured might become insolvent and that he, A, might then have a claim against insurers, he should have disclosure of the policy under rule 31.16. In my judgment, this militates strongly against my exercising my discretion to order disclosure in this case’.

The decision serves as a reminder for parties to tread carefully when considering pre-action disclosure applications in respect of insurance policies. As the decision in Peel Port makes clear, there is no statutory provision allowing a party to obtain the insurance policy of a solvent insured and CPR 31.16 will not be any assistance. Any attempt to seek pre-action disclosure in these circumstances will simply result in a waste of resources for both the parties and the court. 

Masood Ahmed is an associate professor at the University of Leicester and member of the Civil Procedure Rule Committee