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PI Practitioner, July 2020

16/07/20. Each issue a particular topic is highlighted, citing some of the useful cases and other materials in that area. You can also receive these for free by registering for our PI Brief Update newsletter. Just select "Free Newsletter" from the menu at the top of this page and fill in your email address.

This recent case provides a useful reminder of the requirements associated with pre-action disclosure applications. It also highlights the need specifically to identify the documents which ought to have been provided, and why they are required, if applying for further disclosure.

Zenith Insurance Plc v LPS Solicitors Ltd [2020] EWHC 1260 (QB)

The Respondent law firm had acted for three individuals who brought claims for minor personal injuries following a road traffic accident in 2014. Their claims were settled and the Respondent insurance company paid out damages and costs for each claim. Subsequently, the three individuals named in the claims confirmed that the identification documents provided to the Respondent were not theirs and that they had not been involved in an RTA and had not received compensation. The Applicant contended, therefore, that the claims in relation to the 2014 accident were fraudulent and sought to recover the damages and costs paid out. The causes of action pursued by the Applicant were fraud and negligence.

The Applicant applied and obtained an order from Cockerill J for disclosure of all documents held by the Respondent in respect of the claims brought under the names of the three individuals in 2014. Nearly 500 pages of disclosure was produced as a result of Cockerill J's order. However, the Applicant argued that the disclosure was incomplete and sought the disclosure of 10 categories of documents, primarily on the basis that these documents ought to have been disclosed in compliance with Cockerill J's order. To the extent that the disclosure sought went beyond that order, the Applicant sought an order pursuant to CPR 31.36 or Norwich Pharmacal.

Mr Justice Freedman heard the application. He considered that the Applicant's application and statement in support had failed to set out:
1. Why the categories of documents sought fell within the order made by Cockerill J;
2. How the disclosure was incomplete and the extent to which the categories of documents sought had not been produced by the Applicant;
3. Why the additional documents were required; and
4. Why the Court ought to make an order for disclosure in respect of each category of documents, having regard to the criteria of CPR 31.16 and Norwich Pharmacal.
The Applicant's skeleton argument provided some more information as to the missing documents. Freedman J considered that this was completely unsatisfactory and that the Applicant ought to have specified the missing documents in correspondence with the Respondent prior to making the application. The documents which had not been provided ought also to have been detailed in the Applicant's application and accompanying evidence, and not its skeleton argument. If this had not been possible, the missing documents ought at least to have been specified well before the morning of the hearing. The Respondent had filed evidence in response, as well as a statement confirming compliance with the Cockerill order. The Applicant had failed to respond or make inquiries following receipt of this evidence.

Mr Justice Freedman went on to consider CPR 31.16, which provides that:
"The court may make an order under this rule 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.
He was referred to Black and others v. Sumitomo Corpn and Others [2001] EWCA Civ 1819; [2003] 3 All E.R. 643; [2002] 1 W.L.R. 1562, which provides the following guidance on the application of CPR 31.16:
1. All subparagraphs of 31.16 have to be satisfied in order for the court to make an order.
2. There is a two-stage process for determining whether disclosure is desirable. The court has to consider whether 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". This jurisdictional threshold is low, and where it is passed, the court has discretion to determine whether disclosure is desirable, having regard to all the facts.
3. The order can only be made in respect of documents which would be disclosable under standard disclosure. Later case law established that the applicant has to satisfy the court that on the balance of probabilities the documents are within the scope of standard disclosure.
4. Judges are warned against encouraging "fishing expeditions to enable a prospective plaintiff to discover whether he has in fact got a case at all". The Applicant should therefore identify his/her cause of action with care and demonstrate real prospects.

Mr Justice Freedman then considered the conditions for making a Norwich Pharmacal order, as summarised in Mitsui v Nexen Petroleum [2005] EWHC 625 (Ch); [2005] 3 All ER 511:
1. A wrong must have been carried out, or arguably carried out, by an ultimate wrongdoer;
2. There is a need for an order to enable an action to be brought against the ultimate wrongdoer;
3. The person against whom the order is sought is mixed up in, and facilitated, the wrongdoing and or is likely to provide the information necessary to bring an action against the ultimate wrongdoer.

Freedman J observed that the Norwich Pharmacal order is an exceptional jurisdiction and a remedy of last resort, and is not available where the information can be otherwise obtained. Likewise, if the applicant has sufficient information to start an action an order may be refused.

Freedman J applied the above principles to the categories of documents sought, and found that:
1. As regards CPR 31.16:
a. The Applicant had failed to show that the Respondent is likely to be a defendant in subsequent proceedings. The Applicant had insufficient evidence to advance any claim of fraud against the Respondent. There were also serious obstacles to a claim in negligence against the law firm.
b. The jurisdictional element of the desirability test had not been satisfied. Moreover, the Applicant's application and statement were unsatisfactory and the Respondent had cooperated significantly thus far.
c. In relation to some of the categories, the Applicant had also failed to show that the documents fell within the scope of standard disclosure.
2. As to the Norwich Pharmacal order:
a. The Applicant failed to show that the disclosure of certain categories was necessary in order to assert a right against the ultimate wrongdoer. There were "hallmarks of a fishing exercise" with "no attempt to have regard to the exceptional nature of the jurisdiction or to identify why it is necessary in the interests of justice to have such a wide ranging and time consuming order".
b. There had also been a failure to identify any breach of the Cockerill J order, and the Applicant had not established that there was reason to believe that any further documents would be provided. A bare statement that the disclosure was incomplete was insufficient. The court had no reason to disbelieve the Respondent's evidence that the categories sought had been disclosed in their entirety.

The application therefore failed. Freedman J finally noted the requirement to issue a Part 8 claim form when making a Norwich Pharmacal application. Due to the particular circumstances of the case, the application was heard without a Part 8 claim form. However, Freedman J noted that "parties in future might find that the Court might refuse to hear a Norwich Pharmacal matter without a Part 8 claim form and/or may insist that a Part 8 claim form is issued even when dismissing the application"

Olivia Rosenstrom
Temple Garden Chambers

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