AWARE

Keoghs Insight

Author

Matthew Kirk

Finding the missing piece of the jigsaw

AWARE14/06/2017
Property Aware 5

One of the most difficult and important aspects of any claim can be obtaining that vital piece of information or evidence which allows progress to be made.

This can be especially frustrating where another party is very likely to be in possession of such information. Commonly, difficulties are encountered in the following scenarios:

• Where the identity of a third party insurer is unknown;

• Where key factual evidence is missing; and

• Where the identity of a potential recovery target is not known or is subject to insolvency.

There are different ways in which to elicit relevant information from another party. Recognising which information is required at an early stage can assist in action being taken to progress a case as quickly and cost effectively as possible for our clients.

Pre-Action Disclosure

An effective method to elicit key information is via Pre-Action Disclosure (‘PAD’).

A PAD request enables a party to obtain a specific class of document without needing to incur the costs or risk of issuing proceedings at that stage. Engaging in early pre-action disclosure is encouraged by the courts in order to assist in resolving a matter efficiently and, often without the need for proceedings to be commenced.

In the absence of a response to a PAD request, an application can be made to court to seek an order for disclosure where the documents in question would fall under the provisions of standard disclosure had proceedings been issued.

An applicant must show that both themselves and the respondent are likely to be parties to the specific proceedings and that there is already a prima facie case to substantive relief. Commonly, the costs of an application would be borne by the applicant save for situations where there is unreasonable conduct by the respondent.

A practical example of the effectiveness of a PAD request is often found in appliance fire cases. The claimant may have expert evidence stating that a defect from the manufacturing process is the most likely cause of the fire. If evidence of such manufacturing process was required then a PAD request (and subsequent application, if required) could be made to the manufacturer to find the missing pieces of the evidential puzzle.

In addition, a PAD request can be an excellent tool to put an opposing party under pressure to enter into a commercial settlement. If you believe there may be a weakness in an opposing case, a well worded PAD request can shine a light on such a weakness and force a positive outcome.

Other third parties

There may be occasions when the likely defendant is not the holder of relevant information which is key to the case, but rather, such evidence / information may be in the possession of a third party. Examples of information which a third party may hold include reports and data from a local authority / public body.

An effective way of obtaining information in this way can be to issue a request pursuant to the Data Protection Act 1998 or Freedom of Information Act 2000. In addition, The Civil Procedure Rules (section 31.17) allow the court to make an order against a non-party to proceedings. In such a scenario the applicant is required to show that disclosure is necessary for the fair disposal of the case. This is an exceptional order and the court will not make it if it has insufficient information to make its decision or that the evidence is obtainable by other means. It is therefore important to consider the nature of any request before proceeding under this provision.

Identity of a recovery target

It is clear that a recovery case cannot proceed if the identity of a recovery target is unknown. Often there are cases where a third party is likely to know the identity of a recovery target but may be unwilling to disclose the same. This could be in situations of complex supply chains or where there is an unknown independent contractor who may have caused damage.

The Civil Procedure Rules (CPR 31.18) allow the courts to make an order for the identity of a wrongdoer to be disclosed. This is an equitable remedy called a Norwich Pharmacal order which was established in the case of Norwich Pharmacal Co. v Commissioners of Customs and Excise ([1974] A.C. 133).

This provision recognises cases where an innocent party has become “mixed up in the wrongdoing” of a third party and is likely to have knowledge of the identity of the wrongdoer. The court may make an order where it is necessary and where the respondent is likely to hold the information in question.

Case law shows that this is an exceptional remedy and there is a high burden to surpass in order to succeed. However, the courts have set out that whilst exceptional; this is a flexible remedy which can greatly assist the applicant in the right case.

Insolvent recovery target

Any claim can be stopped in its tracks where a recovery target becomes insolvent (especially if they are a limited company) and there is seemingly no public liability insurance in place. In the absence of relevant insurance cover / details, it may be that the claimant goes to the back of the queue of creditors and the claim is no longer commercially viable.

This can become especially frustrating where the third party has insurance but refuses to divulge any such information.

The long awaited Third Party (Rights against Insurers) Act 2010 came into force on 1 August 2016 in an attempt to make it easier for third party claimants to bring a direct action against insurers where the insured is insolvent. There is now no longer any requirement for the claimant to establish the insured’s liability first and they can issue directly against the insurer.

More pertinently, it allows the claimant to obtain information of an insurer if there is reasonable belief that there is a contract of insurance in place. If this request for information is refused then a court order can be obtained to ensure this information is released.

Summary

There are many different ways in obtaining that missing piece of information to ensure that a recovery claim is successful. Choosing the most appropriate and efficient method of obtaining such information is a difficult task and is very dependent on the facts in question.

Undertaking an effective method of evidence gathering at an early stage not only saves time and money, but also assists in pushing a matter to a successful conclusion when used in the right manner.

At Keoghs we consider and advise our clients on the most effective way of obtaining any relevant evidence at an early stage whilst considering the prospects of success and the cost implications for our clients.

Matthew Kirk
Trainee Solicitor
T 01204 677353
mkirk@keoghs.co.uk