(Re)Insurance Weekly Update 16 -2017

A summary of recent developments in insurance, reinsurance and litigation law.

This Week's Caselaw

EMW Law v Halborg: Judge rules on various issues relating to without prejudice privilege

http://www.bailii.org/ew/cases/EWHC/Ch/2017/1014.html

A solicitor delegated work to another firm of solicitors. When the underlying litigation between the solicitor's clients and their opponent settled, the agent-solicitors were not paid their costs and they commenced proceedings against the principal solicitor. Of issue in this case was whether the agent-solicitors were entitled to disclosure of without prejudice documents produced when the principal solicitor had conducted settlement negotiations with the solicitors for the opponents in the underlying litigation. Various issues concerning without prejudice privilege were considered by Newey J, including the following:

(1) Can a party which is entitled to claim without prejudice privilege show a privileged document to a third party? It is an accepted principle that without prejudice privilege can be waived only with the consent of both parties. However, the judge said that a voluntary disclosure differs from compulsory disclosure during litigation: "The fact that a party to without prejudice negotiations is entitled to withhold communications within their scope on disclosure cannot mean that he is not free to show them to someone else if he so chooses, at least if there is a legitimate reason for doing so. Were the position otherwise, a litigant might find himself unable to provide relevant documents to, say, an expert unless and until the other side agreed, which would be absurd".

(2) The judge held that the agent-solicitors could not rely on common interest privilege to insist on seeing without prejudice communications: common interest privilege is a shield, not a "sword".

(3) One of the well-established exceptions to the without prejudice rule is if the court needs to look into the issue of whether or not there was an agreed settlement. Newey J held that that exception could apply here even though no one involved in the without prejudice correspondence was alleging that an agreement had been reached: "On any view, the concluded agreement exception means that [a party to without prejudice negotiations] runs the risk of the correspondence becoming admissible because his opponent alleges that the negotiations resulted in an agreement. The extent of the risk arising from the exception does not seem to me...