Disclosure of insurance and funding details

When is a party to litigation required to give the other side details of its insurance position and how it is funding the case? We look at the present position and what is likely to change with the implementation of the Jackson reforms in April 2013.

A party to litigation is only required to reveal its insurance position and the means by which it is funding its claim or defence in certain circumstances. We look at when such a requirement arises and consider what the position could look like after the implementation of the Jackson reforms next April.

The starting point is that a party to litigation is not generally required to reveal how it is funding its legal costs and disbursements, such as court and expert fees, nor whether it has the benefit of liability insurance in respect of a claim. Details of insurance are a private matter between an insurer and an insured and disclosure of those details would encourage “deep pocket” litigation which could seriously prejudice a defendant (West London Pipeline and Storage Ltd v Total UK Ltd).

Disclosure of certain details is, or may be, required in the following instances:

  • Notification under the Civil Procedure Rules
    Where a party intends to recover an additional liability (a success fee or after the event (ATE) insurance premium) from the other side if it wins the action, it must give notice of the details specified in paragraph 19.4 of the Costs Practice Direction to the court and the other parties (CPR 44.15). This applies whether the CFA or policy is entered into pre or post-action, and is a precondition to recovery from the losing party. The details required where the policy was entered into from October 2009 include the level of cover provided, the claims to which the insurance relates and details of any staged premiums.

  • Details of ATE insurance cover
    In Barr v Biffa Waste Services Ltd, the court ordered disclosure of the claimants’ ATE policy as a condition of making a group litigation order (GLO). The court could also make such orders under its general case management powers where it is considering making a costs capping order or an order for security for costs.

  • Details of third party funding
    Where it is clear that a party does not personally have enough money to fund his participation in the proceedings, the court will make an order that the party discloses the name(s) of those maintaining his participation (Raiffeisen Zentralbank Osterreich AG v Crossseas Shipping Ltd). A non-party costs order under section 51 of the Senior Courts Act 1981 may be made against a commercial third party funder (Arkin v Borchard) or a funder controlling the litigation and/or standing to benefit from it.

    Where it appears that a solicitor, acting on a CFA without ATE insurance, has funded an impecunious claimant’s disbursements, the court may order disclosure to determine whether the solicitor had gone beyond his proper role and become susceptible to a non-party costs order (Germany v Flatman and Tinseltime Ltd v Roberts).

  • Liability insurance details
    Under the Third Parties (Rights against Insurers) Act 1930, as interpreted by the Court of Appeal in Re OT Computers, a third party with a claim against an insolvent insured acquires the right to see details of the insurance on the insured’s insolvency. In other circumstances, a defendant does not have to reveal its insurance position.

Position after April 2013

The Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012 abolishes the recoverability of ATE premiums and success fees with effect from April next year. It is assumed that the notification requirements in the CPR for details of ATE insurance and CFAs will be revoked, since they were introduced to protect a party who might be on the receiving end of a claim to recover the premium and/or success fee.

A question remains about whether there should be an obligation to notify opposing parties that a party has entered into a damages based agreement (DBA) with its lawyer. The Civil Justice Council’s contingency fees report recommended that there should be no requirement to notify the other side about a DBA, CFA or ATE policy under the new regime but the rules governing these matters have not yet been published.


There continues to be a tension between the traditional view that liability insurance details are private to a party to litigation and the post-CPR world of “cards on the table” litigation. As Steel J in the West London Pipeline case put it, why should the one factor which may be key to a claimant’s view of the merit of pursuing a claim, namely what is the limit of cover and will the costs eat it up anyway, not be known? Cases such as Harcourt v Griffin where disclosure of liability insurance was ordered (considered to be wrongly decided by Steel J) and Barr v Biffa (see above) suggest that this will continue to be a contentious issue.

By contrast, we have become used to the disclosure of details of funding arrangements under the present CFA and ATE insurance regime but this is likely to become a thing of the past come April 2013. There are still calls for an obligation to disclose details of third party funding arrangement along the lines approved earlier this year by the New Zealand Court of Appeal in Contractors Bonding Limited v Waterhouse, but at present there is no obligation in this jurisdiction to disclose any details of a commercial third party funding arrangement.

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