Put your lack of money where your mouth is

His Honour Judge Harrison, in the County Court at Cardiff, has delivered a judgment which will be of enormous interest to both the insurance and credit hire industries. The judgment in EUI v. Charles and others [2018] EW Misc B7 (CC)followed an application by the insurer for disclosure of documents dealing with the respondents’ financial status. All of the respondents to the application had asserted credit hire claims but were yet to issue any claims. If the respondents make their own claims in the future then, in order to establish an entitlement to reclaim the cost of the hire at more expensive “credit hire” rates, they will need to demonstrate that they were “impecunious” at the time they hired their vehicles and could not have mitigated their loss by paying up front.

The application involved consideration of CPR 31.16 (pre-action disclosure) and CPR 25.2 (when interim remedies can be granted) – the parties were largely agreed that the procedural requirements were met, save for CPR 31.16 (3)(c) and (d): whether or not the documents were relevant to an issue likely to arise out of the claims and whether it was desirable to grant such an order.

The applicant argued that it was appropriate to grant the requests for disclosure, so they might evaluate the merits of the proposed credit hire claims and possibly settle the claims without litigation. The respondents warned the court that this was an attempt to “re-engineer” the normal rules for disclosure and that it was dangerous to order the disclosure of sensitive financial information when no claim had yet been issued. HHJ Harrison concluded that the documents were plainly relevant to an issue likely to arise and that it was desirable to order disclosure of the particular financial documents requested, noting that the overriding objective to deal with matters at proportionate cost was best served by “allowing informed offers to be made at the earliest stage”.

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