Arbuthnott (Hugh) and Others v Fagan and Others

Arbuthnott (Hugh) and Others v Fagan and Others; Arbuthnott (John) and Others v Fagan and Others; Arbuthnott (Hugh) and Others v Feltrim Underwriting Agencies Ltd and Others; Arbuthnott (Hugh) v Feltrim Underwriting Agencies Ltd and Others

Queen's Bench Division (Commercial)

(Transcript)

HEARING-DATES: 23 May 1994

23 May 1994

INTRODUCTION:

This is a signed judgment handed down by the judge, with a direction that no further record or transcript need be made (RSC Ord 59, r 9(1)(f), Ord 68, r 1) I See Practice Note dated 9 July 1990, [1990] 2 All ER 1024

COUNSEL:

J Cooke QC and M Smith for the Plaintiffs; J Rowland for the Defendant Feltrim; C Butcher for the Members' Agent

PANEL: Cresswell J

JUDGMENTBY-1: CRESSWELL J

JUDGMENT-1:

CRESSWELL J: THE APPLICATIONS

By Notice dated 21.4.94 under the Summonses for Directions the Plaintiff Names apply for Orders in Actions 1992 Folio Nos 1856, 2423 and 3383 ("the 1987-1989 Actions") and Action 1993 Folio No 1191 ("the 1990 Action") for the discovery and production by the Members' Agents of seven transcripts of evidence given by them, their servants or agents to the Feltrim Loss Review Committee. The applications are made under Order 24 Rules 7 and 11. The Members' Agents object to the production of the seven transcripts. They submit that the statements in the transcripts are subject to statutory confidentiality alternatively that these documents are not necessary for fairly disposing of the matter and are in any event irrelevant to the issues in the 1987-1989 Actions. Feltrim, the Managing Agent ("Feltrim") supports the Members' Agents objections.

THE AFFIDAVIT EVIDENCE

There are four affidavits relevant to the applications:- Mr Connoley's seventh and eighth affidavits on behalf of the plaintiff Names and the second and third affidavits of Miss Jones sworn on behalf of the Members' Agents.

THE NEILL COMMITTEE

The Feltrim Loss Review Committee ("The Neill Committee) was appointed by the Council of Lloyd's on 10.7.91 under and pursuant to the Loss Review Byelaw (No 8 of 1991) and reported on 30.9.92. The Neill Committee's terms of reference were to review and report on the circumstances giving rise to the losses suffered on Feltrim Syndicates 540/2 for the 1987, 1988 and 1989 years of account and on Syndicate 847 for the 1987, 1989 and 1990 years of account.

THE LLOYD'S ACT 1982

Section 6(2) of the Lloyd's Act 1982 provides:

"The Council may --

(a) make such byelaws as from time to time seem requisite or expedient for the proper and better execution of Lloyd's Acts 1871 to 1982 and for the furtherance of the objects of the Society, including such byelaws as it thinks fit for any or all of the purposes specified in Schedule 2 to this Act; and

(b) amend or revoke any byelaw made or deemed to have been made hereunder."

Schedule 2 to the Lloyd's Act 1982 provides that without prejudice to the generality of the powers vested in the Council by section 6(2) the Council may pursuant to that section make byelaws for the following purposes:-

"(21) For requiring members of the Society, Lloyd's brokers, underwriting agents, annual subscribers, associates and substitutes, or any director or partner of a Lloyd's broker or underwriting agent or any person who works for a Lloyd's broker or underwriting agent in such capacity as may be specified by the Council to supply such information to the Council as may be so specified;

(22)(a) For empowering the Council to order any inquiry, including an inquiry concerning the affairs of any member of the Society or syndicate of members or any Lloyd's broker or any underwrIting agent;

(b) For requiring any member of the Society or any director or partner of a Lloyd's broker or underwriting agent or any person who works for a Lloyd's broker or underwriting agent in such capacity as may be specified by the Council to give when required such information as may be in his or its possession or to produce such documents and material as may be in his or its possession or under his or its control relating to the subject-matter of the inquiry; . . .

(25) For requiring that, save in so far as the same may be used in disciplinary or criminal proceedings, due confidentiality is preserved with respect to any information supplied or documents or material produced pursuant to byelaws made for the purposes specified in paragraphs (21), (22) (b) and (24) of this Schedule, especially in so far as such information, documents or material relate to the affairs of any persons (including principals and clients of Lloyd's brokers and of underwriting agents) other than those supplying or producing such information, documents or material;"

LOSS REVIEW BYELAW

On 10.7.91 the Neill Committee was appointed under Loss Review Byelaw (No 8 of 1991) ("the Loss Review Byelaw").

The Loss Review Byelaw provides:-

"2. Review of the circumstances giving rise to syndicate losses

(1) If in relation to any single year of account of a syndicate one of the events mentioned in sub-paragraph (2) occurs, then, subject to sub-paragragh (3), the Council shall appoint such person or persons as it thinks fit to review and to report on the circumstances giving rise to that event in such manner as the Council may direct.

(2) The events referred to in sub-paragraph (1) are:

(a) that an underwriting account comprised in an annual report prepared in respect of the syndicate, made up to 31st December 1990 or any date thereafter, and sent to the Society under the Syndicate Accounting Byelaw (No 11 of 1987) shows under item XVI of the format required by Schedule 4 thereto --

(i) in relation to a year of account closed in accordance with the accounting policy disclosed pursuant to paragraph 5(a) of Schedule 3 to that Byelaw ("the accounting policy") at the reference date or during the year ending on the reference date, a loss, . . . in any such case amounting to not less than 100 per cent of the syndicate allocated capacity for that year of account; . . .

6. Production of documents and evidence

(1) If it appears to a person or persons appointed under paragraph 2 that any person mentioned in sub-paragraph (2) of this paragraph has or may have in his or its possession, custody, power or control any information, documents or other material relating to any matter to be reviewed or relevant in connection therewith, the person or persons so appointed may require him or it ([in the case of a corporate member, by a director or officer thereof and] in the case of a [Lloyd's adviser, a] Lloyd's broker, an underwriting agent or a non-Lloyd's broker, by a director, partner or officer thereof):

(a) to attend before them and their agents;

(b) to give oral evidence to them or their agents, and answer questions;

(c) to produce all such information, documents or other material (including information, documents and other material relating to the affairs of principals and clients of Lloyd's [advisers, Lloyd's] brokers, underwriting agents, non-Lloyd's brokers or other persons) to them or their agents;

(d) to give them or their agents all reasonable facilities in his or its premises for the purpose of examining any such documents and other materials;

(e) to permit them or their agents to copy any such documents or other material in his or its premises or elsewhere;

and otherwise to give them all assistance in connection with the review which he or it is reasonably able to give; and it is that person's duty to comply with the request . . .

(2) The persons from whom assistance may be required under sub-paragraph (1) are:

(d) any director [or employee of a corporate member or any director], partner or employee of any Lloyd's [adviser, Lloyd's] broker or underwriting agent;

7. Reports

(1) Any person or persons appointed under paragraph 2 may, and if so directed by the Council shall, make interim reports to the Council, and on the conclusion of their review shall make a final report.

(2) The Council shall furnish a copy of any report made by the person or persons appointed under paragraph 2 to:

(a) any member of the syndicate;

(b) to any person who has at any time acted as managing agent of the syndicate in relation to the year of account concerned;

(c) to any person who has acted as members' agent on behalf of any member of the syndicate in relation to the year of account concerned;

(d) the persons who acted as syndicate auditors of the syndicate at any time in relation to the year of account concerned; and

(e) any other person whose financial interests appear to the Council to be affected by the matters dealt with in the report.

[(3) The provisions of this paragraph shall take effect notwithstanding the provisions of the Information and Confidentiality Byelaw (No 21 of 1993).]

8. Provisions applicable to information obtained and to persons appointed

A review conducted by this byelaw shall be treated as an "inquiry" for the purposes of the byelaw entitled "Information and Confidentiality" [(No 21 of 1993)] and the byelaw entitled "Disciplinary Committees" (No 6 of 1983)."

Sub-paragraph 3 of paragraph 7 was added by Byelaw No 21 of 1993 with effect from 1.10.93. The words in square brackets in paragraph 8 were substituted by Byelaw No 21 of 1993 with effect from 1.10.93. Prior to 1.10.1993 paragraph 8 provided that a review conducted under this byelaw shall be treated as an "inquiry" for the purposes of the byelaw entitled "Information and Confidentiality" (No 4 of 1983).

INFORMATION AND CONFIDENTIALITY BYELAW (No 4 of 1983)

The Information and Confidentiality Byelaw (No 4 of 1983) ("the 1983 Byelaw") provided:-

"1. The Council may at any time require that any member of the Society, and Lloyd's broker, any underwriting agent, any director, partner or employee of any Lloyd's broker or underwriting agent, any annual subscriber, any associate or any substitute give or produce to the Council any information, documents or other material relating to the business of insurance at Lloyd's or to any person or persons involved in or connected with such business or any other information, documents or other material which the Council may consider necessary or appropriate to be given or produced (including information, documents or other material relating to the affairs of principals and clients of Lloyd's brokers, underwriting agents or other persons).

2. The Council may take or facilitate the taking of proceedings of any kind against any persons appearing to be responsible for or concerned in any frauds, crimes, malpractices or misconduct as defined in these byelaws practised or attempted or intended to be practised in connection with the business of insurance at Lloyd's or in any way related thereto.

3. Save insofar as they may be used in or for the purposes of any inquiry or any disciplinary, criminal or other proceedings or the exercise of powers contained in Lloyd's Acts 1871 to 1982 and the byelaws made thereunder, all information, documents and other material produced or supplied pursuant to Lloyd's Acts 1871 to 1982 or to the byelaws made thereunder (including especially all information, documents and other material relating to the affairs of principals and clients of Lloyd's brokers, underwriting agents or other persons) shall be treated as confidential."

INFORMATION AND CONFIDENTIALITY BYELAW (No 21 of 1993)

The Information and Confidentiality Byelaw (No 21 of 1993) provides:-

"2. Power to require production of information

The Council may at any time require that any member of the Society, any Lloyd's adviser, any Lloyd's broker, any underwriting agent, any annual subscriber, any associate or any substitute give or produce to the Council any information, documents or other material relating to --

(a) the business of insurance at Lloyd's; or

(b) any person or persons involved in such business

or any other information, documents or other material which the Council may consider necessary or appropriate to be given or produced (including information, documents or other material relating to the affairs of principals and clients of Lloyd's advisers, Lloyd's brokers, underwriting agents or other persons).

3. Non-disclosure of information

Subject to the following provisions of this byelaw, no information obtained pursuant to any exercise of powers under Lloyd's Acts 1871 to 1982 (or any byelaw or regulation made thereunder) shall be disclosed without the consent of --

(a) the person from whom it was received; and

(b) (if different) the person whom it concerns.

4. Disclosure of information for certain purposes

Notwithstanding the provisions of paragraph 3, or the terms of any undertaking whether express or implied, nothing shall prohibit the disclosure of information --

(a) for the purposes of:

(i) criminal proceedings,

(ii) any inquiry, or

(iii) disciplinary proceedings;

(b) for the purposes of assisting a regulator, investment exchange, professional body or clearing house in the discharge of its functions, whether in taking or facilitating proceedings or otherwise;

(d) where the information has become public knowledge from other sources; or

(e) where the Council so directs, provided that such disclosure or use is for the advancement and protection of the interests of the Society as a whole.

5. Consequential revocations and amendments

The provisions of Schedule 2 to this byelaw (consequential revocations and amendments) shall have effect.

6. Commencement

This byelaw shall come into force on 1 October 1993.

SCHEDULE 1. INTERPRETATION

In this byelaw:-

"inquiry" means any inquiry before an independent tribunal, whether conducted under statutory powers or otherwise; . . .

"underwriting agent" includes any director, partner or employee of an underwriting agent.

SCHEDULE 2. CONSEQUENTIAL REVOCATIONS AND AMENDMENTS

1. The Information and Confidentiality Byelaw (No 4 of 1983) is revoked.

2. The following byelaws shall be amended by substituting for "(No 4 of 1983)" the new reference "(No 21 of 1993)" namely -- . . .

(d) Loss Review Byelaw (No 8 of 1991) paragraph 8.

4. The Loss Review Byelaw (No 8 of 1991), shall be amended by inserting after sub-paragraph 7(2) the following new sub-paragraph:

"(3) the provisions of this paragraph shall take effect notwithstanding the provisions of the Information and Confidentiality Byelaw (No 21 of 1993).".

THE SUBMISSIONS ON BEHALF OF THE PLAINTIFF NAMES

Mr Cooke QC submitted on behalf of the Plaintiff Names:-

(i) Confidential documents are not protected from discovery by reason of their confidentiality alone.

(ii) The Members' Agents' "Statutory confidentiality" argument should not succeed unless the byelaws on which they rely create a new exception to the obligation to give discovery.

(iii) The "Statututory Confidentiality" argument fails no matter which Confidentiality Byelaw governs. The relevant byelaw in the present case is the 1983 Byelaw because the Neill Committee was appointed on 10.7.91 and reported on 30.9.92 before the 1993 Byelaw came into effect on 1.10.93. Such information as was given by the Members' Agents to the Neill Committee was thus obtained "pursuant to" the Loss Review Byelaw in its unamended form. The 1993 Byelaw only came into force for the future as of 1.10.93 and has no retrospective effect.

(iv) The Members' Agents resist discovery in relation to documents which represent their evidence to the Neill Committee which they themselves provided to the Neill Committee. The Names do not seek disclosure of information obtained from third parties. It is difficult to appreciate how the question of "confidentiality" can arise at all. An obligation of confidence is imposed on a person who receives information in confidence. Neither the 1983 Byelaw nor the 1993 Byelaw covers information which emanates from the person from whom discovery is sought.

(v) The Members' Agents' reluctance to disclose the documents sought by the Names runs contrary to an agents' obligation to his principal to produce to the principal all books and documents in his hands relating to the principal's affairs.

(vi) Neither the 1983 Byelaw nor the 1993 Byelaw preclude discovery in the present case. The 1983 Byelaw simply imposes an obligation of confidentiality in relation to the information, documents and other material to which it applies. The Byelaw itself does not prohibit disclosure. Further the Byelaw expressly creates an exception to the obligation of confidentiality in that it allows disclosure "for the purposes of any inquiry or any disciplinary, criminal or other proceedings" (paragraph 3). If a Loss Review Committee amounts to an "inquiry" (which it does, by virtue of paragraph 8) then a fortiori the High Court must itself either fall into this category or constitute "other proceedings".

(vii) Paragraph 3 of the 1993 Byelaw states that ". . . no information obtained pursuant to any exercise of powers . . . shall be disclosed". The Members' Agents have themselves obtained no such information. Paragraph 4 of the 1993 Byelaw expressly provides that nothing in paragraph 3 shall prohibit the disclosure of information for the purpose of "any inquiry". An inquiry is defined in Schedule 1 as "any inquiry before an independent tribunal, whether conducted under statutory powers or otherwise." The term "tribunal" clearly includes a court.

(viii) The subject matter of the transcripts in the possession of the Members' Agents is plainly relevant to the issues before the Court in both the 1990 Action and the 1987-1989 Actions. What is said to an inquiry investigating the cause of the losses ought to be available to a Court whose role it is to determine responsibility for those losses.

THE SUBMISSIONS ON BEHALF OF THE MEMBERS' AGENTS

Mr Butcher submitted on behalf of the Members' Agents:-

(i) The transcripts of evidence are not disclosable or the production of them ought not to be ordered because the statements in them are subject to statutory confidentiality by virtue of the relevant Lloyd's Byelaws and in particular by reason of the 1993 Byelaw which came into force on 1.10.93. Alternatively discovery of the transcripts is not necessary for fairly disposing of the matter and indeed these documents are irrelevant to the issues in the 1987-1989 Action.

(ii) The relevant Byelaw is the 1993 Byelaw and by reason of its provisions the transcripts are not disclosable. The 1993 Byelaw looks to and prohibits any future disclosure of information obtained pursuant to an exercise of powers under the Lloyd's Acts 1871-1982. The words "information obtained pursuant to any exercise of powers under the Lloyd's Acts 1871-1982" apply equally to information which has been and information which will be obtained pursuant to an exercise of such powers. The 1993 Byelaw revoked the 1983 Byelaw with effect from 1.10.93. It was intended that the new Byelaw should apply to any previously obtained information. This is reinforced by the reference to the Lloyd's Acts 1971-1982 (or any byelaw or regulation made thereunder).

(iii) The 1993 Byelaw has statutory effect and is binding upon the Members' Agents and each of the plaintiff Names as a member of theSociety of Lloyd's. Further each of the plaintiffs, as an underwriting Member of Lloyd's agreed to abide by the Lloyd's Acts and Byelaws made thereunder. In addition there are contractual obligations to the Names and Members' Agents inter se to abide by the Lloyd's Acts and Byelaws.

(iv) The obligations of discovery arising under the Rules of the Supreme Court do not and cannot override the statutory obligation to preserve confidentiality arising under the Byelaws.

(v) The principal purpose of the 1993 Byelaw is to ensure that full and frank evidence is given to the various bodies exercising powers under the Lloyd's Byelaws (see Lonhro Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627 at 637 per Lord Diplock).

(vi) For the purposes of the exception in paragraph 4(a) of the 1993 Byelaw an action for damages in the High Court cannot be termed "an inquiry" without a misuse of language. The 1993 Byelaw omits a reference to "other proceedings". Its effect (and its manifest purpose) was to exclude civil proceedings from the exception.

(vii) In any event disclosure of the transcripts should not be ordered. The fact that the documents were produced in circumstances of confidentiality is a matter which is to be taken into account in considering whether discovery should be ordered. The ultimate test is whether discovery of the documents is necessary for the fair disposal of the proceedings. As far as the 1987-1989 Actions are concerned the transcripts are not even relevant. As far as the 1990 Action is concerned disclosure of the transcripts is not necessary.

THE SUBMISSIONS OF FELTRIM

Mr Rowland submitted on behalf of Feltrim:-

(i) With effect from 1.10.93 the question of disclosure of information obtained pursuant to the Loss Review Byelaw is governed by the 1993 Byelaw regardless of when the information was obtained. The important consideration is the date when disclosure is sought of that confidential information rather than the date when the information was obtained. Feltrim objects to the disclosure of such information.

(ii) The burden of proof under Order 24 Rule 13 rests upon the plaintiffs to establish that an order for production of the transcripts is necessary either for disposing fairly of the cause or matter or for saving costs. As against the possible peripheral relevance of these documents sought by the plaintiffs the Court should attach greater importance to the obvious confidentiality which attaches to the documents and the statutory framework which provides that confidentiality.

Mr Rowland in addition broadly adopted Mr Butcher's submissions.

ANALYSIS AND CONCLUSIONS

It is convenient to analyse these applications under two headings, first the 1983 and 1993 Byelaws and second should discovery and production be ordered pursuant to Order 24 Rules 7 and 11?

THE 1983 AND 1993 BYELAWS

1. Certain individual representatives from certain Members' Agents were called to give evidence before the Neill Committee. They are listed at paragraph 8 of Miss Jones' third affidavit. The individuals attended to give evidence before the Neill Committee between 28.1.92 and 19.2.92. A transcript of the evidence of each witness was taken. The transcripts were forwarded in draft to each witness for correction and approval and then returned to the Committee. Copies of the seven transcripts are in possession of Elborne Mitchell, the solicitors acting for the Members' Agents.

2. The Neill Committee was appointed on 10.7.91 pursuant to the Loss Review Byelaw and reported on 30.9.92. At those dates the 1983 Information and Confidentiality Byelaw was in force. Paragraph 8 of the Loss Review Byelaw at those dates expressly provided that a review conducted under the Loss Review Byelaw should be treated as an "inquiry" for the purposes of the 1983 Byelaw. Nothing in paragraph 3 of the 1983 Byelaw precluded an order for discovery in civil proceedings. Mr Butcher and Mr Rowland do not suggest otherwise. Paragraph 3 provided that save in so far as they may be used in or for the purposes of any inquiry or any disciplinary, criminal or other proceedings or the exercise of powers contained in Lloyd's Acts 1871-1982 and the byelaws, all information, documents and other material produced or supplied pursuant to the Acts or the byelaws should be treated as confidential. Further there is no principle in English law by which documents are protected from discovery by reason of confidentiality alone (see Science and Research Council v Nasse [1980] AC 1028, HL at 1065 D per Lord Wilberforce and paragraph 24/5/16 of the SCP).

3. The 1993 Information and Confidentiality Byelaw came into force on 1.10.93. Schedule 2 revoked the 1983 Byelaw. Paragraph 2 of the Interpretation Byelaw (No 1 of 1983) provides that the Interpretation Act 1978 shall extend to and be applicable to every byelaw, which shall be deemed to be "subordinate legislation" within the meaning of that Act. Section 23 of the Interpretation Act 1978 provides that the provisions of the 1978 Act with certain exceptions apply, so far as applicable and unless the contrary intention appears, to subordinate legislation made after the commencement of the 1978 Act. Section 16 of the 1978 Act provides that where an Act repeals an enactment, the repeal does not, unless the contrary intention appears, affect the previous operation of the enactment repealed or anything duly done or suffered under that enactment or affect any right, privilege, obligation or liability acquired, accrued or incurred under that enactment. Paragraph 3 of the Interpretation Byelaw provides that:-

"To avoid any doubt as to the meaning and application of the byelaws, it is declared that the duties, powers and functions imposed and conferred by any byelaw made under Lloyd's Act 1982 were and are exercisable and applicable in relation to any act, default, event or other matter whenever taking place or arising, whether before or after the commencement of Lloyd's Act 1982 . . ."

It is unnecessary for the purposes of these applications to decide whether the 1993 Byelaw is intended to apply as from 1.10.93 to information obtained prior to 1.10.93 pursuant to any exercise of powers under Lloyd's Acts 1871 to 1982 or byelaws, because in my view it is clear that the provisions of the 1993 Byelaw do not (if applicable) preclude the Court from ordering discovery and production by the Members' Agents of the seven transcripts.

4. I consider that the provisions of the 1993 Byelaw do not (if applicable) preclude the Court from ordering discovery and production by the Members' Agents of the seven transcripts for the following reasons.

(i) Paragraph 3 of the 1993 Byelaw is concerned with "information obtained pursuant to any exercise of powers under Lloyd's Acts 1871 to 1982 (or any byelaw or regulation made thereunder)". Subject to disclosure for certain purposes (see paragraph 4) no information obtained pursuant to any exercise of such powers shall be disclosed without the consent of the person from whom it was received and (if different) the person whom it concerns. The seven transcripts of evidence given by representatives from Members' Agents to the Neill Committee, when in possession of those Members' Agents, are not information obtained pursuant to any exercise of such powers. Paragraph 3 draws a distinction between persons (particularly Lloyd's) who obtain information pursuant to any exercise of such powers and the person from whom the information is received. (Compare in this connection section 82 of the Banking Act 1987).

(ii) Mr Cooke argued in the alternative that the words in paragraph 4/Schedule 1 "any inquiry before an independent tribunal, whether conducted under statutory powers or otherwise" are wide enough to include High Court proceedings. It is common ground that the word "tribunal" includes a court (see the New Shorter Oxford English Dictionary, which inter alia defines "tribunal" as "a court of justice"; Halsbury's Laws of England Fourth Edition Volume 10 paragraphs 701-702 and Steel Company of Canada Ltd v Thomas Ramsay [1931] AC 270 at 296-299, PC). My preferred view is that the contents of the list in paragraph 4 serves to confirm my construction of paragraph 3 set out under (i) above. It enables information obtained to be disclosed for specified purposes appropriate in particular to Lloyd's. But I would if necessary in the alternative hold that the words in paragraph 4/Schedule 1 are wide enough to include High Court proceedings.

(iii) I do not consider that it was the intention of the Council of Lloyd's in making the 1993 Byelaw to preclude an order for discovery in civil proceedings by Names against Members' Agents in the circumstances of the present case. Further I do not consider that paragraph 3 has this effect.

(iv) The construction set out above is consistent with the provisions as to waiver by Names of confidentiality and as to production of documents in the Members' Agent's Agreement for the 1990 year (Schedule 1 to the Agency Agreements Byelaw (No 8 of 1988) -- paragraphs 12 and 6.2r) and in the Agency Agreement for the 1987 to 1989 years (Schedule 1 to the Agency Agreements Byelaw (No 1 of 1985) -- paragraphs 7 and 19).

5. Thus neither the 1983 Byelaw nor the 1993 Byelaw preclude an order for discovery in respect of the seven transcripts.

SHOULD DISCOVERY AND PRODUCTION BE ORDERED PURSUANT TO ORDER 24 RULES 7 AND 11?

Relevance alone, although a necessary ingredient, does not provide an automatic test for ordering discovery. The ultimate test is whether discovery is necessary for disposing fairly of the proceedings. The fact that documents are confidential is a factor to which regard should be had. The burden of satisfying the Court that production for inspection is necessary is squarely upon the party applying (see Dolling-Baker v Merrett [1990] 1 WLR 1205, CA).

I have carefully considered the pleadings, the affidavit evidence referred to above and the submissions of the parties.

In paragraph 10 of her third affidavit on behalf of the Members' Agents Miss Jones says:-

"In general terms the topics discussed by Members' Agents with the Committee could be categorised as follows:-

the background to the formation of Feltrim Agency

-- the information provided to Members' Agents by the Feltrim Agency as to the nature of the business written by the Feltrim Syndicates, the reinsurance programme of the Syndicates and the extent of the losses which the Syndicates would and did suffer in the event of catastrophe

-- Members' Agents understanding of concepts such as excess of loss business and the operation of the LMX Spiral

-- the monitoring of Syndicates, including Feltrim, carried out by Members' Agents."

In paragraph 8 of his seventh affidavit on behalf of the Plaintiff Names Mr Connoley says:-

"(a) In the 1990 Action, the case against Members' Agents (insofar as it relates to matters governed by the new Agency Agreements pursuant to Byelaw No 8 of 1988) rests on the Plaintiffs' contention that the Members' Agents acted negligently and in breach of contract in placing or continuing their respective Names as members of the Feltrim Syndicates for the 1990 underwriting year. Clearly any oral evidence given to the Loss Review Committee describing how the Members' Agents perceived the Feltrim Agency, and specifically the Feltrim Agency's apparent inability to predict the impact of the Piper Alpha loss, is clearly of great relevance to this allegation. As is clear, not only from the above-mentioned references in the Neill Report but also from paragraph 10 of Ms Jones' affidavit, oral evidence on this point was almost certainly heard.

(b) Accordingly to Ms Jones, some of the evidence given by the Members' Agents related to "the monitoring of Syndicates, including Feltrim, carried out by Members' Agents. It is of great relevance to the 1990 Action precisely how the Members' Agents regarded the LUAA questionnaire circulated to them by the Feltrim Agency (see paragraph 9.167 of the Neill Report). This questionnaire, the Plaintiffs contend, showed that the Feltrim Agency's underwriting strategy involved excessive aggregate liabilities being left unreinsured. If the monitoring of the Feltrim Agency carried out by the Members' Agents (and described in their evidence to the Loss Review Committee) either disclosed, or should have disclosed, this apparent under-reinsurance, then this fact would be of great materiality to the 1990 Action.

(c) In relation to the 1987-1989 Actions, the information provided to Members' Agents by the Feltrim Agency as to the nature of the business written by the Feltrim Syndicates, the reinsurance programme of the Syndicates and the extent of the losses which the Syndicates would and did suffer in the event of catastrophe would be of great assistance in enabling the Plaintiffs to understand precisely what Mr Fagan and Mr Gofton Salmond's approach to underwriting and reinsurance of such underwriting in actual fact was. Clearly, this issue lies at the heart of the 1987-1989 Actions."

In my view the seven transcripts are plainly relevant to the issues in the 1987-1989 Actions and to the issues in the 1990 Action.

The second category of topics discussed by Members' Agents with the Neill Committee (the information provided to Members' Agents by the Feltrim Agency as to the nature of the business written by the Feltrim Syndicates, the reinsurance programme of the Syndicates and the extent of the losses which the Syndicates would and did suffer in the event of catastrophe) is plainly relevant to both the 1987-1989 Actions and the 1990 Action. The third and fourth categories (Members' Agents understanding of concepts such as excess of loss business and the operation of the LMX Spiral -- the monitoring of Syndicates, including Feltrim, carried out by Members' Agents) are plainly relevant to the 1990 Action. In addition I accept the submissions as to relevance as set out in Mr Connoley's seventh affidavit. The matters referred to above are directly relevant and fall well within the Peruvian Guano test.

I turn to consider whether the plaintiff Names have discharged the burden of satisfying the Court that production for inspection is necessary for disposing fairly of both the 1987-1989 Actions and the 1990 Action.

There is no plea of public interest immunity by the defendants.

I bear in mind that I am concerned with transcripts of evidence given to the Neill Committee pursuant to the Loss Review Byelaw. I also have regard to the terms of the 1983/1993 Byelaws. I further bear in mind the point made in paragraph 11 of Miss Jones' third affidavit "that evidence given to bodies such as Loss Review Committees should be as full and frank as possible".

In my view there is considerable force in the following submissions made by Mr Cooke on behalf of the Plaintiff Names:-

(i) The Names do not have direct information and ought to be permitted in the interests of justice to see by way of discovery what was said by the representatives of the Members' Agents to the Neill Committee about their affairs;

(ii) The underwriting documents available to the Names on discovery will probably require explanation and will probably not reveal the whole story;

(iii) The transcripts will provide insight into Feltrim's stated aims and objectives and their explanations for the underwriting when those aims were not realised. They will show the extent to which Feltrim did or did not appreciate the degree to which the Names were exposed and the results of their own underwriting policies.

(iv) In paragraph 6 of his seventh affidavit Mr Connoley says:-

"From the Neill Report, it is clear that communications between the Feltrim Agency, and those Members' Agents whose Names had been placed on the Feltrim Syndicates, received considerable attention. I refer to paragraphs 5.32-5.35, 5.101-102, 7.13, 8.100 -- 8.110, 9.162-9.200, 10.183-10.213, 11.102-11.116. 12.134-12.148 and 13.89-13.97 (see "MFC-6" pp 13-103). I stress this is not a complete list of all references to Members' Agents in the Neill Report."

There is good reason to suppose that evidence of the meetings which took place and the oral explanations given will enable the plaintiff Names to advance their own case or damage that of the defendants and/or will lead to a train of inquiry which will have one or both of those two consequences.

I consider that in all the circumstances the plaintiff Names have discharged the burden of satisfying the Court that production for inspection is necessary for disposing fairly of both the 1987 -- 1989 Actions and the 1990 Action.

I order that the seven transcripts be produced for inspection.

DISPOSITION:

Judgment accordingly

SOLICITORS:

Richards Butler; Clifford Chance; Elborne Mitchell